/C O R R E C T I O N from Source -- Tim Hortons Inc./



    In c3723 transmitted today at 07:00e the Fourth Quarter and Year-End
    Earnings results contained a clerical transmission error in the balance
    sheet financial statements, affecting the current asset subtotal, which
    should have been reported as Cdn$402,818 as opposed to Cdn$408,018. No
    other line items on the balance sheet were impacted. This release
    supersedes the previous release and is corrected.

    Tim Hortons Inc. Announces 2007 Fourth Quarter and Year-End Results

    Operating income up 9.3% for the fourth quarter and 12.1% for the full
    year

    (All amounts in Canadian dollars)

    
                         Financial & Sales Highlights
                         ----------------------------

    -------------------------------------------------------------------------
    Fourth Quarter Ended    December 30, 2007   December 31, 2006   % Change
    -------------------------------------------------------------------------
    Revenues                       $    515.4          $    466.5      10.5%
    Operating Income               $    116.2          $    106.3       9.3%
    Effective Tax Rate                  32.6%               34.1%
    Net Income                     $     75.7          $     67.9      11.5%
    Diluted Earnings Per Share     $     0.40          $     0.35      14.3%
    Fully Diluted Shares                187.0               192.4     (2.8)%
    -------------------------------------------------------------------------

    ($ in millions except EPS. Fully diluted shares in millions. All numbers
    rounded)

    -------------------------------------------------------------------------
    Fiscal Year Ended       December 30, 2007   December 31, 2006   % Change
    -------------------------------------------------------------------------
    Revenues                       $  1,895.9          $  1,659.5      14.2%
    Operating Income               $    425.1          $    379.2      12.1%
    Effective Tax Rate                  34.0%               28.0%
    Net Income                     $    269.6          $    259.6       3.8%
    Diluted Earnings Per Share     $     1.43          $     1.40       2.1%
    Fully Diluted Shares                188.8               185.4       1.8%
    -------------------------------------------------------------------------

    ($ in millions except EPS. Fully diluted shares in millions. All numbers
    rounded)

    -------------------------------------------------------------------------
    Same Store Sales    Q4 2007        Q4 2006          2007           2006
                                                     Full Year      Full Year
    -------------------------------------------------------------------------
    Canada                3.4%           9.3%           5.9%           7.5%
    U.S.                  4.2%           8.3%           4.1%           8.9%
    -------------------------------------------------------------------------

    Commencing in 2008, Canadian average same store sales will be calculated
    on a consistent basis with the U.S. average same-store sales methodology.
    This method calculates same-store sales based on including a restaurant
    beginning the 13th month after the restaurant's opening. This change will
    align same-store calculation methodologies between both markets and with
    industry practices.

    As of December 30, 2007, 98.9% of the Company's restaurants in Canada and
    89.4% of the U.S. restaurants were franchised.

    Additional Highlights
    ---------------------
    -  Fourth quarter systemwide sales(1) increased 7.9%
    -  119 new units opened in fourth quarter, 198 for full-year(2)
    -  Board approves 28.6% increase in quarterly dividend to $0.09 per
       share, and declares 7th consecutive dividend
    -  2008 targets provided
       -  Operating income growth of 10%
       -  120-140 new restaurants in Canada; 90-110 restaurants in the
          U.S.(2)
       -  2008 same-store sale targets of 4-6% established in Canada and 2-4%
          in the U.S. (refer to 2008 Targets and Outlook discussion below for
          further information)
    

    OAKVILLE, ON, Feb. 20 /CNW/ - Tim Hortons Inc. (NYSE:  THI, TSX: THI) today
announced its results for the fourth quarter ended December 30, 2007.
    Systemwide sales(1) growth, which includes sales from Company-operated
and Franchise restaurants, rose 7.9% in the quarter. Fourth quarter same store
sales increased 3.4% in Canada and 4.2% in the U.S. Total revenues were
$515.4 million in the fourth quarter, up 10.5% compared to $466.5 million in
the same period last year. Net income was $75.7 million in the fourth quarter,
increasing 11.5% compared to $67.9 million last year.
    For the fiscal year ended December 30, 2007, total revenues were
approximately $1.9 billion, up 14.2% from about $1.7 billion in 2006.
Operating income for the year was $425.1 million, an increase of 12.1%
compared to $379.2 million in 2006. The tax rate was 34.0% in 2007 compared to
28.0% in the previous year, affecting growth rates for both net income and
earnings per share. Net income increased 3.8% to $269.6 million, compared to
$259.6 million over the comparable period. Earnings per diluted share were
$1.43 compared to $1.40 in 2006.
    "We met or exceeded our 2007 targets for operating income and unit
growth, and we feel positive about our same store sales performance over the
past year given the significant comparable period growth that we lapped," said
Paul House, Chairman and Chief Executive Officer. "In 2008, we will continue
to focus on the things that have made us successful, including menu
innovation, operational excellence and speed of service," House added.

    Consolidated Performance

    During the quarter, a total of 119 restaurants were opened compared to
111 in the fourth quarter of last year. A total of 198 restaurants were opened
in 2007. The Company's promotional programs during the quarter included
Pumpkin Spice Muffins and Pumpkin Spice Smoothees, a Lemon-baked theme,
Chicken Fajita Wraps, Cream of Broccoli Soup and Toasted Ham and Swiss
sandwiches and holiday merchandise in December. In Canada, the Company also
shifted its promotional focus to the TimCard(TM) cashless electronic payment
card from holiday merchandise.
    Sales growth of 13.7% primarily reflects the completion of the ramp up in
the third quarter of 2007 of the Guelph Distribution Centre to three-channel
delivery of dry, frozen and refrigerated products. Rents and royalties
increased 7.2%, consistent with systemwide sales growth. Franchise fees
decreased 2.6% compared to the same quarter of 2006. The decrease was due
primarily to lower resales, offset in part by a higher number of renovations,
standard restaurant openings and replacements.
    For the fourth quarter, cost of sales rose 13.6%, reflecting higher sales
growth and higher distribution costs. Cost of sales were also impacted by more
restaurants being consolidated under FIN 46R, offset by a fewer number of
corporate stores. Operating expenses increased 4.4% year-over-year, mainly due
to a higher number of restaurants in the system with corresponding
operational, depreciation and lease costs.
    Fourth quarter operating income was $116.2 million, up 9.3% compared to
$106.3 million for the same period in 2006. Operating income was slightly
below revenue growth during the quarter. Growth in operating income reflects
higher systemwide sales and higher warehouse sales from distribution, along
with higher equity income, offset in part by 11.5% growth in general and
administrative costs compared to the same period in 2006. Growth in general
and administrative costs this quarter reflect higher standalone company costs
such as professional fees and systems investments, as well as increased costs
associated with marketing programs in the U.S. segment and higher equity-based
compensation costs. Operating income for the quarter was also impacted by a
combination of lower franchise fee revenues and higher franchise fee costs
compared to the same period last year.
    Net interest expense was higher in the fourth quarter, increasing to
$4.0 million compared to $3.3 million in the same period of 2006. The net
increase reflects reduced interest income from lower cash on hand due to share
repurchase and dividend activities and higher interest expense compared to the
comparable period in 2006.
    Fourth quarter net income was $75.7 million, an increase of 11.5%
compared to $67.9 million in the same period of 2006. The effective tax rate
for the fourth quarter of 2007 was 32.6%, lower than 34.1% in the prior year
comparable period due to discrete items recognized in the quarter. Diluted
earnings per share (EPS) were $0.40 compared to $0.35 in the fourth quarter of
2006. EPS growth for the quarter of 14.3% reflects higher revenues and lower
weighted average shares outstanding in the quarter, which decreased 2.8% to
187.0 million shares due to the Company's share repurchase program.

    Segmented Performance Commentary

    Same-store sales for the fourth quarter were up 3.4% in the Canadian
segment. This performance builds on the significant same-store sales growth of
9.3% in the comparable period mainly due to the introduction in late 2006 of
the popular breakfast sandwich. Sales were also impacted due in part to
considerable snowfall in key markets during the month of December, and a
weighting of the promotional focus on the TimCard instead of holiday
merchandise. The majority of TimCard holiday-oriented sales during the quarter
are not reflected in year-end sales performance, and are demonstrated by the
$37.8 million in restricted cash on hand at year-end. Approximately 2% of same
store growth this quarter in Canada was due to pricing.
    Segment margins in Canada were relatively flat. The Canadian segment had
operating income of $126.2 million for the quarter. A total of 71 restaurants
were opened in Canada during the quarter, bringing the total number of
openings to 130 for the year.
    In the U.S. segment, same-store sales increased 4.2% during the quarter,
building upon an increase of 8.3% in the comparable period of 2006. Pricing
contributed less than a half percent to same-store sales growth in the U.S.
segment during the quarter. The Company is pleased with sales performance in
the U.S. given the challenging sales and economic environment in which it was
delivered. The U.S. segment had a $0.5 million loss for the quarter,
reflecting ongoing investment in developing U.S. markets. Currency translation
lowered U.S. segment revenues and costs by approximately 16% respectively
during the quarter compared to the same period in 2006.
    A total of 48 restaurants were opened in the U.S. during the quarter, and
68 for the full year, including 15 self-serve kiosk locations in gasoline
convenience outlets. The U.S. business is leveraging a Tim Hortons self-serve
kiosk platform in place at about 140 locations in the convenience channel in
Ireland and the U.K. The self-serve platform, while not a significant
contributor to earnings at this time due to their lower volumes compared to
typical non-standard units, do allow the Company to increase its U.S. brand
exposure and create another channel of potential growth. This platform
delivers single-serve hot and cold beverages and a selection of donuts and
pastries, with limited capital requirements.

    Corporate Developments

    Senior management transition
    ----------------------------
    The Board of Directors announced a senior management transition, with the
appointment of Paul House as full-time Executive Chairman and Don Schroeder as
President and CEO, effective March 1, 2008. Mr. Schroeder has also been
appointed to the Board of Directors. The Company will continue to maintain the
independent role of Lead Director filled by The Hon. Frank Iacobucci, a Board
position responsible for fulfilling governance and Board oversight as well as
acting as a liaison between the Board and management. The Executive Chairman
is accountable for overall strategic direction in an advisor role to the CEO
and for leadership of the Board of Directors. The Executive Chairman will
continue to serve as a key liaison with franchisees. In the new structure, the
President and CEO is responsible for operational leadership and day-to-day
running of the business, strategic development in collaboration with the
Executive Chairman and strategy implementation. Don Schroeder will report
directly to Paul House. For additional information, please refer to the
separate announcement made February 19th, 2008 or listen to the conference
call noted below.

    Moya Greene appointed to Board
    ------------------------------
    Ms. Moya Greene has been appointed to the Board. Ms. Green has been
President, Chief Executive Officer and a member of the board of the directors
of Canada Post Corporation, the Canadian postal authority, since May 2005.
From 2003 to 2004, Ms. Greene was Senior Vice President, Operational
Effectiveness, of Bombardier Inc., a leading manufacturer of rail
transportation equipment and aircraft. From 2000 to 2003, she was Senior Vice
President, Chief Administrative Officer, Retail Products, at Canadian Imperial
Bank of Commerce, a leading North American financial institution, and from
1996 to 2000, Managing Director, Infrastructure Finance and Public Private
Partnership for TD Securities Inc., a leading Canadian financial services
firm. Ms. Greene also has an extensive public service background, having
served most recently as Assistant Deputy Minister for Transport Canada (the
Canadian federal transportation authority) from 1991 to 1996 and from 1989 to
1991 as Director, General Policy, for Human Resources and Social Development,
Canada. She is a graduate of Osgoode Hall Law School and was recognized in
2003 by the National Post as one of Canada's Top 100 influential women and in
2004 by the Ivey School of Business/Women Executive Network as one of the top
40 female corporate executives in Canada.
    In addition to the appointments of Ms. Greene and Mr. Schroeder to the
Board of the Directors, the Board has determined that it will add one
additional independent Board member following a search process.

    TimCard(TM)
    -----------
    The Company substantially completed its rollout of reloadable, cashless
TimCards in standard restaurants in the Canadian market in the fourth quarter,
in time for the key holiday season. The TimCard uses the same technology
platform as the MasterCard payment system implemented earlier in 2007 and both
initiatives are designed to provide customer convenience and increase speed of
service. Both initiatives are in relatively early stages of their respective
consumer roll-outs, but the Company is pleased with results at this stage for
both platforms. The U.S. segment is targeted to roll-out TimCards in the first
quarter of 2008.

    $200 million share repurchase program activities
    ------------------------------------------------
    The Company announced in the third quarter of 2007 a new $200 million
share repurchase program for 2007-2008 as part of its ongoing focus of
creating value for shareholders. During the fourth quarter, we spent
$35.6 million to purchase a total of 953,700 shares as part of this program.

    Board declares 7th consecutive dividend and a 28.6% increase to quarterly
    -------------------------------------------------------------------------
    dividend to $0.09 per share
    ---------------------------
    The Board of Directors has approved an increase in the quarterly dividend
to $0.09 and the first payment of a dividend at the new rate is payable on
March 17th, 2008 to shareholders of record as of March 3rd, 2008. The
Company's current dividend policy is to pay a total of 20-25% of prior year,
normalized annual net earnings in dividends each year.
    Dividends are paid in Canadian dollars to all shareholders with Canadian
resident addresses whose shares are registered with Computershare (the
Company's transfer agent). For all other shareholders, including all
shareholders who hold their shares indirectly (i.e., through their broker) and
regardless of country of residence, the dividend will be converted to U.S.
dollars on March 10th, 2008 at the daily noon rate established by the Bank of
Canada and paid in U.S. dollars on March 17th, 2008.

    2008 Targets and Outlook
    ------------------------
    
    The Company has established the following 2008 performance targets:

    -  Operating income growth of 10%
    -  2008 same-store sales growth of 4-6% in Canada and 2-4% in the U.S.
    -  210-250 new unit openings, including 120-140 in the Canadian segment
       and 90-110 in the U.S. segment, which may include self-serve kiosks(2)
    -  Capital expenditures between $200 million - $250 million, the majority
       of which is comprised of growth investments targeted at restaurant
       unit growth and renovations
    -  Tax rate of 33-35%
    

    "While we face some macro economic challenges and competitive discounting
activities which might create volatility quarter to quarter, particularly in
the U.S. segment, we believe our customer value proposition and continued
focus on successful growth strategies such as menu innovation, operational
initiatives and our new cashless payment systems position us well to help
offset the impact of these challenges," said Cynthia Devine, Chief Financial
Officer.
    These financial targets are for 2008 only and they replace and supersede
all previous targets established by the Company, including prior long-term
same-store sales targets. These targets are forward-looking and are based on
our expectations and outlook and shall be effective only as of the date the
targets were originally issued. Except as required by applicable securities
laws, we do not intend to update our annual financial targets. These targets
and our performance generally are subject to various risks and uncertainties
("risk factors") which may impact future performance and our achievement of
these targets. Refer to our safe harbor statement, which incorporates by
reference our "risk factors," set forth at the end of this release.

    Tim Hortons to host conference call at 10:30 a.m. today, February 20th,
    -----------------------------------------------------------------------
    2008
    ----
    Tim Hortons will host a conference call beginning at 10:30 a.m. (Eastern
Standard Time) today. Investors and the public may listen to the conference
call in either one of the following ways:
    Phone: The dial-in number is (416) 641-6712 or 1-800-354-6885. No access
code is required. A simultaneous Web Cast of the conference call will be
available at www.timhortons.com. A replay of the call will be available for
one year at our web-site under the "audio archives" tab under the "Investor
Information" section, and can be accessed at (416) 626-4100 or 1-800-558-5253.
The reservation number for the replay call is 21373595. A slide presentation
will be available to coincide with the conference call, and can be accessed at
www.timhortons.com under the investor information section, by clicking on the
"Presentations" tab.

    Safe Harbor Statement
    ---------------------
    Certain information in this news release, particularly information
regarding future economic performance and finances, and plans, expectations
and objectives of management, is forward-looking. Factors set forth in the
Company's Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995, including by reference the "risk factors" outlined in the
Company's most recent Form 10-K filed March 9, 2007, in addition to other
possible factors not listed or described in the Safe Harbor Statement, could
affect the Company's actual results and cause such results to differ
materially from those expressed in forward-looking statements. As such,
readers are cautioned not to place undue reliance on forward-looking
statements contained in this news release, which speak only as of the date
hereof. Except as required by federal or provincial securities laws, the
Company undertakes no obligation to publicly release any revisions to the
forward looking statements contained in this release, or to update them to
reflect events or circumstances occurring after the date of this release, or
to reflect the occurrence of unanticipated events, even if new information,
future events or other circumstances have made the forward-looking statements
incorrect or misleading. Please review the Company's Safe Harbor Statement at
http://www.timhortons.com/safeharbor.html.

    
    (1) Total systemwide sales growth includes restaurant level sales at both
        Company and Franchise restaurants. Approximately 98% of our system is
        franchised as at December 30, 2007. Systemwide sales growth is
        determined using a constant exchange rate to exclude the effects of
        foreign currency translation. U.S. dollar sales are converted to
        Canadian dollar amounts using the average exchange rate of the base
        year for the period covered. For the fourth quarter of 2007,
        systemwide sales growth was up 7.9% compared to the fourth quarter of
        2006. Systemwide sales impact our franchise royalties and rental
        income, as well as our distribution sales. Changes in systemwide
        sales are driven by changes in average same store sales and changes
        in the number of systemwide restaurants.

    (2) Of the 198 restaurants opened in 2007, 15 were self-serve kiosks in
        the U.S. that leverage the non-standard kiosk model in Ireland and
        the U.K. These units allow the Company to create brand awareness and
        customer value with limited capital requirements. For 2008, the U.S.
        restaurant opening target reflects a higher number of targeted
        openings of non-standard locations potentially including additional
        self-serve kiosks.
    

    Tim Hortons Inc. Overview
    -------------------------
    Tim Hortons is the fourth largest publicly-traded quick service
restaurant chain in North America based on market capitalization, and the
largest in Canada. Tim Hortons appeals to a broad range of consumer tastes,
with a menu that includes coffee and donuts, premium coffees, flavored
cappuccinos, specialty teas, home-style soups, fresh sandwiches and fresh
baked goods. As of December 30, 2007, Tim Hortons had 3,221 systemwide
restaurants, including 2,823 in Canada and 398 in the United States. More
information about the Company is available at www.timhortons.com.


    
                      TIM HORTONS INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
          (In thousands of Canadian dollars, except per share data)

                                  (Unaudited)

                              Fourth Quarter Ended
                             December     December
                             30, 2007     31, 2006     $ Change     % Change
                           -----------  -----------  -----------  -----------
    REVENUES
    Sales                    $335,210     $294,767      $40,443        13.7%
    Franchise revenues
      Rents and royalties     142,638      133,096        9,542         7.2%
      Franchise fees           37,596       38,594         (998)       (2.6%)
                           -----------  -----------  -----------  -----------
                              180,234      171,690        8,544         5.0%
                           -----------  -----------  -----------  -----------
    TOTAL REVENUES            515,444      466,457       48,987        10.5%
                           -----------  -----------  -----------  -----------

    COSTS AND EXPENSES
    Cost of sales             293,829      258,596       35,233        13.6%
    Operating expenses         52,272       50,057        2,215         4.4%
    Franchise fee costs        33,168       32,151        1,017         3.2%
    General &
     administrative
     expenses                  29,098       26,104        2,994        11.5%
    Equity (income)            (9,587)      (8,557)      (1,030)       12.0%
    Other expense
     (income), net                437        1,804       (1,367)         N/M
                           -----------  -----------  -----------  -----------
    TOTAL COSTS &
     EXPENSES, NET            399,217      360,155       39,062        10.8%
                           -----------  -----------  -----------  -----------

    OPERATING INCOME          116,227      106,302        9,925         9.3%

    Interest (expense)         (6,236)      (5,778)        (458)        7.9%
    Interest income             2,268        2,476         (208)       (8.4%)
                           -----------  -----------  -----------  -----------

    INCOME BEFORE
     INCOME TAXES             112,259      103,000        9,259         9.0%

    INCOME TAXES               36,589       35,145        1,444         4.1%
                           -----------  -----------  -----------  -----------

    NET INCOME                $75,670      $67,855       $7,815        11.5%
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Basic earnings per
     share of common stock      $0.41        $0.35        $0.06        17.1%
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Diluted earnings per
     share of common stock      $0.40        $0.35        $0.05        14.3%
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Basic shares of common
     stock (in thousands)     186,712      192,222       (5,510)       (2.9%)
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Diluted shares of common
     stock (in thousands)     186,956      192,383       (5,427)       (2.8%)
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Dividend per share
     of common stock (post
     initial public offering)   $0.07        $0.07        $0.00
                           -----------  -----------  -----------
                           -----------  -----------  -----------

    N/M - not meaningful
    (all numbers rounded)



                      TIM HORTONS INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
          (In thousands of Canadian dollars, except per share data)

                                  (Unaudited)

                              For the Year Ended
                             December     December
                             30, 2007     31, 2006     $ Change     % Change
                           -----------  -----------  -----------  -----------
    REVENUES
    Sales                  $1,248,574   $1,072,405     $176,169        16.4%
    Franchise revenues
      Rents and royalties     553,441      503,375       50,066         9.9%
      Franchise fees           93,835       83,769       10,066        12.0%
                           -----------  -----------  -----------  -----------
                              647,276      587,144       60,132        10.2%
                           -----------  -----------  -----------  -----------
    TOTAL REVENUES          1,895,850    1,659,549      236,301        14.2%
                           -----------  -----------  -----------  -----------

    COSTS AND EXPENSES
    Cost of sales           1,099,248      941,947      157,301        16.7%
    Operating expenses        201,153      182,332       18,821        10.3%
    Franchise fee costs        87,077       76,658       10,419        13.6%
    General &
     administrative
     expenses                 119,416      113,530        5,886         5.2%
    Equity (income)           (38,460)     (35,236)      (3,224)        9.1%
    Other expense
     (income), net              2,307        1,102        1,205          N/M
                           -----------  -----------  -----------  -----------
    TOTAL COSTS &
     EXPENSES, NET          1,470,741    1,280,333      190,408        14.9%
                           -----------  -----------  -----------  -----------

    OPERATING INCOME          425,109      379,216       45,893        12.1%

    Interest (expense)        (24,118)     (22,253)      (1,865)        8.4%
    Interest income             7,411       11,671       (4,260)      (36.5%)
    Affiliated interest
     (expense), net                 -       (7,876)       7,876          N/M
                           -----------  -----------  -----------  -----------

    INCOME BEFORE
     INCOME TAXES             408,402      360,758       47,644        13.2%

    INCOME TAXES              138,851      101,162       37,689        37.3%
                           -----------  -----------  -----------  -----------

    NET INCOME               $269,551     $259,596       $9,955         3.8%
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Basic earnings per
     share of common stock      $1.43        $1.40        $0.03         2.1%
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Diluted earnings per
     share of common stock      $1.43        $1.40        $0.03         2.1%
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Basic shares of common
     stock (in thousands)     188,465      185,153        3,312         1.8%
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Diluted shares of common
     stock (in thousands)     188,759      185,401        3,358         1.8%
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    Dividends per share
     of common stock (post
     initial public offering)   $0.28        $0.14        $0.14
                           -----------  -----------  -----------
                           -----------  -----------  -----------

    N/M - not meaningful
    (all numbers rounded)



                      TIM HORTONS INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                     (In thousands of Canadian dollars)


                                                       December     December
                                                       30, 2007     31, 2006
                                                    ------------ ------------
                                                           (Unaudited)
    ASSETS

    Current assets
      Cash and cash equivalents                        $157,602     $176,083
      Restricted cash                                    37,790            -
      Accounts receivable, net                          104,889      110,403
      Notes receivable, net                              10,824       14,248
      Deferred income taxes                              11,176        6,759
      Inventories and other, net                         60,281       53,888
      Advertising fund restricted assets                 20,256       25,513
                                                    ------------ ------------
                                                        402,818      386,894

    Property and equipment, net                       1,203,259    1,164,536

    Notes receivable, net                                17,415       16,504

    Deferred income taxes                                23,501       23,579

    Intangible assets, net                                3,145        3,683

    Equity investments                                  137,177      139,671

    Other assets                                          9,816       10,120
                                                    ------------ ------------
                                                     $1,797,131   $1,744,987
                                                    ------------ ------------
                                                    ------------ ------------



                      TIM HORTONS INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                     (In thousands of Canadian dollars)


                                                       December     December
                                                       30, 2007     31, 2006
                                                    ------------ ------------
                                                           (Unaudited)
    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities
      Accounts payable                                 $133,412     $115,570
      Accrued liabilities:
        Salaries and wages                               17,975       18,927
        Taxes                                            34,522       27,103
        Other                                            95,777       66,262
      Advertising fund restricted liabilities            39,475       41,809
      Current portion of long-term obligations            6,137        5,518
                                                    ------------ ------------
                                                        327,298      275,189
                                                    ------------ ------------
    Long-term obligations
      Term debt                                         327,956      325,590
      Advertising fund restricted debt                   14,351       23,337
      Capital leases                                     52,524       44,774
                                                    ------------ ------------
                                                        394,831      393,701
                                                    ------------ ------------

    Deferred income taxes                                16,295       17,879
    Other long-term liabilities                          56,624       39,814

    Stockholders' equity
      Common stock, (US$0.001 par value per share)
        Authorized: 1,000,000,000 shares
        Issued: 193,302,977 shares                          289          289
      Capital in excess of par value                    931,084      918,043
      Treasury stock, at cost: 6,750,052 and
       1,930,244 shares, respectively                  (235,155)     (64,971)
      Common stock held in trust, at cost:
       421,344 and 266,295 shares, respectively         (14,628)      (9,171)
      Retained earnings                                 458,958      248,980
      Accumulated other comprehensive loss:
        Cumulative translation adjustments
         and other                                     (138,465)     (74,766)
                                                    ------------ ------------
                                                      1,002,083    1,018,404
                                                    ------------ ------------
                                                     $1,797,131   $1,744,987
                                                    ------------ ------------
                                                    ------------ ------------



                      TIM HORTONS INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
          (In thousands of Canadian dollars, except per share data)

                                                            (Unaudited)

                                                        For the Year Ended
                                                       December     December
                                                       30, 2007     31, 2006
                                                    ------------ ------------
    CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
    Net income                                         $269,551     $259,596
    Adjustments to reconcile net income to net
     cash provided by operating activities
      Depreciation and amortization                      83,595       72,695
      Stock-based compensation expense                    8,560       10,068
      Equity income, net of cash dividends                1,448        3,330
      Deferred income taxes                              (7,097)      (6,365)
      Changes in operating assets and liabilities
        Restricted cash                                 (37,790)           -
        Accounts and notes receivable                     3,171      (24,212)
        Inventories and other                            (8,323)     (10,905)
        Accounts payable and accrued liabilities         58,461      (24,271)
        Amounts receivable from (payable to) Wendy's        406      (10,650)
      Settlement of hedges                                    -      (31,919)
      Other, net                                         21,994       22,062

                                                    ------------ ------------
         Net cash provided by operating activities      393,976      259,429
                                                    ------------ ------------

    CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES
    Capital expenditures                               (175,541)    (180,049)
    Principal payments on notes receivable                6,791        5,770
    Investments in joint ventures and other
     investments                                            596        1,049
    Issuance of notes receivable and other
     investing activities                               (11,697)      (7,219)

                                                    ------------ ------------
        Net cash used in investing activities          (179,851)    (180,449)
                                                    ------------ ------------

    CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES
    Proceeds from issuance of debt,
     net of issuance costs                                2,588      501,263
    Proceeds from share issuance                              -      903,825
    Share issuance costs                                      -      (61,918)
    Purchase of common stock for settlement
     of stock-based compensation                           (110)      (5,489)
    Purchase of treasury stock                         (170,604)     (64,971)
    Purchase of common stock held in trust               (7,202)      (9,171)
    Dividend payments (post initial public offering)    (52,865)     (27,046)
    Tax sharing payment from Wendy's                      9,116            -
    Repayment of borrowings from Wendy's                      -   (1,087,968)
    Principal payments on other long-term
     debt obligations                                    (4,060)    (206,750)

                                                    ------------ ------------
        Net cash used in financing activities          (223,137)     (58,225)
                                                    ------------ ------------

    Effect of exchange rate changes on cash              (9,469)     (30,854)
                                                    ------------ ------------

    Increase (decrease) in cash and cash equivalents    (18,481)     (10,099)

    Cash and cash equivalents at beginning of year      176,083      186,182

                                                    ------------ ------------
    Cash and cash equivalents at end of year           $157,602     $176,083
                                                    ------------ ------------
                                                    ------------ ------------



                      TIM HORTONS INC. AND SUBSIDIARIES
                              SEGMENT REPORTING
                     (In thousands of Canadian dollars)

                                 (Unaudited)

                                          Fourth Quarter Ended
                             December                  December
                             30, 2007   % of Total     31, 2006   % of Total
                           -----------  -----------  -----------  -----------
    REVENUES
    Canada                   $474,221        92.0%     $425,915        91.3%
    U.S.                       41,223         8.0%       40,542         8.7%
                           -----------  -----------  -----------  -----------
    Total Revenues           $515,444       100.0%     $466,457       100.0%
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    SEGMENT OPERATING
     INCOME (LOSS)
    Canada                   $126,165       100.4%     $113,000        99.6%
    U.S.                         (477)       (0.4%)         491         0.4%
                           -----------  -----------  -----------  -----------
    Reportable Segment
     Operating Income         125,688       100.0%      113,491       100.0%
                                        -----------               -----------
                                        -----------               -----------
    Corporate Charges          (9,461)                   (7,189)
                           -----------               -----------
    Consolidated
     Operating Income         116,227                   106,302

    Interest, net              (3,968)                   (3,302)
    Income taxes              (36,589)                  (35,145)
                           -----------               -----------
    Net Income                $75,670                   $67,855
                           -----------               -----------
                           -----------               -----------


                                           For the Year Ended
                             December                  December
                             30, 2007   % of Total     31, 2006   % of Total
                           -----------  -----------  -----------  -----------
    REVENUES
    Canada                 $1,741,372        91.9%   $1,518,737        91.5%
    U.S.                      154,478         8.1%      140,812         8.5%
                           -----------  -----------  -----------  -----------
    Total Revenues         $1,895,850       100.0%   $1,659,549       100.0%
                           -----------  -----------  -----------  -----------
                           -----------  -----------  -----------  -----------

    SEGMENT OPERATING
     INCOME (LOSS)
    Canada                   $467,884       101.0%     $410,582        99.6%
    U.S.                       (4,804)       (1.0%)       1,736         0.4%
                           -----------  -----------  -----------  -----------
    Reportable Segment
     Operating Income         463,080       100.0%      412,318       100.0%
                                        -----------               -----------
                                        -----------               -----------
    Corporate Charges         (37,971)                  (33,102)
                           -----------               -----------
    Consolidated
     Operating Income         425,109                   379,216

    Interest, net             (16,707)                  (18,458)
    Income taxes             (138,851)                 (101,162)
                           -----------               -----------
    Net Income               $269,551                  $259,596
                           -----------               -----------
                           -----------               -----------



                      TIM HORTONS INC. AND SUBSIDIARIES
                           SYSTEMWIDE RESTAURANTS


                                           Increase/               Increase/
                      As of      As of    (Decrease)      As of   (Decrease)
                    December   September  From Prior    December  From Prior
                    30, 2007    30, 2007    Quarter     31, 2006     Year
                   ----------------------------------------------------------
    Tim Hortons
    -----------
      U.S.
        Company           42          47          (5)         61         (19)
        Franchise        356         305          51         275          81
                   ----------------------------------------------------------
                         398         352          46         336          62

    % Franchised       89.4%       86.6%                   81.8%

      Canada
        Company           30          23           7          34          (4)
        Franchise      2,793       2,735          58       2,677         116
                   ----------------------------------------------------------
                       2,823       2,758          65       2,711         112

    % Franchised       98.9%       99.2%                   98.7%

    Total Tim
     Hortons
        Company           72          70           2          95         (23)
        Franchise      3,149       3,040         109       2,952         197
                   ----------------------------------------------------------
                       3,221       3,110         111       3,047         174
                   ----------------------------------------------------------
                   ----------------------------------------------------------

    % Franchised       97.8%       97.7%                   96.9%



                       TIM HORTONS INC. AND SUBSIDIARIES
                       Income Statement Definitions


    Sales              Primarily includes sales of products, supplies and
                       restaurant equipment (except for initial equipment
                       packages sold to franchisees as part of the
                       establishment of their restaurant's business - see
                       "Franchise Fees") that are shipped directly from our
                       warehouses or by third party distributors to the
                       restaurants, which we refer to as warehouse or
                       distribution sales. Sales include canned coffee sales
                       through the grocery channel. Sales also include sales
                       from Company-operated restaurants and sales from
                       franchise restaurants that are consolidated in
                       accordance with FIN 46R.

    Rents and          Includes franchisee royalties and rental revenues.
    Royalties

    Franchise Fees     Includes the sales revenue from initial equipment
                       packages, as well as fees for various costs and
                       expenses related to establishing a franchisee's
                       business.

    Cost of Sales      Includes costs associated with our distribution
                       warehouses, including cost of goods, direct labour and
                       depreciation as well as the cost of goods delivered by
                       third party distributors to the restaurants and for
                       canned coffee sold through grocery stores. Cost of
                       sales also includes food, paper and labour costs for
                       Company-operated restaurants and franchise restaurants
                       that are consolidated in accordance with FIN 46R.

    Operating          Includes rent expense related to properties leased to
    Expenses           franchisees and other property-related costs
                       (including depreciation).

    Franchise          Includes costs of equipment sold to franchisees as
    fee costs          part of the commencement of their restaurant business,
                       as well as training and other costs necessary to
                       ensure a successful restaurant opening.

    General and        Includes costs that cannot be directly related to
    Administrative     generating revenue, including expenses associated with
                       our corporate and administrative functions, allocation
                       of expenses related to corporate functions and
                       services historically provided to us by Wendy's and
                       depreciation of office equipment, the majority of our
                       information technology systems, and head office real
                       estate.

    Equity Income      Includes income from equity investments in joint
                       ventures and other minority investments over which we
                       exercise significant influence. Equity income from
                       these investments is considered to be an integrated
                       part of our business operations and is, therefore,
                       included in operating income. Income amounts are shown
                       as reductions to total costs and expenses.

    Other Income       Includes expenses (income) that are not directly
    and Expense        derived from the Company's primary businesses. Items
                       include restaurant closure costs, currency
                       adjustments, real estate sales, minority interest
                       related to the consolidation of franchised restaurants
                       pursuant to FIN 46R, and other asset write-offs.

    Comprehensive      Represents the change in our net assets during the
    Income             reporting period from transactions and other events
                       and circumstances from non-owner sources. It includes
                       net income and other comprehensive income such as
                       foreign currency translation adjustments and the
                       impact of cash flow hedges.
    





For further information:

For further information: INVESTORS: Scott Bonikowsky: (905) 339-6186 or
investor_relations@timhortons.com; MEDIA: Rachel Douglas: (905) 339-6277 or
douglas_rachel@timhortons.com


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