Tim Hortons delivered record profitability and sales in 2009 in the most challenging economic conditions in the Company’s history. By responding to the pressures our customers were under and leveraging our financial scale and strength, we were able to grow our business while also investing in our future.

Dear Fellow Shareholders,

The prevailing view of most forecasters heading into the year was for gradual economic recovery would unfold in 2009. What the global economy actually experienced was pervasive weakness and consumers under relentless pressure.

Our business is one which tends to perform well in good times and bad, proving fairly resilient given the price-to-value brand position we have established over 46 years of business. I am pleased to report that 2009 was no exception and, on balance, given the pressures our customers were under, we performed very well.

As much of the North American restaurant industry contracted, both from a sales and unit development perspective, we invested in our future by continuing to execute our growth plan, leveraging our financial strength to build new restaurants, and by positioning our brand for success.

We surpassed $2.2 billion in revenues and generated $495.4 million in operating income. Both of our business segments delivered highly respectable sales growth given the decline in the global economy and unprecedented pressures facing our customers. In Canada, same-store sales grew 2.9% in 2009, slightly below our target of 3% to 5%, but quite strong given what transpired economically. In the U.S., we significantly surpassed our same-store sales target of 0% to 2%, coming in at 3.2% for the full year.

Menu introductions that reinforced our value with customers, exciting new initiatives that took our brand where we hadn’t been before, and continued investment in our future growth all contributed to a successful year. Several notable achievements characterized 2009, including:

• Same-store sales growth in Canada and the U.S. that outpaced the significant majority of the North American restaurant industry;
• Opening 176 restaurant locations in Canada and the U.S.;
• Introducing our legendary coffee and baked goods offering to new markets like New York City;
• Expanding our Cold Stone Creamery^® co-branding initiative in the U.S. and securing exclusive development rights for Canada;
• Developing a new sustainability and responsibility strategy that will help position us for leadership and meet our commitment to doing our part to address environmental issues such as the impact of climate change; and
• Opening a significant new coffee roasting and blending facility that, when fully operational, together with our existing coffee roasting facility in Rochester, N.Y., will supply approximately 75% of our system’s coffee requirements and 100% of our blending needs.

At the same time as these initiatives were underway, we undertook a significant reorganization of our corporate structure to become a Canadian public company, a change which we believe will result in long-term benefits to shareholders.

As proud as I am of what our team accomplished in 2009, I am equally proud of our vigorous efforts to continue reinventing ourselves. Working with our Board, we developed a new strategic growth plan for 2010 to the end of 2013, which we believe will help us maintain and further enhance our position as one of the best performing restaurant companies in North America.

Our strategic plan charts an exciting course that builds on our core strengths and foundation. Four strategic themes will guide our activities and focus over the next four years:

• Attacking daypart, category and marketing opportunities to drive same-store sales;
• Investing to build our scale and brand in new and existing markets;
• Growing differently in ways we haven’t grown before; and
• Leveraging our core business strengths and franchise system.

Supporting strategies and initiatives are embedded within each strategic theme, and these activities, coupled with benefits from our public company reorganization and financial strategies, are expected to create 12% to 15%¹ earnings per share (EPS) compound annual growth, beyond 2010, for the period of 2011 to 2013. I am excited about the direction of our organization and the initiatives we have in place to drive growth.

We are fortunate to have what I believe to be the very best franchise group in the restaurant business. They are backed by an incredibly committed and talented corporate team focused on achieving success.

Our collective formula for success is straightforward: demand high standards, hold people accountable and turn loose their creative and intellectual capacity. Our customer offering is also straightforward: offer quality products at reasonable prices and provide friendly and convenient service. Our performance this past year demonstrates the power of this formula, which is reflected in our theme for this year’s annual report, and our strategic plan, of More Than A Great Brand.

While we have achieved iconic brand status in Canada, and we are working hard to build that same brand equity in our core markets in the Northeast and Midwest U.S., there is so much more to this organization than just being a great brand. Our team of franchisees and our unique business model are the foundation for our success. Our scale, unique customer offering and our strategic road map for future growth are all designed to build upon that foundation.

We believe our focus on continuous improvement and growth balanced with our prudent and disciplined management style will continue to position us for leadership.

Sincerely,

¹ Please see our 2009 Form 10-K for additional information on this measure under the “Business Overview and 2010 Objectives” section in item 1.