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ALIMENTATION COUCHE-TARD INC.
AGREEMENT TO ACQUIRECST BRANDS INC.
August 2016
FORWARD-LOOKING INFORMATION AND CAUTIONARY LANGUAGE
This presentation and the accompanying oral presentation contain forward-looking statements within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as “projected”, “estimate”, “may”, “anticipate”, “believe”, “expect”, “plan”, “intend” or similar wordssuggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact contained in these slides are forward-looking statements.
Forward-looking statements involve numerous assumptions, risks and uncertainties. A variety of factors, many of which are beyond Alimentation Couche-TardInc.’s (“Couche-Tard”) control, may cause actual results to differ materially from the expectations expressed in its forward-looking statements. These factorsinclude, but are not limited to, the effects of the integration of acquired businesses and the ability to achieve projected synergies, fluctuations in margins onmotor fuel sales, competition in the convenience store and retail motor fuel industries, foreign exchange rate fluctuations, and such other risks as described indetail from time to time in documents filed by Couche-Tard with securities regulatory authorities in Canada, including those risks described in Couche-Tard’smanagement’s discussion and analysis (MD&A) for the year ended April 24, 2016. Couche-Tard’s MD&A and other publicly filed documents are available onSEDAR at www.sedar.com.
Unless otherwise required by law, Couche-Tard does not undertake to update any forward-looking statement, whether written or oral, that may be made fromtime to time by it or on its behalf.
While the information contained in this presentation is believed to be accurate, Couche-Tard expressly disclaims any and all liability for any losses, claims ordamages of whatsoever kind based upon the information contained in, or omissions from, this presentation or any oral communication transmitted inconnection therewith. In addition, none of the statements contained in this presentation are intended to be, nor shall be deemed to be, representations orwarranties of Couche-Tard and its affiliates. Where the information is from third-party sources, the information is from sources believed to be reliable, butCouche-Tard has not independently verified any of such information contained herein.
This presentation is not, and under no circumstances is to be construed as, a prospectus, an offering memorandum, an advertisement or a public offering ofsecurities. Under no circumstances should the information contained herein be considered an offer to sell or a solicitation of an offer to buy any securities. Thispresentation does not constitute a solicitation of any vote or approval.
2
HIGHLIGHTS OF THE TRANSACTION
3
StrategicImportance
• Unique opportunity to acquire one of few remaining potential North American public targets exceeding 1,000 stores
• ACT to exceed 10,000 North American stores (including Esso Canada) providing ACT with even more scale and leverage to create brand awareness and take advantage of merchandise and fuel procurement opportunities
Acquisition Rationale
• US operating model strongly aligned with ACT North America model – Company-operated retail sites
• Strong geographic and strategic fit• Strong entry into growing Texas market with 600+ sites. Texas is one of the fastest growing market in the US
• Fills in last remaining void in Southeast US with CST’s acquisition of Flash Foods in Georgia and Florida
• Opportunity to strengthen ACT’s network in Colorado, Arizona, Quebec and Ontario
• Talent acquisition and outstanding cross-learning potential
• Significant and valuable real estate portfolio
• Potential to leverage CST’s existing MLP structure
Significant SynergyPotential
• Additional convenience sales and fuel volume present top-line upside
• Significant efficiency gains through sharing of business awareness and best practices
• Cost optimization through combination of two large and successful companies
• Optimization of supply conditions through ACT’s procurement strategy
• Optimization of distribution strategy• Elimination of redundant costs
Rank Chain Name No. of Stores#1 7-Eleven 8,273 #2 Couche-Tard/Circle K 7,276 #3 Speedway 2,770 #4 Casey’s General Stores 1,896 #5 CST Brands/Corner Store 1,318 #6 Aplus, MACS/Tigermarket, Stripes, Aloha (Sunoco Inc.) 1,309 #7 Murphy USA, Murphy Express 1,296 #8 ampm 970 #9 Kroger: Turkey Hill, Kwik Shop, Quik Stop, etc. 790
#10 Suncor Energy: Petro-Canada, Neighbours, SuperStop 750 Source: 2016 CSP Convenience Top 101
TRANSACTION SUMMARY
4
• Alimentation Couche-Tard Inc. (“ACT”) has entered into a merger agreement to acquire 100% of the outstanding shares of CST Brands Inc. (“CST”) by merger, representing a total enterprise value of US$4.43 billion or approximately US$4.28 billion excluding the value of CST’s equity participation in CrossAmerica Partners LP (“CAPL”)
• CST shareholders to receive a cash consideration of US$48.53 per share • Implied CST EBITDA multiple of 10.4x pre-synergies (1), 7.0X to 7.6x post-synergies (1)
• Transaction is expected to generate between US$150M and US$200M in pre-tax annual cost synergies to be realized 24-36 months after closing• Merger expected to be accretive to earnings within the first year post closing – 40-50 cents EPS accretion expected within third year post closing• Couche-Tard expects to finance the purchase of CST, including the refinancing of a portion of CST’s existing indebtedness through:
• Capacity under existing revolving credit facilities • New acquisition debt financing consisting of term loans of which a portion will be termed-out over time
• Provides ACT control over CAPL’s General Partner, ownership of associated Incentive Distribution Rights and equity stake of ~20% in CAPL• CAPL is a distributor of branded and unbranded petroleum for motor vehicles in the United States
• Following acquisition of CST, ACT will sell a majority of CST’s Canadian assets to Parkland Fuel Corporation for approximately US$750M• Strong value creation through:
• Significant EPS accretion• Strong free cash flow generation• Continued capacity to invest in existing business• ACT’s usual discipline which will allow for rapid deleveraging and adequate positioning to seize future investment opportunities
• The transaction is subject to CST shareholders approval, to customary regulatory approvals and to closing conditions. We anticipate that the CST transaction will close early calendar year 2017
(1) Pro forma the Flash Foods acquisition, the California and Wyoming sale of assets and adjusted for non-recurring expenses. Excluding CrossAmerica Partners LP.(2) All financial information in this presentation is in US dollars, except if otherwise indicated(3) All information in this presentation exclude CrossAmerica Partners LP, except if otherwise indicated
ALIMENTATION COUCHE-TARD INC.
ALIMENTATION COUCHE-TARD OVERVIEW
ACT SNAPSHOT
6
• Listed on the Toronto Stock Exchange ATD.B
• Market Cap CA$35B
• Revenues US$34.1B Fiscal Year 2016
• Gross Profit US$6.0B Fiscal Year 2016 (+15.4%)
• EBITDA US$2.3B Fiscal Year 2016 (+24.3%)
• Number of stores North America Europe International
12,0217,8882,6591,474
• Net Debt / EBITDA Leverage FY 2016 US$2.3B / 0.97x
• Ratings S&P Moody’s
BBBBaa2
Our mission is to offer ourcustomers a fast and friendly serviceby developing a warm andcustomized relationship with them,while finding ways to pleasantlysurprise them on a daily basis
Couche-Tard’s vision is to becomethe world’s preferred destination forconvenience and fuel
We strive to meet the demands andneeds of people on the go. We offerfood, hot and cold beverages, carwash services, road transportationfuel and other high quality productsand services designed to meet orexceed customers’ demands in aclean, welcoming and efficientenvironment
COMPANY HIGHLIGHTS• Leading C-store operator in North America, Scandinavia, Ireland and Baltics• Multiple banners (Couche-Tard, Circle K, Mac’s, Ingo, Statoil, Kangaroo Express and Topaz) that will be rebranded to the strong
and well-established Circle K banner (except Couche-Tard in Québec, Canada) to drive traffic and sales• World class Canadian retailer with most geographically diversified footprint
Broad Geographic Footprint with Leading Market Positions
• Increasing focus on private label, fresh food products and famous for concepts• Industry leading merchandise gross marginSuperior Product Offerings
• Proven ability to integrate acquisitions (More than 5,900 stores from 52 acquisitions since Circle K in 2003, including SFR, ThePantry and Topaz)
• Well positioned to lead further consolidation in fragmented industry• Committed to remain investment grade post acquisition
Track Record of Highly Disciplined Growth and Debt Reduction
•Steady industry performance throughout downturns with strong projected growth•C-store sector well positioned to gain share from traditional food retail•Industry-leading returns in recession
Attractive Sector Dynamics
•Strong and consistent financial performance throughout all economic cycles•Prolific history of positive same-store comps and 27% Return on equity•Significant FCF generation (2011-2016) CAGR of 23%
Powerful Financial Results
•Proven ability to extract significant synergies from acquisitions•Transferring best practices across entire platformAttractive Synergy Potential
•Management team with strong track record and founders have 23% equity ownership as of April 24, 2016•Management and Board need to hold a multiple of their salary in Shares•Decentralized operating model
Disciplined Management Culture
7
Leader in the Canadian convenience store industry
Largest independent convenience store operator in the US in terms of number of company operated stores
As of April 24, 2016.
North America network of 7,888 stores increasing to ~8,200 stores pro forma for the acquisition of 279 from Imperial Oil in Canada
NORTH AMERICAN NETWORK
8
Leader in convenience store and road transportation fuel retail in the Scandinavian and Baltic countries and Ireland.
As of April 24, 2016.
2,659 stores in 9 countries or regions in Europe
EUROPEAN NETWORK
9
INTERNATIONAL PRESENCE
10As of April 24, 2016.
Almost 1,500 licensed Circle K stores in Asia, Costa Rica, Egypt, Honduras, Mexico and U.A.E
647 734 841
1,3761,640
1,876
2,332
2010 2011 2012 2013 2014 2015 2016
2,553 2,746 2,975
4,610 4,988 5,2686,082
2010 2011 2012 2013 2014 2015 2016
ACT - HISTORY OF STRONG FINANCIAL PERFORMANCE
(in millions of US Dollars) (in millions of US Dollars)
(1) Free Cash Flow defined as: EBITDA minus total CAPEX (excluding price paid for acquisitions), net dividends paid, net interests paid and net income taxes paid plus proceeds from disposal.
Gross Profit(in millions of US Dollars) 16% CAGR
11
Proven track record of significant growth
Same Store Sales2010 2011 2012 2013 2014 2015 2016
Merchandise SalesUS 2.9% 4.2% 2.7% 1.0% 3.8% 3.9% 4.6%Europe - - - - 1.6% 2.0% 2.8%Canada 4.8% 1.8% 2.8% 2.0% 1.9% 3.4% 2.9%
Motor Fuel VolumeUS 1.0% 0.7% 0.1% 0.6% 1.7% 3.4% 6.6%Europe - - - - 2.5% 2.4% 2.6%Canada 3.0% 3.9% (0.9%) 0.0% 1.3% (0.1%) 0.9%
EBITDA Free Cash Flow (1)
24% CAGR
278378 404
614
865979
1,067
2010 2011 2012 2013 2014 2015 2016
25% CAGR
ACT - PROVEN TRACK RECORD OF SUCCESSFUL ACQUISITIONS
12
(1) Represents Total Debt/ Adjusted EBITDA. Presented on a pro forma basis. (2) Including full-year results for Statoil Fuel & Retail. Refer to the Corporation’s MD&As for more details.(3) Adjusted for non-recurring items. Refer to the Corporation’s MD&As for more details.(4) Pro forma The Pantry for 2015 and Topaz for 2016.
ACT – SUMMARY OF REALIZED COST SYNERGIES – MATERIAL ACQUISITIONS
13
Statoil Fuel & Retail The PantryCircle KObjective $150-$200MRealized >$200M
24-month objective $112MIdentified after 13 months $92MRealized after 13 months $82M
Objective >$50MRealized >$87M
Track record of delivering and even surpassing our cost synergies
objectives
Pantry synergies exclude fuel supply synergies from the
rebranding of more than 1,000 stores in the Southeast US
On track to meet our 24-month objective
ACT - EXCEPTIONAL DELEVERAGING TRACK RECORD
14
• ACT committed to maintaining a strong balance sheet and sustaining its investment grade credit rating
• Track record of rapid deleveraging after landmark acquisitions
(1) Pro forma The Pantry(2) Pro forma Topaz.
4.2
3.0 2.5
3.2 3.2 2.9 2.7 2.1 2.1
3.6 3.1
2.4 2.2 2.0
F2004 F2005 F2006 F2007 F2008 F2009 F2010 F2011 F2012 Pro Forma F2013 F2014 F2015 (1) F2016 (2)
Adj.
Net
Deb
t / A
dj. E
BIT
DAR
Circle K Acquisition No Transformational Acquisition SFR Acquisition The PantryAcquisition
2,453 Stores Acquired 1,017 Stores Acquired2,299 Stores
Acquired 1,547 Stores AcquiredRapid deleveraging
after transformational
acquisitionStrong credit metrics for several years
Leverage post SFR acquisition lower than
Circle K$3.6B
Acquisition $1.7B Acquisition
$804MAcquisition
ALIMENTATION COUCHE-TARD INC.
CST OVERVIEW
16
CST OVERVIEW
Gross Profits (2)
51%45%
4%
Merch. & Serv. Fuel Others
73%
27%
US Canada
• CST operates as an independent retailer of motor fuel and convenience in the United States and Eastern Canada• US public company (NYSE ticker: CST) with a market capitalization of ~ $3.4B• Fuel offer mainly branded Valero in the US and Ultramar in Canada• Convenience offer mainly branded Corner Store in the US and Dépanneur du
Coin/Corner Store in Canada• 4th largest chain in North America, with
• 1,146 locations in the US (1)
• 873 locations in Canada + Commercial & Home Heat business• Owns underlying real estate for approximately 1,000 sites (800 in the US and 200 in
Canada) (1)
• Last-twelve month period ended June 30, 2016 reported EBITDA of US$433M• In February 2016, CST acquired Flash Foods for $425M:
• 165 stores in Georgia and Florida• In July 2016, CST sold 79 stores in California and Wyoming for $408M• CST owns an investment in CrossAmerica Partners LP, an MLP focused on fuel
wholesale and property rental• CST controls the general partner of CrossAmerica Partners LP and owns 100% of
the Incentive Distribution Rights• CST holds a 19% equity/economic stake worth ~ $150 million
Total Per Site
Motor fuel gallons (2) 3.0 billion ~1.5 million
Merchandise sales (2) $2.0 billion ~$1.3 million
(1) As of June 30, 2016, Pro forma sale of 79 California and Wyoming sites. Excludes CrossAmerica Parners LP.(2) LTM June 30, 2016, Pro forma sale of 79 California and Wyoming sites and acquisition of Flash Foods. Excludes CrossAmerica Parners LP.
CST RETAIL NETWORK
17
US Network
Canadian Network
1,146 company operated
sites
-305 company operated sites
-72 cardlock sites-496 commission
agents sites
As of June 30, 2016. US Network pro forma sale of 79 sites in California and Wyoming.
ALIMENTATION COUCHE-TARD INC.
PRO FORMA PROFILE
PRO FORMA NORTH AMERICA FOOTPRINT
19
• COUCHE-TARD US: 6,052 Canada: 1,836
• CST (1)
US: 1,140 Canada: 873 (2)
• Esso Canada Ontario: 229 Quebec: 50
• Total US: 7,192 Canada: 2,988 North America: 10,180
CST acquisition will allow ACT to further diversify its operations and cash flow with a stronger presence in Texas, a fast growing and business friendly state.
57
648
137
37
231
26
15
150
179
32
154
536
(1) As of June 30, 2016, pro forma sale of California and Wyoming sites. Excludes CrossAmerica Parners LP
(2) Not taking into account subsequent sale of certain Canadian assets(3) CST site count on map is as of December 31, 2015 , pro forma sale of
California and Wyoming sites. Does not take into account subsequent sale of certain Canadian assets
Revenues 38.4 9.3 47.7
% of total 81% 19% 100%
GP 6.5 1.3 7.8
% of total 83% 17% 100%
Adj. EBITDA 2.5 0.4 2.9
Store network 12,453 (3) 2,013 14,466 83%
14%3%
PRO FORMA PROFILE - FINANCIAL
20
Couche-Tard to strengthen its leadership position as a global convenience store operator with pro forma EBITDA of $2.9B
(billions of US Dollars)At ClosingPro Forma
Pre-synergies EBITDA Contribution
5%
(1) Couche-Tard Fiscal 2016 results pro forma the acquisition of Shell Denmark, Topaz and Esso Canada.(2) CST LTM financial results as at June 30, 2016 pro forma the acquisition of Flash Foods and divesture of 79 sites in California and Wyoming.
Excludes CrossAmerica Partners LP and the anticipated effect of the sale of certain Canadian assets.(3) Includes Couche-Tard’s Company-Owned/Dealer-Operated and Dealer-Owned/Dealer-Operated sites.
(1)(2)
CROSSAMERICA PARTNERS LP
CST controls the general partner of CrossAmerica Partners LP (CAPL) Ticker: NYSE-CAPL – Market cap of approx. $800M (1)
Formed in 2012, CAPL is a distributor of branded and unbranded petroleum for motor vehicles in the United States and distributes fuel to more than 1,100 locations and owns or leases more than 800 sites. CAPL’s footprint geographic footprint covers 29 states
CAPL is a key component of CST’s growth strategy and provides for added optionality to fund its expansion
CST owns ~20% of CAPL common units – ~6.5 million units – Value of ~$150M (1)
CST owns 100% of the CAPL Incentive Distribution Rights (IDRs) IDRs provide CST with disproportionate cash flow as partnership distributions increase to “incent” the general partner to run and
grow the operations and increase cash flow to its unitholders
Sources of income for CST Cash distributions ~ $15M
IDR income paid in CAPL units ~ $2.6M
ACT believes it has the tools and resources to optimize the value to its shareholders
21(1) Based on CAPL closing unit price as of August 15, 2016., the day preceding rumors in the medias about ACT being the winning bidder for CST.
MAJORITY OF CST’S CANADIAN SITES TO BE SOLD TO PARKLAND
In order to divest non-core business and to address possible overlap in Canada, ACT has entered into a binding agreement with a Parkland Fuel Corporation (“Parkland”) to sell a large portion of CST’s Canadian assets for approximately $750M. Preliminary scope of the sale transaction includes: The Commercial & Home Heat business All of the Cardlock business All of the dealers and commission agents business A portion of the company operated stores network (number of sites to be determined following review by the Competition
Bureau)
Parkland to assume all of CST Canada SG&A costs and liabilities, except for retained SG&A costs and liabilities
Parkland to take on most of CST Canada employees, except for retained employees Parkland has committed financing Overall, the transaction is expected to allow ACT to reduce its leverage and debt The transaction is subject to customary regulatory approvals and closing conditions and is expected to
close 3 to 6 months after the closing of the CST transaction
22
ALIMENTATION COUCHE-TARD INC.
INTEGRATION & FORECASTS
Evaluate talent pool and secure
key employees
Sale of CST Canadian
assets
Integrate operations &
eliminate redundant
costs
Integrate support
functions, technology
and systems & eliminate redundant
costs
Roll-out key programs–Polar Pop,
Simply Great Coffee,
ATMs, etc.
Rebrand to Circle K/
Couche-Tard
Transfer CST to existing
ACT non-fuel agreements
to unlock procurement
synergies
Re-negotiate ACT existing agreements to leverage increased
scale
Review distribution
strategy
INTEGRATION STRATEGY
24
Well planned and efficient integration strategy – Similar to The Pantry
Build optimal strategy for CrossAmerica Partners LP
$150M-$200M in
pre-tax cost
synergies
Merchandise Supply Costs
Fuel Sourcing & Distribution
Costs
Operating Expenses
and Overhead
AREAS OF SYNERGIES
25
FORECASTS
986 798
1,208 1,437 1,489 1,544
FY16 Y1 Y2 Y3 Y4 Y5
Adj. Free cash flow (1)(3)
9% CAGR
26
2.0
3.5 3.1
2.6 2.2
1.8 1.4
FY16 PF Y1 Y2 Y3 Y4 Y5
Leverage (2)(3)
(1) Adjusted EBITDA minus total CAPEX (excluding price paid for acquisitions), net dividends paid, net interests paid and net income taxes paid plus proceeds from disposal.
(2) Adjusted net debt / EBITDAR. Adjusted net debt defined as total debt plus 8 times net rent expense less cash.(3) Before the anticipated effect of the sale of certain Canadian assets.
Strong cash flow coupled with disciplined capital allocation and debt repayment to provide financial flexibility and ample room for continued growth
ACT anticipates EPS accretion to reach 40 to 50 cents during the third year following the acquisition
PROVEN RECORD OF DISCIPLINED DEBT PAYDOWN
27
• At close, pro forma leverage expected to stand at 3.5x(3) (Adjusted Net Debt / Adjusted EBITDAR)• Combined company expected to benefit from strong free cash flow generation & robust EBITDA growth• Scalable capital expenditure allows flexibility to achieve deleveraging plan• Management targets reaching an Adjusted Net Debt/EBITDAR ratio of 2.6x within 18-24 months after closing
(1) Pro forma The Pantry(2) Pro forma Topaz.(3) Rent capitalized at 8.0x.EBITDAR adjusted for non-recurring items. Refer to Couche-Tard’s MDA for more details.(4) Assuming transaction closed April 24 2016. Including the annualized contribution of FY2016/FY2017 Couche-Tard acquisitions. Before the anticipated effect of the sale of certain
Canadian assets.
Couche-Tard is committed to reducing its Adj. Net Debt / EBITDAR below 3.0x within 24 months
4.2
3.0 2.5
3.2 3.2 2.9 2.7 2.1 2.1
3.6 3.1
2.4 2.2 2.0
3.5
2.6
F2004 F2005 F2006 F2007 F2008 F2009 F2010 F2011 F2012 Pro Forma F2013 F2014 F2015 (1) F2016 (2) Pro Forma (4) 18-24 months
Adj.
Net
Deb
t / A
dj. E
BIT
DAR
Circle K Acquisition No Transformational Acquisition SFR Acquisition The PantryAcquisition
CST & EssoAcquisitions
2,453 Stores Acquired 1,017 Stores Acquired 2,299 Stores Acquired
1,547 Stores Acquired
2,298 Stores Acquired
Rapid deleveraging after
transformational acquisition
Strong credit metrics for several yearsLeverage post SFR
acquisition lower than Circle K
$3.6 B Acquisition
$1.7 B Acquisition
$804 MAcquisition
$6.0 B Acquisitions
ALIMENTATION COUCHE-TARD INC.
FINANCING PLAN
FINANCING
Transaction financing needs of ~$4.8 billion (including acquisition costs), funded throughCapacity under ACT’s existing credit facilitiesNew acquisition financing consisting of term loans – three tranches with 1, 2 and 3 years terms
ACT expects to repay for the term loans throughProceeds from the sale of Canadian assetsProceeds from sale of other non-core assetsTerm out to the bonds marketFree cash flow
Financing strategy will allow Access to capital at competitive conditions Flexibility to repay debt rapidly Capacity to modulate debt maturities
29
Competitive, well balanced and flexible financing structure
PROJECTED MATURITY PROFILE AFTER BOND ISSUANCE AND SALEOF CANADIAN ASSETS
FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 FY 28 FY 29 FY 30
ACT senior unsecured notes ACT revolving credit New term loans Other debt & cap. leases Net swaps CAD Bonds US Bonds
30
Well spread maturities will allow ACT to optimize its financial flexibility
ALIMENTATION COUCHE-TARD INC.
CONCLUSION
KEY TAKEAWAYS
32
Strategic acquisition will allow ACT to unlock growth, efficiency opportunities and value
•CST & CAPL provide unique/rare sizeable opportunity in the US•Increased scale advantage and brand awareness•Great geographic fit•Talent acquisition and cross-learning opportunity
Rationale
•Efficient integration through ACT’s scalable infrastructure•Run rate synergies of $150M-$200M – Realized within 3 years•Incremental top-line growth opportunities•Strong cash flow generation will allow ACT to continue to invest for growth
Integration & Growth
•EPS accretion in year 1 – 40-50 cents EPS accretion within 3rd year•Strong free cash flow generation•Continued investment in existing business•Usual discipline will allow ACT to deleverage rapidly and position itself to seize investment opportunities
Value Creation
ALIMENTATION COUCHE-TARD INC.
APPENDIX
PRO FORMA PROFILE – GROSS PROFITS BREAKDOWN
34
Canada 12%
United States63%
Europe 25% Canada 27%
United States73%
Canada 100%
Pro Forma
By Geography
By Products Merch. &
Services 55%
Fuel42%
Others3%
Merch. & Services
51%Fuel45%
Others4%
Couche-Tard to strengthen presence in Canada and United States markets
TBD
(1) FY 2016 pro forma Topaz and Shell Denmark.(2) CST LTM June 30, 2016, pro forma Flash Foods acquisition and sale of California/Wyoming sites. Excludes CrossAmerica Partners LP and the
anticipated effect of the sale of certain Canadian assets.
Canada 17%
United States63%
Europe 20%
Merch. & Services
52%
Fuel44%
Others4%Merch. &
Services 1%
Fuel68%
Others31%
(1) (2)
CST VALUATION SUMMARY(million US dollars unless otherwise indicated)
Price per share 48.53
Number of diluted shares (millions) 77.9
Equity value 3,780
CST debt as of June 30, 2016 1,312
Expected cash proceeds from sale by CST of its California and Wyoming stores (408)
CST cash as of June 30, 2016 (193)
Cash from exercise of CST stock options (63)
CST enterprise value 4,428
Value of equity investment in CrossAmerica Partners LP (150)
CST enterprise value, net of equity investment in CrossAmerica Partners LP 4,278
LTM PF corporate EBITDA multiple (1) 10.4x
35
(1) LTM June 30, 2016, pro forma Flash Foods acquisition and sale of California and Wyoming stores. Adjusted for $9M in non-recurring items.
PRO FORMA ADJUSTED LEVERAGE – ADJUSTED NET DEBT / EBITDAR
ACT Pro Forma April 24, 2016 (1) CST Transaction (2) Pro forma
Debt 4,343 4,746 9,089
Rent 390 47 437
Rent capitalization (8 X rent) 3,120 376 3,496
Adjusted debt 7,463 5,122 12,585
Cash 599 193 792
Adjusted net debt 6,864 4,929 11,793
Adjusted EBITDA 2,522 412 2,934
Rent 390 47 437
EBITDAR 2,912 459 3,371
Ratio 2.4 - 3.5
36
(1) Pro forma Topaz, Shell Denmark, Esso Canada acquisitions(2) As of June 30, 2016, Pro forma Flash Foods acquisition and sale of California/Wyoming stores. EBITDA adjusted for $9M in non-recurring items.
Excludes CrossAmerica Partners LP and the anticipated effect of the sale of certain Canadian assets.