agreement to acquire cst brands inc. - Couche-Tard

ALIMENTATION COUCHE-TARD INC.

AGREEMENT TO ACQUIRE CST 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. Forwardlooking statements are typically identified by words such as “projected”, “estimate”, “may”, “anticipate”, “believe”, “expect”, “plan”, “intend” or similar words suggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact contained in these slides are forwardlooking statements. Forward-looking statements involve numerous assumptions, risks and uncertainties. A variety of factors, many of which are beyond Alimentation Couche-Tard Inc.’s (“Couche-Tard”) control, may cause actual results to differ materially from the expectations expressed in its forward-looking statements. These factors include, but are not limited to, the effects of the integration of acquired businesses and the ability to achieve projected synergies, fluctuations in margins on motor fuel sales, competition in the convenience store and retail motor fuel industries, foreign exchange rate fluctuations, and such other risks as described in detail from time to time in documents filed by Couche-Tard with securities regulatory authorities in Canada, including those risks described in Couche-Tard’s management’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 on SEDAR 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 from time 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 or damages of whatsoever kind based upon the information contained in, or omissions from, this presentation or any oral communication transmitted in connection therewith. In addition, none of the statements contained in this presentation are intended to be, nor shall be deemed to be, representations or warranties of Couche-Tard and its affiliates. Where the information is from third-party sources, the information is from sources believed to be reliable, but Couche-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 of securities. Under no circumstances should the information contained herein be considered an offer to sell or a solicitation of an offer to buy any securities. This presentation does not constitute a solicitation of any vote or approval.

2

HIGHLIGHTS OF THE TRANSACTION Strategic Importance

Acquisition Rationale

• 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

Rank

Chain Name 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

3

No. of Stores

#1

• US operating model strongly aligned with ACT North America model – Companyoperated 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 crosslearning potential • Significant and valuable real estate portfolio • Potential to leverage CST’s existing MLP structure

Significant Synergy Potential • 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

TRANSACTION SUMMARY •

• • •

• • •

•

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) (2) (3)

4

Pro forma the Flash Foods acquisition, the California and Wyoming sale of assets and adjusted for non-recurring expenses. Excluding CrossAmerica Partners LP. All financial information in this presentation is in US dollars, except if otherwise indicated All information in this presentation exclude CrossAmerica Partners LP, except if otherwise indicated


ALIMENTATION COUCHE-TARD OVERVIEW

ACT SNAPSHOT •

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

12,021

   •

Europe

2,659

International

1,474

FY 2016

US$2.3B / 0.97x

Ratings

 

6

7,888

Net Debt / EBITDA Leverage

 •

North America

S&P

BBB

Moody’s

Baa2

Couche-Tard’s vision is to become the world’s preferred destination for convenience and fuel Our mission is to offer our customers a fast and friendly service by developing a warm and customized relationship with them, while finding ways to pleasantly surprise them on a daily basis We strive to meet the demands and needs of people on the go. We offer food, hot and cold beverages, car wash services, road transportation fuel and other high quality products and services designed to meet or exceed customers’ demands in a clean, welcoming and efficient environment

COMPANY HIGHLIGHTS Broad Geographic Footprint with Leading Market Positions Superior Product Offerings Track Record of Highly Disciplined Growth and Debt Reduction

• Increasing focus on private label, fresh food products and famous for concepts • Industry leading merchandise gross margin

• Proven ability to integrate acquisitions (More than 5,900 stores from 52 acquisitions since Circle K in 2003, including SFR, The Pantry and Topaz) • Well positioned to lead further consolidation in fragmented industry • Committed to remain investment grade post acquisition

Attractive Sector Dynamics

•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

Powerful Financial Results

•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%

Attractive Synergy Potential

Disciplined Management Culture

7

• 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

•Proven ability to extract significant synergies from acquisitions •Transferring best practices across entire platform

•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

NORTH AMERICAN NETWORK Leader in the Canadian convenience store industry Largest independent convenience store operator in the US in terms of number of company operated stores

North America network of 7,888 stores increasing to ~8,200 stores pro forma for the acquisition of 279 from Imperial Oil in Canada As of April 24, 2016.

8

EUROPEAN NETWORK

Leader in convenience store and road transportation fuel retail in the Scandinavian and Baltic countries and Ireland.

2,659 stores in 9 countries or regions in Europe As of April 24, 2016.

9

INTERNATIONAL PRESENCE

Almost 1,500 licensed Circle K stores in Asia, Costa Rica, Egypt, Honduras, Mexico and U.A.E As of April 24, 2016.

10

ACT - HISTORY OF STRONG FINANCIAL PERFORMANCE Gross Profit (in millions of US Dollars)

Same Store Sales

16% CAGR 6,082 4,988

4,610

2,553

2010

2,746

2011

5,268

2010 Merchandise Sales US 2.9% Europe Canada 4.8%

2011

2012

2013

2014

2015

2016

4.2% 1.8%

2.7% 2.8%

1.0% 2.0%

3.8% 1.6% 1.9%

3.9% 2.0% 3.4%

4.6% 2.8% 2.9%

Motor Fuel Volume US 1.0% Europe Canada 3.0%

0.7% 0.1% 0.6% 3.9% (0.9%) 0.0%

1.7% 2.5% 1.3%

3.4% 2.4% (0.1%)

6.6% 2.6% 0.9%

2,975

2012

2013

2014

2015

2016

EBITDA (in millions of US Dollars)

Free Cash Flow

(1)

(in millions of US Dollars)

24% CAGR

25% CAGR 2,332 979

1,876 1,640 1,376 647

734

2010

2011

614

841 278 2012

2013

2014

2015

2016

2010

378

404

2011

2012

2013

2014

Proven track record of significant growth (1)

11

1,067

865

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.

2015

2016

ACT - PROVEN TRACK RECORD OF SUCCESSFUL ACQUISITIONS

12

(1) (2) (3) (4)

Represents Total Debt/ Adjusted EBITDA. Presented on a pro forma basis. Including full-year results for Statoil Fuel & Retail. Refer to the Corporation’s MD&As for more details. Adjusted for non-recurring items. Refer to the Corporation’s MD&As for more details. Pro forma The Pantry for 2015 and Topaz for 2016.

ACT – SUMMARY OF REALIZED COST SYNERGIES – MATERIAL ACQUISITIONS

Circle K Objective Realized

>$50M >$87M

Statoil Fuel & Retail Objective Realized

$150-$200M >$200M

Track record of delivering and even surpassing our cost synergies objectives 13

The Pantry 24-month objective Identified after 13 months Realized after 13 months

$112M $92M $82M

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 • ACT committed to maintaining a strong balance sheet and sustaining its investment grade credit rating • Track record of rapid deleveraging after landmark acquisitions

Adj. Net Debt / Adj. EBITDAR

Circle K Acquisition 2,453 Stores Acquired

1,017 Stores Acquired

Rapid deleveraging after transformational acquisition

Strong credit metrics for several years

$804M Acquisition

14

2,299 Stores Acquired Leverage post SFR acquisition lower than Circle K $3.6B Acquisition


$1.7B Acquisition

4.2 3.6 3.2

3.0

3.2

2.9

2.5

F2004

(1) (2)

The Pantry Acquisition

SFR Acquisition

No Transformational Acquisition

Pro forma The Pantry Pro forma Topaz.

F2005

F2006

F2007

F2008

F2009

3.1

2.7

F2010

2.1

2.1

F2011

F2012

2.4

Pro Forma

F2013

F2014

2.2

2.0

F2015 (1)

F2016 (2)


CST OVERVIEW

CST OVERVIEW •

•

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

•

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:

•

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

•

4% 27% 45%

51%

73%

165 stores in Georgia and Florida

•

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

(1) (2)

16

Gross Profits (2)

4th largest chain in North America, with

Merch. & Serv.

Fuel

Others

US

Canada

Total

Per Site

Motor fuel gallons (2)

3.0 billion

~1.5 million

Merchandise sales (2)

$2.0 billion

~$1.3 million

As of June 30, 2016, Pro forma sale of 79 California and Wyoming sites. Excludes CrossAmerica Parners LP. 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

US Network

1,146 company operated sites

Canadian Network

-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.

17


PRO FORMA PROFILE

PRO FORMA NORTH AMERICA FOOTPRINT • 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

536 154

137

179 32

57 150 37

(2) (3)

26

648

2 31

19

(1)

15

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.

As of June 30, 2016, pro forma sale of California and Wyoming sites. Excludes CrossAmerica Parners LP Not taking into account subsequent sale of certain Canadian assets 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

PRO FORMA PROFILE - FINANCIAL

Couche-Tard to strengthen its leadership position as a global convenience store operator with pro forma EBITDA of $2.9B

(2) (billions of US Dollars)

Revenues

(1)

At Closing Pro Forma

38.4

9.3

47.7

81%

19%

100%

6.5

1.3

7.8

% of total

83%

17%

100%

Adj. EBITDA

2.5

0.4

2.9

12,453 (3)

2,013

14,466

% of total

Pre-synergies EBITDA Contribution

5%

3% GP

Store network (1) (2) (3)

Couche-Tard Fiscal 2016 results pro forma the acquisition of Shell Denmark, Topaz and Esso Canada. 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. Includes Couche-Tard’s Company-Owned/Dealer-Operated and Dealer-Owned/Dealer-Operated sites.

20

14%

83%

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

(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.

21

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:    

22

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


INTEGRATION & FORECASTS

INTEGRATION STRATEGY

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

Build optimal strategy for CrossAmerica Partners LP

Well planned and efficient integration strategy – Similar to The Pantry 24

Review distribution strategy

AREAS OF SYNERGIES Merchandise Supply Costs

Operating Expenses and Overhead

25

$150M$200M in pre-tax cost synergies

Fuel Sourcing & Distribution Costs

FORECASTS

Leverage (2)(3)

Adj. Free cash flow (1)(3) 9% CAGR 1,437

1,489

3.5

1,544

3.1 2.6

1,208 986

2.2

2.0

1.8

798

FY16

Y1

1.4

Y2

Y3

Y4

Y5

FY16

PF

Y1

Y2

Y3

Y4

Y5

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 (1)

26

(2) (3)

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. Adjusted net debt / EBITDAR. Adjusted net debt defined as total debt plus 8 times net rent expense less cash. Before the anticipated effect of the sale of certain Canadian assets.

PROVEN RECORD OF DISCIPLINED DEBT PAYDOWN 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

• • • •

Adj. Net Debt / Adj. EBITDAR

Circle K Acquisition

No Transformational Acquisition




Rapid deleveraging after transformational acquisition

Strong credit metrics for several years

$804 M Acquisition

The Pantry Acquisition

SFR Acquisition

CST & Esso Acquisitions


$3.6 B Leverage post SFR Acquisition acquisition lower than Circle K

2,298 Stores Acquired $6.0 B Acquisitions

$1.7 B Acquisition

4.2 3.6 3.2

3.0

3.2

2.9

2.5

F2004

F2005

F2006

F2007

F2008

F2009

F2010

3.5 3.1

2.7 2.1

2.1

F2011

F2012

2.4

Pro Forma

F2013

F2014

2.6 2.2

2.0

F2015 (1)

F2016 (2)

Pro Forma (4)

Couche-Tard is committed to reducing its Adj. Net Debt / EBITDAR below 3.0x within 24 months

27

(1) (2) (3) (4)

Pro forma The Pantry Pro forma Topaz. Rent capitalized at 8.0x.EBITDAR adjusted for non-recurring items. Refer to Couche-Tard’s MDA for more details. 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.

18-24 months


FINANCING PLAN

FINANCING 

Transaction financing needs of ~$4.8 billion (including acquisition costs), funded through Capacity under ACT’s existing credit facilities New acquisition financing consisting of term loans – three tranches with 1, 2 and 3 years terms



ACT expects to repay for the term loans through Proceeds from the sale of Canadian assets Proceeds from sale of other non-core assets Term out to the bonds market Free cash flow



Financing strategy will allow  Access to capital at competitive conditions  Flexibility to repay debt rapidly  Capacity to modulate debt maturities

Competitive, well balanced and flexible financing structure 29

PROJECTED MATURITY PROFILE AFTER BOND ISSUANCE AND SALE OF 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

Well spread maturities will allow ACT to optimize its financial flexibility

30


CONCLUSION

KEY TAKEAWAYS

Rationale

Integration & Growth

Value Creation

•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

•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 •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

Strategic acquisition will allow ACT to unlock growth, efficiency opportunities and value

32


APPENDIX

PRO FORMA PROFILE – GROSS PROFITS BREAKDOWN (1)

(2)

Canada 12%

Europe 25%

By Geography

United States 63%

Canada 100%

TBD

United States 73%

United States 63%

Others 4%

Others 31%

Fuel 45%

Others 4%

Merch. & Services 1%

Fuel 42% Merch. & Services 55%

Fuel 44%

Merch. & Services 51% Fuel 68%

Couche-Tard to strengthen presence in Canada and United States markets (1) (2)

34

Canada 17%

Europe 20%

Canada 27%

Others 3%

By Products

Pro Forma

FY 2016 pro forma Topaz and Shell Denmark. 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.

Merch. & Services 52%

CST VALUATION SUMMARY (million US dollars unless otherwise indicated)

Price per share 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

(1) LTM June 30, 2016, pro forma Flash Foods acquisition and sale of California and Wyoming stores. Adjusted for $9M in non-recurring items.

35

48.53

PRO FORMA ADJUSTED LEVERAGE – ADJUSTED NET DEBT / EBITDAR ACT Pro Forma April 24, 2016 (1) 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

599

193

792

Adjusted net debt

6,864

4,929

11,793

Adjusted EBITDA

2,522

412

2,934

390

47

437

2,912

459

3,371

2.4

-

3.5

Rent EBITDAR

Ratio

36

Pro forma

Debt

Cash

(1) (2)

CST Transaction (2)

Pro forma Topaz, Shell Denmark, Esso Canada acquisitions 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.