Crossamerica Partners Lp · NYSE:CAPL
Crossamerica Partners Lp — Investor Presentation (September 2015)
25 slides from Crossamerica Partners Lp's investor presentation, Sep 14, 2015
Slide 1: Investor Update
c.P CROSSAMERICA PARTNERS LP Investor Update INVESTOR UPDATE © 97135) 2015
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements contained in this presentation that state the Partnership’s or management’s expectations or predictions of the future are forward-looking statements. The words “believe,” “expect,” “should,” “intends,” “estimates,” “target” and other similar expressions identify forw
Slide 3: Partnership Overview
Partnership Overview • Leading motor fuel wholesale distributor, convenience store lessor and c-store operator – Distribute annually over 1 billion gallons – 17.5% equity interest in CST Brands’ wholesale fuels business – CST Brands’ wholesale fuels business is comprised of approximately 1.9 billion
Slide 4: Investment Highlights
Investment Highlights • Serial acquirer and integrator of convenience store and fuel distribution assets – Proven track record of executing on accretive transactions – over $300 million in past 16 months • Acquisition pipeline of assets from general partner sponsor – CST Brands – 82.5% of CST US fue
Slide 5: Growing Distributions
Growing Distributions • On August 24, 2015, announced a 1.5¢ increase to the quarterly distribution per unit, raising the quarterly distribution to $0.5625 per unit – The Partnership has grown distributions per unit 9 out of its first 10 full quarters • All future distribution announcements expected
Slide 6: MLP Current Yield vs. Distribution CAGR
MLP Current Yield vs. Distribution CAGR ___________________________ Note: Market data as of 8/28/2015. Source: Company filings and Wall Street Research. 5% 6% 7% 8% 9% 10% 11% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% WNRL WPT SUN CAPL PBFX DKL SRLP NS GEL NGL HEP BKEP TLP GLP LQA Yield Future Distribu
Slide 7: 2Q15 vs 2Q14 Financial Performance
2Q15 vs 2Q14 Financial Performance • 2Q15 Adjusted EBITDA of $19.1 million vs 2Q14 Adjusted EBITDA of $17.1 million(1) • Contribution of $6.9 million from 3rd party acquisitions • Contribution of $1.2 million from acquisition of 5% interest in CST US fuel supply business • $3.5 million impact from r
Slide 8: Cash Flow Stability
Cash Flow Stability (1) Includes predecessor company • Crude Oil Impact – Portion of our wholesale margin is generated from payment discounts based on market price of wholesale gasoline, which generally follows crude prices – Our cash flow is partially stabilized by the opposite effect that crude oi
Slide 9: Terms Discount vs Retail Margin
$- $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 $0.45 $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 FUEL RETAIL M AR G IN C R U D E O IL 2014 Crude Oil Spot Price and Fuel Retail Margin Crude Oil (WTI Spot Price, per
Slide 10: Wholesale Fuel Supply
Wholesale Fuel Supply APPROX. 1.0 BILLION GALLONS (TTM) • Third party dealers • CST operated locations obtained via acquisitions • CrossAmerica company operated CrossAmerica Base Business and Future Acquisitions • Wholesale supply of fuel has grown to 1 billion gallons per year • Accretive, acquisit
Slide 11: CrossAmerica Equity Ownership in CST Fuel Supply LP
CST Fuel Supply LP Equity CST US Stores 17.5% CrossAmerica Ownership CrossAmerica Equity Ownership in CST Fuel Supply LP APPROX. 1.9 BILLION GALLONS (TTM) • As of July 1, 2015, CST Fuel Supply LP (“CST FS”) supplied fuel to 1,009 CST US stores – Comprised of all CST US stores, with the exception of
Slide 12: Real Estate Growth
Real Estate Growth • Rental Income has become a sizable portion of cash flow contribution – In the first half of 2015, Net Rental Income, net of rent expense on subleased properties, totaled approximately $16 million – We own nearly 60% of all sites from which we generate rental income • We own conv
Slide 13: Acquisition & Integration Strategy
Acquisition & Integration Strategy • For retail assets that are deemed core to CST’s operational strategy and will maximize CrossAmerica’s cash flow, prepare those assets to be transitioned to CST operations Grow EBITDA Prepare Assets for CST Core Operations Acquire strong, profitable businesses at
Slide 14: Key Financial Metrics
Three months ended June 30, % Change 1Q15 Adjusted EBITDA, $mm $19.1 $17.1 12% $15.6 Distributable Cash Flow, $mm $14.3 $13.5 6% $10.1 Wholesale Gross Profit, $mm $21.5 $21.3 1% $21.1 Retail Gross Profit, $mm $16.8 $5.7 195% $14.1 Distributable Cash Flow per LP Unit $0.5692 $0.7195 (21%) $0.4106 Dis
Slide 15: Financial Stability
Financial Stability 15 Mar 31, 2015 (Per 10-Q) Jun 30, 2015 (Per 10-Q) One Stop Acquisition Drop Down Transactions(1) Pro Forma at July 1, 2015 Consolidated Debt, $mm $406.2 $274.3 $41.9 $141.9 $458.1 Less: Cash & Cash Equivalents, $mm ($4.8) ($4.6) ( $4.6) Net Debt, $mm $401.4 $269.7 $453.5 Amount
Slide 16: Investment Summary
Investment Summary • Stable cash flow business with manageable exposure to commodity market fluctuations, even during historically volatile times • Visible path to continued DCF growth through sponsor drop downs, third party acquisitions and operational excellence • Unit price significantly below in
Slide 17: Appendix
Appendix 17
Slide 18: 1Q15 vs 1Q14 Financial Performance
1Q15 vs 1Q14 Financial Performance • 1Q15 Adjusted EBITDA of $15.6 million vs 1Q14 Adjusted EBITDA of $11.3 million(1) • Contribution of $8.3 million from 3rd party acquisitions • Contribution of $1.1 million from acquisition of 5% interest in CST US fuel supply business • $2.7 million impact from r
Slide 19: Recent Acquisitions and Rationale
• Strong margin (5 cpg) with high volume and long-term supply • Leverage existing relationship with Shell • Good rental income • CST operated sites 22 CST Lessee Dealer Sites $41.2 Million Purchase 41 Million Gallons* San Antonio & Austin Shell Jan 8, 2015 close date Asset Purchase Rationale (From L
Slide 20: Prior Acquisitions and Rationale
• Strong fuel margin (6 cpg) with long-term fuel supply • Good rental income •Minimal expense and CapEx impact • CST operated sites 25 CST Dealer Sites (Fuel Income) 23 CST Fee Sites (Rental Income) $53.6 Million Purchase 40 Million Gallons* Central New York Nice N Easy Nov 1, 2014 close date Asset
Slide 21: Acquisition Accretion Assumptions
Acquisition Accretion Assumptions • Leverage-neutral calculation based on ProForma EBITDA, assuming a 4.0x debt-to-EBITDA coverage • Remaining purchase price assumed funded by equity – Issue price adjusted for public equity issuance discount and fees • Accretion calculation assumes all incremental c
Slide 22: Incentive Distribution Rights
Additional Information: • $0.5031 on an annual basis = $2.01 • $0.5469 on an annual basis = $2.19 • $0.6563 on an annual basis = $2.63 • Q4 2014 Dividend = $0.5325, on an annual basis = $2.13 Incentive Distribution Rights 22 100% 85% 75% 50% 15% 25% 50% up to $0.5031 above $0.5031 up to $0.5469 abov
Slide 23: LGO Contractual Adjustments
LGO Contractual Adjustments Sale of Wholesale Fuel Supply Contracts and Assignment of Leases to DMI The Partnership, DMI and LGO consummated a series of transactions pursuant to which DMI acquired, for an aggregate purchase price of $5.7 million and an earn-out in the amount of $0.8 million if DMI r
Slide 24: Non-GAAP Financial Measures
Non-GAAP Financial Measures 24 Three Months Ended March 31, 2015 Three Months Ended March 31, 2014 Three Months Ended June 30, 2015 Three Months Ended June 30, 2014 Net income (loss) available to CrossAmerica limited partners $ (3,136) $ 1,397 $ (165) $ 1,861 Interest expense 4,278 4,027 4,743 3,712
Slide 25: Non-GAAP Financial Measures Supplemental Disclosure
Non-GAAP Financial Measures Supplemental Disclosure Regarding Non-GAAP Financial Measures We use the non-GAAP financial measures EBITDA, Adjusted EBITDA, and Distributable Cash Flow in this presentation. EBITDA represents net income before deducting interest expense, income taxes and depreciation, a
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