Crossamerica Partners Lp · NYSE:CAPL
Crossamerica Partners Lp — Investor Presentation (July 2017)
32 slides from Crossamerica Partners Lp's investor presentation, Jul 19, 2017
Slide 1: Investor Update July 2017
Investor Update July 2017 Exhibit 99.1
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: CrossAmerica Overview
c.P (CROSSAMERICA PARTNERS LP CrossAmerica Overview Investor Update July 2017
Slide 4: CrossAmerica Partners LP Overview
CrossAmerica Partners LP Overview Master limited partnership and leading wholesale fuels distributor, convenience store lessor, and c-store operator Distributes annually over 1 billion gallons of fuel Annual gross rental income over $80 million Operates 75 convenience stores 17.5% equity interest in
Slide 5: History of Growth: Over $800 Million in Acquisitions
2012 Dunmore Oil Acquisition (Pennsylvania) Express Lane Acquisition (Florida) 2013 Rocky Top Acquisition (Tennessee) Rogers Acquisition (Tennessee) 2014 2014 2015 2016 Manchester Acquisition (Virginia) Atlas Acquisition (Chicago) Landmark Industries Acquisition (Texas) Dropdown of 5% interest in CS
Slide 6: Drivers of Cash Flow
Drivers of Cash Flow Segment Gross Profit(1) Category Gross Profit(1) (1) Presented before intersegment eliminations. In addition, Rent is combined for the Wholesale and Retail Segments. 2016 $113 million $43 million $63 million $30 million $54 million 2015 $104 million $65 million $50 million $42 m
Slide 7: Financial Summary
Financial Summary(1) (1) See the (i) reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow (DCF) to net income and (ii) the definitions of EBITDA, Adjusted EBITDA and DCF in the appendix of this presentation.
Slide 8: Circle K-CST Merger Update
PARTNERS LP Circle K-CST Merger Update Investor Update July 2017
Slide 9: Circle K Overview
Circle K Overview(1) As of July 12, 2017 As of June 30, 2017. Excludes recently announced agreement to acquire Holiday StationStores Inc, comprising 522 stores in the US Circle K is the global convenience brand of Alimentation Couche-Tard Inc. (“Couche-Tard”) Based in Laval, Quebec, Canada Largest i
Slide 10: Transaction Overview
Transaction Overview Couche-Tard acquired CST Brands on June 28, 2017 Includes assets related to CrossAmerica Circle K, a subsidiary of Couche-Tard Organizational Relationship Upon Closing Couche-Tard controls the general partner of CrossAmerica Couche-Tard owns 21% of CrossAmerica limited partner u
Slide 11: Vision & Strategy
Vision & Strategy Couche-Tard Vision To become the world’s preferred destination for convenience and fuel CrossAmerica’s Strategy A leader in the wholesale distribution of motor fuels and leasing of fuel retail real estate, CrossAmerica is committed to serving our customers while increasing the valu
Slide 12: Step 1: Organizational Alignment
Step 1: Organizational Alignment Circle K US Wholesale Supply Business Wholly owned by Circle K, operates under the National Wholesale Fuels “NWF” name through nine distinct business units National presence, with regional concentration on the West Coast, Midwest and throughout the South CrossAmerica
Slide 13: Step 1: Organizational Alignment
Step 1: Organizational Alignment Leverage each organization’s strengths and operate as one, national wholesale distribution organization – CrossAmerica Partners LP Will continue to be headquartered out of Allentown, PA Management and board composition Executive Officers Jeremy Bergeron, President an
Slide 14: Step 1: Organizational Alignment
Step 1: Organizational Alignment We expect to achieve over $10 million in annual cost synergies at CrossAmerica Half in the first year and the remainder in the following three years Combining organizations and centralizing functions Strengthening relationships with many of our key fuel, equipment an
Slide 15: Step 2: Simplify Structure
Step 2: Simplify Structure Key part of the strategy is to simplify the two businesses to Retail Operations at Circle K and Wholesale Operations at CrossAmerica Provide clear understanding, and line-of-sight, with how EBITDA is earned in each organization and growth will occur Unwind cash flow entang
Slide 16: Step 3: Execute Growth Strategy
Step 3: Execute Growth Strategy CrossAmerica will have a long runway of growth opportunities through third party M&A strategy and dropdowns Third party M&A greatly enhanced with Circle K alignment Acquisition of Circle K non-core retail sites National Wholesale Fuels Acquisition of initial interest
Slide 17: Step 3: Execute Growth Strategy
Step 3: Execute Growth Strategy Distribution growth CrossAmerica has grown distributions for 12 consecutive quarters Will continue to grow, with pace of growth dependent upon market conditions and financing strategy Incentive Distribution Rights Currently at 25% split-level Will continue to monitor
Slide 18: Summary of Benefits
Summary of Benefits Continuity with a sponsor whose management culture is aligned with CrossAmerica Immediate organizational alignment captures synergies and maximizes talent and offerings within both organizations Simplify cash flow structure to maximize qualified income and provide clear line-of-s
Slide 19: Appendix
PARTNERS LP Appendix Investor Update July 2017
Slide 20: 2016 Highlights
2016 Highlights Acquisitions 31 stores acquired from S/S/G Corp (Franchised Holiday Stores), approx. 26 million annual fuel gallons 55 lessee dealer and 25 independent dealer accounts acquired from State Oil, approx. 60 million annual gallons Portfolio Optimization Continued dealerization process wi
Slide 21: Growth Drivers
Growth Drivers Capital Discipline Executed M&A strategy with two accretive acquisitions in 2016 Leveraged real estate with sale-leaseback transaction Unlocked additional capacity with credit facility enhancements Sustaining CapEx of less than $1 million in 2016 Portfolio Optimization 77 sites dealer
Slide 22: Overview of Business Segments
Overview of Business Segments Wholesale Fuels Distributor Convenience Store Lessor Convenience Store Operator Purchase and sale of wholesale motor fuel Distribute branded and unbranded fuel (83% of the motor fuel we distributed in 2016 was branded) Distribute motor fuel to over 1,200 sites located i
Slide 23: Wholesale Segment
Wholesale Segment Wholesale Fuel Supply Averaged 5.2 cpg in 2016 on 1.04 billion gallons Historically averaged 5-7 cpg margin Fluctuates based on value of prompt-payment discounts and other factors, including dealer-tank-wagon margins Supply Contracts 83% of supply contracts are branded supply and e
Slide 24: Wholesale Segment – Fuel
Wholesale Segment – Fuel Fuel Volume Distributed by Brand (2016, gallons in millions) UNBRANDED Distributed 1.04 billion gallons of motor fuel in 2016 71% increase from IPO year of 2012 OTHER BRANDS
Slide 25: Wholesale Segment – Rent
Wholesale Segment – Rent Rental Income (annuity stream) has become a sizable portion of cash flow contribution We own nearly 60% of all sites from which we generate rental income Gross Rental Income grew 25% from 2015 to 2016 Own convenient fueling locations in areas of high consumer demand Many of
Slide 26: Retail Segment
Retail Segment Own/Lease and Operate 76 Convenience Stores(1) All located in Minnesota and Wisconsin Operate under three store brands FreedomValu, Holiday, or SuperAmerica Merchandise and Services In 2016, averaged sales of $3,790 pspd at 24.6% margin Ongoing process to convert retail sites to lesse
Slide 27: Portfolio Optimization
Portfolio Optimization Continued focus on managing expenses and execution of our integration strategy Divested of low-margin, high-expense commercial fuels business acquired with PMI acquisition Divestiture was cash flow positive despite 80 million gallon reduction of wholesale fuel supply Continue
Slide 28: Operating Results
Operating Results Operating Results (in thousands, except for per gallon and site count) 2016 2015 % Change WHOLESALE Motor Fuel Distribution Sites (period avg.) 1,128 1,064 6% Volume of Gallons Distributed 1,034,585 1,051,357 (2%) Wholesale Fuel Margin per Gallon $0.052 $0.056 (7%) Sites Generating
Slide 29: Executing with Measured Growth
Executing with Measured Growth Declared distribution attributable to first quarter of $0.6175 per unit 0.5 cent per unit increase over distributions attributable to fourth quarter 2016 Increased annual per unit distribution by 6% for 2016 over 2015 Continue to target a long-term distribution coverag
Slide 30: Additional Information: 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 Q1 2017 Distribution = $0.6175, on an annual basis = $2.47 Incentive Distribution Rights If cash distributions to our unitholders exceed $0.5031 per unit in any quarter, C
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Financial Measures We use non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net income available to us before deducting interest expense, income taxes and depreciation, amortization and
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation The following table presents reconciliations of EBITDA, Adjusted EBITDA, and Distributable Cash Flow to net income, the most directly comparable U.S. GAAP financial measure, for each of the periods indicated (in thousands, except for per unit amounts): Year Ended December 31,
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