Parkland to Acquire Chevron Canada s Downstream Fuel Business

Transcription

1 Parkland to Acquire Chevron Canada s Downstream Fuel Business Transformational Acquisition Strengthens a Premier and Diversified Fuels Marketing Company and Enhances Canada-wide Network April 18, 2017

2 FORWARD LOOKING INFORMATION Certain information included herein is forward-looking. Many of these forward looking statements can be identified by words such as believe, expects, expected, will, intends, projects, projected, anticipates, estimates, continues, "objective" or similar words and include, but are not limited to, statements regarding Parkland s expectation of its future financial position, business and growth strategies and objectives, sources of growth, capital expenditures, financial results, future financing and the terms thereof, future acquisitions and the efficiencies to be derived therefrom, Parkland's leverage pro forma the CCL Transaction (as defined in this presentation), Normalized EBITDA (as defined herein) of the business acquired in the CCL Transaction, future projections of Normalized Run-rate EBITDA, the contribution to EBITDA and/or Adjusted EBITDA, and/or Normalized EBITDA from the CCL Transaction, the pro forma site counts, volumes, and gross margins expected to be derived from the CCL Transaction and, where applicable the CST Acquisition, potential synergies associated with the CST and CCL Transactions (as defined in this presentation) and the amount thereof, sources of financing for the CCL Transaction, and pro forma leverage. Unless otherwise stated or the context dictates otherwise, the financial outlook and forward looking metrics contained in this presentation exclude potential import/export synergies and are based on the following assumptions, as applicable, including but not limited to: (i) Parkland securing sufficient supply of crude oil, including sufficient access to linespace on the Trans Mountain pipeline; (ii) refining and marketing margins in Metro Vancouver, Vancouver Island, and the BC Interior remaining consistent with historic norms; (iii) conducting the 2018 Turnaround (as defined in this presentation) as planned in Q1 2018; (iv) maintaining the assets within the forecasted budget for capital expenditures, particularly those relating to the Burnaby Refinery (as defined herein); (v) operating the Burnaby Refinery with no unplanned extended outage; (vi) operating the Burnaby Refinery at a utilization rate within historic norms, including in respect of fluctuations of refining gross margins, and planned maintenance downtime and associated expenses. Parkland believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements should not be unduly relied upon. The forward-looking statements contained herein are based upon certain assumptions and factors including, without limitation: historical trends, current and future economic and financial conditions, and expected future developments. Parkland believes such assumptions and factors are reasonably accurate at the time of preparing this presentation. However, forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties some of which are described in Parkland s annual information form and other continuous disclosure documents. Such forward-looking statements necessarily involve known and unknown risks and uncertainties and other factors, which may cause Parkland s actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward looking statements. Such factors include, but are not limited to, risks associated with: the failure to achieve the anticipated benefits of acquisitions, including the acquisition of Chevron Canada R&M ULC (the "CCL Transaction") of which the assets include: i) 129 Chevron branded retail service stations, ii) 37 cardlock locations, iii) a wholesale aviation business serving the Vancouver International Airport, and iv) terminals located in Burnaby, Hatch Point, and Port Hardy (collectively, the Marketing Business ) which are integrated with and supported by a refinery in Burnaby, British Columbia (the Burnaby Refinery and together with the Marketing Business, the Acquired Business ); the acquisition of the majority of the Canadian assets of CST Brands, Inc. ( CST ) from Alimentation Couche-Tard Inc. (the CST Transaction ); the operations of the Burnaby Refinery Assets including compliance with all necessary regulations; competitive action by other companies; refining and marketing margins; the ability to cost-effectively secure sufficient supply of crude oil and other raw materials, including sufficient access to linespace on the Trans Mountain pipeline; the ability of suppliers to meet commitments; the ability to conduct the 2018 Turnaround (as defined in the presentation) as planned in Q1 2018; the ability of management to maintain the assets within the forecasted budget for capital expenditures, particularly those relating to the Refinery; the ability to maintain productive relationships with the labour union (Unifor and Teamsters) that represent the majority of the employees at the Burnaby Refinery; failure to obtain necessary regulatory or other third party consents and approvals required to complete the CST Transaction and/or CCL Transaction; failure to complete the CCL Transaction and/or the CST Transaction, failure to complete the subscription receipt offering, ability to secure alternative sources of funding to the bridge facility on terms acceptable to Parkland, failure to meet financial, operational and strategic objectives and plans; general economic, market and business conditions; industry capacity, failure to realize anticipated synergies from CST Transaction and/or CCL Transaction; the operations of Parkland s assets, competitive action by other companies; the ability of suppliers to meet commitments; actions by governmental authorities and other regulators including increases in taxes; changes and developments in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. There is a specific risk that Parkland may be unable to complete the CCL Transaction in the manner described in this press release or at all. If Parkland is unable to complete the CCL Transaction there could be a material adverse impact on Parkland and on the value of its securities. Readers are directed to, and are encouraged to read, Parkland's management discussion and analysis for the year ended December 31, 2016 (the "MD&A"), including the disclosure contained under the heading "Risk Factors" therein. The MD&A is available by accessing Parkland's profile on SEDAR at and such information is incorporated by reference herein. This presentation refers to certain financial measures that are not determined in accordance with International Financial Reporting Standards ( IFRS ). Adjusted EBITDA, Distributable Cash Flow, Distributable cash flow per share, Payout Ratio, Earnings Per Share, Normalized EBITDA, Normalized Run-rate EBITDA, Senior Funded Debt and Total Funded Debt to Credit Facility EBITDA are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. Normalized EBITDA is management s estimate of the annualized five-year average EBITDA of the Acquired Business post-2018 Turnaround, based on the annualized average historical EBITDA of the Acquired EBITDA from and is subject to the material factors and assumptions noted above as well as management s assumptions regarding: i) crude oil costs and refined product pricing for the future period (refined product pricing is driven by refined product supply and demand in Metro Vancouver); and ii) expenses in connection with routine turnarounds temporarily increase operating expenses and decreases throughput and revenue. Management considers these to be important supplemental measures of Parkland s performance and believes these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in its industries. Normalized EBITDA in respect of the assets acquired in the CCL Transaction has been determined in a manner consistent with the manner in which Parkland determines EBITDA for reporting purposes over the periods referred to. See Non-GAAP financial measures, reconciliations and advisories section of the MD&A. Investors are encouraged to evaluate each adjustment and the reasons Parkland considers it appropriate for supplemental analysis. Readers are cautioned, however, that these measures should not be construed as an alternative to net income determined in accordance with IFRS as an indication of Parkland s performance. The financial measures that are not determined in accordance with IFRS in this presentation are expressly qualified by this cautionary statement. Additionally, the estimated annual Adjusted EBITDA contribution from the assets Parkland will acquired pursuant to the CCL Transaction and/or business acquired in the CST Transaction is based on the financial statements of CCL and CST respectively, which were prepared in accordance with United States (U.S.) generally accepted accounting principles (U.S. GAAP) and converted to Canadian dollars at averaged historical exchange rates on a quarterly basis. Additionally, readers are directed to, and encouraged to read, the 2017 Adjusted EBITDA Guidance Range section of Parkland's press release dated March 2, 2017 and material factors and assumptions contained therein. Parkland believes its estimation of annual Adjusted EBITDA, Adjusted Gross Profit, and Distributable Cash Flow per share based on such information is reasonable but no assurance can be given that these expectations will prove to be correct and such figures should not be unduly relied upon. Any forward-looking statements are made as of the date hereof and Parkland does not undertake any obligation, except as required under applicable law, to publicly update or revise such statements to reflect new information, subsequent or otherwise. The forward looking statements contained in this presentation are expressly qualified by this cautionary statement. 2

3 THE LARGEST ACQUISITION IN PARKLAND'S HISTORY Purchase Price Acquired Assets Synergies and Accretion Financing Structure C$1,460 million (1) to acquire 100% of the shares of Chevron Canada R&M, from Chevron Canada Limited ( CCL ) which includes its western Canadian retail, commercial, wholesale and fuel supply assets (the CCL Business ) plus C$186 million to acquire the estimated net working capital (the CCL Transaction ) Purchase multiple of ~6.3x the Normalized EBITDA of C$230 million (2) or a multiple of ~5.3x Normalized EBITDA including run-rate synergies of ~C$273 million (3) Retail and Commercial : Chevron-branded retail service stations principally located in Metro Vancouver - 37 cardlock stations across British Columbia and Alberta - 3 marine fuel service stations in Metro Vancouver Supply and Wholesale: - Simple 55,000 bpd refinery with a low Nelson Complexity of 9.1 (4) in Burnaby, BC running light / sweet Canadian crude; supplies 85% of the volume for the CCL Business - Three terminals in Metro Vancouver (Burnaby) and on Vancouver Island (Hatch Point and Port Hardy) - Aviation business serving the Vancouver International Airport ("YVR") Total identified annual run-rate synergies of C$35 million to C$50 million 30%+ accretion to 2016 adjusted distributable cash flow per share including run-rate synergies (5) Fully underwritten financing package including (6) : - C$660 million private placement of common shares; - C$268 million draw on revolving credit facility; - C$500 million bridge facility which Parkland intends to replace with alternative longer term debt; and - C$40 million in cash flow from operations. Furthermore, Parkland intends to enter into an intermediation agreement in the amount of C$258 million Pro forma leverage at close of 3.5x with ~C$200 million of liquidity and cash (1) Approximate Canadian dollar equivalent of US$1,100 million in base purchase price at the current exchange rate of C$1.33 : US$1.00. (2) Management s estimate of C$230 million of Normalized EBITDA is the forecasted contribution from the CCL Business pre-synergies. This figure incorporates factors that fluctuate year to year including (i) refining gross margins, (ii) and planned maintenance downtime and associated expenditures. The C$230 million estimate is less than the actual EBITDA generated by these assets for both FY2016 and the trailing five year average. (3) At mid-point of identified annual run-rate synergies of C$43 million, excluding estimated net working capital. (4) Nelson Complexity Index is an industry metric for quantifying and ranking the complexity of various refineries and units. (5) Distributable cash flow per share calculation compares (A) Parkland (including the CST Transaction) Pro Forma the CCL Transaction (C$2.80) to (B) Parkland Pro Forma CST Transaction (C$2.15) both including run-rate synergies. (6) Including estimated one-time transaction costs of C$80 million. 3

4 ACQUIRING THESE RETAIL, COMMERCIAL, WHOLESALE AND SUPPLY ASSETS IS HIGHLY ALIGNED WITH PARKLAND S STRATEGY Strategic Rationale for the CCL Transaction Parkland s Strategy 1 Acquire the strongest Retail, Commercial, and Wholesale businesses in BC with exclusive use of the Chevron brand (1) to facilitate continued organic growth GROW ORGANICALLY SUPPLY ADVANTAGE 2 Acquire the premier Supply assets in the BC market, which are ideally matched with the Retail, Commercial, and Wholesale businesses ACQUIRE PRUDENTLY 3 Own key supply infrastructure (terminals, and refinery with pipeline access) to further build Parkland s supply advantage and facilitate Parkland s marine and pipeline logistics capabilities 4 The CST and CCL Transactions provide significant opportunity for Parkland to achieve material synergies and create substantial value 4 (1) Exclusivity does not include lubricants.

5 WITH THE CST AND CCL TRANSACTIONS, PARKLAND SOLIDIFIES ITS POSITION AS CANADA S LARGEST FUEL RETAILER BY SITE COUNT Parkland Pro Forma the CST and CCL Transactions Strategic Outcomes GROW ORGANICALLY SUPPLY ADVANTAGE Retail Service Stations Corporate (1)(2) Dealer (3) 1,258-1,258 Total 1, ,834 Commercial Cardlock Locations Marine Service Stations Supply and Wholesale Refining Operations Terminal Operations Bulk Fuel Sales Aviation Fuel Sales Combined Annual Fuel Volume Annual Fuel Volume (BL) 14.0 (4) Aggregate % change +29% +8% +24% +18% ACQUIRE PRUDENTLY Largest Canadian fuel marketer by site count with network spanning across the country 2 nd largest convenience store operator in Canada Entry into new attractive markets in BC, including a strong urban footprint (1) Includes Company Owned Retailer Operated sites ("CORO") and Company Owned Company Operated sites ("COCO"). (2) Assumes 140 estimated COCO sites from the CST Transaction. CST COCO locations are estimated and actual locations of COCO sites will not be known until closing of the CST Transaction. (3) Includes approximately 490 estimated consigned dealers / agents which will be added upon closing of the CST Transaction. (4) Includes Parkland volume of 10.5BL as at December 31, 2016 and estimated CST volume of 3.5BL. CST volume is estimated and actual fuel volume will depend on the number of COCO sites acquired which will not be known until closing of the CST Transaction. 5

6 PARKLAND IS COMMITTED TO ACHIEVING C$60-C$75 MILLION COMBINED SYNERGIES FROM CST AND CCL TRANSACTIONS Overall Implications for Parkland Timing Expected to close in 2Q17 Expected to close in 4Q17 Normalized Run-rate EBITDA of ~C$660 million in 2019 (1) Geography Ontario / Quebec / Atlantic Canada British Columbia Pan-Canadian marketing presence Synergies Leverage the strongest brand in Quebec Increase scale and optimization Leverage the strongest brand in British Columbia Improve site productivity and operating efficiencies Combined run-rate synergies of C$60-C$75 million anticipated to be achieved in the next 36- months C$25 million (2) C$35 C$50 million (2) Additional Opportunities Leverage supply optionality across CST network Leverage west coast logistics assets Enhanced supply and brand optionality across network (1) Normalized Run-rate EBITDA includes: 2016 Adjusted EBITDA (C$254 million) + the mid-point of management's guidance range of EBITDA contribution from the CST Transaction (C$110 million) + management estimates of the anticipated run-rate synergies from the CST Transaction (C$25 million) + management estimates of Normalized EBITDA from the CCL Transaction (C$230 million) + management estimates of the mid-point of anticipated run-rate synergies from the CCL Transaction (C$43 million). (2) Based on management estimates and on annual Adjusted EBITDA on a pro forma basis assuming acquisitions maintain historical performance and Parkland is able to implement synergies consistent with past performance. 6

7 THE CCL TRANSACTION ENHANCES PARKLAND S SUPPLY ADVANTAGE Parkland Supply Strategy Strategic Outcomes GROW ORGANICALLY SUPPLY ADVANTAGE Outcome Create Advantaged Supply ACQUIRE PRUDENTLY Secures the best source of supply for the BC market Key Strategies Exploit Market Inefficiencies Partner of Choice for Refiners Infrastructure ownership gives optionality as market evolves Provides access to scarce tidewater import/export assets Enablers Infrastructure Rail / Truck/ Marine Import / Exports Demand Planning Balance Sheet Balanced Barrel Volume Growth Develops Parkland s marine logistics capability Expands capabilities to additional products (e.g., jet fuel, intermediates) Optionality Scale 7

8 PARKLAND WILL OWN AND OPERATE CHEVRON-BRANDED RETAIL, CARDLOCK, AND MARINE STATIONS IN BC Retail and Commercial Business Investment Highlights Acquired Assets 129 Chevron-branded service stations primarily in Metro Vancouver; complements Parkland's 44 existing Chevronbranded service stations for a total of 173 across BC Parkland secures long-term exclusive use of the Chevron brand (1) and Supreme Plus 94 octane gasoline The retail service station network benefits from industryleading per-site throughputs and total fuel sales in BC Retail Service Stations Annual fuel volume of ~950 ML 129 CORO sites principally in Metro Vancouver 91% of sites owned (9% leased) Strategic relationship with Triple O branded Quick Serve Restaurants; 21 locations throughout BC 10 on-site car washes The cardlock network expands Parkland's BC road transport cardlock network and will complement the Ultramar branded network in Eastern Canada once the CST Transaction closes The marine service stations expand Parkland s existing service offerings in BC Cardlock Network Marine Service Stations Annual fuel volume of ~330 ML 37 cardlocks across BC and AB Annual fuel volume of ~40 ML Three marine fueling stations ~1,320 ML in incremental annual Retail and Commercial fuel volume 8 (1) Exclusivity does not include lubricants.

9 THE CCL TRANSACTION ENHANCES PARKLAND'S CANADIAN RETAIL FOOTPRINT WITH A PREMIER URBAN MARKET BC Locations by Marketer Legend: Legend: Acquired retail locations (1) YT NT Existing footprint (more concentrated) (2) Existing footprint (less concentrated) (2) NU BC AB SK MB QC NL ON PEI NB NS (1) Parkland will also acquire three cardlock locations in Alberta. (2) Pro forma estimate for CST Transaction. Number and location of COCO sites is estimated and will not be finalized until the closing of the CST Transaction. 9

10 THE CHEVRON-BRANDED STATIONS ARE WELL POSITIONED FOR FUTURE GROWTH IN THESE MARKETS The Chevron brand is a leader among consumer preferences in British Columbia % Respondents Indicating Preferred Retailer (1) with a best-in-class premium fuel mix driven by its unique offer of 94 Octane Supreme Plus % Fuel Volume as Premium (2) 20% 18% 18% 11% 16% 10% 13% 8% 12% 7% 8% 7% 4% 6% (1) Source Ipsos survey in BC: Of the fuel retailers visited in the past 6 months, which one do you prefer to go to most often?. (2) Kent Marketing data; includes both 91 octane Premium and 94 octane Supreme Plus. 10

11 THE INTEGRATED NATURE OF THIS BUSINESS CREATES THE STRONGEST FUEL NETWORK IN BC 1 Refinery Supply Matches Marketing Demand 85% of production sold through proprietary channels 4 2 Local Refining Supply Secures supply Important Source of Premium Gasoline Self-source 94 Octane in BC Reinforces High Quality Chevron Brand Drives high throughput volumes 3 11

12 SUPPLY AND WHOLESALE ASSETS ARE UNIQUE AND HIGHLY VALUABLE WITH A TRACK RECORD OF OPERATIONAL EXCELLENCE Keystone Supply and Wholesale Investment Highlights Supply Assets in western Canada Burnaby Refinery in Metro Vancouver is ideally located to serve the BC market Zama Strong stewardship under CCL ownership since 1935 Main Crude Oil Pipelines Other Crude Oil Pipelines Taylor Rainbow Lake Low complexity refinery with track record of highly reliable operations Trans Mountain Pipeline CCL Crude Line from Burnaby Terminal Prince George Fort McMurray Access to cost advantaged sources of crude through the Trans Mountain Pipeline Trans Mountain Jet Fuel Pipeline Edmonton Over 90% of the refinery output is high-value products; primarily gasoline, diesel and jet fuel Dedicated fuel supply to support existing Chevronbranded locations and future organic growth opportunities Burnaby Refinery KM Westridge Marine Terminal Vancouver International Airport KM Burnaby Terminal Port Hardy Vancouver Hatch Point Burnaby Anacortes Sundre Kamloops Cutbank Source of Supreme Plus 94 octane gasoline sold throughout BC Burnaby, Hatch Point, and Port Hardy terminals are integrated with Burnaby Refinery and the Retail, Commercial, and Wholesale businesses Aviation fuel and terminal bulk sales facilitated by infrastructure co-located at terminals 12

13 NORMALIZED EBITDA ACCOUNTS FOR THE CYCLICALITY OF REFINING MARGINS AND SCHEDULED DOWNTIME Though the USWC (1) is an attractive refining market, crack spreads have shown volatility over time US$ / bbl Like all refineries, the Burnaby Refinery goes through scheduled downtime (turnarounds) that impact in-year EBITDA C$ Exceptional USGC margins due to heavy discounts on inland crude USGC (2) Burnaby Refinery forecast turnaround expenditures USWC (3) Exceptional USWC margins due to outage at Torrance Refinery In 2018 and 2020, the Burnaby Refinery is expected to go undergo larger than normal turnarounds 5-year Average $18.70 $ year Average Normalized EBITDA accounts for variability The Burnaby Refinery s annual profitability is expected to experience variability because of cyclicality inherent to the refining industry Annual EBITDA can fluctuate due to volatility in the underlying refining margins and turnaround maintenance; Normalized EBITDA accounts for this variability, and is an estimate of average future profitability The C$230 million forecasted EBITDA contribution from the CCL Transaction is a Normalized figure that incorporates variability from refining margins and turnaround expenditures (1) The USWC refining market represents a relevant public benchmark for the Burnaby refinery, however, refining margins in Burnaby are also impacted by other factors that are not applicable the USWC. (2) Yearly average of U.S. Gulf Coast 321 crack spread, calculated using WTI Cushing, U.S. Gulf Prompt 87 Octane, and U.S. Gulf No. 2 Oil. Sourced from Bloomberg (CRKS321C Index). (3) Yearly average of U.S. West Coast 321 crack spread, calculated using Alaskan North Slope (ANS), Los Angeles 85.5 Octane, and Los Angeles LS Diesel. Sourced from Bloomberg (CRKS321A Index). 13

14 BURNABY REFINERY IS SCHEDULED TO UNDERGO A MATERIAL TURNAROUND IN Refineries undergo periodic turnarounds to upgrade operating units and perform scheduled maintenance 2 While some minor turnaround activity may occur each year, material turnarounds generally only occur every five or ten years 3 4 The Burnaby Refinery is scheduled for a material turnaround in Q ("2018 Turnaround") that is expected to last eight weeks and cost an incremental C$100 million (1) (some costs will be incurred in 2017 prior to close) During the 2018 Turnaround, the Burnaby Refinery will have a lower throughput and incur higher costs than an average year. As a result, 2018 results are expected to be below Normalized EBITDA guidance 5 Planning for the turnaround is already well underway and key turnaround personnel will transition with the asset. Parkland will also receive technical assistance from CCL / Chevron post close 14 (1) The vast majority of the 2018 turnaround expenditure is accounted for as an operating expense and is not capitalized, thus will impact EBITDA during the year in which it is incurred.

15 THREE CATEGORIES OF SYNERGIES HAVE BEEN IDENTIFIED RESULTING IN C$35M TO C$50M OF IDENTIFIED RUN-RATE SYNERGIES (1) Synergies are focused on supply and operation opportunities Operations Reduce direct and indirect costs (e.g., transportation, c- store buying, and retail station maintenance) through integration with existing Parkland network and implementation of best practices Improve same-site revenue through improvements to retail, cardlock, and bulk customer offers Identified opportunities to increase refinery profitability by enhancing energy efficiency and streamlining operations Back Office Savings on costs allocated from global operations to better align the business with local needs and to implement Parkland s back office systems Supply Enable supply and trading opportunities through west coast tidewater storage and terminal capabilities Normalized EBITDA including run-rate synergies (Amounts in C$ millions) ~$273 Range of $35 50 $43 $35 $230 $230 Run-rate synergies are estimated between C$35 million to C$50 million with a mid point of ~C$43 million Normalized EBITDA Run-rate synergies Normalized EBITDA including run-rate synergies (1) Based on management estimates and on annual Adjusted EBITDA on a pro forma basis assuming acquisitions maintain historical performance and Parkland is able to implement synergies consistent with past performance. Excludes terminal import / export synergies. C$42.5 million is the midpoint of identified synergies of C$35 million and C$50 million. 15

16 PARKLAND HAS PROVEN INTEGRATION CAPABILITIES AND HAS THE CAPACITY TO MANAGE THE CCL TRANSACTION Successful track record of completing acquisitions and a proven framework for synergy realization Proven Framework for Synergy Realization Focused on strategic acquisitions with meaningful synergy upside and that position the company for accelerated organic growth Supply (0 6 months) Operations (6 24 months) Back Office (1 3 years) Strong management and execution team with significant experience in integrating acquisitions and maximizing synergies Integration planning for both the CST and CCL Transactions are underway with marketing, refining and back office integration expected to be fully realized within months post-close Parkland is committed to achieving an anticipated C$60 C$75 million in combined run-rate synergies from the CST and CCL Transactions (1) Parkland has previously completed two marketing acquisitions with CCL in the past three years Proven Track Record of Synergy Realization (June 2015) Year one synergies tracked significantly ahead of business case Realized to-date C$13 million of synergies (~24% of acquired EBITDA vs. target of 20%): Operations: C$2 million Back Office: C$3 million Supply: C$8 million 16 (1) Based on management estimates and on annual Adjusted EBITDA on a pro forma basis assuming acquisitions maintain historical performance and Parkland is able to implement synergies consistent with past performance.

17 PRO FORMA THE CST AND CCL TRANSACTIONS, PARKLAND WILL DERIVE ~50-55% OF EBITDA FROM RETAIL Retail 50% - 55% EBITDA Contribution (1) Supply and Wholesale 35% - 40% Commercial 5% - 10% Parkland USA <5% Total 100% 17 (1) Includes management s estimate of Normalized EBITDA for the CCL Transaction, and Run-Rate synergies for both the CST and CCL Transactions.

18 PARKLAND WILL CONTINUE TO BENEFIT FROM STABLE, DIVERSE, AND GROWING EBITDA C$ millions EBITDA volatility of less than 10% (4) ~660 (5) 230 (3) (1) 25 (2) C$273 million Normalized EBITDA including anticipated run-rate synergies Base Business Pro Forma CST Transaction CST Transaction Run-Rate Synergies CCL Transaction Normalized EBITDA CCL Transaction Run-Rate Synergies Parkland Pro Forma CST and CCL Transactions Parkland Pro Forma Guidance Volatility (1) 2016 Adjusted EBITDA (C$254 million) + the mid-point of management's guidance range of EBITDA contribution from the CST Transaction (C$110 million). See Parkland's press releases dated August 22, 2016 and September 7, (2) Management estimates of the anticipated run-rate synergies from the CST Transaction. Based on management estimates and on annual Adjusted EBITDA on a pro forma basis assuming acquisitions maintain historical performance and Parkland is able to implement synergies consistent with past performance. (3) Management estimates of Normalized EBITDA from the CCL Transaction. (4) Management estimates of the mid-point of anticipated run-rate synergies from the CCL Transaction (C$43 million). Based on management estimates and on annual Adjusted EBITDA on a pro forma basis assuming acquisitions maintain historical performance and Parkland is able to implement synergies consistent with past performance. (5) Normalized Run-rate EBITDA includes: 2016 Adjusted EBITDA (C$254 million) + the mid-point of management's guidance range of EBITDA contribution from the CST Transaction (C$110 million) + management estimates of the anticipated run-rate synergies from the CST Transaction (C$25 million) + management estimates of Normalized EBITDA from the CCL Transaction (C$230 million) + management estimates of the mid-point of anticipated run-rate synergies from the CCL Transaction (C$43 million). 18

19 THE CCL TRANSACTION IS BEING FUNDED WITH COMMITTED DEBT, BRIDGE, INTERMEDIATION, AND A BOUGHT DEAL FINANCING Total Purchase Price C$1,460 million (1) to acquire 100% of the shares of Chevron Canada R&M (plus C$186 million in estimated net working capital and C$80 million in estimated transaction expenses) funded by a fully underwritten bridge facility, revolving credit facility and intermediation $2,000 Sources of Funds (Amounts in C$ millions) $40 Equity Concurrent with the acquisition announcement, Parkland will issue C$660 million in common shares $1,500 $268 $258 Debt The transaction will be further financed by: - a draw on the revolving credit facility of C$268 million; and - a bridge facility which Parkland intends to replace with alternative long term debt in the amount of C$500 million Pro forma debt / EBITDA of 3.5x at closing $1,000 $500 $660 $500 C$768 million in total debt financing $1,726 Intermediation C$258 million funded intermediation at closing Cash from non-debt sources C$40 million funded from cash flow primarily from operations $0 Equity Bridge Financing Revolver Draw Intermediation Cash from operations Total Sources of Funds 19 (1) Approximate Canadian dollar equivalent of US$1,100 million in base purchase price at the current exchange rate of C$1.33 : US$1.00.

20 THE TRANSACTION ENABLES PARKLAND TO ACHIEVE ITS LONG TERM FINANCIAL TARGETS Adjusted Distributable Cash Flow per Share (1) (Amounts in C$) +30% $2.56 $ % Adjusted Payout Ratio (1) Pro Forma Leverage Profile(3) (Total Funded Debt / Credit Facility EBITDA) 3.6x 3.5x 3.7x Target 3.5x 58% $1.60 $1.98 $2.15 Target $ % 46% 42% Target 50% 2.5x 2.0x Target 2.0x Included Parkland 2016 (2) PF CST PF CST (Inc. synergies) PF Chevron PF Chevron (Inc. synergies) Parkland 2016 (2) PF CST PF CST PF (Inc. Chevron synergies) PF Chevron (Inc. synergies) Parkland 2016 PF CST PF Parkland Parkland Chevron (1) Adjusted Distributable Cash Flow per Share and Payout Ratio based on management estimate of Normalized EBITDA for the CCL Transaction. (2) See Dividends, Distributable Cash Flow, and Dividend Payout Ratio section of Parkland's MD&A for reconciliation. (3) Leverage is expected to increase as a result of the 2018 Turnaround. Pro Forma company expected to delver within target range by

21 WE LOOK FORWARD TO WELCOMING THE CHEVRON TEAM TO PARKLAND

22 APPENDIX: PRO FORMA CAPITALIZATION (Amounts in C$ millions except per share amounts) (Pro Forma CST) (Pro Forma CCL Transaction) Sha re Pri ce (Apr. 18, 2017) $28.85 $28.85 Diluted Shares Outstanding (Apr. 18, 2017) (1) Add: CST Subscription Receipts (2) Add: CCL Common Shares (3) Total Common Share Equivalents Outstanding Market Capitalization $3,092 $3,779 Less: Cash & Equivalents (Dec. 31, 2016) ($26) ($26) Add Debt (4) : Amount Drawn on Credit Facilities (Dec. 31, 2016) $132 $132 Existing Senior Note Obligations (Dec. 31, 2016) $400 $400 Other Indebtedness (Dec. 31, 2016) (5) $17 $17 CST Revol ver Dra w $515 $515 CCL Revol ver Dra w - $268 CST Seni or Notes Offeri ng $300 $300 CCL Bridge Financing - $500 Net Debt $1,338 $2,107 Enterprise Value $4,430 $5,886 EBITDA: Credit Facility EBITDA (Dec. 31, 2016) (6) $259 $259 CST EBITDA (7) $110 $110 CCL EBITDA (8) - $230 Total EBITDA (ex. Synergies) $369 $599 Net Debt / EBITDA (ex. Synergies) 3.6x 3.5x Synergized EBITDA (9) $394 $666 Net Debt / Synergized EBITDA (9) 3.4x 3.2x (1) Includes 1.1 million in exercisable share options at a weighted average exercise price of C$17.97 and 0.8 million equity-settled RSUs using the treasury stock method. (2) Reflects 9.4 million subscription receipts issued to fund CST Transaction at C$24.50 per subscription receipt. (3) Reflects approximately 24 million common shares that will be issued to fund the CCL Transaction. (4) Amounts as at December 31, 2016 balance sheet except for pro forma adjustments for CST / CCL Transactions. (5) Reflects unamortized discounts and premiums associated with amounts drawn under credit facilities and existing senior note obligations, finance lease obligations and collateralized notes and letters of credit and surety bonds. (6) Credit Facility EBITDA for the twelve month period ending December 31, 2016; Adjusted EBITDA adjusted for share incentive compensation, pro forma adjustments for acquisitions and acquisition, integration and other cost adjustments. (7) Mid-point of EBITDA guidance provided on CST announcement (C$105 million - C$115 million). (8) Normalized run-rate EBITDA. (9) Includes C$25 million in estimated CST synergies, mid-point of anticipated run-rate synergies (C$42.5 million). 22

23 APPENDIX: CST INTEGRATION IS ON-TRACK; CCL INTEGRATION PLANNING IS WELL UNDERWAY AND PROGRESSING Integration Planning Integration plan set to begin day-1 on close Integration plan will include best practices from CST Dedicated Parkland central integration team Engaged experienced advisors to assist with planning and implementation to augment internal team Integration master plan developed in fall 2016 Advisor chosen to assist with implementation / execution Additional consultants will assist with first 100 days Separate initiative to assist tracking and managing of synergy execution Management continues to expect run-rate synergies to be achieved 36 months post-closing Engaged experienced advisors for integration planning and implementation Dedicated central integration team will be formed Integration planning underway since Q4/2016 Transition plan being developed to enable operational continuity Key partners and advisors engaged to provide domain expertise and best practices from recent refinery acquisitions Management expects run-rate synergies to be achieved 36 months post-closing 23