PARKLAND S STRATEGY AND GROWTH TD Securities Energy Conference Parkland.ca January 11, 2016 1
FORWARD LOOKING STATEMENT DISCLAIMER 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 acquisitions and the efficiencies to be derived therefrom, and the contribution to adjusted EBITDA from the acquisitions identified herein. 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: failure to obtain necessary regulatory or other third party consents and approvals; the failure to achieve the anticipated benefits of acquisitions, including the Pioneer Acquisition; failure to meet financial, operational and strategic objectives and plans; general economic, market and business conditions; industry capacity; the operations of Parkland s assets, including the Hold Separate Assets, in accordance with the Interim Order; the operation of the Pioneer Commercial Assets by Pioneer in accordance with the Commercial Assets Agreement; the impact or nature of any order or remedy imposed by or negotiated with the Commissioner in respect of the applications under the Competition Act; failure to successfully defend, in whole or in part, the application under the Competition Act; failure to achieve economic benefits from the indirect economic interest in the Pioneer Commercial Assets and their operation and/or disposition; failure to resolve the Commissioner's concerns in respect of the Pioneer Acquisition or to achieve a final outcome to the application under the Competition Act on terms and conditions acceptable to Parkland; competitive action by other companies; refining and marketing margins; 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. Readers are directed to, and are encouraged to read, Parkland's management discussion and analysis for the nine months ended September 30, 2015 (the "Q3 MD&A"), including the disclosure contained under the heading "Risk Factors" therein, for a description of, and additional information relating to: the Pioneer Acquisition; the Hold Separate Assets; the Interim Order, including Parkland's continued defense of the Commissioner's application; the Commercial Assets Agreement; and Parkland's indirect economic interest in the Pioneer Commercial Assets. The Hold Separate Assets, including the results of operations thereof, are included in the pro forma information presented herein. Further, as Parkland does not control the Pioneer Commercial Assets, only Parkland's indirect economic interest in such assets is reflected in the pro forma information presented herein. The Q3 MD&A is available by accessing Parkland's profile on SEDAR at www.sedar.com and such information is incorporated by reference herein..additionally, readers are directed to, and encouraged to read, the Revised 2015 Adjusted EBITDA Guidance section of the Parkland press release dated June 25th, 2015 and the 2016 Adjusted EBITDA Guidance Range section of the Parkland press release dated October 5th, 2015. 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
ONE OF NORTH AMERICA S FASTEST GROWING INDEPENDENT FUEL MARKETERS $2.1 billion market cap 1 $2.5 Enterprise Value 2 154 TSX Rank 3 $1.08 (~5%) Dividend Annually 4 BB/BB- Corporate Credit Rating 5 1. As of market close on January 4, 2016. 2. As of market close on September 30, 2015. 3. As of market close on November 30,2015. 4. As of January 4,2016. 5. Rated by DBRS and S&P, respectively, as of market close on September 1, 2015. See Risk Factors Credit Ratings of Parkland s most recent Annual Information Form. 3
PARKLAND GOES TO MARKET THROUGH THREE CHANNELS: COMMERCIAL, RETAIL AND WHOLESALE BUY MOVE SELL Commercial Channel Importers Industrial Home Heat Retail Channel Refineries Storage Retail Supply and Trading Channel Producers Reseller 4
PARKLAND REPORTS ITS CORE BUSINESS PERFORMANCE IN FOUR BUSINESS SEGMENTS Wholesale, Supply & Distribution Vol. 4,467 ML Adj. EBITDA $63 MM 1 Commercial Fuels Vol. 1,463 ML Adj. EBITDA $67 MM 1 Retail Fuels Vol. 2,267 ML Adj. EBITDA $89 MM 1,2 SPF Energy Vol. 1,130ML Adj. EBITDA $24 MM 1 1. Non-GAAP financial measure. See the non-gaap Financial Measures, Reconciliations, and Advisories section of Parkland s most current MD&A for reconciliation. Volume and Adjusted EBITDA TTM as of 3Q15. Data from the 3Q2015 and Q42014 MD&A. 2. Includes one quarter of Pioneer results. 5
SOLID BASE BUSINESS GROWTH IS KEY TO BUILDING OUR SUPPLY ADVANTAGE Grow Supply Acquire 6
Feb 2013 Apr 2013 Jan 2014 Apr 2014 Apr 2015 Jun 2015 A TRACK RECORD OF ACCRETIVE AND STRATEGICALLY ATTRACTIVE ACQUISITIONS Overview of Significant Acquisitions Since 2013 C$ MM +21% Acquire 2013 2014 2015 130 12 Chevron sites 108 3 5 20 Chevron (12) Chevron (11) Sparling s Elbow River SPF Energy Pioneer TM SPF Energy 22 TM 11 Chevron sites 55 TM TM 1. Non-GAAP financial measure. See the Non-GAAP Financial Measures, Reconciliations, and Advisories section of Parkland s most current MD&A for reconciliation. 2. Rune Rate : Management s estimate of the annual Adjusted EBITDA these businesses will achieve on a go-forward basis. Acquired EBITDA 1 Run Rate 2 7
FUELING GROWTH AT PARKLAND Parkland Adjusted EBITDA 1 C$ MM Synergies 300 250 200 150 100 103 151 199 207 +15-17% p.a. 183 230 3 30 3 200 265 4 30 4 235 Potential Acquisitions 5 3-5% CAGR Organic 50 0 2010 2 2011 2 2012 2 2013 2 2014 2015E 2016E 1. Non-GAAP financial measure. See the Non-GAAP Financial Measures, Reconciliations, and Advisories section of Parkland s most current MD&A for reconciliation. 2. The Adjusted EBITDA shown includes contribution from the Refiner s Margin contract. The contribution in 2010 was minimal. That contract concluded at the end of 2013. 3. See the Revised 2015 Adjusted EBITDA Guidance section of the Parkland press release dated June 25 th, 2015. 4. See the 2016 Adjusted EBITDA Guidance Range section of the Parkland press release dated October 5th, 2015. 5. Potential acquisitions are subject to certain risk factors. See Acquisition Strategy Risk Factors Credit Ratings of Parkland s most recent Annual Information Form. 8
PARKLAND S FINANCIAL GOALS SET TO DELIVER LONG-TERM, SUSTAINABLE SHAREHOLDER VALUE 5-Year Goals Organic Growth Distributable CFPS 1 Payout Ratio 2 Total Leverage 3 5% >$ 2.00 86% 3.5x 3% $ 1.26 ~$ 1.55 Low 70% s 50% range 2.0x Yearly Range 2015E With Organic Growth With Acquisition Growth 4 2015E With Organic Growth With Acquisition Growth 4 Range 1. Estimates of Distributable Cash Flow based on Adjusted EBITDA less Maintenance Capital, Taxes and Financing charges; it excludes one-time adjustments and acquisition costs. Adjusted EBITDA and Distributable Cash Flow are non-gaap financial measure. See the Non- GAAP Financial Measures, Reconciliations, and Advisories section of Parkland s most current MD&A for reconciliation. 2. Defined as annual dividend per share divided by Distributable Cash Flow per share. 3. Based on Senior Debt and Senior Unsecured Debt divided by Adjusted EBITDA. Adjusted EBITDA is a non-gaap financial measure. See the Non-GAAP Financial Measures, Reconciliations, and Advisories section of Parkland s most current MD&A for reconciliation. 4. Potential acquisitions are subject to certain risk factors. See Acquisition Strategy Risk Factors Credit Ratings of Parkland s most recent Annual Information Form. 9
PARKLAND DELIVERED 174% IN CUMMULATIVE TOTAL SHAREHOLDER RETURN SIGNIFICANTLY OUTPERFORMING TSX SINCE 2011 Parkland Total Shareholder Return 1 % 250% 200% PKI TSX 174% 150% 100% 50% 0% 16% -50% PKI TSX 2011 2012 2013 2014 2015 20% (9%) 59% 5% 1. Total Shareholder Return calculation assumes that dividends are reinvested. Cumulative calculation is from Jan. 1, 2011 to Dec. 31, 2015. Annual calculations are from Jan. 1 to Dec. 31 of the respective year. Source: Capital IQ 2% 12% 24% 11% 11% -9% 10
COME GROW WITH US COME GROW WITH US Investor Relations Contact Patricia van de Sande Director Investor & Government Relations Patricia.vandesande@parkland.ca 403 567 2519