Core-Mark Holding Company

2016 ICR Conference, Orlando FL

January 12, 2016

Safe Harbor & SEC Regulation G

Safe Harbor
Statements made in the course of this presentation that state the companys or managements hopes, beliefs, expectations or
predictions of the future are forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities
Litigation Reform Act of 1995. Actual results and performance could differ materially from those set forth in the forward-looking
statements. Additional information about forward-looking statements and factors that could cause or contribute to actual results
differing materially from those in the forward-looking statements is contained in our filings with the Securities and Exchange
Commission (SEC), including our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form
8-K. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

Non-GAAP Information This presentation includes non-GAAP financial measures, including net sales less excise taxes, remaining gross profit, free cash flow
and adjusted earnings, before interest, taxes, depreciation and amortization (EBITDA) after certain items. These measures are
classified as non-GAAP financial measures by the SEC and may be different from non-GAAP measures used by other companies. We
believe these non-GAAP financial measures provide meaningful supplemental information for investors regarding the performance of
our business and allow investors to view results in a manner similar to the method used by our management. EBITDA is also among
the primary measures used externally by our investors, analysts and peers in our industry for purposes of valuation and comparing
our results to other companies in our industry. Our management uses net sales less excise taxes and remaining gross profit to
separate changes in sales and profitability due to actual sales and other changes in core operations from the effects of increases in
excise taxes, LIFO accounting, inventory holding profits and certain other items. Our presentation of this information is not intended
to be considered in isolation, and these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or
superior to, financial measures calculated in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the
2
most comparable measures prepared in accordance with GAAP are included in the appendix to this presentation.

THOMAS PERKINS
Chief Executive Officer

Milton Draper
Director of Investor Relations
650-589-9445
mdraper@core-mark.com

Agenda

Core-Mark & Industry Overview

Financial Overview
Strategies for Growth

Key Investments Considerations

Market Leader in Highly Fragmented Industry
Only 5% of Market Share with Large Opportunity to Grow
Significant Cash Flow Generation from Cigarette Volume
Cash Invested in Growth Initiatives with Higher Margin Products
Strong Balance Sheet, Supporting Growth & Return of Capital
Adjusted EBITDA* CAGR 12% from 2008 to 2014

CORE-MARK & INDUSTRY OVERVIEW

Core-Mark Overview
Our Mission:
To be the most valued marketer of fresh & broad-line
supply solutions to the convenience retail industry.

Established in 1888
Fortune 500 Company
Experienced Management Team
30 distribution centers across North America
Annual Sales in 2015 Expected to Exceed $11 Billion
7

Core-Marks Supply Chain

Core-Mark plays a critical role for consumer package goods

wherever they are sold in a convenient format

~96 million cubic feet per year

~53,000 SKUs & 4,900 vendors

Through 30 distribution
centers* and ~760 tractors
& tri-temperature trailers**

* Distribution centers includes two 3PLs which we run on behalf of two large customers
** 80% of trailers are tri-temperature as of 12/31/14

to ~38K retail locations

Core-Mark Locations
National footprint with local expertise provides competitive advantage

Headquarters
IT Office
Core-Mark West
Core-Mark East
Core-Mark Canada
Allied Merchandising Industry
AMI-Artic East
Arizona Distribution Center (ADC)
Artic Cascade
Retail Distribution Center (RDC)

Core-Marks Customers
Core-Mark distributes to best in class retailers

10

Convenience Store Industry

Industry Fast Facts*

~

34% of all retail outlets in the US are convenience stores

175K Convenience Stores in US & Canada

63% are single store operators

~67%
45%-55% of product is provided
by broad-line distributors;
remaining by a myriad of DSD vendors

Traditional C-Stores inside sales estimated at $240 billion in

North America representing ~ $190 billion at wholesale

~15%

Sou rce: Comb in ation of 2014 N ACS d ata for US & 2013 CCSA d ata for Can ad a

11

Convenience Industry Stores

Single Store Operators continue to Dominate the Convenience

Store Channel with 67% owning 10 stores or less
~15%
Number of stores owned:

1 to 10
~67%

11 to 50
51 to 200
200 to 500
> 500
12

Source: NACS 2014 State of the Industry Report (on 2013 data)

C-Store Industry - Inside the Store

Trends

Focus on Fresh & Food Service

De-emphasis on Center of Store
Need for efficient Supply Chain
Modernization of Stores
More Natural and Better for
You products

*Center store includes candy, sweet, salty and alternative snacks

Sou rce: Source: NACS 2015 State of the Industry Report (on 2014 data)

2014 In Store Sales by Commodity

7%
11%
15%

Tobacco

11%

36%

Foodservice
Pkg Bev

19%

Center Store
Beer
Other

13

STRATEGIES FOR GROWTH

Strategy #1 Vendor Consolidation Initiative (VCI)

Targets Inefficiencies in the C-Store Supply Chain

In-Store Sales in the C-store Industry ~$240 Billion (at retail)

VCI
Opportunity
Broadline Distr.

~24%
~46%
~30%

Coke/Pepsi/Frito/Beer
DSD Vendors

Core-Marks VCI & Fresh Incremental Sales were over

$500 Million over the Last Five Years

15

Strategy #2 Fresh & Foodservice

Increasing Relevancy to the Retailer

59% of consumers say that they sought more healthy food

options at convenience stores than in the previous year.
Source: Technomic

Supporting Fresh & Foodservice forward

strategies for convenience retailers
Providing Retailers with solutions that consumers demand
Targeting $100 million Incremental Sales per year combined
with VCI
Margins are considerably higher than traditional categories
focus on 20-25 Basis Point improvement in FNF RGP

Penetration with Existing Customers Still Big Opportunity

16

Fresh Opportunity*

Percentage of Existing Customers Buying "Fresh"

Fresh Juices

53.2%

Fresh Milk*

38.4%

Salads/Cut Fruit

23.2%

Yogurt

27.8%

Fresh Sandwiches

25.6%

Fresh Bread
Fresh Bakery
Whole Produce

28.2%
15.9%
19.2%

* Selected Fresh Sub-Categories based on Dec 2014 MTD -U.S. and Canada

17

Roadmap to Fresh Success

18

Strategy #3 - FMI

Transformative Consulting & Category Management

Harnessing the Power of

Big Data

Growing Independent C-Store Profits

FMI 2015 Fast Facts
3,010 FMI Marketing Plans completed.
Real Time Customer Analytics
Providing Critical Insights
Available Through CORE-DATA.

FMI stores incremental Non-Cigarette

Sales growth running ~2x that of nonFMI locations.

Focused MARKETING Plans

Providing Retail Solutions.

Churn for FMI customers ~30% less

than non-FMI customers.
Profit improvement of ~20%

Utilization of the CORE-CRM to

Drive Market Share.

19

Core Strategies are Working

Non Cigarette Same Store Sales Improving

Comparable Same Store Sales Driven by

Success in our Core Strategies
18 consecutive quarters of SSS growth

Non Cigarette Same Store Sales*

8.0%
7.0%
6.0%

Q3-2015 up 3.4%
Indicative of Future Growth & Impact
of Key Strategies on Product Mix

2011 vs. 2010

5.0%

2012 vs 2011

4.0%

2013 vs 2012

3.0%

2014 vs. 2013

2.0%

2014 vs 2015

1.0%
0.0%

Q1

Q2

Q3

Q4

20
* Metric is based on a subset of stores that have comparable sales YOY representing approximately 50 60% of total FNF sales in any given period.

Strategy #4 Acquisition & Expansion

Expansion of our Infrastructure, Focused on Areas with Store Density
Six Acquisitions plus Three New Warehouses since 2006

Headquarters
IT Office
Core-Mark Distribution West
Core-Mark Distribution East
Core-Mark New DCs/ Acquisitions
Consolidation Centers
Arizona Distribution Center (ADC)
Retail Distribution Center (RDC)

21

U.S. Convenience Stores

10 STATES ACCOUNT FOR 50% OF ALL C-STORES IN THE U.S.

REGION 5
8.8%
REGION 6
14.4%

REGION 3
15.3%

(incl. Alaska & Hawaii)

REGION 1
20.9%

REGION 2
24.7%
REGION 4
15.9%

22
Represents Top 10 C-Store states

FINANCIAL OVERVIEW

Growth & Guidance

Growth trends 2008 to 2014:
~ 9% Revenue
~ 12% EBITDA*

2015 Annual Guidance:

Sales expected to reach $11.0-$11.2 billion

Adjusted EBITDA of $133 to $136 million
EPS of $2.08 to $2.15
EPS (excluding LIFO) of $2.40 to $2.47
Free Cash Flow of $2.75 to $2.95 per share
CapX - $35 million
24

* Adjusted EBITDA excludes LIFO expense and other items; see appendix for reconciliation

Growth Story Intact

CAGR over 9% thru 2014
6% Organic
3% M&A

2015 Net Sales Expected to exceed $11 Billion

$11,500

$10,280

$10,500

$9,768

$9,500

$8,892
$8,115

$ Millions

$8,500

$6,500
$5,500

$1,951

$6,532
$1,757

$6,045
$1,516
$1,474

$4,500
$3,500

$2,051

$1,984

$$7,267

$7,500

$2,110

$4,571

$5,016

$5,510

$6,164

$6,908

$7,717

$8,170

$2,500
2008

2009

2010

2011

Net Sales Less Excise Taxes

2012
Excise Tax

2013

2014

25

Revenue & Profit Mix

While cigarettes are a significant revenue driver, Core-Marks
non-cigarette products continue to drive gross profit

2014 Sales Contribution

30.3%

49.2%

Cigarettes

Other Product

20.5%

Excise Tax

Total = $9,768 Million

2014 Gross Profit Contribution

27.1%

Cigarettes

72.9%
Other Product

Total = $537 Million

26

Remaining Gross Profit*

in millions of $

Food / Non-Food profit contribution - 2.4x cigarettes

72.3%

27.7%
27
* Remain in g gross p rofit is a n on -GAAP measu rem e nt s an d is d isclosed in ou r 10-K & 10-Qs

Cigarette Business Facts

Convenience channel has > 85% market share of cigarette sales*
Cigarettes & Other Tobacco Products are 36% of in-store sales*
Category has a higher sales price point than other products
Volume provides platform for leveraging everything else
Limited net invested capital / turns quickly / tax float
E-cigarettes & Vapor Products newer category in the C-store
channel with potential

28
*NACS Daily Report & 2015 SOI Report using 2014 data

Core-Mark growth has outpaced Industry volumes

Tobacco & Nicotine Categories
Core-Mark vs Total US Retail Outlets 2014 vs. YAGO

Chart represents total domestic retail volume

MST is Moist Smokeless Tobacco
Top Directs are major customers that are shipped directly

29

Operating Leverage
Warehouse & Delivery
Increase in mileage & cubic
feet driving leverage

SG&A
Iron Bar in place & flexing
for Administrative costs

W&D Expense
Expense // Cubes
W&D
Cubes // Miles
Miles
(Excludes Carolina Division)

$ / Cube
$4.05

Millions

3.45
3.3
3.15
3
2.85
$3.90
2.7
2.55
2.4
2.25
$3.752.1
1.95
1.8
1.65
1.5
$3.60
1.35
1.2
1.05
0.9
0.75
$3.450.6
0.45
0.3
0.15
0

$3.30

90

90

SG&A
SG&AExpenses
Expenses

% GP

36.0%
36.0%

2.00%
2.00%

75 75
60 60

% Sales

1.90%
1.90%

33.0%
33.0%

1.80%
1.80%
45 45

30.0%
30.0%

1.70%
1.70%

30 30
15 15
0
2011

2010

2012

2011
2012
Cost per Cube
miles
cubic feet

2013

2014 TTM

2013
2014
miles
cubic feet
Linear (Cost per Cube)

27.0%
27.0%

2010
2010

2011
2011

2012
2012

2013
TTM
2013 20142014

SG&A % to Gross Profit *

SG&A
to of
Gross
Profit *
SG&A% %
Sales

1.60%
1.60%

SG&A % of Sales

* Excludes LIFO Expense

30

Adjusted EBITDA*
$122.7

$125.0
$109.5

$ Millions

$100.8

$95.5

$100.0

$91.9

CAGR ~12%
2008 to 2014

$70.0

$75.0
$62.4

$50.0

$25.0

$0.0
2008

2009

2010

Adjusted EBITDA ex holding gains

2011

2012

Cigarette holding gains

2013

2014

Non-cig

While not in our direct control, inventory holding gains contribute to earnings every year.
Cigarette Holding Gains every year versus Candy Holding Gains every three years. 31
* Please see appendix for reconciliation from Net Income to Adjusted EBITDA
Adjusted EBITDA is a non-GAAP measurements and is disclosed in our press releases10-K & 10-Qs

Low Risk Balance Sheet

& Return Focus

Key Balance Sheet Facts:

Net Inventory turns average 70-80x per year*
Collect Receivables in ~ 9 to 10 days
Very Modest debt- 2014 average=$14.8 million
Access to $300 million credit facility**
Current ratio 2:1
Company Standard:
20% RONA Target on (FIFO) Pre-Tax Net income
Over 19% RONA in 2014

*Net Inventory= inventory less accounts payable and tobacco taxes payable
** Includes $100 million expansion feature & expires May 2020

34

Cash & Capital Allocation

2015 Projections
~$65-$70 million Free Cash Flow*
Assumes $35m CAPX

Millions

Free Cash Flow Before CapX

$120

$100

$100
$80

$78

$71

$72

$60
$40
$20

$50

$65

$52

Uses of Cash
Acquisitions / Expansion
Dividends
Inventory Investments
Share Repurchase

$18

$2012
Free Cash Flows

2013

2014

Maintainance CAPX

2015F
Growth CAPX

32
* Excludes any year end temporary spikes in inventory

Total Return of Value to Shareholders

Nearly $70 million returned to Shareholders
Inception through 2014
$25.0
$20.0
$15.0
$10.0

May-Dec
2011

$5.0
$0.0

Oct 19

Oct 19

2011

2012*
Dividend Payout

2013*

2014

Share Repurchases

*In lieu of the first quarter 2013 dividend, the Board of Directors declared an accelerated cash dividend of $2.2 million, or
$0.19 per common share in the fourth quarter of 2012. For comparison purposes, the accelerated dividend is included in
2013 in the above chart.

33

Focused on Shareholder Value

Key Financial Considerations:

Focus on reinvestment into
Business and CapX
Rigorous, DCF based review of
Acquisitions and major projects
Access to capital and cost of
capital more than adequate
Executive Compensation aligned
with delivery of results
Mix of dividends / buybacks

Value Returned to Shareholders:

Quarterly dividend of $0.16
~$48m of $60m buyback
programs spent to date
~$12m remaining

Combined ~$69 million

returned to Shareholders
through 12/31 since 2011
inception =
~54% of cumulative FCF

35

KEY INVESTMENT CONSIDERATIONS

Investments Considerations
60

55

Market Leader in Highly Fragmented Industry

Only 5% of Market Share with Large Opportunity to Grow

50

Significant Cash Flow Generation from Cigarette Volume

45

Cash Invested in Growth Initiatives with Higher Margin Products

40

35

Strong Balance Sheet, Supporting Growth & Return of Capital

Adjusted EBITDA* CAGR 12% from 2008 to 2014

30

25

20
Oct-12

Jan-13

Apr-13

Jul-13

Oct-13

Jan-14

Apr-14

Jul-14

Oct-14

37

Thank You For Your Interest

MS. MILTON DRAPER
DIRECTOR OF INVESTOR RELATIONS
(650) 589.9445
MDRAPER@CORE-MARK.COM

Appendix

Reconciliation Chart for Non-GAAP Financial Metrics

Adjusted EBITDA
Historical EPS excluding LIFO & Free Cash Flow per
diluted share
Other Key Metrics
Note: Reconciliations for certain metrics are provided in our 10Ks 10Qs and our press releases and are
incorporated by reference.
Remaining Gross Profits calculation is included in our 10-Qs & 10-Ks
EPS Reconciliation table is included in our Quarterly Press Releases

39

Core-Mark Adjusted EBITDA

Reconciliation of Net Income to Adjusted EBITDA
Core-Mark Holding Company, Inc.
Historical
Millions
2008
Net Income
Interest (net)
Taxes
Depreciation & amortization
Amortization of stock compensation
Foreign currency transaction losses (gains)
LIFO expense
Adjusted EBITDA (FIFO)
Unusual or special items
Legacy insurance items
OTP tax settlements
Other one-time (benefits) costs disclosed (net)
Normalized EBITDA

17.9 $
1.2
4.7
17.4
3.9
6.3
11.0
62.4 $

(1.4)
1.3
62.3 $

2009

2010

47.3 $
1.4
18.5
18.7
5.1
(2.2)
6.7
95.5 $

17.7 $
2.2
9.5
19.7
4.8
(0.5)
16.6
70.0 $

(0.6)
0.9
95.8 $

1.6
(0.6)
3.9
74.9 $

2011

2012

2013

2014

26.2 $ 33.9 $ 41.6 $ 42.7

2.0
1.8
2.2
1.8
17.0
21.5
24.4
23.7
22.4
25.3
27.2
32
5.5
5.8
4.6
6.1
0.5
0.2
0.8
0.1
18.3
12.3
8.7
16.3
91.9 $ 100.8 $ 109.5
122.7

(1.8)
(0.7)
4.5
1.3
2.8
95.7 $ 100.3 $ 112.3

0.7
(7.5)
1.4
118.8

40

EPS and Free Cash Flow

Reconciliation of EPS & FCF/share
excluding LIFO expense
2012

Earnings per Share

EPS GAAP
plus LIFO expense
EPS excluding LIFO expense

Free Cash Flow per share

Adjusted EBITDA
less working capital changes
s capital expenditure and investing software
less taxes paid in cash
less interest paid in cash
Free Cash Flow
Diluted shares
Free Cash Flow per share

2013

2014

$
$
$

1.46
0.32
1.78

$
$
$

1.79
0.23
2.02

$
$
$

1.83
0.43
2.26

$
$
$
$
$
$

100.8
(9.4)
(28.6)
(11.7)
(1.6)
49.5
23.2
2.13

$
$
$
$
$
$

109.5
(17.8)
(18.4)
(19.5)
(1.5)
52.3
23.2
2.25

$
$
$
$
$
$

122.7
(22.2)
(59.2)
(22.0)
(1.1)
18.2
23.3
0.78

* All per share metrics presented in this presentation reflect the June 2014 stock split

41

Core-Mark Key Metrics

Return on Net Assets (RONA):
Company Standard is 20%
RONA = PTNP / Net Assets

Net Assets = (Inventory + Accounts Receivables + Fixed Assets)

less (Accounts Payable + Tobacco Taxes Payable + Accrued Liabilities)

Applies to all investments of capital

Working Capital Metrics:

Average DSO
~ 9-10 days
Average DCOS ~ 14-16 days
Average DPO ~ 10-11 days

Pre-Pay US cigarette manufacturers ~0-3 days

Tax jurisdictions paid on average ~30 days after purchase
Other vendors get paid on average ~12-14 days

Free Cash Flow (FCF):

FCF = Adjusted EBITDA less (cash interest + cash taxes + CapX

changes in working capital)
42