CST Brands, Inc. Reports Third Quarter 2016 Results

CST Brands, Inc. (NYSE: CST), one of the largest independent retailers of motor fuels and convenience merchandise in North America, today reported financial results for the third quarter ended September 30, 2016.

Kim Lubel, Chairman and CEO of CST Brands, said, "We performed well during the quarter despite the comparison with a very strong fuel margin in the third quarter 2015. Our U.S. business grew merchandise and services gross profit 19% on increased sales and margins, while our Canadian stores grew merchandise and services gross profits 5% with a 3% improvement in same store sales. We also continued to execute on our organic growth plans with the addition of thirteen new-to-industry stores during the quarter and 29 stores year-to-date." Lubel added, "We continue to work toward completing our merger with Circle K and we currently anticipate closing on the transaction in early 2017."

Third Quarter Results

For the three month period ended September 30, 2016, the Company reported net income of $260 million, or $3.41 per diluted share compared to net income of $85 million, or $1.12 per diluted share, for the same period in 2015. This improvement in net income was driven by a gain on the sale of assets and an increase in both the U.S. and Canadian merchandise and services gross profit during the quarter. For the three month period ended September 30, 2016, included in net income are certain special items consisting of a gain from the Company's sale of its California and Wyoming convenience stores, offset by certain acquisition expenses, merger-related expenses, legal expenses and professional fees totaling approximately $221 million, net of tax, or $2.90 per share. Excluding these special items, net income would have been $39 million, or $0.51 per diluted share, for the three month period ended September 30, 2016. There were no such special items in the 2015 period.

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