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GPM Investments, LLC Valuation Study

As of December 31, 2015

Valuation Study - As of December 31, 2015 GPM Investments, LLC ii

BDO Ziv Haft Consulting & Management LTD. Amot Bituach House Building B, Menachem Begin Rd. 46-48 Tel Aviv 66184 Tel: 972 3 6386894 Fax: 972 3 6382511 Website: www.bdo.co.il

GPM Investments, LLC

Dear Mr. Arie Kotler, President and CEO

Per your request, BDO Ziv Haft Consulting & Management Ltd. (hereinafter: "BDO")

has performed a valuation study (hereinafter: the "Study") for GPM Investments LLC

(Hereinafter: the "Company" or "GPM"), as of December 31, 2015 (hereinafter: the

"Valuation Date").

To the best of our knowledge there is no restriction, legal or other, on performing

the Study enclosed herein.

The Study was prepared for GPM and its management (hereinafter: the

"Management") and may be provided to GPM’s and its affiliates’ external auditors.

We hereby approve and consent for our Study to be incorporated into, attached to,

and/mentioned in any of Arko Holdings LTD. (hereinafter: "Arko") and the Company

and/or their subsidiaries/affiliates, publications based on any disclosure

requirements that may apply to any such entity by law or any rule or regulation. We

also hereby approve and consent for our valuation study to be relied upon for the

calculation of the value of shares pledged in accordance to the Trust Deed, as

executed by Arko with regard to its Debentures (series H).

In forming our opinion we have relied on sources, which appeared to us as reliable,

and nothing came to our attention, which is likely to indicate the lack of

reasonability of the data we used. We did not independently examine such data and,

therefore, our work does not constitute verification of the correctness, completeness

or accuracy of the data.

We present and comment on the financial projections of the Company, which are

solely the responsibility of its board of managers. Because financial projections and

the assumptions on which they are based relate to the future, actual results and cash

flows may be different from those projected, because events and circumstances

frequently do not occur as expected. The differences may be material.

This report summarizes the findings of our Study. The accompanying report provides

a detailed explanation of our analysis.

It is emphasized that we do not have any personal interest in the Company and our

fee is not conditioned on the results of the opinion.

The Study is being delivered pursuant to, and is subject to the terms of, an

engagement letter dated December 7, 2015 (hereinafter: “Engagement Letter").

Valuation Study - As of December 31, 2015 GPM Investments, LLC iii

Indemnification Details Regarding the Valuation Specialist

If, in a final, un-appealable legal proceeding, we are found liable to pay any amount

to a third party in connection with the services that are the subject of this

Agreement, the Company undertakes to indemnify and reimburse us if the source of

the claim is not willful misconduct, negligence or malice in providing our services as

follows:

In case the conviction shall arise from information provided by the Company, which

we explicitly relied on in performing the valuation study, the Company agrees to

indemnify and reimburse 100% of any amount which we shall be required to bear.

Otherwise, the Company agrees to indemnify and reimburse us for amounts paid by

us which are exceeding 3 times our fee.

The foregoing limitation will apply regardless of the form of action, whether contract

or tort, including without limitation, negligence, except that such limitation shall not

apply in the case of gross negligence, revenue, data, use of other commercial injury,

or any special, incidental, indirect or consequential damages, suffered by the

Company or any third party, whether or not BDO has been advised of the possibility

of such loss, injury, damages or third party claim, under any cause of action arising

out of or relating to this Agreement.

The Company is solely responsible for the payment of all fees, expenses,

indemnification or other amounts due under or in connection with this engagement.

BDO Consulting and Management Ltd. were founded by the partners of BDO

Certified Public Accountants.

BDO Consulting and Management is part of the international BDO network, provides a

full range of business services required for national and international businesses in

any sector. Our company has vast experience in the following fields: business

valuations, financial and tax due diligence, goodwill and intangible assets valuations,

financial analyses, business plans, project finance PFI/PPP advisory, M&A,

investment banking and more.

Moti Dattelkramer, CPA, CPA/MBA, Partner, Head of Corporate Finance of BDO

Consulting Group.

Current role - In his current position Moti manages a team which performs business

plans, business valuations, economic consulting, PPA, impairment, employee stock

option valuation and budget building for a wide range of public and private

companies.

Career and employment – Moti is qualified as a Certified Public Accountant. Moti

holds bachelor degree in Economics and computer science from Bar Ilan University

and M.B.A in finance from Bar Ilan University.

Valuation Study - As of December 31, 2015 GPM Investments, LLC iv

Details Regarding the Valuation Specialist (continued)

Moti’s recent projects include:

Delek Group – PPA and valuation studies;

Sonol – Impairment studies;

Super Gas - Impairment studies;

Given Imaging - Valuation studies, impairment studies and valuations of financial

instruments;

One1- Variety of valuations, PPAs and impairment tests for the company and its

subsidiaries;

XTL Biopharmaceuticals – In Process Research and Development (IPR&D)

impairment examination (IAS36 & IAS38), Goodwill impairment examination

(IAS36).

Gazit-Globe - Investment in associate impairment examination (IAS28 & IAS36).

PPA study following the step-by-step method (IAS28), PPA study following the

business combination method (IFRS 3).

Valuation Study - As of December 31, 2015 GPM Investments, LLC v

Sources of information Results

The principal sources of information used in performing our Study include:

The Company's audited financial statements for 2013-2015;

Management's forecast for 2016-2019, including, number of gallons, gross

profit, gross profit per gallon, credit card expenses, operating expenses,

etc.;

Various documents and reports received from Management;

Publicly available information.

Conversations held with Management:

Mr. Arie Kotler, CEO;

Mr. Eyal Nuchamovitz, Executive VP;

Mr. Don Bassell, CFO;

Ms. Ashleigh McDermott, Vice President – Financial Reporting;

The following is the Company's equity value:

The Company's equity's value, as of December 31, 2015, was determined to be

USD 410,414 thousands.

Respectfully submitted,

BDO Ziv Haft

Consulting & Management Ltd.

# Approach Method Equity's Value

1 DCF Method 393,278

2 DCF Method, Post Private Issuance 404,300

3 Public Company Method (EBITDA Ratios) 433,666

Average 410,414

Valuation Study - As of December 31, 2015 GPM Investments, LLC vi

Table of Contents

Company Overview 1

Market Overview 14

Financial Statements Analysis 27

Valuation Methodology 39

Valuation – DCF Method 44

Valuation – DCF Method, Post Private Issuance 64

Valuation - EBITDA Ratios 71

Valuation - Summary 73

Appendixes 75

Section 1 - Company Overview Valuation Study - As of December 31, 2015 GPM Investments, LLC

1

Section 1

Company Overview


2

Company Overview

General Overview

GPM was formed on June 12, 2002, as a limited liability company in accordance

with the laws of the State of Delaware, United States. The Company and its

subsidiaries (the “Group”) operate a chain of convenience stores selling

merchandise and fuel (which includes motor fuels and kerosene) in several

locations that include the Mid-Atlantic, Southeastern, Midwestern and Northeastern

United States. Stores are located in states including Connecticut, Delaware,

Illinois, Indiana, Iowa, Kentucky, Maryland, Michigan, North Carolina and Virginia.

In addition, the Company has a fuel distribution division that supplies petroleum to

convenience stores and petroleum stations operated by external operators.

As of the valuation date, GPM is 75% owned by Arko Convenience Stores, LLC

(“ACS, LLC”) and 25% owned by GPM Holdings Inc. (“Holdings”). ACS, LLC is wholly

owned by a subsidiary of Arko.

The graph below presents the Company's holding structure:

ARKO Convenience Stores, LLC - a private company registered in the United States,

which is 100% owned by ARKO, through a wholly owned subsidiary and owns 75% of

the issued common membership units and voting rights of the Company and 50% of

the issued New Preferred Member Units of the Company.

GPM Holdings, Inc. – a private company registered in the United States, which owns

25% of the issued common membership units and the voting rights of the Company

and 50% of the issued New Preferred Member Units of the Company.


3

Company Overview

General Overview (continued)

The Group operates in two operating segments:

1. Retailing - This segment includes the self-operation of a chain of retail

stores which include convenience stores selling fuel products and other

merchandise to retail customers. At its Group-operated convenience

stores, the Group owns the merchandise and petroleum inventory and

employs the on-site employees.

2. Wholesaling - This segment includes:

a. The supply of petroleum on consignment to independent external

operators as to which the Group is the owner of the petroleum

inventory at the site and is also responsible for the pricing of the

petroleum to the consumer. The Group’s petroleum is sold to the

final consumer, while the gross profit is shared with the external

operators.

b. The supplying of petroleum to independent convenience stores

and gas stations operated by external operators who, in this

segment, are the final customers of the Group.

The following table summarizes the number of sites and the operating channels in

the two fields of activity, as of December 31, 2015:

Source: Management.

In the ordinary course of business, stores may switch operating channels. For

instance, a self-operated store may become a site operated by external operators

and vice-versa. This is typically done based upon the economic status of the store

and the conditions in the market that exist at each site. These changes are relatively

infrequent and occur on an occasional basis at the Groups sites each year.

Sites that are

owned by GPM

Sites that are

leased by GPM

Sites that are not

controlled by GPMTotal

The retail sales field

Self-operating 60 606 – 666

The wholesale sales field

Outside operators – under consignment 1 38 3 42

Outside operators – supply of petroleum 5 20 44 69

Total 66 664 47 777


4

Company Overview

General Overview - The Company's Organizational Chart (continued)

GPM's Richmond, Virginia headquarters are responsible for all of GPM's fields of activity. The organization is comprised of multiple departments, which were, as of December 31,

2015, managed by GPM’s CEO, COO and Vice Presidents, as set forth in the following chart:

President & CEO

Senior Vice President of Human

ResourcesGeneral Counsel

Executive Vice President

Chief Operating Officer

Senior Vice President of Marketing

SVP Operations

Div VP Operations

NE Division

Div VP Operations

MW Division

Div VP Operations

SE Division

Chief Financial Officer

Senior Vice President of Information Technology


5

Company Overview

General Overview - Recent Acquisitions

During the past few years, the Company grew significantly through the acqusition of several companies. Below are the Company's acquisitions that have been executed since 2013,

according to their closing date:

There are two transactions that were closed in Q1 2016:

Fuel USA Acquisition – Pursuant to an agreement dated January 14, 2016 between the Company and its subsidiary, GPM Apple, LLC and an unrelated third-party (“Apple

Seller”), the Group purchased:

i. In the retail field 42 self-operated stores; and

ii. In the wholesale field 20 dealer operated stores and petroleum supply contracts, in the Southeast US.

iii. All for consideration of approximately USD 5.4 million plus approximately USD 5.4 million (subject to adjustments) for the value of inventory and cash in the stores,

this was paid in cash at the closing dates. Apple Seller contributed its rights to its existing petroleum supply contracts to GPM Petroleum LP ("GPMP") in exchange for

limited partnership units having a value of approximately USD 16.9 million. The closing occurred in two phases with the final closing completed on March 8, 2016.

Gas Mart Acquisition – On January 22, 2016, the Company entered into an asset purchase agreement with four non-related third parties for the acquisition of up to 21

convenience stores, including the ownership of the real estate at such sites, in Illinois, Iowa and Nebraska. The consideration agreed to be approximately was USD 6.1 million

plus the value of cash and inventory at the stores plus USD 0.4 million in expenses related to the legal proceedings. The purchase agreement was approved by the bankruptcy

court on February 8, 2016. The closings took place with regard to 15 convenience stores to be operated by the Company including the fee ownership of the real estate. The

closings of the purchased stores occurred in multiples phases, all of which were completed by February 23, 2016. At each closing, GPMP purchased the right to supply

petroleum to the acquired sites in exchange for the Company’s subsidiary operating such locations entering into a petroleum supply agreement with GPMP.

Acquisition Date of Acquisition

Number of

Convenience

Stores Acquired

Virginia Acquisition August 1, 2013 5

Southeast Acquisition August 6, 2013 263

Carolinas Acquisition February 3, 2015 8

Road Ranger Acquisition March 20, 2015 42

Midwest Acquisition June 3, 2015 161


6

Company Overview

General Overview (continued)

Targets, business strategy and expectations in respect of developments in the

coming year

GPM's business strategy is based on growth in profitability that is based on

expansion of the operations through additional acquisitions, in all geographic areas

in which GPM is active. As part of this strategy, GPM intends to acquire additional

convenience stores selling gas, both in the areas in which GPM currently operates

and also in additional regions where GPM can leverage its head office management

operations, cost structure and economies of scale. As described, GPM’s strategy is

of a gradual geographic growth by expanding to new areas that are close to areas

where it already operates.

As part of the above strategy, GPM plans to expand the business of GPMP, and as

part of this, utilize the USD 110 million credit line that can in certain terms be

raised to USD 220 million, and GPM plans to continue to pursue the possibility of a

public offering of limited partnership units of GPMP.

Within the framework of the main targets that GPM has set for itself, it continues

to develop and to enhance the existing sites through capital improvements while

focusing on increasing operational efficiency by means of the employment of

experienced manpower, the improvement of training processes for employees, the

automation of the processes, the expansion of the food offerings in the

convenience stores and the reduction of expenses.

As of December 31, 2015, GPM is analyzing numerous potential capital investments

that will improve the appearance of its stores and their operation, which includes,

among others, the relamping of the sites by using more energy efficient lighting

fixtures and the introduction of additional national branded food operations to GPM’s

stores.

The food and beverages field in convenience stores is typified by relatively high

profit rates and the possibility for high levels of growth. Accordingly, GPM intends to

continue to develop and to focus on the development of that field, including by

means of the entry of new products into the convenience stores, the changing of the

mix of products that are sold in the convenience stores and the development of the

fast food field, both by itself and also by means of franchises from well-known chains

in the fast food field.


7

Company Overview

Retail Operating Segment

Products and Services

The main products and services in the field of retail activity include:

The marketing of various types and brands of petroleum, including various

sorts of gasoline, diesel and gasoline mixed with ethanol (E-10 products);

The sale of various retail products, including the sale of tobacco products

such as cigarettes, grocery products, drinks and snacks manufactured by

leading brands in the US, beer and wine, fountain soft drinks and coffee;

Food services, including quick service restaurants (at some of the sites);

The sale of lottery tickets, phone cards and stored value cards;

Cash withdrawal services (ATM), money transfer services, and sale of

money orders (at most of the sites);

Car washes, vacuum services and air for tires (at a few of the sites).

The services and the products in this field are intended for passerby travelers and

are sold at convenience stores selling gas that are open for 16-24 hours a day,

seven days a week.

Customers

GPM does not have dependency on any specific customer as a result of the fact that

most of its activity at the self-operated sites is dependent upon private consumers.


8

Company Overview

Retail Operating Segment (continued)

Petroleum Suppliers

The Group has entered into commitments under an array of agreements with its

main petroleum suppliers. The Group generally enters into petroleum supply

agreements for periods ranging from three to ten years and its current supply

agreements (the “Petroleum Supply Agreements”) with its main petroleum

suppliers are as follows:

Valero Marketing and Supply Company (“Valero”) – Effective until

December 31, 2021;

BP Products North America Inc. (“BP”) – Effective until December 31,

2019;

ExxonMobil Oil Corporation (“ExxonMobil”) – Effective until August 31,

2020;

Marathon Petroleum Company LLC (“Marathon”) – Effective until July 31,

2018.

Within the framework of the Petroleum Supply Agreements, the Group has made a

commitment to purchase a minimum quantity of petroleum from each supplier.

The Group has undertaken to sell at least three grades of branded petroleum at

most of its sites. The Petroleum Supply Agreements state that the petroleum

purchase prices will be based on the daily rack prices.

In addition, the Group enters into incentive agreements (“Incentive Agreements”)

with its petroleum suppliers for periods which generally are the same duration as,

or exceed, those in the Petroleum Supply Agreements.

The Incentive Agreements provide that the Group may receive incentives for

branding and upgrades as well as other benefits from each supplier subject to

compliance with terms that were set in the Incentive Agreements.

Merchandise Suppliers

McLane:

Most of the merchandise products in the Group’s convenience stores which the Group

owned prior to the Southeast Acquisition, including all cigarettes and tobacco

products and most of the grocery products are supplied to the Group's convenience

stores by McLane Company, Inc. (“McLane”). On November 3, 2012, the Company

and McLane entered into a three year agreement originally terminating on November

3, 2015. In December 2015, the term of the agreement was retroactively extended

until November 3, 2018.

Core-Mark:

In 2015, most of the merchandise products for the Southeast Operations including all

cigarettes and tobacco products and most of the grocery products were supplied to

the Group’s convenience stores by Core-Mark (the parent company of what was

formerly known as Davenport) through an agreement between Core-Mark and one of

the Company’s subsidiaries. Commencing in 2016, all of the Group’s convenience

stores not supplied by McLane (excluding future acquisitions) will be supplied by

Core-Mark pursuant to two parallel agreements for a period from January 1, 2016

through January 31, 2019.


9

Company Overview


The table below details the total and the percentage of GPM's gross purchases in

the retail operations from its retail suppliers in relation to the overall amount of

GPM's purchases for the twelve month period ended on December 31, 2015 (in USD

thousands):

Petroleum

Merchandise

Competition

In the retail field of activities, GPM operates in a competitive market, which includes

chains that operate similar convenience stores selling petroleum with similar

operations to those operated by GPM. Purchases are often influenced based on a

passerby's need to stop for gas or take a break from driving and brand loyalty does

not have a major influence. The market is similarly competitive in all markets in

which GPM operates.

According to GPM’s Management, main competitors are convenience store chains

that include but are not limited to: 7-Eleven, Royal Farms, Wawa, Quik Trip,

Sheetz, Murphy Express, Speedway, Circle K, etc.

SupplierTotal Purchases

2015%

Valero 317,600 38%

Marathon 154,262 19%

BP 128,669 16%

Exxon 92,275 11%

Other Suppliers 130,920 16%

Total 823,726


2015%

McLane 124,357 20%

Core-Mark 115,795 18%


636,857


10

Company Overview


Seasonality

The weather, including daylight, temperature and precipitation, affects

the volume of activity in the retail operating segment, which is

concentrated in the Mid-Atlantic, Southeastern, Midwestern and

Northeastern United States. Seasonality affects the entire industry, not

just GPM. Accordingly, in the first and last quarters of the calendar year,

there is an observed decline in business and sales volume.

During the winter seasons (first and fourth quarters) when it is cold and

dark earlier in the day, and when there are snow storms or there is heavy

rain, customers’ tendency to leave their homes is reduced. As a result of

this, sales of convenience store products, petroleum and ancillary services

decrease.

During the course of the summer, the autumn and part of the spring,

when it is light later in the day and it is warmer, the volume of activity

increases as a result of greater customer traffic.


11

Company Overview

Wholesale Operating Segment

Products and Services

The main products and services in the field of wholesale activity include:

Petroleum Supplying – supplies various types of fuel to convenience stores

and gas stations that are operated by external operators, including various

grades of gas, gas that is mixed with ethanol (E10) and diesel;

Leases - GPM leases real estate property to external operators for the

purpose of the operation of gas stations and convenience stores, which is

in addition to the supply of petroleum to these stations.

Customers

The Group’s customers in this operating segment are the external operators, with

whom, in most cases, the Group has long-term supply agreements. GPM is not reliant

on any specific customer in this operating segment.

In this field, the Group purchases petroleum from its traditional fuel suppliers (such

as Valero, BP) and in most cases also arranges for a third party trucking company to

pick up the petroleum at the applicable terminals, which are not owned by GPM, and

deliver the petroleum to external operators sites. It should be noted that GPM does

not store petroleum at any warehouse.

In most of the agreements, the external operators have agreements with the Group

to operate the gas stations in accordance with the provisions that are set in the

dealer agreement, such as, branding of the station in accordance with the supplier

that has been selected by GPM, preservation of the environment rules, and the

cleanliness and maintenance of the site. The Group has the right to cancel these

agreements, in any case in which the external operators do not pay on a timely basis

or comply with the provisions that have been set in the dealer agreements.


12

Company Overview

Wholesale Operating Segment (continued)

Customers (continued)

There are 2 types of agreements under which GPM supplies fuel to the locations

operated by these external operators:

Consignment Arrangements - In most cases, GPM’s commitments with the

external operators at the consignment sites are for a period of up to ten

years, which may be a fixed period or a shorter period with an option or

series of options, where at the end of the term, in accordance with the

wishes of the parties, the parties may enter into a commitment under a

new agreement. At the consignment sites, GPM sets the price to the retail

customers based upon fuel costs, competition and volume trends, goals

and supplier commitments.

Supply Arrangements - In most of the agreements with the external

operators which are not on consignment sites, GPM’s commitments with

the external operators are for long-term periods, which can be extended

by mutual agreement. The external operators typically pay for the

petroleum within three days of receipt. In most of the agreements, the

external operators provide personal guarantees and/or monetary

collateral at the time of the commitment, including a security deposit.

Suppliers

The table below details the total and the percentage of GPM's gross purchases from

its main wholesale petroleum suppliers in relation to the overall amount of GPM's

purchases for the twelve month period ended on December 31, 2015 (in USD

thousands):


2015%

Valero 47,020 41%

Marathon 47,773 41%

Exxon 10,048 9%

BP 3,727 3%


Total 115,208


13

Company Overview

Wholesale Operating Segment (continued)

Competition

At sites that are controlled by GPM, GPM does not have any real

competition, because the rental agreement through which GPM enters

into a commitment with the external operator is conditional upon a long-

term contract for the supply of petroleum;

At the sites that are not controlled by GPM, there is competition from

other marketers of petroleum, which competes in the regions in which

GPM operates. As part of the way in which it copes with the competition

in the field, GPM offers the external operators competitive pricing and the

possibility of an investment in equipment and in branding, within the

framework of the gas supply agreements, which it has with its main

suppliers, Valero and BP and with other suppliers of gas, such as Shell,

Marathon and ExxonMobil.

Section 2 - Market Overview Valuation Study - As of December 31, 2015 GPM Investments, LLC

14

Section 2

Market Overview


15

Market Overview

The U.S Economy1

Real GDP has increased by 0.7% at an annual rate (percent change from preceding

quarter) in Q4 2015 according to estimations of the national income and product

accounts. In Q3 2015, the real GDP has increased by 2% (percent change from

preceding quarter). For 2015, real GDP increased 2.4%, the same rate as in 2014.

The deceleration in real GDP in the fourth quarter primarily reflected a deceleration

in consumer spending and downturns in nonresidential fixed investment, in exports,

and in state and local government spending that were partly offset by a smaller

decrease in private inventory investment, a deceleration in imports, and an

acceleration in federal government spending

Prices of goods and services purchased by U.S. residents increased by 0.2% in Q4 2015

after increasing 1.3% in Q3 2015. Energy prices turned significantly down in Q4 2015,

and food prices haven’t change. Excluding food and energy, gross domestic purchases

prices increased 0.9% in Q4 2015 after increasing 1.3% in Q3 2015.

Real disposable personal income (DPI) increased by 0.8% in Q4 2015 after increasing

3.5% in Q3 2015. DPI increased 3.7% in 2015, compared with an increase of 4.2% in

2014.

The personal saving rate, personal saving as a percentage of current-dollar DPI, was

4.7% in Q4 2015; in Q3 2015, the rate was the same.

In 2016, the expected GDP growth is 1.5%, 2%, 2.8% and 2.66% in Q1, Q2, Q3 and Q4

2016, respectively.

1 U.S. Bureau of Economics (BEA)- November 2015

% change (adjusted annual rate)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Gross domestic product growth rate -0.9% 4.6% 4.3% 2.1% 0.6% 3.9% 2.0% 0.7%

Purchases, by type:

Gross domestic purchases 0.5 4.7 3.8 2.9 2.5 3.6 2.2 2.4

Personal consumption expenditures 1.3 3.8 3.5 4.3 1.8 3.6 3.0 2.2

Nonresidential fixed investment 8.3 4.4 9.0 0.7 1.6 4.1 2.4 (1.8)

Residential investment (2.8) 10.4 3.4 10.0 10.1 9.3 7.3 8.1

Exports of goods and services (6.7) 9.8 1.8 5.4 (6.0) 5.1 0.9 (2.5)

Imports of goods and services 2.8 9.6 (0.8) 10.3 7.1 3.0 2.1 1.1

Government consumption – 1.2 1.8 (1.4) (0.1) 2.6 1.7 0.7

Prices of:

Gross domestic purchases 1.6 1.9 1.5 –0.1 (1.6) 1.5 1.3 0.2

Personal consumption expenditures 1.6 2.1 1.2 (0.4) (1.9) 2.2 1.3 0.1

Gross domestic product 1.5 2.2 1.6 0.1 0.1 2.1 1.3 0.2

20152014


16

Market Overview

The U.S Economy (Continued)

The graph below presents the historical GDP growth rate in the U.S from 2014-2015

for each quarter:

The table below presents the GDP per capita in the U.S. during the past quarters in

constant 2009 (USD):

(Source: "The World Bank")

The table below presents the unemployment rate in the U.S in the past year:

(Source: "The World Bank")

The unemployment rate has dramatically decreased in the past 12 months from 5.7%

in January 2014 to 5% in December 2015.

-0.9%

4.6% 4.3%

2.1%

0.6%

3.9%

2.0% 0.7%

-5%

0%

5%

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015Q2 2015 Q3 2015 Q4 2015

Gross domestic product growth…

49,905 49,874

50,298 50,457 50,433

50,830 50,973 50,993

49,200

49,400

49,600

49,800

50,000

50,200

50,400

50,600

50,800

51,000

51,200

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

GDP Per Capita

5.7%

5.5% 5.5% 5.4%

5.5%

5.3% 5.3%

5.1% 5.1% 5.0% 5.0% 5.0%

4.6%

4.8%

5.0%

5.2%

5.4%

5.6%

5.8%

Unemployment rate


17

Market Overview

Economic Factors Influencing Main States of Operation

As of the valuation date, GPM operates in several states throughout the U.S. The

states of its retail operation are: Connecticut, Delaware, Illinois, Indiana, Iowa,

Kentucky, Maryland, Michigan, North Carolina, Ohio, Pennsylvania, South Carolina,

Tennessee and Virginia.

Hereunder presents the unemployment rate as December 31, 2015 and the Gross

State Product (GSP) for Q3 2015, by states:

(Sources: "U.S. Bureau of Census")

The table below presents the unemployment rate by states (USD million):

Country Unemployment

Rate

Q3 2015 GSP

(M USD)

Connecticut 5.4% 262,212

Delaware 4.9% 66,695

Maryland 5.0% 365,209

North Carolina 5.6% 509,718

Tennessee 5.6% 310,276

Virginia 4.2% 480,876

Illinois 6.1% 771,896

Iowa 3.5% 171,532

South Carolina 5.5% 199,256

Indiana 4.6% 331,126

Michigan 5.1% 468,029

Ohio 4.8% 599,093

Kentucky 5.7% 194,578

5.4%

4.9% 5.0%

5.6% 5.6%

4.2%

6.1%

3.5%

5.5%

4.6%

5.1%

4.8%

5.7%

–

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%


18

Market Overview

Economic Factors Influencing Main States of Operation (continued)

The table below presents information regarding the actual and the estimated

population in 2014 and 2015, respectively by state:

(Sources: "U.S. Bureau of Census", "U.S. Bureau of Economic", BDO analysis)

Country (USD)

Population

2014

Estimated

Population

2015

Population

Annual

Growth Rate

Connecticut 3,594,762 3,590,886 -0.11%

Delaware 935,968 945,934 1.06%

Maryland 5,975,346 6,006,401 0.52%

North Carolina 9,940,387 10,042,802 1.03%

Tennessee 6,547,779 6,600,299 0.80%

Virginia 8,328,098 8,382,993 0.66%

Illinois 12,882,189 12,859,995 -0.17%

Iowa 3,109,481 3,123,899 0.46%

South Carolina 4,829,160 4,896,146 1.39%

Indiana 6,597,880 6,619,680 0.33%

Michigan 9,916,306 9,922,576 0.06%

Ohio 11,596,998 11,613,423 0.14%

Kentucky 4,412,617 4,425,092 0.28%

Average 6,820,536 6,848,471 0.5%


19

Market Overview

Gasoline Market Structure and Key Developments2

The future path of crude oil and natural gas prices can vary substantially, depending

on assumptions about the size of global and domestic resources, demand for

petroleum products and natural gas (particularly in non-OECD countries), levels of

production, and supplies of other fuels.

Growth in U.S. energy production—led by crude oil and natural gas—and only modest

growth in demand reduces U.S. reliance on imported energy supplies. Natural gas is

the dominant U.S. energy export, while liquid fuels continue to be imported.

Through 2020, strong growth in domestic crude oil production from tight formations

leads to a decline in net petroleum imports and growth in net petroleum product

exports. In the high oil and gas resource case, increased crude production before

2020 results in increased processed condensate exports. Slowing growth in domestic

production after 2020 is offset by increased vehicle fuel economy standards that limit

growth in domestic demand. The net import share of crude oil and petroleum

products supplied falls from 33% of total supply in 2013 to 17% of total supply in 2040

in the reference case. The United States becomes a net exporter of petroleum and

other liquids after 2020 in the High Oil Price and High Oil and Gas Resource cases

because of greater U.S. crude oil production.

The United States transitions from being a modest net importer of natural gas to a

net exporter by 2017. U.S. export growth continues after 2017, with net exports in

2040 ranging from 3.0 trillion cubic feet (Tcf) in the Low Oil Price case to 13.1 Tcf in

the High Oil and Gas Resource case.

Growth in crude oil and dry natural gas production varies significantly across oil and

natural gas supply regions and cases, forcing shifts in crude oil and natural gas flows

between U.S. regions, and requiring investment in or realignment of pipelines and

other midstream infrastructure.

U.S. energy consumption is expected to grow at a modest rate in the next years

averaging 0.3% a year from 2013 through 2040. A marginal decrease in transportation

sector energy consumption contrasts with growth in most other sectors. Declines in

energy consumption tend to result from the adoption of more energy-efficient

technologies and existing policies that promote increased energy efficiency.

2 EIA- Annual Energy Outlook- 2015


20

Market Overview

Gasoline Market Structure and Key Developments (continued)

The following chart of the EIA represents recent annual average consumption of

transportation fuel (data and forecast, million barrels per day):

As can be seen from the chart above, 2007 is perceived by EIA as the historic turning

point of motor-fuels consumption. As mentioned earlier, the EIA projects that higher

efficiency will overcome the increase in miles traveled and will lead to substantial

long-term decrease in fuels consumption. This assumption is mainly relevant to

western states in the U.S.

The following table of the EIA represents history and projections for motor gasoline

and diesel fuel consumption (data and forecast, gasoline in blue, million barrels per

day):

As can be seen from the chart above, gasoline's market share is predicted to fall,

comparing to a predicted rise in diesel fuel.

10

12

14

2

3

4

5

6

7

8

9

10


21

Market Overview

Gasoline Market Structure and Key Developments 3 (Continued)

Electric Cars (E-Cars) Consumption

A large part of the gasoline consumption is attributed to private cars. In the past

years, E-Cars (both hybrid and plug-in cars) have become popular.

The table below presents the sales of electric and hybrid cars ("E-Cars") during the

years 2007-2015 in the U.S:

Betweem 2011-2013, the share of electric and hybrid cars constantly raising. In 2014

and 2015 we can see that the total elctric drive vechles have decreased.

The following table presents the number of hybrid and plug in cars that were sold in

the past years and the market share of E-Cars out of total car sales in the years 2009-

2015:

In the past 2 years, hybrid car sales have decreased, while the plugs in cars sales

have increased dramatically. The market share of E-Cars has decreased from 3.81% in

2013 to 2.87% in 2015.

3 Electric Drive transportation Association

Type 2009 2010 2011 2012 2013 2014 2015

Hybrid 290,292 274,210 266,329 434,645 495,530 451,702 384,404

Plug in – 326 17,735 52,835 96,702 118,773 114,022

Total Vehicles Sales 10,429,014 11,588,783 12,734,356 14,439,684 15,531,609 16,435,286 17,386,331

E-Drive Market Share 2.78% 2.37% 2.23% 3.38% 3.81% 3.47% 2.87%

2.78%

2.37%2.23%

3.38%

3.81%

3.47%

2.87%

0%

1%

1%

2%

2%

3%

3%

4%

4%

5%

–

100,000

200,000

300,000

400,000

500,000

600,000

Hybrid Plug in E-Drive Market Share


22

Market Overview

Gasoline Market Structure and Key Developments (Continued) Convenience Stores Market Structure and Key Developments4

The chart below presents the motor gasoline price (including federal, state and local

tax) for regular graded gasoline--actual and forecasted, in 2013 constant USD

(Source: EIA- Annual Energy Outlook 2015):

As can be seen above, in Q1 2016, the gasoline priced is forecasted to fall to USD

1.85 per gallon. The price will stabilize in Q2 2016. In Q3 2016 the gasoline price is

expected to increase to USD 2.10 per gallon and decrease by Q4 2016 to USD 2.00 per

gallon.

Convenience Stores ("C-stores") have greatly benefited from the growth of the overall

retail industry and continuous surge in oil prices.

C-Stores are of various sizes ranging from 800-5,000 square-feet (as of Nielsen

Convenience Industry Store Count) and offer a variety of products and services like:

gasoline, groceries products, diesel, tobacco products, meals and snacks, lottery

sales, ATMs, money orders etc. The average convenience store is 2,744 square feet.

New stores are bigger, with 3,590 square feet, with about 2,582 square feet of sales

area and about 1,008 square feet of non-sales area.

The U.S. convenience store count increased to a record of 154,195 stores as of

December 31, 2015, a 0.9% increase from the year prior; overall, 80.7% of

convenience stores (124,374 totals) sell motor fuels.

Convenience stores account for over 80% of the gasoline purchased in the U.S.

Foodservice, salty snacks and packaged beverages helped propel the U.S.

convenience store industry to a record sales year in 2014.

Buoyed in part by low fuel prices, the industry posted record in-store sales of USD

214.9 billion in 2014. This figure represented an increase of 4.6% over 2013.

4 NACS/Nielsen Convenience Industry Store Count

3.40

3.68 3.50

2.88

2.27

2.67 2.60

2.10

1.85 1.90

2.10 2.00

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

3.6

3.8

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Motor Gasoline prices- Actual and Forecast

Q1 2014 Q4 2016Forecast Actual


23

Market Overview

Convenience Stores Market Structure and Key Developments (Continued)

According to IBIS World Industry's analyst Hester Jeon, while gasoline constitutes the

majority of sales, store owners are increasingly relying on convenience store sales

because in-store products are more profitable than gasoline.

The convenience store industry is a destination for food and refreshments. With

falling revenues from fuels and tobacco products, foodservice sales are increasingly

becoming convenience stores’ most profitable category.

A detailed breakdown of C-stores revenue by product is as follows:

The convenience retailing industry continues to be dominated by single-store

operators, which in 2015 account for 63.1% of all convenience stores (97,359 stores

total).

This suggests that the increase in single-store ownership occurred as a result of larger

industry participants vacating some of the smaller or less desirable markets. These

locations, in most cases, did not appeal to distributors, since they were too

geographically removed for efficient route inclusion or lacked the demographic

statistics or physical location or structure to be considered by larger acquirers.

69%

11%

6% 7%

7%

motor fuels Tobacco

Foodservice Packaged beverages and Beer

other


24

Market Overview

Industry Risk Factors- C-Stores

By far, C-stores have the most locations nationwide, but over the past five years,

others in the small box category are increasing store count at a faster clip. Dollar

stores added 19% more stores and drug stores added 6% more, compared to 2% in the

C-store category. This trend is likely to continue because, in addition to competition

with other retail formats, four of the leading reasons people stop at C-Stores are

under pressure include:

Highly competitive industry

The convenience store and retail fuel industries are highly competitive and

characterized by ease of entry and constant change in the number and type of

retailers offering the products and services found in stores. They compete with many

other convenience store chains, gasoline stations, supermarkets, drugstores, discount

stores, club stores, fast food outlets, and mass merchants. In recent years, several

nontraditional retailers such as supermarkets, club stores, and mass merchants have

affected the convenience store industry by entering the fuel retail business. These

nontraditional fuel retailers have obtained a significant share of the motor fuels

market, and their market share is expected to grow.

The volatility of wholesale petroleum costs

Crude oil and domestic wholesale petroleum markets are marked by significant

volatility. General political conditions, acts of war or terrorism, and instability in oil

producing regions, particularly in the Middle East and South America, can

significantly affect crude oil supplies and wholesale petroleum costs.

In addition, the supply of fuel and the wholesale purchase costs could be adversely

affected in the event of a shortage, which could result from, among other things,

lack of capacity at United States oil refineries or from the absence of fuel contracts

that guarantee an uninterrupted unlimited supply of gasoline. Significant increases

and volatility in wholesale petroleum costs have resulted and could in the future

result in significant increases in the retail price of petroleum products and in lower

gasoline average margin per gallon. Increases in the retail price of petroleum

products have resulted and could in the future adversely affect consumer demand for

fuel. This volatility makes it difficult to predict the impact that future wholesale cost

fluctuations will have on the operating results and financial condition.

Changing consumer preferences for alternative motor fuel and improvements in

fuel efficiency

Technological advancement, regulatory changes, or changes in consumer preferences

toward alternative motor fuels or more fuel-efficient vehicles could reduce demand

for the fuel products. In addition, a shift toward electric, hydrogen, natural gas or

other alternative fuel-powered vehicles could fundamentally change the shopping

habits of the customers or lead to new forms of fueling destinations or new

competitive pressure. New technologies developed to improve the fuel efficiency of

automobiles, or further governmental mandates to improve fuel efficiency, may

result in decreased demand for conventional fuel. Any of these outcomes could

potentially result in fewer customer visits to C-Stores, decreases both in fuel and

general merchandise sales revenue or reduce profit margins.


25

Market Overview

Industry Risk Factors- C-Stores (Continued) Competitors- Convenience Stores

Wholesale cost and tax increases relating to tobacco products

Sales of tobacco products have a lion share of the C-Stores revenues. Any significant

increases in wholesale cigarette costs or tax increases on tobacco products may have

a materially adverse effect on unit demand for cigarettes domestically.

The table below presents the top 10 convenience stores chains in U.S.A and Canada (not

including petroleum refining) as of March 2016:

(Source: companies' website).

(*) Couche-Tard, one of the world’s leading convenience retailers, has announced on

March 2015, the creation of a new, global convenience brand, “Circle K”. The new

Circle K brand will replace Couche-Tard’s existing Circle K®, Statoil®, Mac’s® and

Kangaroo Express® branding on stores and service stations across Canada, the USA,

Scandinavia and Central and Eastern Europe.

8,600

14,778

2,822

1,049 1,911

650 1,184 786 550

–

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000


26

Market Overview

Competitors- Convenience Stores

Chain Name Number Of stores Description

7-Eleven 8,600 7-Eleven Malaysia Holdings Berhad owns, operates, and franchises a chain of convenience stores under

the 7-Eleven brand name.

Alimentation Couche-

Tard (Circle K)

14,778 Couche-Tard, one of the world’s leading convenience retailers, has announced on March 2015, the

creation of a new, global convenience brand, “Circle K”. The new Circle K brand will replace Couche-

Tard’s existing Circle K®, Statoil®, Mac’s® and Kangaroo Express® branding on stores and service

stations across Canada, the USA, Scandinavia and Central and Eastern Europe.

Circle K operates a network of 24-hour convenience stores. The Company offers food products, fast-food

services, lottery tickets, fuel stations, chemicals, lubricant, automated banking machines, and a variety

of other products.

Speedway 2,822 International Speedway Corporation promotes motorsports activities in the United States. The Company

owns and/or operates various facilities, including Daytona International Speedway, Talladega

Superspeedway, Phoenix International Raceway.

CST Brands 1,049 CST Brands, Inc. retails motor fuels and convenience merchandise. The Company provides its services in

the United States and eastern Canada.

Casey's General Stores 1,911 Casey's General Stores, Inc. operates convenience stores in the Midwest. The Company's stores,

operating under the name Casey's General Store, carry a selection of food, beverages, tobacco

products, health and beauty aids, automotive products, and other.

Sunoco Inc. 650 Sunoco LP distributes motor fuel to convenience stores, independent dealers, commercial customers,

and distributers. The Company also operates convenience stores and retail fuel sites. Sunoco is located

in the United States.

Murphy USA Inc. 1,184 Murphy USA Inc. produces and distributes petroleum products. The Company engages in refining,

marketing, and transportation of oil and gas products. Murphy USA provides products and services

worldwide.

Kroger Co. 786 The Kroger Co. operates supermarkets and convenience stores in the United States. The Company also

manufactures and processes some of the foods that its supermarkets sell.

Pilot flying 550 Pilot Flying J Inc. owns and manages convenience stores. The Company offers filling stations, parking, car

washes, payphones, automated teller machines, showers, game rooms and public laundry services. Pilot

Flying J serves customers throughout the U.S.

Section 3 - Financial Statements Analysis Valuation Study - As of December 31, 2015 GPM Investments, LLC

27

Section 3

Financial Statements Analysis


28


Balance Sheets (GPM's IFRS Financials)

The table below presents the Company's audited balance sheets as of December 31, 2014 and 2015 (USD thousands):

USD in thousands USD in thousands

Current assets: 2014 2015 Current liabilities: 2014 2015

Cash and cash equivalents 3,694 7,649 Current Portion of Bank Loans 17,982 34,672

Restricted cash 4,079 8,941 Trade Payables 46,938 70,134

Trade receivables, net 7,919 9,570 Related party loans - current – 44,057

Other current assets 18,051 35,217 Accrued income taxes payable – 396

Inventory 50,212 72,521 Other Current Liabilities 24,952 45,278

Current portion of environmental receivables 1,279 1,008 Current portion of environmental liabilities 2,988 2,783

Current portion of favorable leases 974 1,573 Current portion of unfavorable leases 1,372 3,531

Real estate assets held for sale – 66 Total current liabilities 94,232 200,851

Total current assets 86,208 136,545

Non current liabilities:

Non current assets: Bank Loans 29,843 32,767

Environmental receivables 7,292 7,171 Environmental liabilities 10,137 11,209

Fixed assets 108,354 152,095 Asset retirement obligation 7,341 9,862

Intangible assets 26,391 95,532 Unfavorable leases 11,243 23,721

Favorable leases 4,339 11,298 Deffered tax liabilities – 487

Prepaid expenses 767 1,494 Other liabilities 16,969 43,396

Other long-term assets 8,942 2,421 Total non current liabilities 75,533 121,442

Total non current assets 156,085 270,011

Total liabilities 169,765 322,294

Equity 72,528 84,263

Total assets 242,293 406,556 Total liabilities and equity 242,293 406,556

As of December 31 As of December 31


29


Balance Sheets – Notes 5

Restricted cash

Usually, the Group's restricted cash balance includes amounts, which the Group

deposited in order to comply with agreements with third parties. As of December 31,

2015, according to Management, the majority of the restricted cash (USD 7.4 million)

included amounts connected to open issues of environmental matters, processing of

money orders and net receipts on account of lottery sales. The remaining USD 1.5

million is used as cash collateral for replacement letters of credit that were required

under the Midwest Acquisition Agreement. A related liability of USD 1.5 million is in

place in "other liabilities" balance.

Trade receivables, net

As of December 31, 2014 and 2015, the majority of the trade receivables are from

credit cards which typically convert to cash shortly after the transaction.

As of December 31, 2014 and 2015, the total trade receivables from the Company's

gross profit amounted to approximately 3.2% and 3%, respectively.

Inventory

The Group's inventory is valued at the lower of cost or net realizable value. The cost

of the inventory includes the purchase costs and other costs incurred in bringing it to

its current location and condition.

The table below presents the Group’s inventory composition as of December 31, 2014

and 2015:

5 Source: Financial statements, Management and BDO analysis.

USD in thousands 2014 2015

Inventory of merchandise in convenience stores 31,428 47,778

% of inventory 62.6% 65.9%

Inventory of petroleum 13,455 15,499


Inventory of lottery tickets 5,329 9,244


Inventory 50,212 72,521


30


Balance Sheets – Notes (continued)

Fixed assets

The table below presents the Group's fixed asset breakdown as of December 31, 2014

and 2015:

Equipment includes fuel equipment, computers and other office equipment. The

majority of the fuel equipment includes dispensers, fuel tanks, fuel station canopy,

etc. The equipment in the convenience stores includes, among other things, cabinets,

counters, shelving, tables, food equipment, etc.

Intangible assets

The table below presents the Group's intangible asset breakdown as of December 31,

2014 and 2015:

The majority of intangible assets were acquired in the context of acquisitions. As of

December 31, 2015, intangible assets were mainly composed of goodwill, which

amounted to approximately 92% of its total intangible assets balance.


Equipment 66,746 80,410

% of total fixed assets 61.6% 52.9%

Leasehold Improvements, Buildings and Real Estate Assets 41,380 71,310


Motor Vehicles 228 375

Total 108,354 152,095


Goodwill 22,104 87,756


Trade name 2,326 6,195


Petroleum supply and non competition agreements 1,179 769


Computer software and licenses 494 584


Customer relations 288 228


Total 26,391 95,532


31



Other assets

The table below presents the Group's other current asset composition as of December

31, 2014 and 2015:

The table below presents the Groups other long term asset composition as of

December 31, 2014 and 2015:

(1) Vendor receivables represent amounts of incentives that it would receive from its

principle suppliers (please refer to section "Company Overview") which are

conditional upon the volume of fuel and/or merchandise, purchased by the Group in

accordance with its supply agreements.

(2) Prepaid expenses balance as of December 31, 2015 includes approximately USD

4.4 million of prepaid expenses incurred on account of the limited partnership

transactions (please refer to section "EBITDA Ratios").

(3) On August 18, 2014, a new non-interest bearing promissory note in the amount of

USD 7,133 thousands was signed with Holdings. According to the Company's financial

statements, as of December 31, 2015, the fair value of this promissory note is USD

6,973 thousands and its book value is USD 6,994 thousands.

(4) As of December 31, 2015, deposits and other balance are mostly composed from

an environmental indemnification asset that increased as a result of the acquisitions

in the past years.


Vendor receivables (1) 9,351 13,089

Prepaid expenses (2) 3,139 8,674

Promissory note from Holdings - Current (3) – 6,994

Prepayment for future business acquisitions 2,300 –

Inventory - supplies 1,252 1,859

Other receivables 2,009 4,601

Other current assets 18,051 35,217


Promissory note from Holdings (3) 6,780 –

Deposits and other (4) 1,148 1,721

Deferred branding expenses 481 319

Notes receivables 533 381

Other long term assets 8,942 2,421


32



Environmental assets and liabilities

The operations of the Group are exposed to environmental risks through its

petroleum marketing and distribution operations which includes the storage and sale

of petroleum products. According to the Company, it has invested significant amounts

for the purposes of complying with environmental laws and regulations.

The insurance policies of the Group together with Underground Storage Tank ("UST")

trust funds, in certain states, in which the Group operates, generally cover

environmental pollution subject to the terms of the relevant policies.

The table below summarize the Group's environmental assets and liabilities as of


Trade payables

The table below presents the Group’s trade payables' composition as of December 31,

2014 and 2015:


Current portion of environmental receivables 1,279 1,008

Environmental receivables 7,292 7,171

Total environmental assets 8,571 8,179

Current portion of environmental liabilities (2,988) (2,783)

Environmental liabilities (10,137) (11,209)

Total environmental liabilities (13,125) (13,992)

Total environmental liabilities, net (4,554) (5,813)


Open account 35,465 50,767

% of trade payables 75.6% 72.4%

State lottery payables 9,334 16,521

% of trade payables 19.9% 23.6%

Accrued liabilities 1,499 1,438

Other 640 1,408

Trade payables 46,938 70,134


33



Other liabilities

The table below presents the Group's other current liabilities' composition as of


The table below presents the Group’s other noncurrent liabilities' composition as of



Accrued expenses 6,017 13,031

% of other current liabilities 24.1% 28.8%

Taxes payable to government agencies (1) 4,500 11,267

% of other current liabilities 18.0% 24.9%

Liabilities to employees and other liabilities related to

wages and salaries6,443 7,528

Current maturity of M idwest Seller Note (2) – 4,696

Current maturity of financial lease obligations (3) 1,292 2,983

Other 1,039 2,788

Deferred vendor income 1,527 1,315

Notes payable 475 865

Accrued interest 110 805

Current maturity of Southeast Seller Note 3,549 –

Other current liabilities 24,952 45,278


Midwest Seller Note (2) – 15,927

% of other noncurrent liabilities 0.0% 36.7%

Financing lease liabilities (3) 3,411 11,579

% of other noncurrent liabilities 20.1% 26.7%

Deferred rent 7,445 10,202

Deferred vendor income 4,257 3,698

Deposits from outside operators 1,450 1,439

Other 406 551

Other liabilities 16,969 43,396


34



Other liabilities (continued)

(1) Taxes payable to government agencies represents the Group's obligation of

federal and state taxes on fuel, which applies, to the purchase of petroleum (excise

taxes).

(2) Midwest Seller Note is in connection with the Midwest Acquisition, in which the

Sellers accepted a promissory note from the Company. This balance represents part

of the Midwest Acquisition's consideration, secured by the Company. In pursuance to

the Midwest Acquisition, these amounts were recognized partially at fair value.

(3) Financing lease liabilities - The Group leases certain store equipment, office

equipment, automatic tank gauges, store lighting, fuel dispensers, land and buildings

under financing leases.


35


Statements of Operations

The following are the Company's statements of operations for 2012-2015:

Revenues and Gross Profit

The table below presents the Company's revenues and cost of sales composition for

2014 and 2015:

USD in thousands FY 2012 FY 2013 FY 2014 FY 2015

Revenues 1,132,753 1,378,925 1,771,279 1,741,304

% change 21.7% 28.5% -1.7%

Cost of sales (1,011,750) (1,217,309) (1,525,749) (1,419,325)

% of revenues 89.3% 88.3% 86.1% 81.5%

Gross profit 121,003 161,616 245,530 321,979

% gross profit 10.7% 11.7% 13.9% 18.5%

Selling and marketing expenses (97,191) (140,112) (204,398) (263,324)

% of gross profit 80.3% 86.7% 83.2% 81.8%

General and administrative expenses (13,440) (16,591) (25,948) (31,078)

% of gross profit 11.1% 10.3% 10.6% 9.7%

Other expenses (1,041) (1,638) (1,337) (3,730)

% of gross profit 0.9% 1.0% 0.5% 1.2%

Operating income 9,331 3,275 13,847 23,847

% operating margin 0.8% 0.2% 0.8% 1.4%

Financing income 408 266 76 217

Financing expenses (2,503) (3,188) (4,237) (9,755)

Net income before income taxes 7,236 353 9,686 14,309

% net income margin 0.6% 0.03% 0.5% 0.8%

Income tax expense – – – (2,440)

Comprehensive income 7,236 353 9,686 11,869

% comprehensive income 0.6% 0.03% 0.5% 0.7%

USD in thousands FY 2014 FY 2015

Petroleum

Revenue 1,283,595 1,067,736

Cost of sales (1,191,446) (958,403)

Gross profit 92,149 109,333

% gross profit 7.2% 10.2%

Merchandise

Revenue 464,812 645,328

Cost of sales (332,443) (458,605)

Gross profit 132,369 186,723


Other Revenue 22,872 28,240

Changes in inventory of petroleum, merchandise (1,860) (2,317)

Total Gross profit 245,530 321,979



36


Statements of Operations (continued)

Revenues and Gross Profit (continued)

The cost of the purchase of petroleum is presented after deducting federal and state

taxes on fuel which applies to the purchase of petroleum (excise taxes) in the

amount of USD 170.1 million and USD 225.7 million, respectively, for the twelve

month period ended December 2014 and 2015, respectively.

In December 2015, agreements were signed between the Group and a fuel supplier

effective retroactively to August 1, 2015, which resulted in a reduction to cost of

sales of approximately USD 1 million for the year ended December 31, 2015.

The table below presents the Company's revenue per operating segment for the 12

month period ended on December 31, 2015:

The Company's main revenues are from petroleum, which for the 12 month period

ended on December 31, 2015, amounted to approximately USD 1,067 million and

accounted to 61% of the total Company's revenues.

In addition, the Group operates mainly in the retail operating segment, and for the

12 month period ended on December 31, 2015, the Group's revenues from this

operating segment amounted to approximately 93% of its total revenues.

USD in thousands Retail Wholesale Other Total

Petroleum revenues 942,060 125,676 – 1,067,736

% of revenues 54.1% 7.2% 0.0% 61.3%

Merchandise revenues 645,328 – – 645,328

% of revenues 37.1% 0.0% 0.0% 37.1%

Other revenues, net 23,949 3,505 786 28,240

% of revenues 1.4% 0.2% 0.0% 1.6%

Total Revenues 1,611,337 129,181 786 1,741,304

% of total revenues 92.5% 7.4% 0.0% 100.0%


37



Revenues and Gross Profit (continued)

The table below presents the Group's petroleum gallons that were sold during 2012-

2015 (in thousands):

The Group’s main petroleum gallons were sold under its retail operating segment. It

can be noticed that the number of gallons sold through its retail operating segment

for the 12 month period ended on December 31, 2015, increased approximately by

31% compared with the same period last year, due to the acquisitions made during

2015 (please refer to "Company Overview" section).

Operating Profit

The tables below present the Company's operating expense composition for 2012-

2015:

Selling and Marketing Expenses ("S&M Expenses")

In thousands 2012 2013 2014 2015

Retail 220,771 284,997 380,854 500,546

% change 29.1% 33.6% 31.4%

% from total 77.6% 81.2% 84.7% 88.1%

Wholesale 63,907 66,121 68,655 67,552

% change 431.0% 3.8% -1.6%

% from total 22.4% 18.8% 15.3% 11.9%

Total 284,678 351,118 449,509 568,098

% change 23.3% 28.0% 26.4%


Salaries (32,089) (47,733) (70,795) (94,283)

% of total S&M expenses 33.0% 34.1% 34.6% 35.8%

Rent (20,773) (29,729) (42,944) (55,360)


Credit card commissions (13,566) (17,268) (23,028) (25,550)


Electricity, upkeep and taxes (8,608) (12,658) (17,379) (23,873)


Depreciation and amortization (6,112) (9,875) (15,774) (20,010)


Other (6,546) (9,388) (14,660) (18,420)

Maintenance and repairs (4,136) (7,104) (10,303) (13,889)

Insurance (4,350) (5,230) (7,645) (9,449)

Advertising (1,011) (1,127) (1,870) (2,490)

Total S&M expenses (97,191) (140,112) (204,398) (263,324)


38



Operating Profit (continued)

General and Administrative Expenses ("G&A Expenses")

The table below presents the Company's total operating income and its operating

income per operating segment for 2015:

(*) The operating profit rate was calculated from GPM's revenues.


Salaries, wages and related expenses (7,218) (10,062) (16,703) (19,292)

% of total G&A expenses 53.7% 60.6% 64.4% 62.1%

Other (3,119) (4,244) (6,081) (6,851)

Legal, audit and professional fees (2,376) (1,548) (2,076) (3,686)

Rent and office maintenance (727) (737) (1,088) (1,249)

Total G&A expenses (13,440) (16,591) (25,948) (31,078)

USD in thousands 2015

Retail Operating Income 74,531

% operating profit 4.6%

Wholesale Operating Income 4,148


Other (54,832)

Total operating income 23,847


Section 4 - Valuation Methodology Valuation Study - As of December 31, 2015 GPM Investments, LLC

39

Section 4

Valuation Methodology


40


Background Market Approach

The generally accepted approaches to valuation are commonly referred to as the

following:

Market approach;

Income approach;

Asset-based approach.

Within each category, a variety of methodologies exist to assist in the estimation of

fair value. The following sections contain a brief overview of the theoretical basis of

each approach, as well as a discussion of the specific methodologies relevant to the

analyses performed.

The market approach references actual transactions in the equity of the enterprise

being valued or transactions in similar enterprises that are traded in the public

markets. Third-party transactions in the equity of an enterprise generally represent

the best estimate of fair market value if they are done at arm’s length. In using

transactions from similar enterprises, there are two primary methods. The first,

often referred to as the Guideline Transactions Method, involves determining

valuation multiples from sales of enterprises with similar financial and operating

characteristics and applying those multiples to the subject enterprise. The second,

often referred to as the Guideline Public Company Method, involves identifying and

selecting publicly traded enterprises with financial and operating characteristics

similar to the enterprise being valued. Once publicly traded enterprises are

identified, valuation multiples can be derived, adjusted for comparability, and then

applied to the subject enterprise to estimate the value of its equity or invested

capital.


41


Income Approach Asset-Based Approach

The income approach is based on the premise that the value of a security or asset is

the present value of the future earning capacity that is available for distribution to

investors in the security or asset. A commonly used methodology under the income

approach is a discounted cash flow analysis. A discounted cash flow analysis involves

forecasting the appropriate cash flow stream over an appropriate period and then

discounting it back to a present value at an appropriate discount rate. This discount

rate should consider the time value of money, inflation, and the risk inherent in

ownership of the asset or security interest being valued.

A third approach to the valuation is the asset-based approach. The discrete valuation

of an asset using an asset-based approach is based upon the concept of replacement

as an indicator of value. A prudent investor would pay no more for an asset than the

amount for which he or she could replace the asset new. The asset-based approach

establishes value based on the cost of reproducing or replacing the property, less

depreciation from physical deterioration and functional obsolescence, if present and

measurable. This approach generally provides the most reliable indication of the

value of land improvements, special-purpose buildings, special structures, systems,

and special machinery and equipment.


42


Discounted Cash Flow Method

The discounted cash flow (“DCF”) method under the Income Approach estimates the

future cash flow that a business is expected to generate. Future cash flow is

converted to a present value equivalent using an estimated discount rate such as the

cost of equity or the weighted average cost of capital (“WACC”), based on the type

of cash flows being discounted. We have utilized a discounted cash flow method as

an indicator of fair market value in the equity of the Company.

The DCF assumptions were estimated considering forecasts provided by, and

discussions with, Management of Company, historical operating performance, and

the economic and industry outlook as of the Valuation Date.

Debt-Free Cash Flow Assumptions and Adjustments

For purposes of this analysis, debt-free cash flow is defined as:

Earnings before Interest and Income Taxes (EBIT)

Less: Provision for Income Taxes

Equals: Debt-Free Net Income After Tax

Plus: Depreciation

Equals: Gross Cash Flow

Less: Working Capital Additions

Less: Capital Expenditures

Equals: Debt-Free Cash Flow

In applying this method, the first step is to project the debt-free cash flow that the

business will generate in the future.


43


WACC

When applying the Income Approach, the cash flows expected to be generated by a

business are discounted to their present value equivalent using a rate of return that

reflects the relative risk of the investment, as well as the time value of money. This

return, known as the weighted average cost of capital (“WACC”) is calculated by

weighting the required returns on interest-bearing debt and common equity capital

in proportion to their estimated percentages in an expected industry capital

structure.

The general formula for calculating the WACC is:

WACC = Kd (D%) + Ke (E%)

Where:

WACC Weighted average rate of return on invested capital;

Kd After-tax rate of return on debt capital;

D% Debt capital as a percentage of the sum of the debt and common

equity capital (“Total Invested Capital”);

Ke Rate of return on common equity capital; and

E% Common equity capital as a percentage of the Total Invested Capital.

CAPM has been empirically tested and is widely accepted for the purpose of

estimating a company’s required return on capital. In applying the CAPM, the rate of

return on capital is estimated as the current risk-free rate of return on US Treasury

bonds, plus a market risk premium expected over the risk-free rate of return,

multiplied by the “beta” for the valued company. Beta is defined as a risk measure

that reflects the sensitivity of a company’s stock (or capital) price to the movements

of the stock market as a whole.

The CAPM rate of return on capital is calculated using the formula:

Ke Rate of return on capital (in this case, Total Invested Capital);

Rf Risk free rate of return;

Β Beta or systematic risk for this type of capital investment (in this case, asset beta);

Rm – Rf Market risk premium; the expected return on a broad portfolio of stocks in the market (Rm) less the risk free rate (Rf);

SCP Small cap premium;

SRP Specific Premium

Where, Ke = Rf + β(Rm - Rf)+ SCP+SRP.

Section 5 - Valuation – DCF Method Valuation Study - As of December 31, 2015 GPM Investments, LLC

44

Section 5

Valuation – DCF Method


45


General Definitions

The Company's valuation was performed according to the Discounted Cash

Flow (DCF) Method and the income approach.

The DCF assumptions were estimated considering forecasts provided by the

Company, discussions with Management, historical operating performance,

and the economic and industry outlook as of the Valuation Date.

Nominal Cash Flow – the DCF presented below is adjusted for inflation. The

Company's discount rate (WACC) is also inflation adjusted.

The valuation's assumptions do not take into consideration any acquisitions

that the Company have executed after the Valuation Date or any potential

acquisitions that the Company may execute in the future (Fuel USA

Acquisition, Gas Mart Acquisition, please refer to section 1 – Company

Overview).

The DCF Method does not take into account the Privet Issuance transaction

(please refer to section 6 – DCF Method Post Privet Issuance).

1. "2015A" - represents the Company's audited financial statements for the 12

month period ended on December 31, 2015;

2. "2015 pr.F" - represents the Company's pro-forma for 2015 in order to

examine the Company's forecasts in 2016. This pro-forma is based on the

Company's and its acquisitions operating performances as of the beginning

of the year;

3. "2016F-2019F" - represent the Company's forecast for 2016-2019;

4. "2020F and Terminal Year" – 2020 and the terminal year were projected

and prepared after discussions with Management and based on our

assessment of economic and industry growth outlooks.


46


Gross Profit

The table below presents the forecasted gross profit of the Company's Petroleum Retail Segment (USD thousands; gallons in thousands):

Gallons – Number of gallons forecasted for 2016-2019 were calculated based on the

price of gas as of December 31, 2015 and the Company’s forecast for 2016-2019 and

is expected to increase from 2020 at the same growth rate of approximately 1%. We

found this rate to be reasonable and in compliance with our market analysis (please

refer to "Market Analysis" section).

Gross Profit Cents per Gallon (CPG) – The Company's CPG on 2015 pro-forma same

stores amounts to 19.5, a decrease of approximately 8.2% compared to 2014. The

Company's CPG for 2015A amounts to 20.3. According to Management, the CPG from

2016 to 2019 is forecasted to be 20.8. This forecast takes into consideration the

Company's agreements with its petroleum suppliers, as amended.

USD in thousands FY 20142015 pr.

Same Stores2015A 2015 pr.F 2016F 2017F 2018F 2019F 2020F

Terminal

Year

Number of Gallons 380,854 376,073 500,546 562,314 555,788 561,346 566,959 572,629 578,355 584,139

% change -1.3% -1.2% 1.0% 1.0% 1.0% 1.0% 1.0%

Gross profit per gallon, Cent Per Gallon (CPG) 0.213 0.195 0.203 0.201 0.208 0.208 0.208 0.208 0.215 0.225

% change -8.18% 3.45% 0.00% 0.00% 0.00% 3.37% 4.65%

Total petroleum retail gross profit 81,016 73,453 101,627 113,018 115,566 116,722 117,889 119,068 124,307 131,391

% change -9.34% 2.25% 1.00% 1.00% 1.00% 4.40% 5.70%

Petroleum retail credit cards expenses (19,037) (13,942) (19,377) (22,704) (23,919) (26,725) (29,824) (33,245) (33,578) (33,914)

% change -26.8% 5.35% 11.73% 11.60% 11.47% 1.00% 1.00%

% of gross profit 23.50% 18.98% 19.07% 20.09% 20.70% 22.90% 25.30% 27.92% 27.01% 25.81%

Total petroleum retail gross profit, net 61,979 59,511 82,250 90,314 91,647 89,997 88,065 85,822 90,729 97,478

% change -3.98% 1.48% -1.80% -2.15% -2.55% 5.72% 7.44%


47

Valuation –DCF Method

Gross Profit (continued)

Petroleum Retail Segment (continued):

Gross Profit Cents per Gallon (CPG) (continued)

In addition, based on Management estimations, in 2020 and in the terminal year, the

Company's agreements with some of its main petroleum suppliers are expected to

change and benefit the Company. This will increase the Company's CPG by 0.007 and

0.01 in 2020 and in the terminal, respectively.

Due to internal classification differences, the petroleum retail gross profit in the

Company's financial statements for 2015 may be different than presented above.

Petroleum Retail Credit Cards Fees Expenses – Credit cards fees are payable to credit

cards companies for consumers paying with credit cards. The yearly amount of these

expenses is influenced by several parameters, such as, fuel revenue, merchandise

revenue and credit card companies' rates.

The expenses presented above represent the credit card fees related to petroleum

retail sales, only.

According to Management, there is no expectation that the credit card fees and/or

the Company's agreements with the credit cards companies, will change in the

future.

Because this expense is influenced by several parameters, it is characterized as a

variable expense that depends on the Company's number of gallons sold and on the

retail petroleum price.

In order to estimate the Company's petroleum retail credit card expenses in 2016-

2019, an analysis regarding the retail petroleum price and its connection to the

Company's petroleum retail gross profit was performed by Management.

In accordance with the Management analysis (based on the Company's Retail

historical performances and on crude oil futures' prices forecasted), between 2016

and 2019, the retail price of petroleum is predicted to increase. That assumption

leads to the conclusion that Petroleum Retail CC Expenses will increase,

respectively. After 2019, we assume that the retail petroleum price will be stable.

Therefore, the CC Expenses' growth rate will be approximately 1%, per the gallons'

growth rate.


48

Valuation- DCF Method


The table below presents the forecasted gross profit of the Company's Petroleum Wholesale Segment (USD thousands; gallons in thousands):

Gallons – Number of gallons forecasted for 2016-2019 were based on the Company’s

forecast. We assume that from 2020 onward, the number of gallons is not expected

to change.

Gross Profit Cents per Gallon (CPG) – The Company's CPG on 2015A amounts to 6.8, a

decrease of 6% compared to 2014. According to Management, the CPG from 2016 is

forecasted to be 6.7. This forecast takes into consideration the Company's

agreements with its petroleum suppliers.



Terminal

Year

Number of Gallons 68,655 67,552 67,552 67,552 67,264 67,264 67,264 67,264 67,264 67,264

% change -1.6% -0.4% 0.0% 0.0% 0.0% 0.0% 0.0%

Gross profit per gallon, Cent Per Gallon (CPG) 0.072 0.068 0.068 0.068 0.067 0.067 0.067 0.067 0.074 0.084

% change -6.0% -1.4% 0.0% 0.0% 0.0% 10.5% 13.6%

Total petroleum wholesale gross profit 4,946 4,575 4,575 4,575 4,491 4,491 4,491 4,491 4,962 5,634

% change -7.52% -1.83% 0.00% 0.00% 0.00% 10.48% 13.56%

Petroleum wholesale credit cards expenses (470) (430) (430) (430) (534) (534) (534) (534) (534) (534)

% change -8.5% 24.2% 0.0% 0.0% 0.0% 0.0% 0.0%

% of gross profit 9.50% 9.4% 9.4% 9.4% 11.9% 11.9% 11.9% 11.9% 10.8% 9.5%

Total petroleum wholesale gross profit, net 4,477 4,145 4,145 4,145 3,957 3,957 3,957 3,957 4,428 5,100

% change -7.42% -4.52% 0.0% 0.0% 0.0% 11.9% 15.2%


49



Petroleum Wholesale Segment (continued):

Gross Profit Cents per Gallon (CPG) (continued)

In addition, based on Management estimations, in 2020 and in the terminal year, the

Company's agreements with some of its main petroleum suppliers are expected to

change and benefit the Company. This will increase the Company's CPG by 0.007 and

0.01 in 2020 and in the terminal year, respectively.

Due to internal classification differences, the petroleum wholesale gross profit in the

Company's financial statements for 2015 may be different than presented above.


50



The table below presents an overview of the forecasted gross profit of the Company's Petroleum Segment (USD thousands):



Terminal

Year

Total petroleum retail gross profit, net 61,979 59,511 82,250 90,314 91,647 89,997 88,065 85,822 90,729 97,478

% change -3.98% 1.48% -1.80% -2.15% -2.55% 5.72% 7.44%

Total petroleum wholesale gross profit, net 4,477 4,145 4,145 4,145 3,957 3,957 3,957 3,957 4,428 5,100

% change -7.42% -4.52% 0.0% 0.0% 0.0% 11.9% 15.2%

Total petroleum gross profit, net 66,456 63,655 86,395 94,459 95,604 93,954 92,022 89,779 95,157 102,578

% change -4.2% 1.2% -1.7% -2.1% -2.4% 6.0% 7.8%


51


Revenue and Gross Profit

The table below presents an overview of the forecasted revenue, cost of sales and gross profit of the Company's Merchandise Segment (USD thousands):

Revenue – The merchandise revenues forecasts for 2016-2019 were calculated based

on the Company's forecast for 2016-2019 and is expected to increase from 2020 with

the same growth rate of approximately 3%. We found this rate to be reasonable and

in compliance with our market analysis (please refer to the "Market Analysis"

section).

Total Merchandise Gross Profit – From 2016 to 2019, the merchandise gross margin

was forecasted by Management to be approximately 31%. Based on this merchandise

gross margin and on the historical merchandise gross margin, we found this rate to

be reasonable and assumed that the merchandise gross margin forecast for onward

periods will stay stable and amount to 31%, as well. Gross profit excludes costs

associated with inventory adjustments and spoilage. Due to internal classification

differences, the merchandise gross profit in the Company's financial statements for

2015 may be different than presented above.



Terminal

Year

Revenue 464,812 467,099 644,382 733,562 741,975 764,235 787,162 810,777 835,100 860,153

% change 0.49% 1.15% 3.0% 3.0% 3.0% 3.0% 3.0%

Total cost of sales (328,795) (322,724) (446,486) (509,161) (513,399) (528,801) (544,665) (561,005) (577,835) (595,170)

% of COGS 70.74% 69.09% 69.29% 69.41% 69.19% 69.19% 69.19% 69.19% 69.19% 69.19%

Total merchandise gross profit 136,017 144,375 197,896 224,400 228,577 235,434 242,497 249,772 257,265 264,983

% gross profit 29.3% 30.9% 30.7% 30.6% 30.8% 30.8% 30.8% 30.8% 30.8% 30.8%

Merchandise credit cards expenses (3,519) (4,133) (5,742) (6,706) (5,914) (6,092) (6,274) (6,463) (6,656) (6,856)

% of revenue 0.76% 0.88% 0.89% 0.91% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80%

Total merchandise gross profit, net 132,498 140,242 192,154 217,694 222,662 229,342 236,223 243,309 250,609 258,127

% gross profit 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0%


52


Revenue and Gross Profit (continued)

Merchandise Segment (continued):

Merchandise Credit Cards Fees Expenses – according to Management, merchandise

credit card expenses are calculated as a rate of its merchandise revenues. The total

credit card expense for 2016-2019 was calculated by Management.

After 2019, we assume the merchandise credit card expense rate from its

merchandise revenues will stay stable at 0.8%.


53



The table below represents the Company's forecasted other income (USD thousands):

Other Income – represents all the other income that does not include petroleum

refueling services or merchandise products sold at the convenience stores. For

example: revenue from rental income from outside operators, sale of phone cards,

sale of lottery tickets and money orders, money transfer services, withdrawing of

cash (ATM), car washing, etc.

The other income forecast for 2016-2019 was calculated based on Management's

forecast for 2016-2019 and is expected to increase from 2020 at the same growth

rate of approximately 1%. We found this rate to be reasonable and in compliance

with our market analysis (please refer to the "Market Analysis" section).



Terminal

Year

Retail other income 17,111 17,168 23,358 26,667 26,182 26,443 26,708 26,975 27,245 27,517

% change 0.33% -1.82% 1.00% 1.00% 1.00% 1.00% 1.0%

Wholesale other income 3,388 3,504 3,504 3,504 3,612 3,650 3,687 3,726 3,763 3,800

% change 3.42% 3.09% 1.04% 1.04% 1.04% 1.0% 1.0%

Other 2,077 2,097 818 1,818 – – – – – –

% change 0.98%

Total other income 22,576 22,769 27,680 31,989 29,794 30,093 30,395 30,701 31,008 31,318

% change 0.86% -6.86% 1.00% 1.00% 1.00% 1.00% 1.00%


54



The table below summarizes the total gross profit for the forecasted years (USD thousands):



Terminal

Year

Total petroleum gross profit, net 66,456 63,655 86,395 94,459 95,604 93,954 92,022 89,779 95,157 102,578

% change -4.2% 1.2% -1.7% -2.1% -2.4% 6.0% 7.8%

Total merchandise gross profit, net 132,498 140,242 192,154 217,694 222,662 229,342 236,223 243,309 250,609 258,127

% gross profit 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0%

Total other income 22,576 22,769 27,680 31,989 29,794 30,093 30,395 30,701 31,008 31,318

% change 0.9% -6.9% 1.0% 1.0% 1.0% 1.0% 1.0%

Total gross profit 221,529 226,667 306,229 344,142 348,060 353,389 358,640 363,789 376,773 392,023

% change 2.3% 1.1% 1.5% 1.5% 1.4% 3.6% 4.0%


55


Operating Expenses and Operating Margin

The table below presents the operating expenses composition for the forecasted period (USD thousands):

The Retail and Wholesale operating expenses in each category is composed of

personnel, variable and fixed expenses.

Personnel Expenses – These expenses represent variable expenses, including salaries

and related expenses to employees and executive officers. The personnel expenses

for 2016-2019 were forecasted by Management. Based on our assumptions, from 2020

onward, these expenses were calculated according to elasticity rates for each the

Retail and the Wholesale operating segments, from the total gross margin excluding

CC Expenses.

Variable Expenses - These expenses represent the following: advertising,

maintenance and repairs, electricity, upkeep, taxes, etc. The variable expenses for

2016-2019 were forecasted by Management. Based on our assumptions, from 2020

onward, these expenses were calculated according to elasticity rates for each the

Retail and the Wholesale operating segments, from the total gross margin excluding

CC Expenses.

USD in thousands 2016F 2017F 2018F 2019F 2020FTerminal

Year

Total gross profit 348,060 353,389 358,640 363,789 376,773 392,023

% change 1.1% 1.5% 1.5% 1.4% 3.6% 4.0%

Retail operating expenses (255,395) (258,497) (261,638) (264,819) (267,325) (269,875)

% from total gross margin (excluding CC Expenses) 69.0% 68.3% 67.6% 66.9% 66.0% 65.2%

Wholesale operating expenses (5,974) (6,030) (6,088) (6,146) (6,146) (6,146)


G&A expenses (35,689) (36,366) (37,057) (37,761) (38,604) (39,469)


Total operating expenses (297,058) (300,894) (304,783) (308,725) (312,074) (315,489)

EBITDA 51,002 52,495 53,857 55,064 64,699 76,533

% from total gross margin 14.7% 14.9% 15.0% 15.1% 17.2% 19.5%


56


Operating Expenses and Operating Margin (continued)

Fixed Expenses – According to Management, the fixed expense forecast for 2016 to

2019 is expected to increase by approximately 1%. We assumed that these expenses

are stable and are not expected to change on the long term period. Therefore, in

2020 and in the terminal year, these fixed expenses forecasted to be the same as

they were forecasted by the Management in 2019.

G&A Operating Expenses

The G&A expenses for 2016-2019 were forecasted by Management. In 2019, the G&A

expenses rate from the total gross margin (excluding CC Expenses) is amounted to

approximately 9.3%. We assumed that this rate is stable and is not expected to

change on the long term period. Therefore, in 2020 and in the terminal year, these

expenses forecasted to be approximately 9.3% from the total gross margin (excluding

CC Expenses).


57


Net Operating Profit

The table below presents the forecasted net operating profit for the forecasted period (USD thousands):

Depreciation – represents the Company's depreciation expenses for tax purposes. The

forecasted depreciation expenses for 2016-2020 were forecasted by Management.

The depreciation expenses forecast for the terminal year is expected to converge

gradually to a capital expenditure annual rate from the total gross profit (please

refer to the "Cash Flow Adjustments").

Amortization - represents the Company's amortization expense for tax purposes. The

forecasted amortization expenses for 2016-2030 were forecasted by Management

(please refer to the "Cash Flow Adjustments").

Tax Expenses – the weighted income tax rate (at the level of the members of the

Company) is composed from a federal income tax rate, amounting to 34%, and from a

state income tax rate which is determined according to the state where the income

is produced. According to Management, the effective income tax rate as of

December 31, 2015 is approximately 38%.


Year

EBITDA 51,002 52,495 53,857 55,064 64,699 76,533


Depreciation (TAX purpose) (20,492) (19,630) (17,669) (16,358) (15,709) (13,854)

Amortization (TAX purpose) (3,553) (3,553) (3,553) (3,553) (3,553) –

Net Operating Profit before Tax 26,958 29,312 32,635 35,153 45,437 62,679

% from total gross profit 7.7% 8.3% 9.1% 9.7% 12.1% 16.0%

Tax Expenses (10,411) (11,320) (12,604) (13,576) (17,548) (24,207)

Deductible TAX 651 651 651 651

Net Operating Profit after Tax 17,198 18,643 20,683 22,228 27,889 38,473



58


Adjustments to Cash Flow

In order to arrive at a debt-free net cash flow in our valuation model, the net operating profit after tax had to be adjusted for certain items in order to estimate the cash return

on the assets that generate the forecasted revenue. Firstly, non-cash items (depreciation and amortization) were added back to the debt-free net income. Secondly, forecasted

capital expenditures ("CapEx") and investment in working capital were deducted.

The following is the forecasted adjustments to cash flow for the forecasted period (USD thousands):


Year



Cash Flow Adjustments

Depreciation (TAX purpose) 20,492 19,630 17,669 16,358 15,709 13,854

% from gross margin 5.9% 5.6% 4.9% 4.5% 4.2% 3.5%

Amortization (TAX purpose) 3,553 3,553 3,553 3,553 3,553 –

CapEx (13,315) (13,315) (13,315) (13,315) (13,315) (13,854)

% from gross margin 3.8% 3.8% 3.7% 3.7% 3.5% 3.5%

Changes in working capital (45) (61) (60) (59) (148) (174)

Total adjustments 10,685 9,807 7,847 6,537 5,799 (174)


59


Adjustments to Cash Flow (continued)

Amortization - Under the assumption that the Company will not actively acquire

intangible assets, these expenses will not exist in the long term. Therefore, the

Management's amortization expense forecast for the terminal year is zero.

Tax amortization assets - The capitalized tax value derived from the forecasted

amortization expense in 2021-2030, was added, at a discount, directly to the

Company's value from operations.

The table below presents the Company's tax amortization assets' calculation as of

December 31, 2015 (in USD thousands):

CapEx – The Company's CapEx forecast for 2016-2020 was estimated by Management.

According to Management, the Company's CapEx forecast for 2020 amounted to

approximately 3.5% from total gross profit. For further periods, we assume that the

CapEx rate of total gross profit will be 3.5% as well.

Depreciation – The depreciation expenses forecast in the terminal year is

expected to converge gradually to a capital expenditure annual rate from

the Company's total gross profit, and offset the CapEx rates of total gross

profit.

Changes in Working Capital – The Company's changes in working capital

forecast for the forecasted years were calculated based on the Company's

working capital rate of total gross profit for the 12 month period ended in

December 31, 2015, and on the assumption that the Company will preserve

this rate during the forecasted period (approximately 1.1%).

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Amortization Expenses 3,553 2,792 2,031 1,740 1,655 1,655 1,642 1,604 1,604 334

Tax Rate 38% 38% 38% 38% 38% 38% 38% 38% 38% 38%

Tax Shield 1,372 1,078 784 672 639 639 634 619 619 129

Amortization Period 5.50 6.50 7.50 8.50 9.50 10.50 11.50 12.50 13.50 14.50

Discounted Tax Shield 865 625 418 329 288 265 242 217 200 38

Tax Amortization Asset 3,487


60


Discounted Cash Flow (continued)

Using a DCF method, the Company's value from operations as of December 31, 2015 was determined to be USD 520,383 thousands:

Discount Rate – The Company's debt free cash flow was discounted with a discount rate of 8.75% (please refer to the appendix "WACC").

Terminal Growth Rate - the Company's terminal growth rate used for the terminal year debt free cash flow discount is approximately 2.3% and it represents the total gross profit growth rate in the

terminal year.


Year




Debt Free Cash Flow 27,883 28,450 28,530 28,765 33,688 38,299


Period 0.5 1.5 2.5 3.5 4.5 4.5

Discounted Cash Flow 26,737 25,087 23,133 21,447 23,096 410,825

Total Discounted Cash Flow 530,325

Environmental liabilities and ARO (9,941)

Value from operations (EV) 520,383


61


Sensitivity Analysis

The following is a sensitivity analysis of the Company's value from operations according to the change in the Terminal growth rate and to the change in the Company's weighted

average cost of capital (WACC):

The following is a sensitivity analysis of the Company's value from operations according to the change in the Terminal CapEx rates and to the change in the Company's weighted

average cost of capital (WACC):

######## 9.75% 9.25% 8.75% 8.25% 7.75%

1.3% 408,532 435,297 465,678 500,456 540,653

1.8% 427,304 457,033 491,062 530,391 576,359

2.3% 448,598 481,898 520,383 565,362 618,622

2.8% 472,957 510,620 554,636 606,753 669,429

3.3% 501,095 544,173 595,177 656,513 731,663

WACC

Terminal

growth

rates

######## 9.75% 9.25% 8.75% 8.25% 7.75%

2.5% 469,859 505,163 545,975 593,687 650,199

3.0% 459,229 493,530 533,179 579,524 634,410

3.5% 448,598 481,898 520,383 565,362 618,622

4.0% 437,967 470,266 507,587 551,199 602,833

4.5% 427,337 458,633 494,791 537,036 587,044

WACC

Terminal

CapEx

rates


62


Equity Value

The following is the Company's equity value:

Based on the DCF Method, the Company's equity's value, as of December 31, 2015,

was determined to be approximately USD 393 million.

(*) Net Financial Liabilities - As of December 31, 2015, the Company's net financial

liabilities are composed of the following:

USD in thousands

Value from operation 520,383

Net financial liabilities (*) (127,105)

Equity's value 393,278

USD in thousands

Cash and cash equivalents 7,649

Financing lease obligations (1) (14,562)

Promissory notes from Holdings 6,994

Bank and related party loans (2) (128,228)

Current Maturity of M idwest Seller Note (4,696)

Deferred tax (3) 3,185

Other (4) 2,702

Total net debt (126,956)

Liabilities Fair Value Adjustments (5) (243)

TAX 38%

After Tax Fair Value Adjustments (149)



63


Equity Value (continued)

(1)

(2)

(3) The deferred tax assets and liabilities presented below are those that were

classified as net debt:

(4)

(5) The table below presents the Company's net debt book value and fair value

according to the Company's financial statements, as of December 31, 2015:

USD in thousands

Current maturity of financial lease obligations (2,983)

Financing lease liabilities (11,579)

Total financing lease obligations (14,562)

USD in thousands

Current Portion of Bank Loans (34,672)

Related Party Loans - ST (44,057)

Accrued Interest (805)

Bank Loans - LT (32,767)

Loan from Sellers - LT (15,927)

Total bank and related party loans (128,228)

USD in thousands

Deferred Tax Liability - LT 3,126

DT ACS 59

Total Deferred Tax 3,185

USD in thousands

Restricted cash 1,500

Other (1,500)

Other receivables 52

Prepaid expenses 4,364

Real estate assets held for sale 66

Notes Payable (865)

Accrued expenses (490)

Trade Payables (425)

Total Other 2,702

USD in thousands Book Value Fair Value Difference

Promissory notes from Holdings 6,994 6,973 (21)

PNC line of credit (21,102) (21,185) (83)

PNC term loan (41,693) (41,872) (179)

M&T term loan (4,644) (4,664) (20)

Loans from ARKO (28,465) (28,485) (20)

Loans from Holdings (16,250) (16,252) (2)

Midwest Seller Note (3,640) (3,629) 11

Financing leases (14,562) (14,491) 71

Total (123,362) (123,605) (243)

Section 6 - Valuation – DCF Method, Post Private Issuance Valuation Study - As of December 31, 2015 GPM Investments, LLC

64

Section 6

Valuation – DCF Method, Post Private Issuance


65


Merger and Acquisition Method Limited Partnership

A general way of determining a value indication of a business, business ownership

interest, security or asset by using one or more methods that compare the subject to

similar businesses, business ownership interests, securities or assets that have been

sold. The market approach is based on the principle of substitution, which reflects

the premise that an informed investor would pay no more for a security or asset than

he/she could pay for another security or asset of equal utility.

The merger and acquisition method is based upon the merger, acquisition or

divestiture, within a comparable time frame, of companies engaged in activities

similar to the Company. These transactions typically involve controlling interests and

the indicated value from this method would be on a controlling-interest basis.

On January 11, 2016, the Company and certain subsidiaries including its limited

partnership subsidiary, GPM Petroleum LP ("GPMP"), signed an agreement with a US

investment company through two of its funds (collectively, the "Investor"), pursuant

to which, within the framework of a private placement, GPMP issued to the Investor,

upon closing on January 12, 2016, 22.46% of the limited partnership interests in

GPMP (3.5 million Class A Preferred Units), in exchange for consideration of USD 70

million (USD 20 per unit). The balance of the limited partnership interests

(approximately 77.54%) are held by the Company through GPM Investments, LLC and

WOC Southeast Holding Corp. (“WOC”), a wholly owned and controlled subsidiary of

GPM.

As part of completion of the transactions, with regard to GPMP (directly or relating

to an entity wholly-owned and controlled by it), the following actions were taken:

a. Assignment of petroleum distribution agreements – GPMP assumed all the

rights and obligations under the agreements between the Company and its

petroleum suppliers. GPM Investments, LLC has agreed to guaranty the

obligations under such agreements.

b. Distribution agreements with the Company – The Group entered into

exclusive supply agreements for 10 years with GPMP and its subsidiaries

pursuant to which the Group will purchase fuel from GPMP at GPMP’s cost of

petroleum including taxes and transportation plus a fixed margin of 4.5

cents per gallon.


66


Limited Partnership (continued) Valuation - General

c. Regarding the relationship between the Company and GPMP with respect to

future transactions – Until the earlier of (i) 10 years following January 12,

2016 or (ii) the consummation of an IPO, in the event that the Company or

any entity controlled by the Company proposes to acquire any retail or

wholesale fuel distribution assets, GPMP shall have the right to purchase

such petroleum supply activity or will otherwise distribute petroleum to the

Company for sale at such acquired assets at a lower fixed margin than

mentioned in item b above.

d. Assignment of financial liabilities to GPMP – GPMP assumed financial

liabilities of the Company and GPM WOC Holdco, LLC in a total amount of

approximately USD 64 million, which included (1) assignment of Road Ranger

Related-Party Loans in the amount of approximately USD 24 million, (2) the

assignment of approximately USD 32.4 million loans from PNC, and (3)

approximately USD 7.7 million of certain trade payables.

e. GPMP, certain lenders and KeyBank National Association, as the

administrative agent, swingline lender and letter of credit issuer entered

into a credit agreement for a credit line of up to USD 110 million (subject to

increase as set forth in the credit agreement).

The Company's equity fair value was calculated in two stages:

First Stage - The Company's holdings in GPMP, amounts to 77.54%. The

Company's holdings in GPMP were valued based on the offering equity value;

Second Stage - The residual GPM value, after shifting GPMP results from

GPM. The Company's residual fair value was performed according to the DCF

Method using relevant adjustments.


67


First Stage Second Stage

The offering valuation (equity value) amounted to approximately USD 311.7 million.

The table below presents the offering valuation calculation (USD):

Due to the fact that the Company holds 77.54% in GPMP, the equity value related to

GPM amounted to approximately USD 242 million.

Please note that the Company's holdings value in GPMP may be higher than USD

242 million, due to the fact that GPM owns 100% of the General Partner of GPMP.

This potential value was not taken into consideration.

According to Management and the agreements related to GPMP, the table below

presents the EBITDA adjustments needed in order to calculate the Company's residual

value (USD in thousands):

(1) As mentioned above, according to the agreements, the Group will purchase fuel

from GPMP at GPMP’s cost of petroleum including taxes and transportation plus a

fixed margin of 4.5 cents per gallon.

(2) According to Management, GPMP will pay the Company an estimated annual

management fee of USD 500 thousands.

(3) According to Management, GPMP’s other operating expenses are approximately

USD 130 thousands.

Please note that no additional adjustments were performed to the Company's

forecasted cash flows, included in Section 5.

MLP Agreement offering valuation

Class A preferred units 3,500,000

Class B preferred units 12,085,000

Total offering units 15,585,000

Purchase price per unit (USD) 20

Total offering value 311,700,000

USD in thousands Note 2016F 2017F 2018F 2019F 2020FTerminal

Year

Number of Gallons 623,052 628,610 634,223 639,893 645,619 651,403

% change 0.9% 0.9% 0.9% 0.9% 0.9%

Gross profit per gallon, CPG 0.045 0.045 0.045 0.045 0.045 0.045

Total gross profit adjustment 1 (28,037) (28,287) (28,540) (28,795) (29,053) (29,313)

Management fee to GPM 2 500 500 500 500 500 500

Other 3 130 131 132 134 135 136

% from gross profit 0.46% 0.46% 0.46% 0.46% 0.46% 0.46%

Total EBITDA adjustment (27,407) (27,656) (27,908) (28,162) (28,418) (28,677)


68


Second Stage (continued)

The table below presents the Company's residual EBITDA for the forecasted period (in USD thousands):


Year

EBITDA 51,002 52,495 53,857 55,064 64,699 76,533


GPMP Adjustments (27,407) (27,656) (27,908) (28,162) (28,418) (28,677)

Residual EBITDA GPM 23,595 24,839 25,949 26,902 36,281 47,856


69


Second Stage (continued)

Using a DCF method, the Company's residual value from operations as of December 31, 2015(1) was determined to be USD 224,713 thousands:

(1) Assuming no other change is required for the period from December 31, 2015 until January 12, 2016.

(2) Discount Rate – The debt free cash flow was discounted with a discount rate of 9.75% (please refer to the Appendixes).


Year

Residual EBITDA GPM 23,595 24,839 25,949 26,902 36,281 47,856

Depreciation (TAX purpose) (20,492) (19,630) (17,669) (16,358) (15,709) (13,854)

Amortization (TAX purpose) (3,553) (3,553) (3,553) (3,553) (3,553) –

Net Operating Profit before Tax (450) 1,656 4,728 6,992 17,019 34,002

% from total gross profit -0.1% 0.5% 1.3% 1.9% 4.5% 8.7%

Tax Expenses 174 (640) (1,826) (2,700) (6,573) (13,132)

Deductible TAX 651 651 651 651

Net Operating Profit after Tax 375 1,668 3,553 4,943 10,446 20,871



Debt Free Cash Flow 11,060 11,475 11,400 11,479 16,245 20,697


Period 0.5 1.5 2.5 3.5 4.5 4.5

Discounted Cash Flow (2) 10,557 9,980 9,034 8,289 10,688 186,106

Total Discounted Cash Flow 234,654

Environmental liabilities and ARO (9,941)

Value from operations (EV) 224,713


70


Valuation Summary

The table below presents the Company's equity value considering the post private

issuance (USD in thousands):

The Company's equity's value, as of December 31, 2015, was determined to be

approximately USD 404,300 million.

(*) Net Financial Liabilities - The Company's net financial liabilities are composed of

the following:

USD in thousands

Residual GPM - Value from operation 224,713

Residual GPM - Net financial liabilities (*) (62,105)

GPM Residual Equity's value 162,607

77.54% from GPMP 241,692

Total equity value 404,300

USD in thousands

Net debt (Section 5, Valuation - DCF Method) (127,105)

Investment amount (cash) 70,000

GPMP transaction costs (5,000)


Section 7 - Valuation - EBITDA Ratios Valuation Study - As of December 31, 2015 GPM Investments, LLC

71

Section 7

Valuation - EBITDA Ratios

Section 7 - Valuation - EBITDA Ratios Valuation Study - As of December 31, 2015 GPM Investments, LLC

72

Valuation - EBITDA Ratios

Public Company Method

The public company method is based upon transactions of minority interests in

publicly-traded companies (comparable companies) that are engaged in a line (or

lines) of business similar to that of the Company’s.

The table below presents the Company's comparable companies and their EV to

EBITDA multiples (USD thousands):

The table below presents the Company's equity value according to its comparable

company's EBITDA ratios (USD in thousands):

(*) Please refer to Section 6, Valuation – DCF Method, Post Private Issuance.

Company EV Current EBITDA T12M Ratio

Casey's General Stores, Inc 5,054,719 548,216 9.220

CST Brands, Inc 3,990,452 476,000 8.383

Murphy USA Inc 2,906,878 342,306 8.492

TravelCenters of America LLC 841,168 150,680 5.582

Sunoco LP 5,286,667 519,269 10.181

Alimentation Couche-Tard Inc 26,657,128 2,101,200 12.687

Buckeye Partners, L.P. 12,586,506 825,394 15.249

CrossAmerica Partners LP 1,214,098 74,244 16.353

Average 7,317,202 629,664 10.8

USD in thousands

Residual GPM - EBITDA 2016 (*) 23,595

Average EBITDA ratio 10.8

Residual GPM value from operation 254,079

Residual GPM - Net financial liabilities (*) (62,105)

GPM Residual Equity's value 191,974

77.54% from GPMP 241,692

Total equity value 433,666

Section 8 - Valuation - Summary Valuation Study - As of December 31, 2015 GPM Investments, LLC

73

Section 8

Valuation - Summary

Section 8 - Valuation - Summary Valuation Study - As of December 31, 2015 GPM Investments, LLC

74

Valuation - Summary

Equity's Value Summary

The table below presents the Company's equity value according to three methods presented above (USD thousands):

The Company's equity's value, as of December 31, 2015(*), was determined to be USD 410,414 thousands.

(*) Assuming no other change is required for the period from December 31, 2015 until January 12, 2016.

# Approach Method Forecasted

EBITDA 2016

EBITDA

Multiply

Value From

Operation

Net Debt Equity's Value

Adjustments

Equity's Value # Section

1 DCF Method 51,002 10.2 (P.N) 520,383 (127,105) – 393,278 5

2 DCF Method, Post Private Issuance 23,595 9.5 (P.N) 224,713 (62,105) 241,692 404,300 6

3 Public Company Method (EBITDA Ratios) 23,595 10.8 254,079 (62,105) 241,692 433,666 7

Average 410,414

Section 9 - Appendixes Valuation Study - As of December 31, 2015 GPM Investments, LLC

75

Section 9

Appendixes


76

Appendixes

WACC – DCF Method

Following are the parameters that served for the calculation of the Company's WACC:

Tax Rate - the weighted income tax rate (at the level of the members of the Company) is composed from a federal income tax rate, amounting to 34%, and from a state income

tax rate which is determined according to the state where the income is produced. According to Management, the effective income tax rate as of December 31, 2015 is

approximately 38%.

Parameter Symbolization Value Source

Equity E/V 69.3%

Debt D/V 30.7% Damodaran January 2016 (Oil/Gas and Retail Industries) and comparable companies

Cost of Debt Kd 3.85% Damodaran January 2016 (Oil/Gas and Retail Industries)

1 - Tax Rate 1-T 61.38% Based on the Company's effective tax rate as of December 31, 2015

Beta β 0.78 According to comparison group, adjusted to the Company's financial leverage

Rf Rf 2.52% Risk free interest rate for 15 years, US Treasury, Bloomberg, as of December 31, 2015

Market Premium Rm-Rf 6.00% Damodaran January 1st, 2016 (USA)

Size Premium SRP 4.22% Duff& Phelps 2015

Cost of Equity Ke 11.4% Rf +β*(Rm-Rf)+SRP

WACC 8.75% (D/V)*(1-T)*Kd + (E/V)*Ke


77

Appendix

WACC – DCF Method, Post Private Issuance

Following are the parameters that served for the calculation of the Company's WACC:

Tax Rate - the weighted income tax rate (at the level of the members of the Company) is composed from a federal income tax rate, amounting to 34%, and from a state income

tax rate which is determined according to the state where the income is produced. According to Management, the effective income tax rate as of December 31, 2015 is

approximately 38%.

Parameter Symbolization Value Source

Equity E/V 69.3%

Debt D/V 30.7% Damodaran January 2016 (Oil/Gas and Retail Industries) and comparable companies

Cost of Debt Kd 3.85% Damodaran January 2016 (Oil/Gas and Retail Industries)

1 - Tax Rate 1-T 61.38% Based on the Company's effective tax rate as of December 31, 2015

Beta β 0.78 According to comparison group, adjusted to the Company's financial leverage

Rf Rf 2.52% Risk free interest rate for 15 years, US Treasury, Bloomberg, as of December 31, 2015

Market Premium Rm-Rf 6.00% Damodaran January 1st, 2016 (USA)

Size Premium SRP 5.78% Duff& Phelps 2015

Cost of Equity Ke 13.0% Rf +β*(Rm-Rf)+SRP

WACC 9.75% (D/V)*(1-T)*Kd + (E/V)*Ke

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