Alimentation Couche-Tard announces its second quarter results

    
    -------------------------------------------------------------------------
    Second quarter
    --------------

    - Second quarter results this year compare to a quarter last year which
      had benefited from exceptional motor fuel gross profit in the United
      States
    - Net earnings of $88.2 million, or $0.47 per share on a diluted basis
      compared to $97.6 million, or $0.49 per share on a diluted basis last
      year
    - Same-store merchandise sales up 2.9% in the United States and 5.2% in
      Canada
    - Merchandise and service gross profit up 0.2% on a consolidated basis,
      up 0.3% and 0.2% in the United States and Canada, respectively
    - Growth of same-store motor fuel volume at 3.9% in the United States and
      3.3% in Canada
    - Motor fuel gross margin at 15.78 cents per gallon in the United-States,
      a decrease of 9.10 cents per gallon
    - Operating, selling, administrative and general expenses down 4.7% once
      impacts related to exchange rate, acquisitions and expenses related to
      electronic payment modes are excluded.

    First half-year
    ---------------

    - Net earnings of $179.3 million, or $0.95 per share on a diluted basis
      compared to $144.8 million, or $0.73 per share on a diluted basis last
      year
    -------------------------------------------------------------------------
    TSX: ATD.A, ATD.B
    

LAVAL, QC, Nov. 24 /CNW Telbec/ - For its second quarter, Alimentation Couche-Tard Inc. announces net earnings of $88.2 million, down $9.4 million or 9.6%, mainly a result of a 9.10 cents per gallon decrease in motor fuel gross margins in the United States, an estimated impact of more than $65 million before income taxes. During the comparable period last fiscal year, motor fuel gross margins in the United-States were unusually high, whereas this year's margins are closer to expectations. Net earnings reflect Couche-Tard's prudent management of operating expenses, the increase in same-store merchandise sales and motor fuel volume, the contribution from acquisitions, the decrease in electronic payment mode expenses due to lower motor fuel prices as well as lower financial expenses. These positive results were partially offset by a higher income tax rate, a weakened Canadian dollar and a higher depreciation expense.

"Except for the motor fuel gross margin in the United States, our key performance indicators continued to improve over the second quarter. However, we feel economic conditions remain fragile", declared Alain Bouchard, President and Chief Executive Officer. "Accordingly, we prefer to remain cautious", he added. "Our second quarter performance is nonetheless remarkable considering that the United States motor fuel gross margin was unusually high during the comparable period last fiscal year", he concluded.

Raymond Paré, Vice-President and Chief Financial Officer added: "Our key indicators are rising in both the United States and Canada: same-store merchandise sales and motor fuel volume, merchandise and service gross margin, as well as our debt ratios. Last but not least, our operating expenses have decreased for a third quarter in a row. These results are very encouraging, especially considering that our teams are working very hard to improve the networks efficiency, product offering and customer service", Mr. Paré concluded.

Highlights of the Second Quarter of Fiscal 2010

Growth of the Store Network

The following table presents certain information regarding changes in Couche-Tard's stores over the 12 and 24-week periods ended October 11, 2009:

    
                        12-week period ended          24-week period ended
                          October 11, 2009              October 11, 2009
              ---------------------------------------------------------------
                   Company-     Affi-            Company-     Affi-
                  operated    liated            operated    liated
                    stores    stores     Total    stores    stores     Total
              ---------------------------------------------------------------

    Number of stores,
     beginning of
     period          4,414     1,492     5,906     4,395     1,048     5,443
      Acquisitions       5         -         5        49       444       493
      Openings /
       construc-
        tions /
        addi-
        tions            1        21        22         6        31        37
      Closures /
       dispo-
       sals /
       withdrawals     (15)      (14)      (29)      (45)      (24)      (69)
    -------------------------------------------------------------------------
    Number of stores,
     end of period   4,405     1,499     5,904     4,405     1,499     5,904
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Business acquisitions

During the second quarter of fiscal 2010, Couche-Tard acquired five new stores.

Dividends

On November 24, 2009, the Board of Directors declared a quarterly dividend of Cdn$0.035 per share for the second quarter of fiscal 2010 to shareholders on record as at December 3, 2009, and approved its payment for December 11, 2009. This is an eligible dividend within the meaning of the Income Tax Act of Canada.

Share repurchase program

1) Program effective August 8, 2008, which expired August 7, 2009

During the second quarter of fiscal 2010, under this program, Couche-Tard repurchased 1,400 Class A multiple voting shares at an average cost of Cdn$16.63 and 1,850,300 Class B subordinate voting shares at an average cost of Cdn$16.52. On a cumulative basis since the implementation of this program, Couche-Tard has repurchased a total of 19,000 Class A multiple voting shares at an average cost of Cdn$13.43 and 11,779,400 Class B subordinate voting shares at an average cost of Cdn$13.61.

    
    2) Program effective August 10, 2009, expiring at the latest on August 9,
       2010
    

During the second quarter of fiscal 2010, Couche-Tard implemented a new share repurchase program in replacement of the program which expired on August 7, 2009. This new program allows the Company to repurchase up to 2,685,370 of the 53,707,412 Class A multiple voting shares and up to 12,857,284 of the 128,572,846 Class B subordinate voting shares issued and outstanding as at July 24, 2009 (representing 5.0% of the Class A multiple voting shares issued and outstanding and 10.0% of the Class B subordinate voting shares of the public float, as defined by applicable rules, as at that date, respectively). In accordance with the Toronto Stock Exchange requirements, Couche-Tard may repurchase a daily maximum of 1,000 Class A multiple voting shares and 107,717 Class B subordinate voting shares. When making such repurchases, the number of Class A multiple voting shares and of Class B subordinate voting shares issued and outstanding is reduced and the proportionate interest of all remaining shareholders in the Company's share capital is increased on a pro rata basis. The share repurchase program period will end no later than August 9, 2010. All shares repurchased under the share repurchase program are cancelled upon repurchase. As at October 11, 2009, no shares had been repurchased under this program.

Subsequent event

Joint venture

On November 11, 2009, Couche-Tard announced its intention to enter into an agreement to create a joint venture with Shell Oil Products US ("Shell") to operate approximately 100 convenience stores in the greater Chicago metropolitan area. The transaction is subject to final management approvals, standard regulatory approvals and closing conditions and is expected to close by the end of 2009.

Of the 100 convenience stores, 89 stores are currently operated by third party operators under an operator agreement with Shell, including 32 operated under the Circle K banner by Couche-Tard's Midwest Division. The remaining 11 locations currently operate as Shell retail marketers under a retail lease agreement. The majority of the 100 stores would be operated by Couche-Tard's Midwest Division under the Circle K banner. Shell motor fuel and branded products would continue to be marketed and sold at all 100 locations. All 100 stores held by Shell would be transferred over to the Joint Venture through a combination of purchased and contributed fee and lease sites.

Exchange Rate Data

The Company's US dollar reporting provides more relevant information given the predominance of its operations in the United States and its US dollar denominated debt.

The following table sets forth information about exchange rates based upon the Bank of Canada closing rates expressed as US dollars per Cdn$1.00:

    
                               12-week periods ended   24-week periods ended
                            -------------------------------------------------
                              October 11, October 12, October 11, October 12,
                                    2009        2008        2009        2008
                            -------------------------------------------------
    Average for period(1)         0.9228      0.9458      0.8974      0.9679
    Period end                    0.9575      0.8469      0.9575      0.8469
    ------------------------------------------------------------------------
    (1) Calculated by taking the average of the closing exchange rates of
        each day in the applicable period.
    

As the Company uses the US dollar as its reporting currency, in its consolidated financial statements and in the present document, unless indicated otherwise, results from its Canadian and corporate operations are translated into US dollars using the average rate for the period. Variances and explanations related to variations in the foreign exchange rate and the volatility of the Canadian dollar which are discussed in the present document are therefore related to the translation in US dollars of the Company's Canadian and corporate operations results and do not have a true economic impact on its performance since most of the Company's consolidated revenues and expenses are received or denominated in the functional currency of the markets in which it does business. Accordingly, the sensitivity of the Company's results to variations in foreign exchange rates is economically limited.

Selected Consolidated Financial Information

The following table highlights certain information regarding Couche-Tard's operations for the 12-week and 24-week periods ended October 11, 2009, and October 12, 2008:

    
               --------------------------------------------------------------
    (In millions
     of US dollars,
     unless
     otherwise
     stated)      12-week periods                  24-week periods
                            ended                            ended
               --------------------------------------------------------------
                October   October     Varia-     October   October     Varia-
                     11,       12,     tion           11,       12,     tion
                   2009      2008        %          2009      2008         %
               --------------------------------------------------------------
    Statement of
     Operations
     Data:
    Merchandise
     and service
     revenues(1):
      United
       States     946.5     899.6       5.2      1,900.2   1,757.4       8.1
      Canada      469.8     445.4       5.5        906.9     889.6       1.9
               --------------------------------------------------------------
    Total
     merchandise
     and service
     revenues   1,416.3   1,345.0       5.3      2,807.1   2,647.0       6.0
               --------------------------------------------------------------
    Motor fuel
     revenues:
      United
       States   1,995.8   2,748.9     (27.4)     3,907.3   5,371.4     (27.3)
      Canada      413.7     462.5     (10.6)       786.5     857.0      (8.2)
               --------------------------------------------------------------
    Total motor
     fuel
     revenues   2,409.5   3,211.4     (25.0)     4,693.8   6,228.4     (24.6)
               --------------------------------------------------------------
    Total
     revenues   3,825.8   4,556.4     (16.0)     7,500.9   8,875.4     (15.5)
               --------------------------------------------------------------
               --------------------------------------------------------------
    Merchandise
     and service
     gross
     profit(1):
      United
       States     308.4     290.5       6.2        621.1     568.4       9.3
      Canada      162.4     153.0       6.1        311.7     310.4       0.4
               --------------------------------------------------------------
    Total
     merchandise
     and service
     gross
     profit       470.8     443.5       6.2        932.8     878.8       6.1
               --------------------------------------------------------------
    Motor fuel
     gross profit:
    United
     States       123.7     181.2     (31.7)       243.1     282.3     (13.9)
    Canada         29.4      21.6      36.1         57.4      43.3      32.6
               --------------------------------------------------------------
    Total motor
     fuel gross
     profit       153.1     202.8     (24.5)       300.5     325.6      (7.7)
               --------------------------------------------------------------
    Total gross
     profit       623.9     646.3      (3.5)     1,233.3   1,204.4       2.4
    Operating,
     selling,
     administra-
     tive and
     general
     expenses     447.5     466.6      (4.1)       878.5     889.7      (1.3)
    Depreciation
     and
     amortization
     of property
     and equipment
     and other
     assets        46.9      41.1      14.1         91.9      84.0       9.4
               --------------------------------------------------------------
    Operating
     income       129.5     138.6      (6.6)       262.9     230.7      14.0
               --------------------------------------------------------------
    Net earnings   88.2      97.6      (9.6)       179.3     144.8      23.8
               --------------------------------------------------------------
               --------------------------------------------------------------
    Other
     Operating
     Data:
    Merchandise
     and service
     gross
     margin(1):
      Consolidated 33.2%     33.0%      0.2         33.2%     33.2%        -
      United
       States      32.6%     32.3%      0.3         32.7%     32.3%      0.4
      Canada       34.6%     34.4%      0.2         34.4%     34.9%     (0.5)
    Growth
     (decrease)
     of same-
     store
     merchandise
     revenues(2)(3):
      United
       States       2.9%     (1.0%)                  2.7%     (0.5%)
      Canada        5.2%      1.4%                   3.8%      0.3%
    Motor fuel
     gross
     margin(3):
      United
       States
       (cents par
       gallon):   15.78     24.88     (36.6)       15.61     20.47     (23.7)
      Canada
       (Cdn cents
        per litre) 5.49      4.66      17.8         5.62      5.05      11.3
    Volume of
     motor fuel
     sold(4):
      United
       States
       (millions
       of
       gallons)   812.6     753.6       7.8      1,613.1   1,429.2      12.9
      Canada
       (millions
       of litres) 580.7     490.9      18.3      1,136.2     886.8      28.1
    Growth
     (decrease)
     of same-
     store
     motor fuel
     volume(3):
      United
       States       3.9%    (10.6%)                  2.8%     (7.7%)
      Canada        3.3%      2.2%                   2.4%      2.5%
               --------------------------------------------------------------
    Per Share
     Data:
      Basic net
       earnings
       per
       share
       (dollars
       per action) 0.48      0.50      (4.0)        0.97      0.74      31.1
      Diluted net
       earnings
       per share
       (dollars
       per action) 0.47      0.49      (4.1)        0.95      0.73      30.1

               --------------------------------------------------------------
                                                 October     April     Varia-
                                                      11,       26,     tion
                                                    2009      2009        $
               --------------------------------------------------------------
    Balance Sheet Data:
      Total assets                               3,500.7   3,255.9     244.8
      Interest-bearing debt                        727.7     749.2     (21.5)
      Shareholders' equity                       1,492.8   1,326.0     166.8
    Ratios:
    Net interest-bearing debt/total
     capitalization(5)                            0.26:1    0.30:1
    Net interest-bearing debt/EBITDA(6)           0.85:1(7) 0.98:1
    -------------------------------------------------------------------------
    (1)  Includes other revenues derived from franchise fees, royalties and
         rebates on some purchases by franchisees and licensees.
    (2)  Does not include services and other revenues (as described in
         footnote 1 above). Growth in Canada is calculated based on Canadian
         dollars.
    (3)  For company-operated stores only.
    (4)  Includes volume of franchisees and dealers.
    (5)  This ratio is presented for information purposes only and represents
         a measure of financial condition used especially in financial
         circles. It represents the following calculation: long-term
         interest-bearing debt, net of cash and cash equivalents and
         temporary investments, divided by the addition of shareholders'
         equity and long-term debt, net of cash and cash equivalents and
         temporary investments. It does not have a standardized meaning
         prescribed by Canadian GAAP and therefore may not be comparable to
         similar measures presented by other public companies.
    (6)  This ratio is presented for information purposes only and represents
         a measure of financial condition used especially in financial
         circles. It represents the following calculation: long-term
         interest-bearing debt, net of cash and cash equivalents and
         temporary investments, divided by EBITDA (Earnings Before Interest,
         Tax, Depreciation and Amortization). It does not have a standardized
         meaning prescribed by Canadian GAAP and therefore may not be
         comparable to similar measures presented by other public companies.
    (7)  This ratio was standardized over a period of one year. It includes
         the results of the first and second quarters of the fiscal year
         which will end April 25, 2010 as well as the third and fourth
         quarters of the year ended April 26, 2009.
    

Operating Results

Revenues amounted to $3.8 billion in the second quarter of fiscal 2010, down $730.6 million, a decrease of 16.0% compared to the second quarter of fiscal 2009. The decline is chiefly the result of a $958.0 million decrease in motor fuel revenues resulting from a lower sale price and an adverse impact of $22.0 million from a weaker Canadian dollar. These factors were partially offset by a $145.0 million increase generated by acquisitions as well as by the growth of same-store merchandise revenues and motor fuel volume in both the United States and Canada.

Although lower motor fuel sale prices may decrease total revenues, they nevertheless have a positive impact on results for several reasons:

    
    1. They prompt consumers to use their car more often. Hence, they are
       more likely to purchase more volume of motor fuel;
    2. Lower motor fuel prices leave more money in a consumer's pocket for
       purchases that carry higher margins, such as in-store merchandise;
    3. Credit card expenses are largely tied into motor fuel sale prices.
       Therefore, the lower the price is, the lower credit card expenses are;
       and
    4. Barring a wild and rapid shift in prices, motor fuel sale prices do
       not directly influence margins per unit (cents per gallon/litre). In
       fact, these margins are rather dependent on supply and demand as well
       as market competitiveness. Hence, the relative margin (percentage of
       sales) has a tendency to increase when the retail prices decrease.
    

As for the first half-year of fiscal 2010, revenues dropped by $1.4 billion, a decrease of 15.5% compared to the first half-year of fiscal 2009. Like for the second quarter, the decline is mainly the result of a $2.0 billion decrease in motor fuel revenues resulting from a lower sale price and an adverse impact of $127.0 million from a weaker Canadian dollar. Thus, its clients have $2.0 billion more in their pockets. These factors contributing to the decrease were partially offset by a $623.0 million increase in revenues generated by acquisitions as well as by the growth of same-store merchandise revenues and motor fuel volume in both the United States and Canada.

More specifically, the growth of merchandise and service revenues for the second quarter of fiscal 2010 was $71.3 million, an increase of 5.3% compared to the same period last fiscal year, of which $38.0 million was generated by acquisitions, partially offset by a $11.0 million related to the depreciation of the Canadian dollar against its U.S. counterpart. Regarding internal growth, as measured by same-store merchandise revenues, it rose by 2.9% in the United States, mainly because of the increase in tobacco products retail prices following the increases in taxes on these products. As for the Canadian market, the increase in same-store merchandise revenues was 5.2%.

In the first half-year, merchandise and service revenues rose by $160.1 million, a 6.0% increase compared to the same period last fiscal year for reasons similar to those of the second quarter, including an increase in same-store merchandise revenues of 2.7% in the United States and 3.8% in Canada.

Motor fuel revenues decreased by $801.9 million or 25.0% in the second quarter of fiscal 2010. The lower average retail price at the pump in the United Stated and Canada created a drop in revenues of $958.0 million, as shown in the following table, beginning with the third quarter of the fiscal year ended April 26, 2009:

    
                                                                    Weighted
    Quarter                      3rd       4th       1st       2nd   average
    -------------------------------------------------------------------------
    52-week period
     ended October 11, 2009
      United States
       (US dollars per
       gallon)                  2.00      1.95      2.41      2.48      2.20
      Canada (Cdn cents
       per litre)              78.05     78.67     88.80     89.24     83.58
    52-week period
     ended October 12, 2008
      United States
       (US dollars per
       gallon)                  2.96      3.22      3.91      3.67      3.41
      Canada (Cdn cents
       per litre)              95.92    103.69    122.66    114.37    108.96
    -------------------------------------------------------------------------
    

Acquisitions contributed 37.0 million additional gallons in the second quarter of fiscal 2010, or $107.0 million in revenues, partially offset by the depreciation of the Canadian dollar against its U.S. counterpart, resulting in a decrease in revenues of $11.0 million. As for the growth in same-store motor fuel volume, it was 3.9% in the United States and 3.3% in Canada.

For the first two quarters of fiscal 2010, acquisitions contributed 177.7 million additional gallons, or $467.0 million in revenues, partially offset by the depreciation of the Canadian dollar against its U.S. counterpart, resulting in a decrease in revenues of $62.0 million. As for the growth in same-store motor fuel volume, it was 2.8% in the United States and 2.4% in Canada.

In summary, the Company's internal growth and the contribution of its acquisitions are good considering the economic turmoil, both in terms of merchandise and service revenues and motor fuel volume.

For the second quarter of fiscal 2010, the consolidated merchandise and service gross margin recorded a 0.2% increase in the second quarter of fiscal 2010 to 33.2%. In the United States, despite additional tax increases on tobacco products on July 1st, 2009 in Florida and Mississippi - which add to the significant federal tax increase that became effective April 1st, 2009 - the gross margin was 32.6%, an increase from 32.3% last fiscal year. As for Canada, the margin rose to 34.6%, a 0.2% increase. In both the United States and Canada, gross margin reflects the Company's merchandising strategy in tune with market competitiveness and economic conditions within each of its market as well as improvements to its supply terms.

During the first half-year of fiscal 2010, the merchandise and service gross margin was 33.2%. More specifically, it was 32.7% in the United States, an increase of 0.4%, and 34.4% in Canada a decrease of 0.5%. In Canada, as indicated in the Company's first quarter report, the gross margin this fiscal year compares to a gross margin last year that benefited from non-recurring amounts in the first quarter.

During the second quarter of fiscal 2010, the motor fuel gross margin for company-operated stores in the United States decreased by 9.10 cents per gallon, from 24.88 cents per gallon last year to 15.78 cents per gallon this year. It should be noted that last year's gross margin was unusually high, whereas this year's is closer to expectations based on results from recent years. In Canada, the margin rose, reaching Cdn5.49 cents per litre compared to Cdn4.66 cents per litre in the second quarter of fiscal 2009. The motor fuel gross margin of company-operated stores in the United States as well as the impact of expenses related to electronic payment modes for the last eight quarters, beginning with the third quarter of the fiscal year ended April 26, 2009 were as follows:

    
    (US cents per gallon)
                                                                    Weighted
    Quarter                      3rd       4th       1st       2nd   average
    -------------------------------------------------------------------------
    52-week period ended
     October 11, 2009
      Before deduction of
       expenses related to
       electronic
       payment modes           18.21     11.38     15.43     15.78     15.41
      Expenses related to
       electronic
       payment modes            3.15      3.10      3.56      3.79      3.38
      -----------------------------------------------------------------------
      After deduction of
       expenses related to
       electronic
       payment modes           15.06      8.28     11.87     11.99     12.03
      -----------------------------------------------------------------------
    52-week period ended
     October 12, 2008
      Before deduction of
       expenses related to
       electronic
       payment modes           14.38     10.02     15.55     24.88     16.25
      Expenses related to
       electronic
       payment modes            3.98      4.02      5.07      4.94      4.47
      -----------------------------------------------------------------------
      After deduction of
       expenses related to
       electronic
       payment modes           10.40      6.00     10.48     19.94     11.78
      -----------------------------------------------------------------------
    -------------------------------------------------------------------------
    

As for the 24-week period ended October 11, 2009, the motor fuel gross margin for company-operated stores in the United States decreased by 4.86 cents per gallon, from 20.47 cents per gallon last fiscal year to 15.61 cents per gallon this fiscal year. In Canada, the margin rose, reaching Cdn5.62 cents per litre compared with Cdn5.05 cents per litre for the comparable half-year of fiscal 2009.

For the second quarter of fiscal 2010, operating, selling, administrative and general expenses decreased by 4.1% compared with last fiscal year. These expenses increased by 3.5% due to acquisitions while they decreased by 2.2% and by 0.7%, respectively because of the decrease in electronic payment modes expenses and a weaker Canadian dollar. Excluding these items, expenses decreased by 4.7%. Moreover, excluding expenses related to electronic payment modes for both comparable periods, expenses in proportion of merchandise and service sales represented 28.7% of sales this fiscal year compared to 31.1% last fiscal year.

During the first half-year of 2010, operating, selling, administrative and general expenses decreased by 1.3% compared with last year. These expenses increased by 7.4% due to acquisitions while they decreased by 2.4% and by 2.0%, respectively following the decrease in electronic payment modes expenses and the weaker Canadian dollar. Excluding these items, expenses therefore decreased by 4.3%. Moreover, excluding expenses related to electronic payment modes for both comparable periods, expenses in proportion of merchandise and service sales represented 28.5% of sales this fiscal year compared to 30.1% last fiscal year.

Prudent management of controllable expenses as well as sustainable cost reduction measures put in place are the main reasons for these decreases. This performance is quite satisfactory, especially considering that expenses have decreased for a third consecutive quarter, when excluding the impact of acquisitions, exchange rate and electronic payment mode expenses without affecting the service the Company offers its clients.

Earnings before interests, taxes, depreciation and amortization (EBITDA) were $176.4 million for the second quarter of fiscal 2010, down 1.8% compared to the comparable period of the previous fiscal year, and was $354.8 million for the first half-year of fiscal 2010, up 12.7%. Acquisitions contributed to EBITDA for an amount of $7.1 million during the second quarter and $18.8 million during the first half-year.

It should be noted that EBITDA is not a performance measure defined by Canadian GAAP, but management, investors and analysts use this measure to evaluate Couche-Tard's financial and operating performance. Note that this definition of this measure may differ from the one used by other public companies.

    
    (in millions of
     US dollars)               12-week periods ended   24-week periods ended
                              October 11, October 12, October 11, October 12,
                                    2009        2009        2009        2008
    -------------------------------------------------------------------------
    Net earnings, as reported       88.2        97.6       179.3       144.8
    -------------------------------------------------------------------------
    Add :
      Income taxes                  34.3        31.7        69.7        66.8
      Financial expenses             7.0         9.3        13.9        19.1
      Depreciation and
       amortization of
       property and
       equipment and other
       assets                       46.9        41.1        91.9        84.0
    -------------------------------------------------------------------------
    EBITDA                         176.4       179.7       354.8       314.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

For the second quarter and the first half-year of fiscal 2010, the depreciation expense increased due to the investments made through acquisitions, replacement of equipment, additions of new stores and the ongoing implementation of the Couche-Tard's IMPACT program within its network.

For the second quarter and the first half-year of fiscal 2010, financial expenses decreased by $2.3 million and $5.2 million, respectively, compared with last fiscal year. These decreases are the result of the combined reduction in Couche-Tard's average borrowings and interest rates.

The income tax rate for the second quarter of fiscal 2010 is 28.0% compared to a rate of 24.5% for the same quarter last fiscal year. As for the first half-year of fiscal 2010, the rate is 28.0% compared to a rate of 31.6% for the comparable period last fiscal year. Variations in the effective rates are mainly related to the corporate reorganization put in place in the first quarter last fiscal year.

Couche-Tard closed the second quarter of fiscal 2010 with net earnings of $88.2 million, which equals $0.48 per share (or $0.47 per share on a diluted basis), compared to $97.6 million last fiscal year ($0.50 per share or $0.49 per share on a diluted basis), a decrease of $9.4 million or 9.6%. This is a very good performance given the exceptionally high motor fuel gross margin in the United-States posted by the Company during the second quarter of fiscal 2009. The impact of the 9.10 cents per gallon decrease in the motor fuel gross margin in the United-States corresponds to a drop of over $40.0 million in net earnings, approximately.

As for the first half-year of fiscal 2010, net earnings were $179.3 million ($0.97 per share or $0.95 per share on a diluted basis), compared to $144.8 million last fiscal year ($0.74 per share or $0.73 per share on a diluted basis), an increase of $34.5 million or 23.8%.

Liquidity and Capital Resources

Couche-Tard's sources of liquidity remain unchanged compared with the fiscal year ended April 26, 2009. For further information, please refer to the Company's 2009 Annual Report.

The Company has an interest rate swap agreement, which it entered into in 2004 with a bank. The terms of the agreement remain unchanged compared with the information disclosed in Couche-Tard's 2009 Annual Report.

With respect to capital expenditures, acquisitions and share repurchases carried out by Couche-Tard in the first half-year of fiscal 2010, they were financed using available cash flow. The Company expects that cash available from operations together with borrowings available under its revolving unsecured credit facilities, as well as potential sale and leaseback transactions, will meet liquidity needs in the foreseeable future.

With respect to Couche-Tard's credit facilities, totalling $1 billion, they have not changed with respect to their terms of use since April 26, 2009 and they will only mature in 2012. As at October 11, 2009, $362.3 million of the Company's term revolving unsecured operating credits had been used ($280.0 million for the US dollar portion and $82.3 million for the Canadian dollar portion). At such date, the weighted average effective interest rate was 0.75% for the US dollar portion and 0.90% for the Canadian dollar portion. In addition, standby letters of credit in the amount of Cdn$0.9 million and $22.2 million were outstanding as at October 11, 2009. Couche-Tard also has a $350.7 million subordinated unsecured debt (nominal value amounting to $350.0 million, net of attributable financing costs of $0.7 million, adjusted for the fair value of the interest rate swaps designated as a fair value hedge of the debt), bearing interest at an effective rate of 7.55% (6.48% taking into account the effect of the interest rate swap described above) and maturing in 2013.

Selected Consolidated Cash Flow Information

    
    (In
     millions
     of US dollars)     12-week periods                24-week periods
                                  ended                          ended
               --------------------------------------------------------------
                   October   October     Varia-  October   October     Varia-
                        11,       12,     tion        11,       12,     tion
                      2009      2008        $       2009      2008         $
               --------------------------------------------------------------
    Operating
     activities
      Cash flows(1)  135.6     146.2     (10.6)    277.2     242.0      35.2
      Other           26.5       2.6      23.9     (36.9)    (35.0)     (1.9)
               --------------------------------------------------------------
    Net cash
     provided
     by operating
     activities      162.1     148.8      13.3     240.3     207.0      33.3
               --------------------------------------------------------------
    Investing
     activities
      Purchase of
       property
       and
       equipment,
       net of
       proceeds
       from the
       disposal
       of property
       and
       equipment     (45.0)    (50.6)      5.6     (71.1)    (83.2)     12.1
      Proceeds from
       sale and
       leaseback
       transactions    6.5       2.6       3.9       9.6       2.6       7.0
      Business
       acquisitions   (6.2)     (1.1)     (5.1)    (67.6)    (66.2)     (1.4)
      Other           (2.4)     (2.8)      0.4      (1.5)     (5.7)      4.2
               --------------------------------------------------------------
    Net cash
     used in
     investing
     activities      (47.1)    (51.9)      4.8    (130.6)   (152.5)     21.9
               --------------------------------------------------------------
    Financing
     activities
      Decrease
       in long-term
       borrowings    (57.7)    (46.7)    (11.0)    (30.0)    (17.6)    (12.4)
      Share
       repurchase    (28.1)    (43.8)     15.7     (56.4)    (43.8)    (12.6)
      Dividends      (11.9)    (13.3)      1.4     (11.9)    (13.3)      1.4
      Issuance of
       shares          2.0         -       2.0       2.0         -       2.0
               --------------------------------------------------------------
    Net cash
     used in
     financing
     activities      (95.7)   (103.8)      8.1     (96.3)    (74.7)    (21.6)
               --------------------------------------------------------------
               --------------------------------------------------------------
    Company
     credit rating
      Standard and
       Poor's          BB+       BB+                 BB+       BB+
      Moody's          Ba1       Ba1                 Ba1       Ba1
    -------------------------------------------------------------------------
    (1)  These cash flows are presented for information purposes only and
         represent a performance measure used especially in financial
         circles. They represent cash flows from net earnings, plus
         depreciation and amortization, loss on disposal of assets and future
         income taxes. They do not have a standardized meaning prescribed by
         Canadian GAAP and therefore may not be comparable to similar
         measures presented by other public companies.
    

Operating activities

During the second quarter of fiscal 2010, net cash from operating activities reached $162.1 million, up $13.3 million from the second quarter of fiscal 2009. This increase is mainly due to changes in working capital, including an increase in income taxes payable. During the first half-year of 2010, net cash from operating activities reached $240.3 million, up $33.3 million from the comparable period of fiscal 2009 due to an increase in net earnings.

Investing activities

During the second quarter of fiscal 2010, investing activities were primarily for the acquisition of five company-operated stores for an amount of $5.9 million and for capital expenditures for an amount of $45.0 million. Capital investments were primarily for the replacement of equipment in some of Couche-Tard's company-operated stores to enhance offerings of products and services and comply with regulations, the addition of new stores as well as the ongoing implementation of the Company's IMPACT program throughout its network.

Financing activities

During the second quarter of fiscal 2010, Couche-Tard recorded a $57.7 million decrease in long-term borrowing and repurchased shares for a total amount of $28.1 million. In addition, the Company paid $11.9 million in dividends.

Financial Position as at October 11, 2009

As shown by the indebtedness ratios included in the "Selected Consolidated Financial Information" section and net cash provided by operating activities, Couche-Tard's financial position is excellent.

The Company's total consolidated assets amounted to $3.5 billion as at October 11, 2009 compared to $3.3 billion as at April 26, 2009. This increase is chiefly the result of five factors:

    
    1. The increase in property and equipment mainly resulting from the
       stores acquired from ExxonMobil;
    2. The increase in in-store merchandise inventory due to a greater number
       of stores;
    3. The increase in motor fuel inventory due to a higher product cost
       compared to the fourth quarter of fiscal 2009 and a greater number of
       stores selling motor fuel;
    4. The increase in credit and debit cards receivables driven by higher
       motor fuel retail price compared to the fourth quarter of fiscal 2009
       as well as the increase in supplier rebates receivable following the
       increase in merchandise inventories; and
    5. An overall increase in Canadian and corporate operations assets once
       translated in U.S. dollars due to a stronger Canadian dollar as at the
       balance sheet date.
    

Shareholders' equity amounted to $1.5 billion as at October 11, 2009, up $166.8 million compared to April 26, 2009, reflecting net earnings generated during the current fiscal year and the increase in accumulated other comprehensive income due to the strengthening of the Canadian dollar, partially offset by the share repurchases made during the first half-year of 2010.

Selected Quarterly Financial Information

    
    (In millions of
     US dollars except
     for per share data,
     unaudited)                                              24-week period
                                                           ended October 11,
                                                                  2009
    -------------------------------------------------------------------------
    Quarter                                                  2nd         1st
    Weeks                                               12 weeks    12 weeks
                                ---------------------------------------------
    Revenues                                             3,825.8     3,675.1
                                ---------------------------------------------
    Income before depreciation
     and amortization of
     property and equipment and
     other assets, financial
     expenses and income taxes                             176.4       178.4
    Depreciation and
     amortization of property and
     equipment and other assets                             46.9        45.0
                                ---------------------------------------------
    Operating income                                       129.5       133.4
                                ---------------------------------------------
    Financial expenses                                       7.0         6.9
                                ---------------------------------------------
    Net earnings                                            88.2        91.1
                                ---------------------------------------------
                                ---------------------------------------------
    Net earnings per share
      Basic                                                $0.48       $0.49
      Diluted                                              $0.47       $0.48
    -------------------------------------------------------------------------

    (In millions of
     US dollars except
     for per share data,
     unaudited)                        52-week period ended April 26, 2009
    -------------------------------------------------------------------------
    Quarter                          4th         3rd         2nd         1st
    Weeks                       12 weeks    16 weeks    12 weeks    12 weeks
                                ---------------------------------------------
    Revenues                     2,994.0     3,911.7     4,556.4     4,319.0
                                ---------------------------------------------
    Income before depreciation
     and amortization of
     property and equipment and
     other assets, financial
     expenses and income taxes     105.0       168.1       179.7       135.0
    Depreciation and
     amortization of property and
     equipment and other assets     42.6        56.4        41.1        42.9
                                ---------------------------------------------
    Operating income                62.4       111.7       138.6        92.1
                                ---------------------------------------------
    Financial expenses               6.8        10.3         9.3         9.8
                                ---------------------------------------------
    Net earnings                    38.0        71.1        97.6        47.2
                                ---------------------------------------------
                                ---------------------------------------------
    Net earnings per share
      Basic                        $0.20       $0.37       $0.50       $0.24
      Diluted                      $0.20       $0.36       $0.49       $0.24
    -------------------------------------------------------------------------

    (In millions of
     US dollars except                                   Extract from the 52-
     for per share data,                                   week period ended
     unaudited)                                              April 27, 2008
    -------------------------------------------------------------------------
    Quarter                                                  4th         3rd
    Weeks                                               12 weeks    16 weeks
                                ---------------------------------------------
    Revenues                                             3,705.8     4,590.9
    Income before depreciation
     and amortization of
     property and equipment and
     other assets, financial
     expenses and income taxes                              63.7       130.6
    Depreciation and
     amortization of property and
     equipment and other assets                             39.9        53.8
                                ---------------------------------------------
    Operating income                                        23.8        76.8
                                ---------------------------------------------
    Financial expenses                                       9.1        16.7
                                ---------------------------------------------
    Net earnings                                            15.5        50.5
                                ---------------------------------------------
                                ---------------------------------------------
    Net earnings per share
      Basic                                                $0.08       $0.25
      Diluted                                              $0.08       $0.24
    -------------------------------------------------------------------------
    

Outlook

In the course of the fiscal year 2010, Couche-Tard expects to pursue its investments with caution in order to, amongst other things, deploy its IMPACT program. Given the economic climate and the Company's attractive access to capital, Couche-Tard believes to be well positioned to realize acquisitions and create value. However, the Company will continue to exercise patience in order to benefit from a fair price in view of current market conditions. The Company also intends to keep an ongoing focus on its supply terms and its operating expenses.

Finally, in line with its business model, Couche-Tard intends to continue to focus its resources on the sale of fresh products and on innovation, including the introduction of new products and services, in order to satisfy the needs of their large clientele.

November 24, 2009

Profile

Alimentation Couche-Tard Inc. is the leader in the Canadian convenience store industry. In North America, Couche-Tard is the largest independent convenience store operator (whether integrated with a petroleum company or not) in terms of number of stores. Couche-Tard currently operates a network of 5,904 convenience stores, 4,128 of which include motor fuel dispensing, located in 11 large geographic markets, including eight in the United States covering 43 states and the District of Columbia, and three in Canada covering all ten provinces. More than 52,000 people are employed throughout Couche-Tard's retail convenience network and service centers.

The statements set forth in this press release, which describes Couche-Tard's objectives, projections, estimates, expectations or forecasts, may constitute forward-looking statements within the meaning of securities legislation. Positive or negative verbs such as "plan", "evaluate", "estimate", "believe" and other related expressions are used to identify such statements. Couche-Tard would like to point out that, by their very nature, forward-looking statements involve risks and uncertainties such that its results, or the measures it adopts, could differ materially from those indicated or underlying these statements, or could have an impact on the degree of realization of a particular projection. Major factors that may lead to a material difference between Couche-Tard's actual results and the projections or expectations set forth in the forward-looking statements include the effects of the integration of acquired businesses and the ability to achieve projected synergies, fluctuations in margins on motor fuel sales, competition in the convenience store and retail motor fuel industries, exchange rate variations, and such other risks as described in detail from time to time in the reports filed by Couche-Tard with securities authorities in Canada and the United States. Unless otherwise required by applicable securities laws, Couche-Tard disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking information in this release is based on information available as of the date of the release.

    
    Webcast on November 24, 2009 at 3:30 P.M. (EST)
    -------------------------------------------------------------------------
    

Couche-Tard invites analysts known to the Company to send their two questions in advance to its management, before 1:30 P.M. (EST) on November 24, 2009.

Financial analysts and investors who wish to listen to the webcast on Couche-Tard's results which will take place online on November 24, 2009 at 3:30 P.M. (EST) can do so by accessing the Company's website at www.couche-tard.com and by clicking on the corporate presentations link of the investor relations section. For those who will not be able to listen to the live presentation, the recording of the webcast will be available on the Company's website for a period of 90 days.

    
    CONSOLIDATED STATEMENTS OF EARNINGS
    (in millions of US dollars, except per share amounts, unaudited)

                                     12 weeks                24 weeks
    For the periods ended     October 11, October 12, October 11, October 12,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
                                       $           $           $           $

    Revenues                     3,825.8     4,556.4     7,500.9     8,875.4
    Cost of sales (excluding
     depreciation and
     amortization of property
     and equipment and other
     assets as shown separately
     below)                      3,201.9     3,910.1     6,267.6     7,671.0
    -------------------------------------------------------------------------
    Gross profit                   623.9       646.3     1,233.3     1,204.4
    -------------------------------------------------------------------------

    Operating, selling,
     administrative and general
     expenses                      447.5       466.6       878.5       889.7
    Depreciation and
     amortization of property
     and equipment and other
     assets                         46.9        41.1        91.9        84.0
    -------------------------------------------------------------------------
                                   494.4       507.7       970.4       973.7
    -------------------------------------------------------------------------
    Operating income               129.5       138.6       262.9       230.7
    Financial expenses               7.0         9.3        13.9        19.1
    -------------------------------------------------------------------------
    Earnings before income taxes   122.5       129.3       249.0       211.6
    Income taxes                    34.3        31.7        69.7        66.8
    -------------------------------------------------------------------------
    Net earnings                    88.2        97.6       179.3       144.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings per share
     (Note 4)
      Basic                         0.48        0.50        0.97        0.74
      Diluted                       0.47        0.49        0.95        0.73
    Weighted average number of
     shares (in thousands)       183,718     194,530     184,959     195,628
    Weighted average number of
     shares - diluted (in
     thousands)                  188,311     198,265     189,144     199,474
    Number of shares outstanding
     at end of period (in
     thousands)                  183,572     193,023     183,572     193,023
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    (in millions of US dollars, unaudited)

                                     12 weeks                24 weeks
    For the periods ended     October 11, October 12, October 11, October 12,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
                                       $           $           $           $
    Net earnings                    88.2        97.6       179.3       144.8
    Other comprehensive income
      Changes in cumulative
       translation adjustments(1)   21.5       (69.9)       46.5       (67.7)
      Change in fair value of a
       financial instrument
       designated as a cash
       flow hedge(2)                 0.3           -         0.8           -
    -------------------------------------------------------------------------
    Other comprehensive income      21.8       (69.9)       47.3       (67.7)
    -------------------------------------------------------------------------
    Comprehensive income           110.0        27.7       226.6        77.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) For the 12 and 24-week periods ended October 11, 2009, these amounts
        include a gain of $28.2 and $71.2, respectively (net of income taxes
        of $11.0 and $27.7, respectively). For the 12 and 24-week periods
        ended October 12, 2008 these amounts include a loss of $101.5 and
        $86.3, respectively (net of income taxes of $33.0 and $39.8,
        respectively). These gains and losses arise from the translation of
        US dollar denominated long-term debt designated as a foreign exchange
        hedge of the Company's net investment in its U.S. self-sustaining
        operations.

    (2) For the 12 and 24-week periods ended October 11, 2009, these amounts
        are net of income taxes of $0.1 and $0.3, respectively.

    The accompanying notes are an integral part of the consolidated financial
    statements.


    CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
    (in millions of US dollars, unaudited)

    For the 24-week period ended                            October 11, 2009
    -------------------------------------------------------------------------
                                                          Accumula-
                                                         ted other
                                       Contrib-             compre-    Share-
                             Capital      uted  Retained   hensive   holders'
                               stock   surplus  earnings    income    equity
    -------------------------------------------------------------------------
                                   $         $         $         $         $

    Balance, beginning of
     period                    329.1      17.7     932.6      46.6   1,326.0
    Comprehensive income:
      Net earnings                                 179.3               179.3
      Change in cumulative
       translation
       adjustments                                            46.5      46.5
      Change in fair value
       of a financial
       instrument designated
       as a cash flow hedge
       (net of income taxes
       of $0.3)                                                0.8       0.8
                                                                    ---------
    Comprehensive income for
     the period                                                        226.6
                                                                    ---------
    Dividends                                      (11.9)              (11.9)
    Stock-based compensation
     expense (note 6)                      0.9                           0.9
    Fair value of stock
     options exercised           0.7      (0.7)                            -
    Cash received upon exercise
     of stock options            2.0                                     2.0
    Repurchase and cancellation
    of shares                  (10.3)                                  (10.3)
    Excess of acquisition
     cost over book value of
     Class A multiple voting
     shares and Class B
     subordinate voting shares
     repurchased and cancelled                     (40.5)              (40.5)
    -------------------------------------------------------------------------
    Balance, end of period     321.5      17.9   1,059.5      93.9   1,492.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    For the 24-week period ended                            October 12, 2008
    -------------------------------------------------------------------------
                                                          Accumula-
                                                         ted other
                                       Contrib-             compre-    Share-
                             Capital      uted  Retained   hensive   holders'
                               stock   surplus  earnings    income    equity
    -------------------------------------------------------------------------
                                   $         $         $         $         $
    Balance, beginning of
     period                    348.8      15.6     775.0     114.3   1,253.7
    Comprehensive income:
      Net earnings                                 144.8               144.8
      Change in cumulative
       translation adjustments                               (67.7)    (67.7)
                                                                    ---------
    Comprehensive income for
     the period                                                         77.1
                                                                    ---------
    Dividends                                      (13.3)              (13.3)
    Stock-based compensation
     expense (note 6)                      1.5                           1.5
    Repurchase and
     cancellation of shares     (8.8)                                   (8.8)
    Excess of acquisition cost
     over book value of
     Class A multiple voting
     shares and Class B
     subordinate voting
     shares repurchased and
     cancelled                                     (27.2)              (27.2)
    -------------------------------------------------------------------------
    Balance, end of period     340.0      17.1     879.3     (46.6)  1,283.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The accompanying notes are an integral part of the consolidated financial
    statements.

    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in millions of US dollars, unaudited)

                                     12 weeks                24 weeks
    For the periods ended     October 11, October 12, October 11, October 12,
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
                                       $           $           $           $
    Operating activities
    Net earnings                    88.2        97.6       179.3       144.8
    Adjustments to reconcile
     net earnings to net cash
     provided by operating
     activities
      Depreciation and
       amortization of property
       and equipment and other
       assets, net of
       amortization of deferred
       credits                      40.5        36.4        79.5        74.5
      Future income taxes            8.7         9.6        20.3        19.2
      (Gain) loss on disposal
       of property and equipment
       and other assets             (1.8)        2.6        (1.9)        3.5
      Deferred credits               6.8         1.8         8.8         4.1
      Other                          4.7         2.8         8.9         7.2
      Changes in non-cash
       working capital              15.0        (2.0)      (54.6)      (46.3)
    -------------------------------------------------------------------------
    Net cash provided by
     operating activities          162.1       148.8       240.3       207.0
    -------------------------------------------------------------------------

    Investing activities
    Purchase of property and
     equipment                     (45.0)      (53.1)      (71.1)      (88.1)
    Proceeds from sale and
     leaseback transactions          6.5         2.6         9.6         2.6
    Business acquisitions (Note 3)  (6.2)       (1.1)      (67.6)      (66.2)
    Increase in other assets        (4.2)       (2.8)       (8.0)       (5.7)
    Proceeds from disposal of
     property and equipment and
     other assets                    1.8         2.5         6.5         4.9
    -------------------------------------------------------------------------
    Net cash used in investing
     activities                    (47.1)      (51.9)     (130.6)     (152.5)
    -------------------------------------------------------------------------

    Financing activities
    Net decrease in long-term
     debt                          (57.7)      (46.7)      (30.0)      (17.6)
    Issuance of shares               2.0           -         2.0           -
    Repurchase of shares           (28.1)      (43.8)      (56.4)      (43.8)
    Dividends                      (11.9)      (13.3)      (11.9)      (13.3)
    -------------------------------------------------------------------------
    Net cash used in financing
     activities                    (95.7)     (103.8)      (96.3)      (74.7)
    -------------------------------------------------------------------------
    Effect of exchange rate
     fluctuations on cash and
     cash equivalents                4.0        (8.7)        9.0        (7.9)
    -------------------------------------------------------------------------
    Net increase (decrease) in
     cash and cash equivalents      23.3       (15.6)       22.4       (28.1)
    Cash and cash equivalents,
     beginning of period           172.4       203.5       173.3       216.0
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period                 195.7       187.9       195.7       187.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental information:
      Interest paid                  1.9         4.9        14.9        19.2
      Income taxes paid             15.2        21.6        42.0        46.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The accompanying notes are an integral part of the consolidated financial
    statements.


    CONSOLIDATED BALANCE SHEETS
    (in millions of US dollars)
                                                           As at       As at
                                                      October 11,   April 26,
                                                            2009        2009
                                                      (unaudited)
    -------------------------------------------------------------------------
                                                               $           $
    Assets
    Current assets
      Cash and cash equivalents                            195.7       173.3
      Accounts receivable                                  269.7       225.4
      Inventories                                          460.7       400.3
      Prepaid expenses                                      14.8         8.5
      Future income taxes                                   38.0        37.0
    -------------------------------------------------------------------------
                                                           978.9       844.5
    Property and equipment                               1,860.3     1,789.4
    Goodwill                                               411.6       384.8
    Trademarks and licenses                                173.8       172.0
    Deferred charges                                        10.5        10.9
    Other assets                                            59.3        49.8
    Future income taxes                                      6.3         4.5
    -------------------------------------------------------------------------
                                                         3,500.7     3,255.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities
    Current liabilities
      Accounts payable and accrued liabilities             794.1       758.1
      Income taxes payable                                  37.2        26.3
      Future income taxes                                    1.4         0.7
      Current portion of long-term debt                      4.0         3.9
    -------------------------------------------------------------------------
                                                           836.7       789.0
    Long-term debt                                         723.7       745.3
    Deferred credits and other liabilities                 278.1       259.0
    Future income taxes                                    169.4       136.6
    -------------------------------------------------------------------------
                                                         2,007.9     1,929.9
    -------------------------------------------------------------------------

    Shareholders' equity
    Capital stock                                          321.5       329.1
    Contributed surplus                                     17.9        17.7
    Retained earnings                                    1,059.5       932.6
    Accumulated other comprehensive income                  93.9        46.6
    -------------------------------------------------------------------------
                                                         1,492.8     1,326.0
    -------------------------------------------------------------------------
                                                         3,500.7     3,255.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The accompanying notes are an integral part of the consolidated financial
    statements.


    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (in millions of US dollars, except per share and stock option data,
     unaudited)
    

1. CONSOLIDATED FINANCIAL STATEMENTS PRESENTATION

The unaudited interim consolidated financial statements have been prepared by the Company in accordance with Canadian generally accepted accounting principles (Canadian GAAP) and have not been subject to a review engagement by the Company's external auditors. These consolidated financial statements were prepared in accordance with the same accounting policies and methods as the audited annual consolidated financial statements for the fiscal year ended April 26, 2009, with the exception of the accounting changes described in Note 2 below. The unaudited interim consolidated financial statements do not include all the information for complete financial statements and should be read in conjunction with the audited annual consolidated financial statements and notes thereto in the Company's 2009 Annual Report (the 2009 Annual Report). The results of operations for the interim periods presented do not necessarily reflect results expected for the full year. The Company's business follows a seasonal pattern. The busiest period is the first half of each fiscal year, which includes summer's sales.

2. ACCOUNTING CHANGES

Goodwill and Intangible Assets

On April 27, 2009, the Company adopted Canadian Institute of Chartered Accountants (CICA) Handbook Section 3064 "Goodwill and Intangible Assets", replacing Section 3062 "Goodwill and Other Intangible Assets" and Section 3450 "Research and Development Costs". The new Section establishes standards for the recognition, measurement, presentation and disclosure of goodwill subsequent to its initial recognition and of intangible assets by profit-oriented enterprises. Standards relating to goodwill are unchanged from the standards included in the previous Section 3062. The adoption of this new Section had no impact on the Company's consolidated financial statements.

3. BUSINESS ACQUISITIONS

On May 28, 2009, the Company purchased 43 company-operated stores in the Phoenix, Arizona region, United-States from ExxonMobil Corporation. The Company leases the lands and buildings related to nine sites, it owns the building and leases the land for one site, while it owns both these assets for the other sites. Under the same transaction, ExxonMobil also transferred to the Company the "On the Run" trademark rights in the United States as well as 444 franchised stores operating under this trademark in the United States.

Since the beginning of the fiscal year, the Company also acquired six stores through two distinct transactions. The Company owns the land and buildings for five sites while it leases both these assets for one site.

These acquisitions were settled for a total cash consideration of $67.6, including direct acquisition costs. The preliminary allocations of the purchase price of the acquisitions were established based on available information and on the basis of preliminary evaluations and assumptions management believes to be reasonable. Since the Company has not completed its fair value assessment of the net assets acquired for all transactions, the preliminary allocations of certain acquisitions are subject to adjustments to the fair value of the assets and liabilities until the process is completed. The allocations are based on the estimated fair values on the dates of acquisition:

    
                                                                           $
    Tangible assets acquired
      Inventories                                                        4.0
      Property and equipment                                            63.0
      Other assets                                                       0.1
    -------------------------------------------------------------------------
    Total tangible assets                                               67.1
    -------------------------------------------------------------------------
    Liabilities assumed
      Accounts payable and accrued liabilities                           1.1
      Deferred credits and other liabilities                             1.3
    -------------------------------------------------------------------------
    Total liabilities                                                    2.4
    -------------------------------------------------------------------------
    Net tangible assets acquired                                        64.7
    -------------------------------------------------------------------------
    Intangibles                                                          1.3
    Goodwill                                                             1.6
    -------------------------------------------------------------------------
    Total consideration paid, including direct acquisition costs        67.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The Company expects that approximately $1.0 of the goodwill related to
these transactions will be deductible for tax purposes.


    4. NET EARNINGS PER SHARE

                         12-week period                12-week period
                   ended October 11, 2009          ended October 12, 2008
                -------------------------------------------------------------
                            Weighted                      Weighted
                             average                       average
                              number                        number
                                  of       Net                  of       Net
                              shares  earnings              shares  earnings
                       Net  (in thou-      per       Net  (in thou-      per
                   earnings     sands)    share  earnings     sands)    share
                -------------------------------------------------------------
                         $                   $         $                   $

    Basic net
     earnings
     attributable
     to Class A
     and B
     shareholders     88.2   183,718      0.48      97.6   194,530      0.50

    Dilutive effect
     of stock
     options                   4,593     (0.01)              3,735     (0.01)
                -------------------------------------------------------------
    Diluted net
     earnings
     available
     for Class A
     and B
     shareholders     88.2   188,311      0.47      97.6   198,265      0.49
                -------------------------------------------------------------
                -------------------------------------------------------------


                         24-week period                24-week period
                   ended October 11, 2009          ended October 12, 2008
                -------------------------------------------------------------
                            Weighted                      Weighted
                             average                       average
                              number                        number
                                  of       Net                  of       Net
                              shares  earnings              shares  earnings
                       Net  (in thou-      per       Net  (in thou-      per
                  earnings     sands)    share  earnings     sands)    share
                -------------------------------------------------------------
                         $                   $         $                   $
    Basic net
     earnings
     attributable
     to Class A
     and B
     shareholders    179.3   184,959      0.97     144.8   195,628      0.74

    Dilutive effect
     of stock
     options                   4,185     (0.02)              3,846     (0.01)
                -------------------------------------------------------------
    Diluted net
     earnings
     available for
     Class A and B
     shareholders    179.3   189,144      0.95     144.8   199,474      0.73
                -------------------------------------------------------------
                -------------------------------------------------------------
    

A total of 864,075 stock options are excluded from the calculation of the diluted net earnings per share due to their antidilutive effect for the 12 and 24-week period ended October 11, 2009. There are 1,682,795 stocks options excluded from the calculation for the 12 and 24-week period ended October 12, 2008.

5. CAPITAL STOCK

As at October 11, 2009, the Company has 53,706,712 (53,727,412 as at October 12, 2008) issued and outstanding Class A multiple voting shares each comprising ten votes per share and 129 865 277 (139,295,236 as at October 12, 2008) outstanding Class B subordinate voting shares each comprising one vote per share.

On August 8, 2008, the Company implemented a share repurchase program which allows to repurchase up to 2,693,860 Class A multiple voting shares (representing 5.0% of the 53,877,212 Class A multiple voting shares issued and outstanding as at July 29, 2008) and up to 14,031,210 Class B subordinate voting shares (representing 10.0% of the 140,312,108 Class B subordinate voting shares of the public float, as defined by applicable rules, as at July 29, 2008). When making such repurchases, the number of issued and outstanding Class A multiple voting shares and Class B subordinate voting shares is reduced and the proportionate interest of the shareholders in the share capital of the Company is increased on a pro rata basis. All shares repurchased under the share repurchase program are cancelled upon repurchase. During the 12-week period ended October 11, 2009, the Company has repurchased under this program a total of 1,400 Class A multiple voting shares at an average cost of Cdn$16.63 and 1,850,300 Class B subordinate voting shares at an average cost of Cdn$16.52. On a cumulative basis since the implementation of the program, the Company has repurchased a total of 19,000 Class A multiple voting shares at an average cost of Cdn$13.43 and 11,779,400 Class B subordinate voting shares at an average cost of Cdn$13.61. This program expired on August 7, 2009 and was replaced by a new program on August 10, 2009 which will expire on August 9, 2010. No repurchase has been done under this new program.

6. STOCK-BASED COMPENSATION AND OTHER STOCK-BASED PAYMENTS

Stock Options

As at October 11, 2009, 8,656,278 stock options for the purchase of Class B subordinate voting shares are outstanding (9,083,695 as at October 12, 2008). These stock options can be gradually exercised at various dates until September 12, 2019, at an exercise price varying from Cdn$2.38 to Cdn$25.71. Three series of stock options totaling 105,000 stock options at an exercise price ranging from Cdn$13.15 to Cdn$19.85 were granted since the beginning of the fiscal year.

For the 12 and 24-week periods ended October 11, 2009, the stock-based compensation costs amount to $0.5 and $0.9, respectively. For the 12 and 24-week periods ended October 12, 2008, the stock-based compensation costs amount to $0.7 and $1.5, respectively.

The fair value of stock options granted is estimated at the grant date using the Black & Scholes option pricing model on the basis of the following assumptions for the stock options granted since the beginning of the year:

    
    - risk-free interest rate of 3.03%;
    - expected life of 8 years;
    - expected volatility of 33%;
    - expected quarterly dividend of Cdn$0.035 per share.
    

The weighted average fair value of stock options granted since the beginning of the year is Cdn$6.49 (Cdn$5.44 as at October 12, 2008). A description of the Company's stock option plan is included in Note 19 of the consolidated financial statements presented in the 2009 Annual Report.

Phantom Stock Units

On May 1st, 2009, the Company implemented a Phantom Stock Unit (the "PSU") Plan allowing the Board of Directors, through its Human Resources and Corporate Governance Committee, to grant PSUs, to the officers and selected key employees of the Company (the "Participants"). A PSU is a notional unit, which value is based on the weighted average reported closing price for a board lot of the Company's Class B subordinated voting share (the "Class B share") on the Toronto Stock Exchange for the five trading days immediately preceding the grant date. The PSU provides the Participant with the opportunity to earn a cash award equal to the fair market value of the Company's Class B shares on the open market of the Toronto Stock Exchange upon vesting of the PSU. Each PSU initially granted vest no later than one day prior to the third anniversary of the grant date subject namely to the achievement of performance objectives of the Company, based on external and internal benchmarks, over a three-year performance period. PSUs are not dilutive since they are solely payable in cash.

The PSU compensation cost and the related liability are recorded on a straight-line basis over the corresponding vesting period based on the fair market value of Class B shares and the best estimate of the number of PSUs that will ultimately be paid. The liability is adjusted periodically to reflect any variation in the fair market value of the Class B shares. 3,920 PSUs were granted while 5,323 PSUs were cancelled for the 12-week period ended October 11, 2009. For the 24-week period ended October 11, 2009, the Company granted a total of 193,177 PSUs while it cancelled 5,323 PSUs and the compensation costs for the 12 and 24-week periods ended October 11, 2009 amount to $0.2 and $0.4, respectively. As at October 11, 2009, 187,854 PSUs were outstanding. On the consolidated balance sheet, the obligation related to the PSU Plan is recorded in deferred credit and other liabilities.

To manage current and forecasted risk related to changes in the fair market value of the PSUs granted by the Company, the Company has entered into a financial arrangement with an investment grade financial institution. The financial arrangement includes a total return swap with an underlying representing 189,072 Class B shares (the "Instrument"). The Instrument is recorded at fair market value on the consolidated balance sheet under other assets. The financial arrangement will be adjusted as needed to reflect new awards and/or settlements of PSUs.

The Company has documented and identified the Instrument as a cash flow hedge of the anticipated cash settlement transaction related to the granted PSUs. The Company has determined that the instrument is an effective hedge at the time of the establishment of the hedge and for the duration of the Instrument. The changes in the fair value of the instrument are initially recorded in consolidated other comprehensive income and subsequently reclassified to consolidated net earnings in the same period the recording of the change in the fair value of the PSUs affects consolidated net earnings. Should it become probable that the hedge transaction will not occur, any gains, losses, revenues or expenses associated with the hedging item that had previously been recognized in other comprehensive income as a result of applying hedge accounting will be recognized in the reporting period's net income. As at October 11, 2009, the fair value of the Instrument was $1.1.

7. EMPLOYEE FUTURE BENEFITS

For the 12 and 24-week periods ended October 11, 2009, the Company's total net pension expense included in its consolidated statement of earnings amounts to $1.7 and $3.8, respectively. For the corresponding 12 and 24-week periods ended October 12, 2008, the expense is $1.4 and $2.9, respectively. The Company's pension plans are described in Note 20 of the consolidated financial statements presented in the 2009 Annual Report.

8. SEGMENTED INFORMATION

The Company operates convenience stores in the United States and in Canada. It essentially operates in one reportable segment, the sale of goods for immediate consumption and motor fuel through corporate stores or franchise operations. It operates a convenience store chain under several banners, including Couche-Tard, Mac's and Circle K. Revenues from outside sources mainly fall into two categories: merchandise and services and motor fuel.

The following table provides the information on the principal revenue classes as well as geographic information:

    
                          12-week period               12-week period
                      ended October 11, 2009       ended October 12, 2008
    -------------------------------------------------------------------------
                    United                        United
                    States    Canada     Total    States    Canada     Total
    -------------------------------------------------------------------------
                         $         $         $         $         $         $
    External
     customer
     revenues(a)
    Merchandise
     and services    946.5     469.8   1,416.3     899.6     445.4   1,345.0
    Motor fuel     1,995.8     413.7   2,409.5   2,748.9     462.5   3,211.4
    -------------------------------------------------------------------------
                   2,942.3     883.5   3,825.8   3,648.5     907.9   4,556.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross Profit
    Merchandise
     and services    308.4     162.4     470.8     290.5     153.0     443.5
    Motor fuel       123.7      29.4     153.1     181.2      21.6     202.8
    -------------------------------------------------------------------------
                     432.1     191.8     623.9     471.7     174.6     646.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Property and
     equipment and
     goodwill(a)   1,770.7     500.6   2,271.3   1,699.9     443.8   2,143.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                          24-week period               24-week period
                      ended October 11, 2009       ended October 12, 2008
    -------------------------------------------------------------------------
                    United                        United
                    States    Canada     Total    States    Canada     Total
    -------------------------------------------------------------------------
                         $         $         $         $         $         $
    External
     customer
     revenues(a)
    Merchandise
     and services  1,900.2     906.9   2,807.1   1,757.4     889.6   2,647.0
    Motor fuel     3,907.3     786.5   4,693.8   5,371.4     857.0   6,228.4
    -------------------------------------------------------------------------
                   5,807.5   1,693.4   7,500.9   7,128.8   1,746.6   8,875.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross Profit
    Merchandise
     and services    621.1     311.7     932.8     568.4     310.4     878.8
    Motor fuel       243.1      57.4     300.5     282.3      43.3     325.6
    -------------------------------------------------------------------------
                     864.2     369.1   1,233.3     850.7     353.7   1,204.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (a) Geographic areas are determined according to where the Company
        generates operating income (where the sale takes place) and according
        to the location of the property and equipment and goodwill.
    

9. RECENTLY ISSUED ACCOUNTING STANDARDS NOT YET IMPLEMENTED

Accounting Changes

In June 2009, CICA amended Section 1506 "Accounting Changes", to exclude from the scope of this Section, changes in accounting policies upon the complete replacement of an entity's primary basis of accounting. This amendment is effective for fiscal years beginning after July 1, 2009. The Company will implement this standard in its first quarter of fiscal year 2011 but does not believe it will have an impact on its consolidated financial statements.

Financial Instruments - Recognition and Measurement

In June 2009, CICA amended Section 3855 "Financial Instruments - Recognition and Measurement" to clarify application of the effective interest rate method after a debt instrument has been impaired. The amendment also clarifies when an embedded prepayment option is separated from its host debt instrument for accounting purposes. This amendment is effective January 1, 2011, at which time Canadian public companies will have adopted IFRS. At this point, the Company does not intend to early adopt this amendment. The Company is currently evaluating the impact of the adoption of this amendment.

Financial Instruments - Disclosures

In June 2009, CICA amended Section 3862 "Financial Instruments - Disclosures" to enhance disclosure requirements about liquidity risk of financial instruments. The amendment also includes new disclosure requirements about fair value measurement of financial instruments. This amendment is effective January 1, 2011, at which time Canadian public companies will have adopted IFRS. At this point, the Company does not intend to early adopt this amendment. The Company is currently evaluating the impact of the adoption of this amendment.

10. SUBSEQUENT EVENT

On November 11, 2009, the Company announced its intention to enter into an agreement to create a joint venture with Shell Oil Products US to operate approximately 100 convenience stores in the greater Chicago metropolitan area of the United States. The transaction is subject to final management approvals, standard regulatory approvals and closing conditions and is expected to close by the end of 2009.

SOURCE Alimentation Couche-Tard Inc.

For further information: For further information: Raymond Paré, Vice-President and Chief Financial Officer, (450) 662-6632, ext. 4607, investor.relations@couche-tard.com


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