Stable Financial Performance

914187 ALBERTA CO. LTD

Request:  Dealer requesting $125M increase to their permanent credit line for a total combined facility of $625M.  Dealer is requesting increase to accommodate growth and be in a position to purchase in advance of selling season to account for shipping delays

Background:  914187 Alberta Co. Ltd. o/a Performance Motor Sports (PMS) is an active AB corporation in good standing as per corp. search dated 03/018/2015. Established and current control since 1995. CDF customer since 1995

• Dealer retails sales, service, parts and accessories acting as a stand alone Kawsaki dealership. Dealer operates out of one 1 location in St. Paul, AB
• Ownership is split between Wayne Balash 50% & Mario Michael 50%

Operational Performance:

1. Their > 12 month aging is at 17.1%, out of which 3.1% is >540 days. Dealer also expects to liquidate through aged inventory throughout the selling season.
2. CDF Turn of 1.22x
3. Their 3 month FC release average is within parameters at 0.00%

Vendor Repurchase:

o        The sole vendor is Kawasaki which offers full and unlimited repurchase.

PPSA Status:

1. CDF is first ranked

D&B Scores:

1. Paydex of 73 (Paying 11 days PD on average)
2. FSSP of 85 (low to moderate risk of severe financial stress)

Additional Security:  $150M ILOC on file

PG from following individuals:

• Wayne Balash – PBS ‘Great’ as of March 2015, PFS requrested from portfolio
• Mario Michael – PBS ‘Great’ as of March 2015, PFS requrested from portfolio
• Renee Balash – PBS N/A and PFS requrested from portfolio
• Rosemarie Balash – PBS N/A and PFS requrested from portfolio

Financial Summary: (TTM Summary as of Jan 31, 2015)

- Revenues declined to 5.4% to $3.1MM while GM remained flat at 20%

- EBITDA of $138M and Net Income of $39M on a 12 month basis

-  FCCR of 0.32x due to dividends of $120M. Pre-dividend FCCR of 4.61x.

 - Inventory turn of 0.88x is less than CDF parameters and explains the high aging