06:09:45 EDT Fri 29 Mar 2024
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Superior Plus Corp
Symbol SPB
Shares Issued 126,179,149
Close 2013-10-31 C$ 11.12
Market Cap C$ 1,403,112,137
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Superior Plus earns $35.9-million in Q3

2013-10-31 18:05 ET - News Release

Mr. Luc Desjardins reports

SUPERIOR PLUS CORP. ANNOUNCES 2013 THIRD QUARTER RESULTS AND 2014 FINANCIAL OUTLOOK

Superior Plus Corp. has released its results for the third quarter of 2013.

Third quarter highlights

  • For the quarter ended Sept. 30, 2013, Superior generated adjusted operating cash flow (AOCF) per share of 19 cents, consistent with the prior-year quarter of 19 cents per share, excluding the one-time effect of 11 cents or $12.5-million related to a settlement with TransCanada that was included in the third quarter of 2012. Superior's results for the third quarter were consistent with management's expectations. AOCF per share compared with the prior-year quarter was affected by lower results from Superior's energy services and specialty chemicals business segments, combined with a higher number of weighted average common shares, offset by an improvement in Superior's construction products distribution business and lower interest costs.
  • Superior is confirming its 2013 financial outlook of AOCF per share of $1.60 to $1.85. The 2013 financial outlook is provided before restructuring charges.
  • Superior is introducing its 2014 financial outlook of AOCF per share of $1.65 to $1.95 before restructuring charges, an approximate 5-per-cent increase over the anticipated 2013 financial results. Superior will provide additional details on its 2014 financial outlook and the progress on its "destination 2015" growth targets at its upcoming 2013 annual investor day.
  • Superior is pleased to announce that it has entered into a strategic supply agreement with Tronox LLC to purchase and market up to 130,000 metric tonnes of sodium chlorate on an annual basis from Tronox's Hamilton, Miss., facility.
  • Superior's expansion of its hydrochloric acid production capabilities at its Port Edwards, Wisc., facility is now anticipated to be in commercial production in the fourth quarter of 2014, earlier than the update provided on Aug. 21, 2013, which anticipated commercial production in the first quarter of 2015, as a result of the Port Edwards acid burner being significantly damaged during the shipping process. The Saskatoon facility expansion was not affected by the accident and remains on time and on budget, with commercial production anticipated in the fourth quarter of 2014.
  • Superior anticipates incurring $15-million to $20-million in one-time restructuring costs associated with further operational improvements at its energy services and construction products distribution. Restructuring charges are anticipated to be recognized over the fourth quarter of 2013 and the first and second quarters of 2014. As previously noted, Superior's 2013 and 2014 financial outlooks are provided before one-time restructuring costs.
  • Energy services results for the third quarter were affected by a reduced contribution from the fixed-price energy business due to the normal course run-off of the residential customer base as a result of exiting this portion of the business in prior years due to difficult market conditions. Superior anticipates that the resultant reduction in the contribution from this business will continue for the remainder of 2013, after which the contribution is anticipated to normalize on a comparative basis. Additionally, results were affected by modestly lower contributions from the Canadian propane and U.S. refined fuels businesses due to higher operating costs and reduced sales volumes.
  • Specialty chemicals results for the third quarter were lower than the prior year as a result of reduced chloralkali profits due to weaker average sales prices on chlorine and hydrochloric acid, reduced sales volumes due to plant downtime at the Port Edwards facility, and higher maintenance costs due to the timing of normal course maintenance. Sodium chlorate gross profits were consistent with the prior-year quarter as higher sales volumes were fully offset by higher electricity prices.
  • The construction products distribution business results for the third quarter benefited from higher average selling prices, sales margins and sales volumes.
  • Superior's forecasted Dec. 31, 2013, total-debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization) ratio is unchanged at 3.3 times to 3.7 times, with a bias toward the high end of the range due to recent commodity price increases for propane that negatively affect Superior's working capital requirements. Superior anticipates that its total-debt-to-EBITDA ratio as at Dec. 31, 2014, will be in the range of 3.3 times to 3.7 times. Superior continues to focus on reducing its total debt; Superior's target total-debt-to-EBITDA ratio remains unchanged at 3.0 times to 3.5 times.
  • On Oct. 28, 2013, Superior redeemed all of its outstanding $150-million, 8.25-per-cent senior unsecured debentures due Oct. 27, 2016. The early redemption allows for Superior to benefit from lower average interest costs.

                                                                 
                   THIRD QUARTER FINANCIAL SUMMARY
           (in millions of dollars, except per-share amounts)                                             
 
                                     Three months ended   Nine months ended
                                               Sept. 30,           Sept. 30,
                                         2013      2012      2013      2012 

Revenue                              $  813.8  $  790.1  $2,718.1  $2,690.3 
Gross profit                            184.9     195.9     628.0     618.1 
EBITDA from operations(1)(2)             43.0      57.6     196.6     197.1 
Interest                                (15.5)    (18.3)    (46.3)    (55.1)
Cash income tax recovery (expense)        0.4      (0.3)     (0.4)     (0.8)
Corporate costs                          (3.7)     (5.3)    (13.5)    (12.7)
Adjusted operating cash flow(1)          24.2      33.7     136.4     128.5 
Adjusted operating cash flow per                                            
share, basic and diluted(1)(3)(4)    $   0.19  $   0.30  $   1.12  $   1.15 
Dividends paid per share             $   0.15  $   0.15  $   0.45  $   0.45 

(1) EBITDA from operations and adjusted operating cash flow are key         
    performance measures used by management to evaluate the performance of  
    Superior. These measures are defined under non-IFRS (international
    financial reporting standards) financial measures in Superior's 2013 
    third quarter management's discussion and analysis (MD&A). 
(2) The prior-year results have been restated for the effect of adopting    
    international accounting standard (IAS) 19, employee benefits amendments,  
    effective Jan. 1, 2013. The effect to EBITDA from operations was a   
    decrease to energy services of $300,000 and $900,000 for the three and    
    nine months ended Sept. 30, 2012, and a decrease to specialty chemicals 
    of $500,000 and $1.5-million for the three and nine months ended Sept. 30, 
    2012. See Superior's 2013 third quarter MD&A for additional details.  
(3) The weighted average number of shares outstanding for the three months  
    ended Sept. 30, 2013, was 126.2 million (2012 -- 112.2 million), and for
    the nine-month period was 122.0 million (2012 -- 111.6 million).             
(4) For the three and nine months ended Sept. 30, 2012, and 2013, there  
    were no dilutive instruments.                                           

Energy services

  • Energy services EBITDA from operations for the third quarter was $8.3-million, compared with $13-million in the prior-year quarter. Results were affected by lower contributions from the fixed-price energy services, the Canadian propane business and the U.S. refined fuels business.
  • The Canadian propane business generated gross profit of $47.6-million in the third quarter, compared with $47.3-million in the prior-year quarter, as modestly higher average sales margins were offset by reduced sales volumes.
  • Canadian propane average sales margins were 20.5 cents per litre in the third quarter, compared with 19.7 cents per litre in the prior-year quarter. Average sales margins were higher than the prior year due to the effect of a favourable sales mix as a result of a larger proportion of higher-margin residential and small commercial customers in the current-year quarter, which more than offset the effect of a rise in the wholesale cost of propane that negatively affected sales margins.
  • Canadian propane distribution sales volumes were eight million litres or 3 per cent lower than the prior-year quarter due to a reduction in oil field volumes as a result of reduced customer activity and the gasification of certain customer sites. Residential, small commercial and industrial volumes were consistent or modestly higher than the prior-year quarter.
  • Average weather across Canada, as measured by degree days, for the third quarter was 10 per cent colder than the prior year and 2 per cent warmer than the five-year average. Due to the nature of the Canadian propane business, weather does not have a material effect on sales volumes in the third quarter.
  • During the third quarter, the Canadian propane business began the initial rollout of of its ADD IT system, starting with the Atlantic region in September, 2013. The remaining regions will implement the ADD system throughout the remainder of 2013 and over the first half of 2014, minimizing the effect on the business during the 2013/2014 heating season. The ADD system will facilitate continuing operational improvements.
  • The U.S. refined fuels business generated gross profits of $16.8-million in the third quarter, compared with $16.5-million in the prior-year quarter. The modest increase in gross profit was due to higher sales margins as a result of improved sales mix, offset in part by reduced sales volumes.
  • U.S. refined fuels average sales margins were 5.1 cents per litre in the quarter, compared with 4.9 cents per litre in the prior-year quarter. Sales margins were positively affected by an improved overall sales mix, offset in part by the effect of higher wholesale propane costs that negatively affected sales margins.
  • Sales volumes within the U.S. refined fuels business were nine million litres or 3 per cent lower than the prior year. Sales volumes were affected by reduced wholesale delivery volumes, which were negatively affected as a result of competitive pricing pressures. Retail heating oil and propane sales volume were consistent with the prior year.
  • Average weather for the U.S. refined fuel business, as measured by degree days, was consistent with both the prior-year quarter and the five-year average. Due to the nature of the U.S. refined fuels business, weather does not have a material effect on sales volumes in the third quarter.
  • The fixed-price energy services business generated gross profits of $4.8-million, compared with $8-million in the prior-year quarter, due to reduced natural gas profits. Lower natural gas gross profits were due to a reduction in sales volumes as a result of a reduced contribution from the residential segment, which has been in decline due to a change in strategy in prior years to exit that market and focus on small commercial and industrial accounts. Gross profit related to the electricity segment was lower than the prior year due to reduced contributions from the Ontario market. Superior anticipates that the reduction in the contribution from this business, due to exiting the residential segment in prior years, will continue for the remainder of 2013, after which the contribution is anticipated to normalize on a comparative basis.
  • The supply portfolio management business generated gross profits of $4.4-million in the third quarter, compared with $3.9-million in the comparative period, as market-based trading conditions were consistent with the prior-year quarter.
  • Operating expenses were $75.3-million in the third quarter, compared with $72.4-million in the prior-year quarter. Operating expenses were higher than the prior year due to costs associated with process re-engineering, costs associated with the implementation of the ADD IT system, regulatory and compliance costs, and higher truck-related maintenance costs. Superior remains focused on reducing its cost structure in a sustainable manner as part of its continuing cost-reduction initiatives.
  • Superior expects business conditions for the fourth quarter of 2013 for its energy services business will be similar to the conditions experienced throughout year-to-date 2013. Weather for the fourth quarter of 2013 is anticipated to be consistent with the five-year average. EBITDA from operations for 2014 is anticipated to be higher than in 2013 due to improved results at the Canadian propane and U.S. refined fuels businesses. Improvement in EBITDA is anticipated as a result of modestly higher sales volumes and improved average sales margins due to the continuing implementation of business initiatives. EBITDA from the fixed-price energy services and wholesale supply business is anticipated to be consistent with 2013. Operating expenses are anticipated to be consistent with 2013 due to improvements in operational efficiencies from business initiatives, offset by costs associated with higher volumes. Average weather, as measured by degree days, is anticipated to be consistent with the five-year average for 2014. Operating conditions for 2014 are anticipated to be similar to 2013.

Specialty chemicals

  • EBITDA from operations for the third quarter was $24.6-million, compared with $41-million in the prior-year quarter or $28.5-million in the prior year, excluding the one-time payment of $12.5-million related to a settlement with TransCanada.
  • Sodium chlorate gross profits were modestly higher than the prior-year quarter due to higher sales volumes and modestly higher average selling prices, which more than offset the effect of higher electricity input costs.
  • Sodium chlorate sales volumes were 10 per cent higher than the prior-year quarter due primarily to incremental export volume to CMPC in Chile. Sales volumes to North American and other international customers were modestly higher than the prior year.
  • Chloralkali gross profits were lower than the prior-year quarter due to a reduction in average sales prices and modestly lower sales volumes. Sales volumes were affected in part by downtime at the Port Edwards, Wisc., facility for normal course maintenance. The reduction in average selling prices for chloralkali was due to a weak pricing environment for chlorine and hydrochloric acid due to weak supply demand fundamentals, offset in part by modestly higher caustic soda and potassium caustic pricing. Superior anticipates that the pricing environment for both chlorine and hydrochloric acid will remain at current levels in the short-term.
  • Operating expenses of $34.6-million were $2.8-million higher than the prior year, due to unfavourable foreign currency revaluations on U.S.-dollar-denominated working capital, higher maintenance costs as a result of the timing of normal course maintenance compared with the prior-year quarter and general inflationary increases.
  • As previously announced, Superior has approved an expansion of its hydrochloric acid production capacity at its Port Edwards, Wisc., and Saskatoon, Sask., facilities. Upon completion of both projects, Superior will have doubled its total hydrochloric acid production capacity to 360,000 wet metric tonnes. The expansion of the production capacity will allow Superior to optimize overall returns at both facilities by converting a larger portion of its chlorine into higher-value hydrochloric acid. The Port Edwards project is anticipated to cost $18-million, with commercial production now expected early in the fourth quarter of 2014. As previously disclosed, the Port Edwards project has been delayed as a result of an accident involving the hydrochloric acid burner while being prepared by the manufacturer for shipment to the Port Edwards facility. The Saskatoon project is anticipated to cost $25-million, with commercial production expected in the fourth quarter of 2014. To date, cumulative costs of $12.8-million have been incurred with respect to both projects.
  • Superior expects business conditions for the fourth quarter of 2013 for its specialty chemicals business to be similar to the conditions experienced throughout year-to-date 2013. For 2014, EBITDA from operations is anticipated to be lower than in 2013 due to a reduced contribution from sodium chlorate due to higher electricity prices and lower average selling prices, offset in part by the contribution from the strategic supply agreement with Tronox noted herein. Contribution from the chloralkali segment is anticipated to be modestly higher than 2013 due to the completion of the hydrochloric acid facility expansions during 2014. Sales volumes of caustic, chlorine and hydrochloric acid are anticipated to be modestly higher than 2013, which will be offset in part by a modest reduction in average sales pricing on an electrical-chemical-unit basis. Supply demand fundamentals in the chloralkali markets in which Superior operates are anticipated to remain consistent with the prior year.

Tronox strategic supply agreement

  • The specialty chemicals business has entered into a supply agreement with Tronox LLC to purchase up to 130,000 metric tonnes of sodium chlorate per year from Tronox's Hamilton, Miss., facility. The initial term of the agreement extends to Dec. 31, 2016, and may be automatically extended in one-year increments thereafter. Under the terms of the agreement, Tronox will continue to own and operate the facility, and the specialty chemicals business will purchase sodium chlorate to meet customers under certain customer contracts being assumed. The specialty chemicals business will pay an initial fee of $5-million and a quarterly fee of $800,000 during the initial term of the agreement, plus a cost for sodium chlorate delivered. As part of the agreement, the specialty chemicals business will acquire finished inventory, assume existing rail car leases and assume existing customer contracts, as assigned. Additionally, the parties have entered into a strategic long-term agreement for the supply of chloralalkali product to service Tronox's requirements in North America.
  • The Tronox sodium chlorate facility is strategically located in the southeast United States, which will allow ERCO to optimize the logistics and transportation of product within its existing network of sodium chlorate facilities.

Construction products distribution

  • EBITDA from operations for the third quarter was $10.1-million, compared with $3.6-million in the prior-year quarter. Prior-year results included $2.7-million in one-time restructuring costs. Excluding the effect of the restructuring costs noted above, results in the third quarter were higher than the prior-year quarter due to improved selling prices, sales margins, volumes and cost-reduction initiatives.
  • Gross profit was higher than the prior-year quarter due to improved average selling prices and sales margins, and higher sales volumes in the United States. Gypsum sales volumes were higher than the prior-year quarter as improved residential construction activity in the United States more than offset reduced Canadian residential activity and the effect of a reduction in branch locations as a result of restructuring activities completed during 2012. Sales margins benefited from improved purchasing, the implementation of pricing initiatives and the withdrawal from certain Canadian markets that were less profitable.
  • Commercial and industrial insulation (C&I) sales volumes were higher than the prior-year quarter as sales and marketing initiatives to increase sales have been successful despite a challenging commercial market. C&I gross margins were modestly lower than the prior-year quarter due to a higher proportion of lower margin large projects.
  • Operating expenses for the third quarter were $41.3-million, compared with $43.1-million in the prior-year quarter. Prior-year operating costs included $2.7-million in one-time restructuring costs. Excluding the effect of prior-year restructuring costs, operating costs were affected by cost associated with higher sales volumes in the United States, operations and inflationary increases of wages, and other operating costs. Operating expenses as a percentage of sales, excluding restructuring costs, were modestly lower than the prior-year quarter.
  • Superior expects business conditions for the fourth quarter of 2013 for its construction products distribution business to be similar to the conditions experienced throughout year-to-date 2013. Superior anticipates that EBITDA from operations in 2014 will be higher than in 2013 due to continued improvements in U.S. construction markets, in particular U.S. residential construction, as well as benefits associated with continuing business initiatives. Superior anticipates that the U.S. commercial market will be modestly improved in 2014 compared with 2013 and that the Canadian residential and commercial markets will continue to be challenging.

Corporate related

  • Total interest expense for the third quarter was $15.5-million, compared with $18.3-million in the prior-year quarter. Interest expense was lower than the prior-year quarter as a result of lower average debt levels due to Superior's continuing focus to reduce its total debt levels.
  • Corporate costs were $3.7-million in the third quarter, a decrease of $1.6-million compared with the prior-year quarter. The decrease in corporate costs is due to reduced costs associated with long-term incentive plans as a result of a reduction in Superior's share price.
  • Superior's total debt (including convertible debentures) to compliance EBITDA improved to 3.6 times as at Sept. 30, 2013, compared with 4.4 times as at Dec. 31, 2012, and 4.1 times as at Sept. 30, 2012. The reduction in total leverage compared with Dec. 31, 2012, is due to Superior using the $137.8-million in net proceeds from its common share equity issue to repay existing indebtedness. Superior continues to focus on reducing its total leverage through continuing debt reduction, including reducing working capital requirements and improving business operations.
  • On Oct. 28, 2013, Superior redeemed all of its outstanding $150-million, 8.25-per-cent senior unsecured debentures due Oct. 27, 2016, at a redemption price of $1,041.25 per $1,000 principal amount plus any accrued and unpaid interest. The redemption price was as allowed for in the underlying indenture. The early redemption allows for Superior to benefit from lower average interest costs.

Canada Revenue Agency (CRA) income tax update

As anticipated in Superior's previous disclosure, Superior received on April 2, 2013, from the CRA notices of reassessment for Superior's 2009 and 2010 taxation years, reflecting the CRA's intent to challenge the tax consequences of Superior's corporate conversion transaction (conversion) that occurred on Dec. 31, 2008. The CRA's position is based on the acquisition of control rules, in addition to the general anti-avoidance rules in the Income Tax Act (Canada). The accompanying table summarizes Superior's estimated tax liabilities and payment requirements associated with the received and anticipated notices of reassessment.

                  Taxes payable        50% of the taxes
Taxation year             (1)(2)           payable(1)(2)        Payment dates

2009/2010                 $13.0                    $6.5   Paid in April, 2013
2011                      $10.0(3)                 $5.0               Q1 2014
2012                      $10.0(3)                 $5.0               Q1 2014
2013                      $10.0(3)                 $5.0               Q3 2014
2014                      $20.0(3)                $10.0               Q3 2015

Total                     $63.0                   $31.5

(1) In millions of dollars.                                                 
(2) Includes estimated interest and penalties.                              
(3) Estimated based on Superior's previously filed tax returns and the midpoint      
    of Superior's 2013 and 2014 financial outlooks.    

Superior filed a notice of objection with respect to the notice of reassessments on May 8, 2013. The CRA did not respond or settle the notice of objection with Superior in the 90 days after filing. As such, Superior filed a notice of appeal with the Tax Court of Canada on Aug. 7, 2013. Superior anticipates that if the application proceeds in the Tax Court of Canada, a decision could be rendered by the beginning of fiscal 2015. If a decision of the Tax Court of Canada were to be appealed, the appeal process could reasonably be expected to take an additional two years. If Superior receives a positive decision, then any taxes, interest and penalties paid to the CRA will be refunded plus interest, and if Superior is unsuccessful, then any remaining taxes payable plus interest and penalties will have to be remitted.

Superior remains confident in the appropriateness of its tax filing position and the expected tax consequences of the conversion, and intends to vigorously defend such position, and intends to file its future tax returns on a basis consistent with its view of the outcome of the conversion.

Superior's 2013 and 2014 financial outlooks includes the effect of the reassessments, although the interim tax payments made by Superior will be recorded to the balance sheet and will not affect either adjusted operating cash flow or net earnings.

Based on the midpoint of Superior's current 2014 financial outlook of AOCF per share of $1.80, if the tax pools from the conversion were not available to Superior, the effect would be an increase to cash income taxes of approximately 15 cents per share for 2014. As previously stated, Superior intends to file its future income tax returns on a basis consistent with its view of the outcome of the conversion.

2013 financial outlook

Superior expects 2013 AOCF per share of $1.60 to $1.85, consistent with the financial outlook provided at the end of the second quarter of 2013. Superior's 2013 financial outlook excludes the effect of one-time restructuring costs anticipated to be incurred in 2013.

2014 financial outlook

Superior expects 2014 AOCF per share of $1.65 to $1.95. The increase in the midpoint of the 2014 financial outlook relative to the 2013 financial outlook is due to continuing improvements in the businesses as a result of Superior's business initiative projects. Superior's 2014 financial outlook assumes there is no material change to the outlook for the North American economy and that average temperatures throughout 2014 are consistent with the five-year average. Superior's 2014 financial outlook excludes the effect of one-time restructuring costs anticipated to be incurred in 2014.

In conjunction with Superior's 2014 financial outlook, Superior is also confirming its previously provided "destination 2015" growth rate in AOCF per share of 5 per cent to 7 per cent for 2014 and 9 per cent to 12 per cent for 2015. Superior continues to see positive momentum in its energy services and construction products distribution businesses due to a combination of traction on its business initiatives and improved market conditions. The expected improvement in the energy services business and the construction products distribution business is being offset in part by reduced results at the specialty chemicals business due to lower average selling prices on sodium chlorate combined with higher electricity rates; caustic, chlorine and hydrochloric acid pricing are anticipated to be consistent with 2013.

Luc Desjardins, Superior's president and chief executive officer, stated: "I am pleased with the results for the third quarter and the fact we were able to confirm our financial outlook for 2013 based on year-to-date results, the current state of the North American economy and the assumption that average temperatures for the last quarter of 2013 are consistent with the five-year average. I am also pleased to confirm that the initiatives that underpin Superior's 'destination 2015' continue to track to our expectations. As a result, Superior's expected growth rates for 2014 and 2015 as noted above remain on track.

"We remain committed to transforming Superior into a best-in-class organization. As I have reiterated in the past, a significant amount of work is required in order for Superior to meet its long-term goals. In order to meet these goals, we have determined that there are additional restructuring opportunities in our Canadian propane and construction products distribution businesses to improve their operational and financial performance.

"Efforts to improve all aspects of the Canadian propane business have been under way throughout 2012 and 2013. Although we have realized tangible improvements in many aspects of the business, such as customer service, customer retention, sales and intelligent pricing, we still have a significant amount of work to do to become a best-in-class operator. The update to our IT platform which will facilitate ongoing improvements in the efficiency of our operations began in September, 2013, beginning with the Atlantic region. To date the implementation has gone well, and we remain on track to roll out the ADD system to our remaining regions throughout the remainder of 2013 and over the first half of 2014. As we have communicated in the past, the ADD IT system will facilitate improvements to our operations by providing the platform to improve our forecasting and distribution efficiency. In order to ensure we continue to transform the Canadian propane business to realize both the financial and operational improvements in a timely manner, we will be undertaking some additional restructuring activities which will accelerate the realization of operational efficiencies by implementing a more disciplined and consistent management operating system across the company designed to leverage the new processes and information system investments. Restructuring activities, which will begin in 2013, are anticipated to be completed by end of 2014. A project team with assistance from an external consulting firm has been established to implement the restructuring and business improvement initiatives.

"In 2012 the CPD business underwent successful operational restructuring through branch rationalization to reduce operating expenses. In 2013 and into 2014, the CPD business will undergo further realignment to make the organization more agile and increase our ability to capitalize on the U.S. residential and commercial construction recovery. We are implementing common business processes and systems across the business, which was delayed over the past several years due to challenging market conditions. In addition, we are reorganizing our regional operational structure to align across all business segments. These transformation initiatives will be implemented over the next two years and will result in a completely integrated business with improved operating effectiveness and an ability to react quickly to changing market conditions, providing the necessary platform to operate at a best-in-class level."

Superior's 2013 and 2014 financial outlooks have been provided on the basis that Superior will continue to prepare and file its future tax returns on a basis consistent with its view of the outcome of the CRA's challenge of its corporate conversion transaction.

For additional details on the assumptions underlying the 2013 and 2014 financial outlooks, see Superior's 2013 third quarter MD&A.

Debt management update

Superior remains committed to reducing its total debt and its total debt leverage ratios. Superior anticipates its total-debt-to-EBITDA ratio as at Dec. 31, 2013, will be in the range of 3.3 times to 3.7 times, consistent with the update provided at the second quarter of 2013, but with a bias toward the high end of the range due to recent commodity price increases for propane that negatively affect Superior's working capital requirements.

Superior's Dec. 31, 2013, and 2014 forecasted total-debt-to-EBITDA leverage ratios are stated before restructuring costs due to uncertainty in the timing in the recognition of these costs. Superior anticipates that restructuring costs will be recognized over the fourth quarter of 2013 and the first and second quarters of 2014.

Superior's anticipated debt repayment for 2014 and total-debt-to-EBITDA leverage ratio as at Dec. 31, 2014, based on Superior's 2013 and 2014 financial outlooks and Superior's 2013 year-to-date results, is detailed in the accompanying table.

                                                   Dollar per    Millions of 
                                                        share        dollars 
2014 financial outlook AOCF per share --
midpoint(1)                                    $         1.80  $       227.1
Maintenance capital expenditures, net                   (0.29)         (36.5)
Capital lease obligation repayments                     (0.14)         (18.2)
Payments to CRA in relation to tax
reassessment(2)                                         (0.12)         (15.0)
Cash flow available for dividends and debt
repayment before growth capital                $         1.25  $       157.4
Expansion of Port Edwards and Saskatoon
facilities                                              (0.19)         (23.4)
Other growth capital expenditures                       (0.12)         (15.1)
Estimated 2014 free cash flow available for
dividends and debt repayment                   $         0.94  $       118.9
Dividends                                               (0.60)         (75.7)
Total estimated debt repayment                 $         0.34  $        43.2
Estimated total debt to EBITDA as at                3.3 times      3.3 times
Dec. 31, 2014                                    to 3.7 times   to 3.7 times
Dividends                                      $         0.60  $        75.7
Calculated payout ratio after all capital and
payment to CRA                                             64%            64%

(1) See the financial outlook in Superior's 2013 third quarter MD&A for 
    additional details, including assumptions, definitions and risk factors.                                           
(2) See CRA income tax update for additional details.

2013 detailed third quarter results

Superior's 2013 third quarter MD&A is available on Superior's website in the investor relations section.

2013 third quarter and annual results conference call

Superior will be conducting a conference call and webcast for investors, analysts, brokers and media representatives to discuss the 2013 third quarter results at 8:30 a.m. MT on Friday, Nov. 1, 2013. To participate in the call, dial 1-866-226-1798. An archived recording of the call will be available for replay until midnight on Dec. 31, 2013. To access the recording, dial 1-800-408-3053 and enter passcode 2815242 followed by the pound key. Internet users can listen to the call live, or as an archived call, on Superior's website.

Superior 2013 annual investor day

Superior is pleased to announce its upcoming annual investor day on Friday, Nov. 29, 2013, at the King Edward Hotel in Toronto. A detailed update on Superior's current operations, short- and long-term growth opportunities, and financial position will be presented. The formal presentation will commence at 9 a.m. ET, and a light breakfast and lunch will be served. Members of the professional investment community are invited to attend. To confirm your participation, please RSVP by e-mailing your contact information. Details of the event can also be found on Superior's website.

            CONDENSED CONSOLIDATED STATEMENT OF NET EARNINGS 
                    AND TOTAL COMPREHENSIVE INCOME                                                                      
           (in millions of dollars, except per-share amounts)

                                 Three months ended   Nine months ended
                                           Sept. 30,           Sept. 30,                                              
                                     2013      2012(1)   2013      2012(1)

Revenues                        $   813.8 $   790.1 $ 2,718.1 $ 2,690.3
Cost of sales (includes
products and services)             (628.9)   (594.2) (2,090.1) (2,072.2)
Gross profit                        184.9     195.9     628.0     618.1
Expenses
Selling, distribution and
administrative costs               (167.7)   (171.9)   (517.1)   (518.5)
Finance expense                     (17.7)    (19.3)    (51.5)    (59.4)
Unrealized gains (losses) on
derivative financial
instruments                          36.6      38.8      (4.7)     46.2
                                   (148.8)   (152.4)   (573.3)   (531.7)
Net earnings before income
taxes                                36.1      43.5      54.7      86.4
Income tax expense                   (0.2)     (7.6)    (12.9)     (9.9)
Net earnings                         35.9      35.9      41.8      76.5
Net earnings                         35.9      35.9      41.8      76.5
Other comprehensive income
Unrealized foreign currency
(losses) gains on
translation of foreign
operations                          (10.2)    (15.1)     12.9     (13.5)
Actuarial defined benefit
gains (losses)                       12.4      (4.1)     24.3      (7.7)
Income tax (expense)
recovery on other
comprehensive income (loss)          (1.8)      1.3      (6.4)      2.7
Other comprehensive income
(loss)                                0.4     (17.9)     30.8     (18.5)
Total comprehensive income
for the period                       36.3      18.0      72.6      58.0
Net earnings per share
Basic                                0.28      0.32      0.34      0.69
Diluted                              0.12      0.31      0.33      0.68

(1) The three and nine months ended Sept. 30, 2012, have been restated 
    for the effect of adopting IAS 19 employee benefits amendments on 
    Jan. 1, 2013.                                               

We seek Safe Harbor.

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