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Fourth Quarter Financial Summary
---------------------------------------------------------------------------- Three months ended Year ended December 31, December 31,(millions of dollars except per share amounts) 2012 2011 2012 2011----------------------------------------------------------------------------Revenue 934.0 1,043.4 3,624.3 3,925.6Gross profit 228.2 234.6 846.3 827.5----------------------------------------------------------------------------EBITDA from operations (1) 83.0 87.9 282.5 273.0Interest (16.6) (19.4) (71.7) (79.2)Cash income tax expense (0.3) (1.4) (1.1) (1.5)Corporate costs (3.5) (3.3) (16.2) (11.9)----------------------------------------------------------------------------Adjusted operating cash flow (1) 62.6 63.8 193.5 180.4------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Adjusted operating cash flow per share, basic and diluted (1)(2)(3) $0.56 $0.58 $1.73 $1.65----------------------------------------------------------------------------Dividends paid per share $0.15 $0.20 $0.60 $1.17--------------------------------------------------------------------------------------------------------------------------------------------------------(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 Financial Measures" in Superior's 2012 Fourth Quarter Financial Discussion and Analysis.(2) The weighted average number of shares outstanding for the three months ended December 31, 2012 is 112.6 million (2011 - 110.4 million) and for the year ended December 31, 2012 is 111.9 million (2011 - 109.2 million).(3) For the three months and year ended December 31, 2012 and 2011, there were no dilutive instruments.Segmented Information---------------------------------------------------------------------------- Three months ended Year ended December 31, December 31,(millions of dollars) 2012 2011 2012 2011----------------------------------------------------------------------------EBITDA from operations: Energy Services 46.1 46.5 134.2 133.6 Specialty Chemicals 29.1 34.5 127.5 115.2 Construction Products Distribution 7.8 6.9 20.8 24.2---------------------------------------------------------------------------- 83.0 87.9 282.5 273.0--------------------------------------------------------------------------------------------------------------------------------------------------------
Energy Services
-- Energy Services EBITDA from operations for the fourth quarter was $46.1 million compared to $46.5 million in the prior year quarter. Results were impacted by modestly higher contributions from all the businesses except for the fixed-price energy services business.-- The Canadian propane business generated gross profit of $68.1 million in the fourth quarter compared to $62.3 million in the prior year quarter due to improved average sales margins and sales volumes.-- Canadian propane average sales margins were 17.8 cents per litre in the fourth quarter compared to 16.9 cents per litre in the prior year quarter. The increase in the average sales margin was due to improved pricing on industrial and commercial contracts, benefits associated with a reduction in the wholesale cost of propane, and improvements to overall pricing management. These improvements were partially offset by a higher proportion of lower margin industrial volumes.-- Canadian propane distribution sales volumes were 15 million litres or 4% higher than the prior year quarter due to improved sales volumes in all lines of business except for agricultural. Sales volumes, specifically residential and commercial sale volumes, benefited from colder average temperatures across Canada throughout the fourth quarter.-- Average weather across Canada, as measured by degree days, for the fourth quarter was 11% colder than the prior year and 4% colder than the 5-year average.-- The U.S. refined fuels business generated gross profits of $37.3 million in the fourth quarter compared to $37.9 million in the prior year quarter. Gross profits were modestly lower than the prior year period due primarily to a reduced contribution from the heating oil segment which was offset in part by growth in the propane segment.-- U.S. refined fuels average sales margins were 8.7 cents per litre in the quarter, compared to 8.6 cents per litre in the prior year quarter. Sales margins were positively impacted by the reduced cost for wholesale propane and a higher contribution from residential propane sales volumes, offset by a higher proportion of lower margin automotive volumes and higher distillate supply costs.-- Sales volumes within the U.S. refined fuels business were 3% lower than the prior year. Sales volumes of residential heating oil relative to the prior year quarter were impacted by higher in-tank customer volumes due to unseasonably warm weather experienced in the first three quarters of 2012 which impacted the timing and size of residential customer tank fills for the quarter.-- Average weather for the U.S. refined fuel business, as measured by degree days, for the fourth quarter was 9% colder than the prior year but 6% warmer than the 5-year average. The impact of colder weather relative to the prior year quarter was more than offset by the impact of higher in-tank volumes as noted above.-- The fixed-price energy services business generated gross profits of $6.3 million compared to $10.3 million in the prior year quarter as reduced natural gas profits more than offset improved electricity gross 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. Improved electricity gross profits compared to the prior year quarter were due to the aggregation of new customers in the U.S. market.-- The supply portfolio management business generated gross profits of $6.5 million in the fourth quarter compared to $6.4 million in the comparative period, as market based trading conditions were consistent with the prior year.-- Operating expenses were $83.5 million in the fourth quarter compared to $83.3 million in the prior year quarter. Operating expenses were impacted by higher sales volumes in the Canadian propane business, offset by cost reduction initiatives implemented earlier in the year.-- Superior expects business conditions in 2013 for its Energy Services business will be similar to 2012. EBITDA from operations is anticipated to be higher in 2013 than in 2012 due in part to the assumption that weather will be consistent with the 5-year average in 2013. Superior's 2012 results were negatively impacted by warm weather, as average weather in the first quarter of 2012, as measured by degree days, across Canada and the Northeastern U.S. was at record or near record levels. Additionally, Superior expects to realize ongoing improvements in its financial results as a result of its business initiative activities which will more than offset a reduction in the contribution from the fixed-price energy services business due to exiting the Canadian residential market in prior years.
