Other Capital Disclosures
Additional Capital Disclosure
Superior's objectives when managing capital are: (i) to maintain a flexible capital structure to preserve its ability to meet its financial obligations, including potential obligations from acquisitions; and (ii) to safeguard its assets while maximizing the growth of its businesses and returns to its shareholders.
In the management of capital, Superior includes shareholders' equity (excluding accumulated other comprehensive loss) current and long-term debt, convertible debentures, securitized accounts receivable and cash and cash equivalents.
Superior manages its capital structure and makes adjustments in light of changes in economic conditions and nature of the underlying assets. In order to maintain or adjust the capital structure, Superior may adjust the amount of dividends to Shareholders, issue additional share capital, issue new debt or convertible debentures, issue new debt or convertible debentures with different characteristics.
Superior monitors its capital based on the ratio of senior debt outstanding to net earnings before interest, taxes, depreciation, amortization and other non-cash expenses (EBITDA), as defined by its revolving term credit facility, and the ratio of total debt outstanding to EBITDA. Superior's reference to EBITDA as defined by its revolving term credit facility may be referred to as compliance EBITDA in its other public reports.
Superior is subject to various financial covenants in its credit facility agreements, including senior debt, total debt to EBITDA ratio and restricted payments test which are measured on a quarterly basis. As at December 31, 2012 and December 31, 2011 Superior was in compliance with all of its financial covenants.
Superior's financial objectives and strategy related to managing its capital as described above remained unchanged from the prior fiscal year. Superior believes that its debt to EBITDA ratios are within reasonable limits, in light of Superior's size, the nature of its businesses and its capital management objectives.
Financial Measures utilized for bank covenant purposes
Compliance EBITDA
Compliance EBITDA represents earnings before interest, taxes, depreciation, amortization and other non-cash expenses calculated on a 12 month trailing basis giving pro forma effect to acquisitions and divestitures and is used by Superior to calculate its debt covenants and other credit information. Compliance EBITDA is not a defined performance measure under IFRS. Superior's calculation of compliance EBITDA may differ from similar calculations used by comparable entities.
The capital structure of Superior and the calculation of its key capital ratios are as follows:
--------------------------------------------------------------------------------------------------------------------------------------------------------As at December 31, 2012 December 31, 2011----------------------------------------------------------------------------Total shareholders' equity 382.9 349.6Exclude accumulated other comprehensive loss 61.3 55.3----------------------------------------------------------------------------Shareholders' equity excluding accumulated other comprehensive loss loss loss 444.2 404.9Current borrowing (1) 59.7 54.3Borrowing (1) 579.9 707.8Less: Senior unsecured notes (150.0) (150.0)----------------------------------------------------------------------------Consolidated secured debt 489.6 612.1Add: Senior unsecured notes 150.0 150.0----------------------------------------------------------------------------Consolidated debt 639.6 762.1Current portion of convertible unsecured subordinated debentures(1) 50.0 49.9Convertible unsecured subordinated debentures (1) 491.5 541.5----------------------------------------------------------------------------Total debt 1,181.1 1,353.5----------------------------------------------------------------------------Total capital 1,625.3 1,758.4--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Borrowing and convertible unsecured subordinated debentures are before deferred issuance costs and option value.-------------------------------------------------------------------------------------------------------------------------------------------------------- 2012 2011----------------------------------------------------------------------------Net earnings (loss) 93.1 (302.6)Adjusted for: Finance expense 77.6 85.5 Realized gains on derivative financial instruments included in finance expense 2.2 2.3 Depreciation of property, plant and equipment 42.4 47.9 Depreciation and amortization included in cost of sales 44.9 44.9 Losses on disposal of assets 1.0 0.5 Amortization of intangible assets 23.5 41.9 Impairment of intangible assets and goodwill - 378.6 Impairment of property, plant and equipment 4.7 3.4 Income tax recovery 9.0 (50.4) Unrealized (gains) losses on derivative financial instruments (32.1) 9.7 Pro-forma impact of acquisitions 0.6 1.5----------------------------------------------------------------------------Compliance EBITDA(1) 266.9 263.2--------------------------------------------------------------------------------------------------------------------------------------------------------(1) EBITDA, as defined by Superior's revolving-term credit facility, is calculated on a trailing 12-month basis taking into consideration the pro-forma impact of acquisitions and dispositions in accordance with the requirements of Superior's credit facility. Superior's calculation of EBITDA and debt to EBITDA ratios may differ from those of similar entities. 2012 2011----------------------------------------------------------------------------Consolidated secured debt to Compliance EBITDA 1.8:1 2.3:1Consolidated debt to Compliance EBITDA 2.4:1 2.9:1Total debt to Compliance EBITDA 4.4:1 5.1:1--------------------------------------------------------------------------------------------------------------------------------------------------------16. Net Earnings (Loss) per Share Three months ended Twelve months ended December 31, December 31, 2012 2011 2012 2011----------------------------------------------------------------------------Net earnings (loss) per share computation, basic and diluted(1) Net earnings (loss) for the period 14.2 (231.4) 93.1 (302.6) Weighted average shares outstanding (millions) 112.6 110.4 111.9 109.2----------------------------------------------------------------------------Net earnings (loss) per share, basic and diluted $0.13 $(2.10) $0.83 $(2.77)--------------------------------------------------------------------------------------------------------------------------------------------------------(1) All outstanding convertible debentures have been excluded from this calculation as they were anti-dilutive.
