This five year strategic plan aims to double 2011 normalized EBITDA of $125 million by the end of 2016. (Normalized EBITDA ignores one-time costs and irregular profits). $70 million is expected to be derived through a one cent increase in EBITDA margin, $55 million is expected to be derived through acquisitions.
A more detailed explanation of the Parkland Penny Plan and the full scorecard can be found in this quarter's Management's Discussion and Analysis.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)
Due to the acquisition of Elbow River Marketing and ongoing mergers and acquisition activities Parkland will utilize "Adjusted EBITDA". Adjusted EBITDA represents earnings before finance costs (accretion on refinery remediation, accretion on asset retirement obligation, interest on long-term debt, interest and accretion on convertible debentures and loss on interest rate swaps), income tax expense (recovery), depreciation and amortization, unrealized loss (gain) on commodities forward contracts and US dollar forward exchange contracts, acquisition related costs and gain on disposal of property, plant and equipment. Adjusted EBITDA differs from the previously disclosed EBITDA due to the exclusion of acquisition related costs in the calculation. See the Adjusted EBITDA discussion of the MD&A for a reconciliation of Adjusted EBITDA.
---------------------------------------------------------------------------- Three Months Ended March 31,----------------------------------------------------------------------------(in thousands of Canadian dollars) 2013 2012----------------------------------------------------------------------------Net earnings 30,525 17,505Finance costs (1) 5,276 5,518Loss/(gain) on disposal of property, plant and equipment 275 560Income tax expense 8,984 6,068Unrealized (gain) loss from the change in fair value of risk commodities forward contracts and US dollar forward exchange contracts 1,537 -Acquisition related costs 1,525 -Amortization and depreciation 13,211 13,481----------------------------------------------------------------------------Adjusted EBITDA (2)(3) 61,333 43,132----------------------------------------------------------------------------(1) Includes realized and unrealized (gain) loss on the interest rate swap(2) Includes the realized and unrealized (gain) loss on put options(3) Please refer to the Non-GAAP Measures section in the MD&A for definitions.
Pay Out Ratio Driven Down to 39% As Result of an $18 million Increase in Adjusted EBITDA
Q1 2013 vs. Q1 2012
The dividend payout ratio for the first quarter of 2013 was 39% compared with 64% in the first quarter of 2012.
Distributable cash flow increased $18.9 million or 73% to $44.9 million in the first quarter of 2013 compared with $26.0 million in the first quarter of 2012.
The increase in distributable cash flow and decrease in the dividend payout ratio are primarily due to the $18.2 million increase in Adjusted EBITDA and a $2.6 million decrease in maintenance capital partially offset by a $3.0 million decrease in proceeds on disposal of property, plant and equipment and a $1.5 million increase in acquisition related costs.
