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Superior Plus Corp. Announces 2016 Annual and Fourth Quarter Results

TORONTO, ONTARIO -- (Marketwired) -- 02/16/17 -- Superior Plus Corp. (TSX:SPB) -

Financial Overview

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                                      Three Months Ended Twelve Months Ended
                                             December 31         December 31
(millions of dollars, except per                                            
 share amounts)                           2016      2015      2016      2015
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Revenue (1)                             583.1      546.0   2,023.7  2,253.1 
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Gross Profit (1)                        193.6      174.3     656.4    658.2 
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Net earnings (loss) from continuing                                         
 operations                             (22.8)      20.2     114.2     (8.9)
Net earnings (loss) from continuing                                         
 operations per share, basic           $(0.16)     $0.15     $0.80   $(0.07)
Net earnings (loss) from continuing                                         
 operations per share, diluted         $(0.19)     $0.13     $0.78   $(0.07)
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Adjusted EBITDA from operations                                             
 (2)(3)(4)                               94.0      100.3     303.6    331.6 
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Net cash flows from operating                                               
 activities                              27.6       47.6     188.5    339.5 
Net cash flows from operating                                               
 activities per share - basic and                                           
 diluted                                $0.19      $0.34     $1.33    $2.64 
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Adjusted operating cash flow before                                         
 transaction and other costs                                                
 (2)(5)(6)                               77.3       71.3     212.6    213.6 
Adjusted operating cash flow before                                         
 transaction and other costs per                                            
 share - basic and diluted                                                  
 (2)(4)(5)(6)(7)                        $0.54      $0.52     $1.50    $1.65 
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Adjusted operating cash flow after                                          
 transaction and other costs (2)         68.4       61.3     162.4    203.6 
Adjusted operating cash flow per                                            
 share - basic and diluted                                                  
 (2)(4)(6)(7)                           $0.48      $0.45     $1.14    $1.58 
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Cash dividends declared                 $25.5      $24.5    $102.2    $92.8 
Cash dividends declared per share       $0.18      $0.18     $0.72    $0.72 
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(1)  Revenue and gross profit exclude the results of Construction Products  
     Distribution (CPD) and the Fixed-price energy service business.        
(2)  Adjusted EBITDA from operations and adjusted operating cash flow (AOCF)
     are non-GAAP measures. Refer to "Non-GAAP Measures" for further details
     and reconciliations.                                                   
(3)  Adjusted EBITDA from operations excludes the results of the Fixed-price
     energy services business as substantially all assets were divested     
     during Q1 2016. Comparative figures have been reclassified to reflect  
     the current period presentation.                                       
(4)  Adjusted EBITDA from operations, AOCF and AOCF per share include the   
     results of CPD up to the August 9, 2016 date of disposition. For the   
     three and twelve months ended December 31, 2016, CPD contributed $nil  
     per share and $0.16 per share to AOCF per share, respectively. For the 
     three and twelve months ended December 31, 2015, CPD contributed $0.10 
     per share and $0.33 per share to AOCF per share, respectively.         
(5)  Transaction and other costs for the three and twelve months ended      
     December 31, 2016 and 2015 are related to the terminated acquisition of
     Canexus Corporation, the divesture of the CPD business, restructuring  
     costs and costs associated with the relocation of the Superior Plus    
     Corporate office to Toronto. Refer to "Transaction and Other Costs" in 
     the Annual MD&A (the "MD&A") for further details.                      
(6)  The weighted average number of shares outstanding for the three months 
     ended December 31, 2016 is 142.8 million (December 31, 2015 - 136.3    
     million) and for the twelve months ended December 31, 2016 is 142.1    
     million (December 31, 2015 - 129.0 million).                           
(7)  There were no dilutive instruments with respect to AOCF per share for  
     the three and twelve months ended December 31, 2016 and December 31,   
     2015.                                                                  

Highlights

--  For the quarter ended December 31, 2016, Superior Plus Corp. (Superior)
    generated AOCF per share before transaction and other costs of $0.54,
    consistent with management's expectations and $0.02 per share higher
    than the prior year quarter of $0.52 per share. AOCF per share increased
    due to lower realized foreign currency hedging losses, higher Energy
    Distribution and Specialty Chemicals Adjusted EBITDA, and lower interest
    expense, partially offset by lower CPD Adjusted EBITDA related to the
    divesture, higher corporate costs and weighted average shares
    outstanding. AOCF for the current quarter excludes $7.1 million in
    restructuring costs and $1.8 million in transaction costs related to
    business development activities. 
--  As previously announced on February 13, 2017, Superior has entered into
    an option purchase agreement which gives Superior the rights to acquire
    all of the outstanding shares and units of the entities that carry on
    the industrial propane business of Canwest Propane from Gibson Energy
    Inc., representing a total transaction value of $412 million. Superior
    anticipates the acquisition of Canwest will close in the second half of
    2017. 
--  The acquisition of Canwest will significantly enhance Superior's current
    Energy Distribution business, while positioning the business for
    oilfield activity recovery and improved demand in Western Canada. On a
    pro forma basis, the acquisition of Canwest would result in an
    approximate 20% increase in the Energy Distribution Adjusted EBITDA from
    operations excluding synergies. Superior anticipates the acquisition of
    Canwest will generate run-rate synergies of at least $20 million,
    providing for double digit run-rate accretion. 
--  Superior has the ability to finance 100% of the purchase price with the
    available room on its credit facility and additional commitments
    received from lenders. Depending on market conditions, Superior may
    consider additional long-term debt financing alternatives to reduce the
    draw on its credit facilities. 
--  Adjusted EBITDA from operations for the Energy Distribution business
    increased $7.9 million or 15% compared to the prior year quarter due to
    higher gross profit related to colder weather and lower operating
    expenses related to cost reductions. 
--  Adjusted EBITDA from operations for the Specialty Chemicals business
    increased $1.7 million or 5% compared to the prior year quarter due
    primarily to lower operating costs and modestly higher sodium chlorate
    gross profit, partially offset by lower chlor-alkali gross profit. 
--  For the year ended December 31, 2016, Superior generated AOCF per share
    before transaction and other costs of $1.50, consistent with
    management's expectations and $0.15 per share lower than $1.65 per share
    in the prior year. 
--  Superior's 2017 financial outlook of AOCF per share has been confirmed
    at $1.45 to $1.75. Superior's 2017 Financial Outlook excludes the impact
    of the Canwest acquisition. See "2017 Financial Outlook" for further
    details. 
--  Superior's total debt to Adjusted EBITDA as at December 31, 2016 was
    2.1X. Superior's forecasted December 31, 2017, total debt to Adjusted
    EBITDA ratio, excluding the acquisition of Canwest, is expected to be in
    the range of 1.8X to 2.2X, which is below Superior's target range of
    3.0X. See "Debt Management Update" in the MD&A for additional details. 
--  Superior's total debt, including convertible debentures, as at December
    31, 2016 was $542 million, which was $331 million lower than total debt
    of $873 million as at December 31, 2015.  
--  During the fourth quarter, Energy Distribution and Specialty Chemicals
    incurred $7.1 million in restructuring costs to align the operating
    costs with the current business. One of the key mandates of Evolution
    2020 is to continuously improve the business to manage costs. Due
    primarily to reduced customer demand in the Western Canadian oilfield
    and reduced demand for chlor-alkali products, Superior identified
    potential cost savings opportunities and executed on a plan to
    sustainably reduce the cost structure of Energy Distribution and
    Specialty Chemicals. 

                                                                            
Segmented Information                                                       
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                                  Three months ended     Twelve months ended
                                         December 31             December 31
(millions of dollars)               2016        2015        2016        2015
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Adjusted EBITDA from                                                        
 operations(1)                                                              
  Energy Distribution(2)            59.8        51.9       167.4       166.3
  Specialty Chemicals               34.2        32.5       109.1       117.4
  Construction Products                                                     
   Distribution(3)                     -        15.9        27.1        47.9
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                                    94.0       100.3       303.6       331.6
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(1)  See "Non-GAAP Financial Measures".                                     
(2)  Adjusted EBITDA from operations excludes the results of the fixed-price
     energy services business as the segment was divested during Q1 2016.   
(3)  Adjusted EBITDA from operations includes the results of CPD up to the  
     August 9, 2016 date of disposition.                                    

Energy Distribution

--  Adjusted EBITDA from operations for the fourth quarter was $59.8 million
    compared to $51.9 million in the prior year quarter. Results were $7.9
    million higher due primarily to an increase in gross profit and a
    decrease in operating costs. 
--  The Canadian propane distribution ("Canadian propane") business
    generated gross profit of $88.0 million in the fourth quarter compared
    to $84.6 million in the prior year quarter, an increase of $3.4 million
    due to higher sales volumes, partially offset by modestly lower average
    sales margins. 
--  Average weather across Canada, as measured by degree days, for the
    fourth quarter was 7% colder than the prior year and 2% warmer than the
    five-year average. 
--  Canadian propane average sales margins were 21.1 cents per litre in the
    fourth quarter compared to 21.4 cents per litre in the prior year
    quarter due to weaker basis differentials, partially offset by higher
    retail sales margins. Average retail sales margins in the fourth quarter
    of 2016 increased as sales volumes for higher margin heating demand
    improved and sales volumes for lower margin industrial volumes declined
    due to reduced oilfield demand. 
--  Canadian propane sales volumes were 6% higher than the prior year
    quarter as increases in all other segments were partially offset by a
    decrease in industrial and automotive volumes. Industrial sales volumes
    were lower due to a decrease in oilfield volumes as continued weakness
    in oilfield activity negatively impacted demand. Residential and
    commercial volumes were higher due to increased demand related to the
    colder weather. Agricultural volumes were higher due to increased crop
    drying demand related to wetter weather compared to the prior year
    quarter. Wholesale volumes were higher due primarily to an increase in
    third-party sales volumes from the supply portfolio management business.
--  The U.S. refined fuels business generated gross profit of $42.9 million
    in the fourth quarter consistent with the prior year quarter as the
    impact of higher unit margins were partially offset by lower sales
    volumes. 
--  Average weather for the Northeast U.S., as measured by degree days, for
    the fourth quarter was 20% colder than the prior year and 4% warmer than
    the five-year average. 
--  U.S. refined fuels average sales margin were 11.5 cents per litre in the
    fourth quarter compared to 10.9 cents per litre in the prior year
    quarter due primarily to sales mix as higher margin residential and
    commercial volumes improved and lower margin wholesale volumes declined.
--  Sales volumes within the U.S. refined fuels business were 4% lower than
    the prior year quarter due primarily to a decrease in wholesale volumes
    related to increased competition, offset in part by increased
    residential and commercial volumes related to colder weather.  
--  Other services gross profit was $9.6 million in the fourth quarter
    consistent with the prior year quarter. 
--  Cash operating and administrative costs were $80.7 million in the fourth
    quarter, a decrease of $3.9 million compared to the prior year quarter.
    Operating expenses in the fourth quarter were lower due primarily to a
    decrease in salaries and wages from reduced headcount in the Canadian
    propane and the U.S. refined fuels businesses. Canadian propane reduced
    headcount in response to lower oilfield activity and customer demand in
    Western Canada. U.S. refined fuels hired fewer seasonal employees and
    reduced headcount in the service business.  
--  Andrew Peyton assumed the role of President of U.S. refined fuels
    effective October 3, 2016. Mr. Peyton has held senior positions within
    the fuel distribution industry over the past 10 years and brings
    significant propane industry knowledge, business development and
    operational experience. 
--  Energy Distribution Adjusted EBITDA from operations for 2017 is
    anticipated to be consistent to modestly higher than 2016. Gross profits
    in Canadian propane distribution are anticipated to be consistent to
    modestly higher than 2016 due to increased sales volumes related to
    sales and marketing initiatives and normal weather, partially offset by
    a decrease in oilfield volumes. U.S. refined fuels gross profits are
    anticipated to be higher than 2016 due to increased sales volumes
    related to sales and marketing initiatives and normal weather. Average
    weather for 2017, as measured by degree days, is anticipated to be
    consistent with the 5-year average. Operating conditions for 2017 are
    anticipated to be similar to 2016. 

Specialty Chemicals

--  Adjusted EBITDA from operations for the fourth quarter was $34.2 million
    compared to $32.5 million in the prior year quarter. 
--  Sodium chlorate gross profit was modestly higher than the prior year as
    the decrease in sales volumes and average selling prices were offset by
    lower power costs. Sodium chlorate sales volumes were 9% lower than the
    prior year quarter due to a decrease in sales volumes associated with
    purchases under the Tronox agreement. Excluding the Tronox volumes,
    total sodium chlorate sales volumes were consistent with the prior year
    quarter, and 5.9% higher for the year when compared to 2015. 
--  Chlor-alkali gross profits were lower than the prior year quarter
    primarily due to a decline in insurance settlement proceeds, decreased
    demand for caustic potash due to a slower start to the de-icing season
    and weaker agricultural demand and decreased hydrochloric acid demand on
    reduced oilfield activity. The lower chlor-alkali gross profit was
    partially offset by improved caustic soda and chlorine pricing and
    increased chlorine sales volumes. In the prior year quarter Superior
    recognized $4.9 million in insurance settlement proceeds related to a
    previous claim. 
--  Cash operating and administrative costs of $36.3 million were $4.6
    million lower than the prior year quarter due to a decrease in Tronox-
    related expenses, partially offset by general inflationary increases. 
--  Specialty Chemicals Adjusted EBITDA from operations for 2017 is
    anticipated to be consistent to modestly lower than 2016. Sodium
    chlorate Adjusted EBITDA is anticipated to be consistent to modestly
    lower than 2016 as modest improvements in sodium chlorate pricing are
    expected to be offset by increases in electricity mill rates. Chlor-
    alkali Adjusted EBITDA is anticipated to be consistent to modestly
    higher than 2016 due to an increase in netback prices for caustic soda
    and improvements in caustic potash volumes. Operating conditions for
    2017 are anticipated to be consistent with 2016. 

Construction Products Distribution

--  Adjusted EBITDA from operations for the fourth quarter was $nil million
    compared to $15.9 million in the prior year quarter as the CPD business
    was sold to Foundation Building Materials on August 9, 2016. 

Corporate Related

--  Interest expense for the year was $36.3 million compared to $47.1
    million in the prior year. Interest expense was $10.8 million lower than
    the prior year quarter due to lower average effective interest rates and
    reduced average debt levels. 
--  Corporate costs for 2016 were $20.2 million which was $3.7 million
    higher than the prior year due primarily to an increase in long-term
    incentive plan costs and professional fees. Long-term incentive plan
    costs increased primarily due to Superior's higher share price compared
    to the prior year. Corporate costs exclude one-time transaction and
    other costs in 2016 of $50.2 million. See "Transaction and Other Costs"
    in the MD&A for further details. 
--  Superior's total debt (including convertible debentures) to Adjusted
    EBITDA was 2.1X as at December 31, 2016 compared to 3.3X at December 31,
    2015. The reduction in leverage is due to lower debt levels as a result
    of the repayment of debt with the proceeds from the divesture of the CPD
    business. 
--  Realized losses on foreign currency hedging contracts were $29.6 million
    compared to $52.3 million in the prior year. Realized losses were $22.7
    million lower due to the increase in Superior's effective average hedge
    rate. Superior's effective average hedge rate is higher due to the
    settlement and reset of foreign currency hedging contracts for 2016 in
    the third quarter. During the third quarter Superior settled its foreign
    currency hedging contracts for 2016 and 2017 and re-entered new foreign
    currency hedging contracts for 2016 and 2017 at market rates on August
    12, 2016. See "Foreign Currency Hedging Contracts" in the MD&A for
    further details. 
--  Realized losses on foreign currency hedging contracts for 2017 are
    anticipated to be lower than 2016 due to an increase in Superior's
    effective average hedge rate due to the settlement and reset of foreign
    currency hedging contracts discussed above. See "Foreign Currency
    Hedging Contracts" in the MD&A for further details. 

2017 Financial Outlook

Superior's 2017 financial outlook of AOCF per share of $1.45 to $1.75 is consistent with the financial outlook provided at the end of the third quarter of 2016. As previously noted in the individual business financial outlook sections, Energy Distribution results are anticipated to be consistent to modestly higher and Specialty Chemicals results are anticipated to be consistent to modestly lower than 2016. The positive impact from the decrease in the realized losses on foreign currency hedging contracts in the 2017 financial outlook is offset in part by the loss of the CPD business contribution compared to 2016.

For additional details on the assumptions underlying the 2017 financial outlook, see Superior's 2016 MD&A. Superior's 2017 financial outlook does not incorporate the Canwest acquisition. Once Superior purchases the option to acquire Canwest (the "Option") Superior anticipates providing an updated 2017 financial outlook.

Debt Management Update

Superior remains focused on managing both its total debt and its total debt to Adjusted EBITDA. Superior's total debt (including convertible debentures) to Adjusted EBITDA was 2.1X as at December 31, 2016, compared to 3.3X at December 31, 2015. The debt levels and the total leverage ratio as at December 31, 2016 are lower as the proceeds from the Sale of CPD were used to reduce indebtedness.

Superior is forecasting a total debt to Adjusted EBITDA range of 1.8X to 2.2X as at December 31, 2017, which is below the target range of 3.0X. Superior's 2017 total debt (including convertible debentures) to Adjusted EBITDA guidance does not incorporate the Canwest acquisition. Once Superior purchases the Option, Superior will provide updated total debt to Adjusted EBITDA guidance.

Superior's total debt to Adjusted EBITDA (excluding 2016 CPD results and realized losses on foreign exchange hedging contracts) on a pro forma basis including the Canwest acquisition would be 3.3X. Pro forma total debt to Adjusted EBITDA, including realized losses on foreign exchange hedging contracts (excluding 2016 CPD results) would be 3.7X.

MD&A and Financial Statements

Superior's MD&A, the unaudited Consolidated Financial Statements and the Notes to the Consolidated Financial Statements for the year ended December 31, 2016, are available online at Superior's website at www.superiorplus.com under the Investor Relations section and on www.sedar.com.

2016 Fourth Quarter Conference Call

Superior will be conducting a conference call and webcast for investors, analysts, brokers and media representatives to discuss the 2016 Fourth Quarter and Annual Results at 10:30 a.m. EST on Friday, February 17, 2017. To participate in the call, dial: 1-844-389-8661. An archived recording of the call will be available on Superior's website until February 17, 2018. Internet users can listen to the call live, or as an archived call, on Superior's website at: www.superiorplus.com under the Events section.

Non-GAAP Measures

Throughout the fourth quarter earnings release, Superior has used the following terms that are not defined by GAAP, but are used by management to evaluate the performance of Superior and its business. These measures may also be used by investors, financial institutions and credit rating agencies to assess Superior's performance and ability to service debt. Non-GAAP financial measures do not have standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies, securities regulations require that Non-GAAP financial measures be clearly defined, qualified and reconciled to their most comparable GAAP financial measures. Except as otherwise indicated, these Non-GAAP financial measures are calculated and disclosed on a consistent basis from period to period. Specific adjusting items may only be relevant in certain periods.

The intent of Non-GAAP financial measures is to provide additional useful information to investors and analysts. The measures do not have any standardized meaning under IFRS. The measures should not, therefore, be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. Other issuers may calculate Non-GAAP financial measures differently.

Investors should be cautioned that AOCF, Adjusted EBITDA, and Adjusted EBITDA from operations should not be construed as alternatives to net earnings, cash flow from operating activities or other measures of financial results determined in accordance with GAAP as an indicator of Superior's performance.

Non-GAAP financial measures are identified and defined as follows:

Adjusted Operating Cash Flow

AOCF is equal to cash flow from operating activities as defined by IFRS, adjusted for changes in non-cash working capital, other expenses, non-cash interest expense, current income taxes and finance costs. Superior may deduct or include additional items in its calculation of AOCF; these items would generally, but not necessarily, be infrequent in nature and could distort the analysis of trends in business performance. Excluding these items does not imply that they are non-recurring. AOCF and AOCF per share are presented before and after transaction and other costs.

AOCF per share before transaction and other costs is calculated by dividing AOCF before transaction and other costs by the weighted average number of shares outstanding. AOCF per share is calculated by dividing AOCF by the weighted average number of shares outstanding.

AOCF is the main performance measure used by management and investors to evaluate Superior's ongoing performance of its businesses and ability to generate cash flow. AOCF represents cash flow generated by Superior that is available for, but not necessarily limited to, changes in working capital requirements, investing activities and financing activities of Superior. AOCF is also used as one component in determining short-term incentive compensation for certain management employees.

The seasonality of Superior's individual quarterly results must be assessed in the context of annualized AOCF. Adjustments recorded by Superior as part of its calculation of AOCF include, but are not limited to, the impact of the seasonality of Superior's businesses, principally the Energy Distribution segment, by adjusting for non-cash working capital items, thereby eliminating the impact of the timing between the recognition and collection/payment of Superior's revenues and expenses, which can differ significantly from quarter to quarter.

Adjusted EBITDA

Adjusted EBITDA represents earnings before taxes, depreciation, amortization, losses/(gains) on disposal of assets, finance expense, restructuring, transaction and other costs and unrealized gains/(losses) on derivative financial instruments. Adjusted EBITDA is used by Superior and investors to assess its consolidated results and those of its operating segments.

Adjusted EBITDA from Operations

Adjusted EBITDA from operations is defined as adjusted EBITDA excluding gains/(losses) on foreign currency hedging contracts, corporate costs and transaction and other costs. For purposes of this MD&A, foreign currency hedging contract gains and losses are excluded from the results of the operating segments. Adjusted EBITDA from operations is used by Superior and investors to assess the results of its operating segments. Adjusted EBITDA from operations is reconciled to net earnings before income taxes.

Reconciliation of Net Earnings Before Income Taxes to Adjusted EBITDA from Operations

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                                                                Construction
For the three months ended December          Energy  Specialty      Products
 31, 2016 (millions of dollars)        Distribution  Chemicals  Distribution
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Net earnings before income taxes               48.5       21.6             -
Add: Depreciation and amortization                                          
 included in selling, distribution and                                      
 administrative costs                          15.0          -             -
  Depreciation included in cost of                                          
   sales                                          -       13.6             -
  Realized losses on foreign currency                                       
   hedging contracts                              -        1.5             -
  Losses (gains) on disposal of assets         (0.5)       0.2             -
  Finance expense                               0.7        0.1             -
  Restructuring                                 3.4        3.7             -
  Unrealized (gains) on derivative                                          
   financial instruments                       (7.3)      (6.5)            -
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Adjusted EBITDA from operations                59.8       34.2             -
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                                                                Construction
For the three months ended December          Energy  Specialty      Products
 31, 2015 (millions of dollars)        Distribution  Chemicals  Distribution
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Net earnings (loss) before income                                           
 taxes                                         32.1       (0.9)         11.9
Add: Depreciation and amortization                                          
 included in selling, distribution and                                      
 administrative costs                          14.2          -           2.2
  Depreciation included in cost of                                          
   sales                                          -       19.1             -
  Realized losses on foreign currency                                       
   hedging contracts                            3.1       11.7           1.5
  Losses on disposal of assets                    -        1.0             -
  Finance expense                               0.9        0.3           0.3
  Unrealized losses on derivative                                           
   financial instruments                        1.6        1.3             -
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Adjusted EBITDA from operations                51.9       32.5          15.9
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                                                               Construction 
For the year ended December 31, 2016         Energy  Specialty     Products 
 (millions of dollars)                 Distribution  Chemicals Distribution 
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Net earnings (loss) before income                                           
 taxes                                        143.4       30.7        (21.4)
Add (Deduct):                                                               
  Depreciation included in selling,                                         
   distribution, and administrative                                         
   costs and amortization of                                                
   intangible assets                           58.2          -          4.8 
  Depreciation included in cost of                                          
   sales                                          -       54.5            - 
  Realized losses (gains) on foreign                                        
   currency hedging contracts                  (0.1)      26.1          3.6 
  Losses (gains) on disposal of assets         (1.0)       0.7         39.4 
  Finance expense                               2.9        0.4          0.7 
  Restructuring                                 3.4        3.7            - 
  Unrealized (gains) on derivative                                          
   financial instruments                      (39.4)      (7.0)           - 
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Adjusted EBITDA from operations               167.4      109.1         27.1 
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                                                               Construction 
For the year ended December 31, 2015         Energy  Specialty     Products 
(millions of dollars)                  Distribution  Chemicals Distribution 
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Net earnings before income taxes              121.3        8.0         34.9 
Add (Deduct):                                                               
  Depreciation included in selling,                                         
   distribution, and administrative                                         
   costs and amortization of                                                
   intangible assets                           52.9          -          7.5 
  Depreciation included in cost of                                          
   sales                                          -       63.8            - 
  Realized losses on foreign currency                                       
   hedging contracts                            7.7       40.0          4.6 
  Losses on disposal of assets                  1.3        1.2            - 
  Finance expense                               2.9        0.9          0.9 
  Unrealized (gains) losses on                                              
   derivative financial instruments           (19.8)       3.5            - 
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Adjusted EBITDA from operations               166.3      117.4         47.9 
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Adjusted Operating Cash Flow Reconciled to Net Cash Flow from Operating     
 Activities(1)(2)                                                           
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                                      Three months ended Twelve months ended
                                             December 31         December 31
(millions of dollars)                     2016      2015      2016      2015
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Net cash flow from operating                                                
 activities                              27.6      47.6     188.5     339.5 
Add (Deduct):                                                               
  Non-cash interest expense               1.1       1.9       7.4      13.6 
  Changes in non-cash operating                                             
   working capital                       48.6      21.4      35.1     (87.5)
  Discontinued operations                 0.4      (1.8)     14.6      (3.6)
  Cash income tax expense                (1.1)     (0.1)     (4.9)     (2.1)
  Finance expense recognized in net                                         
   earnings                              (8.2)     (7.7)    (78.3)    (56.3)
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Adjusted Operating Cash Flow             68.4      61.3     162.4     203.6 
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(1)  See "Non-GAAP Financial Measures".                                     
     See the unaudited condensed consolidated financial statements for net  
(2)  cash flow from operating activities and changes in non-cash working    
     capital.                                                               

Forward Looking Information

Certain information included herein is forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking information may include statements regarding the objectives, business strategies to achieve those objectives, expected financial results (including those in the area of risk management), economic or market conditions, and the outlook of or involving Superior, Superior LP and its businesses. Such information is typically identified by words such as "anticipate", "believe", "continue", "estimate", "expect", "plan", "forecast", "future", "outlook, "guidance", "may", "project", "should", "strategy", "target", "will" or similar expressions suggesting future outcomes.

Forward-looking information in this document includes: future financial position, consolidated and business segment outlooks, expected EBITDA from operations, expected AOCF and AOCF per share, expected leverage ratios and debt repayment, expectations in terms of the cost of operations, business strategy and objectives, development plans and programs, business expansion and cost structure and other improvement projects, expected product margins and sales volumes, market conditions in Canada and the U.S., continued improvements in operational efficiencies and sales and marketing initiatives in Energy Distribution, expected synergies as a result of the acquisition of Canwest, anticipated acquisition closing and financing, future economic conditions, future exchange rates, exposure to such rates and incremental earnings associated with such rates, expected weather, expectations for to the global economic environment, our trading strategy and the risk involved in these strategies, the impact of certain hedges on future reported earnings and cash flows, commodity prices and costs, the impact of contracts for commodities, demand for propane, heating oil and similar products, demand for chemicals including sodium chlorate and chlor-alkali, effect of operational and technological improvements, anticipated costs and benefits of business enterprise system upgrade plans, future working capital levels, expected governmental regulatory regimes and legislation and their expected impact on regulatory and legislative compliance costs, expectations for the outcome of existing or potential legal and contractual claims, our ability to obtain financing on acceptable terms, expected life of facilities and statements regarding net working capital and capital expenditure requirements of Superior or Superior LP.

Forward-looking information is provided for the purpose of providing information about management's expectations and plans about the future and may not be appropriate for other purposes. Forward-looking information herein is based on various assumptions and expectations that Superior believes are reasonable in the circumstances. No assurance can be given that these assumptions and expectations will prove to be correct. Those assumptions and expectations are based on information currently available to Superior, including information obtained from third party industry analysts and other third party sources, and the historic performance of Superior's businesses. Such assumptions include anticipated financial performance, current business and economic trends, the amount of future dividends paid by Superior, business prospects, availability and utilization of tax basis, regulatory developments, currency, exchange and interest rates, future commodity prices relating to the oil and gas industry, future oil rig activity levels as well as receipt of required regulatory approvals to complete the acquisition of Canwest, trading data, cost estimates, our ability to obtain financing on acceptable terms, the assumptions set forth under the "Financial Outlook" sections of our MD&A and are subject to the risks and uncertainties set forth below.

By its very nature, forward-looking information involves numerous assumptions, risks and uncertainties, both general and specific. Should one or more of these risks and uncertainties materialize or should underlying assumptions prove incorrect, as many important factors are beyond our control, Superior's or Superior LP's actual performance and financial results may vary materially from those estimates and intentions contemplated, expressed or implied in the forward-looking information. These risks and uncertainties include incorrect assessments of value when making acquisitions, increases in debt service charges, the loss of key personnel, fluctuations in foreign currency and exchange rates, inadequate insurance coverage, liability for cash taxes, counterparty risk, compliance with environmental laws and regulations, reduced customer demand, operational risks involving our facilities, force majeure, labour relations matters, our ability to access external sources of debt and equity capital, and the risks identified in (i) our MD&A under the heading "Risk Factors" and (ii) Superior's most recent Annual Information Form. The preceding list of assumptions, risks and uncertainties is not exhaustive.

When relying on our forward-looking information to make decisions with respect to Superior, investors and others should carefully consider the preceding factors, other uncertainties and potential events. Any forward-looking information is provided as of the date of this document and, except as required by law, neither Superior nor Superior LP undertakes to update or revise such information to reflect new information, subsequent or otherwise. For the reasons set forth above, investors should not place undue reliance on forward-looking information.

For more information about Superior, visit our website at www.superiorplus.com.

Contacts:
Superior Plus Corp.
Beth Summers
Senior Vice President and Chief Financial Officer
(416) 340-6015
[email protected]

Superior Plus Corp.
Rob Dorran
Vice President, Investor Relations and Treasurer
(416) 340-6003 or Toll Free: 1-866-490-PLUS (7587)
[email protected]
www.superiorplus.com

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