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Superior Plus Corp. Announces Strong Third Quarter Results,

Superior Plus Corp. Announces Strong Third Quarter Results, an
Expansion of its Saskatoon Hydrochloric Acid Capacity and its 2013
Financial Outlook 
CALGARY, ALBERTA -- (Marketwire) -- 11/01/12 -- Superior Plus Corp.
(TSX:SPB) 
Third Quarter Highlights 


 
--  For the quarter ended September 30, 2012, Superior generated adjusted
    operating cash flow (AOCF) per share of $0.31 compared to $0.21 per
    share in the comparative period. The current quarter's results include a
    one-time payment from TransCanada of $12.5 million or $0.11 per share
    which is included in Superior's Specialty Chemicals business results.
    Excluding the one-time payment, Superior's results were consistent with
    management's expectations and with the prior year quarter, as improved
    results at the Energy Services business were offset by reduced results
    within the Construction Products Distribution business and higher
    corporate costs. 
--  Energy Services results benefited from improved margins in the Canadian
    propane and U.S. refined fuels businesses. 
--  Specialty Chemicals results, excluding the one-time $12.5 million
    TransCanada payment noted below, were modestly lower than the prior year
    period. Results were impacted by higher sodium chlorate gross profits
    due to higher realized selling prices and lower electrical rates, which
    more than offset the impact of reduced chloralkali gross profits due to
    product sales mix and lower chlorine pricing. Specialty Chemicals
    results in the third quarter were also impacted by the timing of foreign
    currency revaluations on US-denominated working capital. 
--  During the third quarter, Superior received a payment of $15.8 million
    from TransCanada Energy Ltd., a subsidiary of TransCanada, in connection
    with the arbitration ruling related to the Sundance Power Purchase
    Agreement (PPA) between TransAlta Corporation and TransCanada. As a
    result, Superior has included in its third quarter results as a
    reduction of cost of goods sold, a one-time gain of $12.5 million,
    representing the gross settlement net of certain settlement costs. 
--  Superior's Board of Directors has approved a $25 million expansion of
    the hydrochloric acid production capacity at the Saskat
oon, Saskatchewan
    chloralkali facility. The existing capacity of this facility is
    currently 70,000 wet metric tonnes (WMT) or 24,500 dry metric tonnes.
    The capacity will increase to 140,000 WMT upon completion of the
    expansion. The Saskatoon facility is strategically positioned to service
    customers in Western Canada oil and gas industry. 
--  The Construction Products Distribution business results were impacted by
    restructuring charges of $2.7 million recognized in the third quarter
    related to announced branch closures ($4.2 million in restructuring
    charges incurred year-to-date). 
--  Based on year-to-date results, Superior Superior anticipates its 2012
    financial results will be at the high end of its previously disclosed
    2012 financial outlook of AOCF per share of $1.45 to $1.80. Superior's
    2012 financial outlook of AOCF per share is unchanged from the financial
    outlook provided at the end of the first quarter of 2012. 
--  Superior is introducing its 2013 financial outlook of AOCF per share of
    $1.65 to $1.95. See "2013 Financial Outlook" for additional details.
    Superior anticipates that its total debt to EBTIDA ratio as at December
    31, 2013 will be in the range of 3.8X to 4.0X. See "Debt Management
    Update" for additional details on the forecasted December 31, 2013 debt
    to EBITDA ratio. Superior's targeted total debt to EBITDA remains
    unchanged at 3.5X to 4.0X. 
--  Superior anticipates that one-time costs of approximately $0.08 to $0.10
    per share will be incurred in fiscal 2012 ($0.05 per share incurred
    year-to-date), the impact of which is included in Superior's 2012
    financial outlook. 
--  As disclosed by Superior on September 20, 2012, Superior has received
    indications from the Canada Revenue Agency ("CRA") that the CRA will be
    reassessing Superior's corporate conversion transaction. See "CRA Income
    Tax Update" for additional details. 
--  Superior's total debt to EBITDA ratio improved to 4.1X as at September
    30, 2012, compared to 5.2X at September 30, 2011 and 5.1X at December
    31, 2011. Superior continues to make excellent progress on its debt
    reduction. As a result, Superior has reduced its anticipated total debt
    to EBITDA ratio from its previous range of 4.4X to 4.6X, to 4.2X to 4.4X
    as at December 31, 2012. The seasonality of Superior's business impacts
    Superior's debt to EBITDA ratios due to changes in working capital
    requirements which are typically at a seasonal low at the end of the
    second quarter, rising throughout the heating season. 

 
Third Quarter Financial Summary  


 
----------------------------------------------------------------------------
                                     Three months ended   Nine months ended 
                                          September 30,       September 30, 
(millions of dollars except per                                             
 share amounts)                          2012      2011      2012      2011 
----------------------------------------------------------------------------
Revenue                                 790.1     845.0   2,690.3   2,882.2 
Gross profit                            195.9     178.5     618.1     592.9 
----------------------------------------------------------------------------
EBITDA from operations (1)               58.4      45.4     199.5     185.1 
Interest                                (18.3)    (20.5)    (55.1)    (59.8)
Cash income tax recovery (expense)       (0.3)      0.1      (0.8)     (0.1)
Corporate costs                          (5.3)     (1.5)    (12.7)     (8.6)
----------------------------------------------------------------------------
Adjusted operating cash flow (1)         34.5      23.5     130.9     116.6 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Adjusted operating cash flow per                                            
 share, basic and diluted (1)(2)(3)     $0.31     $0.21     $1.17     $1.07 
----------------------------------------------------------------------------
Dividends paid per share                $0.15     $0.30     $0.45     $0.97 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(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 Third Quarter Management's Discussion and Analysis.  
(2) The weighted average number of shares outstanding for the three months  
    ended September 30, 2012 is 112.2 million (2011 - 109.5 million) and for
    the nine months ended September 30, 2012 is 111.6 million (2011 - 108.8 
    million).                                                               
(3) For the three and nine months ended September 30, 2012 and 2011, there  
    
were no dilutive instruments.                                           

 
Segmented Information 


 
----------------------------------------------------------------------------
                                      Three months ended   Nine months ended
                                           September 30,       September 30,
(millions of dollars)                     2012      2011      2012      2011
----------------------------------------------------------------------------
EBITDA from operations:                                                     
  Energy Services                         13.3       8.1      88.1      87.1
  Specialty Chemicals                     41.5      30.2      98.4      80.7
  Construction Products Distribution       3.6       7.1      13.0      17.3
----------------------------------------------------------------------------
                                          58.4      45.4     199.5     185.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
Energy Services 


 
--  Energy Services EBITDA from operations for the third quarter was $13.3
    million compared to $8.1 million in the prior year quarter. The increase
    is due to improved results from all businesses except for the fixed-
    price energy services business. 
--  The Canadian propane business generated gross profit of $47.3 million in
    the third quarter compared to $45.4 million in the prior year quarter
    due to improved average sales margins. 
--  Canadian propane average sales margins were 19.7 cents per litre in the
    third quarter compared to 19.0 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 1 million litres higher
    than the prior year quarter due to improved industrial volumes. Non-
    heating based industrial volumes continued to benefit from strong demand
    from the oil and gas sector. 
--  Although weather does not typically have a material impact on third
    quarter total sales volumes, heating related volumes, in particular,
    residential and commercial volumes within the Canadian propane business,
    were negatively impacted by warmer than average weather throughout most
    of Canada in the third quarter. Average weather across Canada, as
    measured by degree days, for the third quarter was 6% warmer than the
    prior year and 12% warmer than the 5-year average. 
--  The U.S. refined fuels business generated gross profits of $16.5 million
    in the third quarter compared to $15.7 million in the prior year
    quarter. Gross profits were modestly higher than the prior year period
    as a 7% improvement in gross margins more than offset a 3% reduction in
    sales volumes. 
--  U.S. refined fuels average sales margins were 4.9 cents per litre in the
    quarter, compared to 4.6 cents per litre in the prior year quarter.
    Sales margins benefited from a reduction in the wholesale cost of
    propane and heating oil. 
--  Sales volumes within the U.S. refined fuels business were 3% lower than
    the prior year. Sales volumes of residential heating oil and propane
    relative to the prior year quarter were impacted by higher in-tank
    customer volumes due to the unseasonably warm weather experienced in the
    first and second quarters of 2012 which has impacted the timing of
    residential customers first tank fill of the upcoming heating season.
    Weather within the quarter does not typically have a material impact on
    sales volumes due to the seasonality of heating related volumes.  
--  The fixed-price energy services business generated gross profits of $8.0
    million compared to $9.5 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 due
    to a change in strategy in prior years to focus on small commercial and
    industrial accounts. Additionally, gross profits relative to the prior
    year were impacted by the timing of risk reserve adjustments which
    positively impacted the prior quarter's results. Improved electricity
    gross profits were due to the aggregation of new customers compared to
    the prior year quarter.  
--  The supply portfolio management business generated gross profits of $3.9
    million in the third quarter compared to $1.9 million in the comparative
    period. The increase in gross profit is due to improved market trading
    opportunities throughout the quarter relative to the prior year quarter.
--  Superior's supply portfolio management business is currently exploring
    opportunities to enhance its physical storage and transportation
    capabilities in the Saskatoon region in order to maximize its supply
    flexibility while minimizing its procurement costs. The capital cost of
    potential project is estimated at $4 million, the impact of which is
    included in Superior's updated debt management summary. 
--  Operating expenses were $72.1 million in the third quarter compared to
    $74.2 million in the prior year quarter. The decrease in operating
    expenses is due to the impact of cost reduction initiatives implemented
    earlier in the year, particularly within the Canadian propane and U.S.
    refined fuels businesses. 
--  On November 1, 2012, Superior finalized a management reorganization of
    its Energy Services business. Greg McCamus who had previously been named
    acting President of the Canadian propane operations has assumed the role
    of President, Energy Services. Mr. McCamus's responsibilities as
    President, Energy Services include overall responsibility of Superior's
    Energy Services distribution businesses, including day-to-day management
    of the Canadian propane business. Keith Wrisley, who had been acting
    President of the U.S. refined fuels business, will continue in this
    capacity as full-time President. Dave Tims who was Senior Vice-President
    of Superior's wholesale supply business will assume additional
    responsibilities for Superior's oil field customers and will assume the
    role of President, Energy Supply and Oilfield. These new roles will help
    ensure the success of Superior's Energy Services business by improving
    Superior's focus on its oil field accounts and its comprehensive energy
    services offerings. 
--  Initiatives to improve results in the Energy Services business continued
    during the third quarter in conjunction with Superior's goal for each of
    its businesses to become best in class. Business improvement projects
    for 2012/2013 will be focused on: a) improving customer service levels,
    b) improving overall logistics and procurement functions, c) enhancing
    the management of margins through intelligent pricing, d) working
    capital management, and e) improv
ing existing and implementing new
    technologies to facilitate improvements to the business. 
--  Superior expects business conditions in 2013 and for the last quarter of
    2012 for its Energy Services business will be similar to year-to-date
    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
    the business initiative activities noted above. 

 
Specialty Chemicals 


 
--  EBITDA from operations for the third quarter was $41.5 million, or $29.0
    million excluding the $12.5 million payment from TransCanada, compared
    to $30.2 million in the prior year quarter, as higher average realized
    selling prices more than offset a reduction in chemical sales volumes. 
--  Sodium chlorate gross profits were higher than the prior year quarter
    due to higher average realized selling prices and lower average
    electricity costs which more than offset a modest reduction in sales
    volumes. 
--  Sodium chlorate sales volumes were 4% lower than the prior year quarter
    as a result of reduced demand from international customers due in part
    to pulp mill maintenance and a softer global market for pulp. Sales
    volumes to North American customers were consistent with the prior year.
--  Chloralkali gross profits were modestly lower than the prior year as
    weaker average prices, particularly for chlorine, more than offset an
    increase in sales volumes. 
--  Operating expenses were $0.7 million higher than the prior year due to
    higher employee costs and general inflationary increases. 
--  Superior's Board of Directors has approved a $25 million expansion of
    the hydrochloric acid production capacity at the Saskatoon, Saskatchewan
    chloralkali facility. The existing capacity of 70,000 wet metric tonnes
    (WMT), or 24,500 dry metric tonnes, will increase to approximately
    140,000 WMT upon completion of the expansion. The project will be
    completed through 2013 and 2014 with commercial production expected in
    the fourth quarter of 2014. 
--  As previously announced in the first quarter of 2012, Superior has also
    approved an $18 million expansion of the hydrochloric acid production
    capacity at the Port Edwards, Wisconsin chloralkali facility. The
    existing capacity of 110,000 wet metric tonnes (WMT), or 36,000 dry
    metric tonnes, will increase to approximately 220,000 WMT upon
    completion of the expansion. The project will be completed through 2012
    and 2013 with commercial production expected in the second quarter of
    2014. Upon completion of both projects, Superior will have total
    hydrochloric acid production capacity of 360,000 WMT. 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. 
--  Superior expects business conditions in 2013 and for the last quarter of
    2012 for its Specialty Chemicals business will be similar to year-to-
    date 2012. EBITDA from operations, excluding the impact of the $12.5
    million one-time payment from TransCanada, is anticipated to be modestly
    higher in 2013 due to improved performance of the chloralkali product
    segment due to higher gross profits from hydrochloric acid and modestly
    higher selling prices for caustic soda, which will more than offset
    reduced pricing for chlorine. Superior continues to see a stable market
    for sodium chlorate as a result of the current market for pulp. Superior
    also expects a stable market for chloralkali sales volumes and pricing
    as North American supply demand fundamentals continue to be balanced.
    The market for chloralkali continues to be supported by low natural gas
    prices. 

 
Construction Products Distribution 


 
--  EBITDA from operations for the third quarter was $3.6 million, including
    one-time restructuring charges of $2.7 million, compared to $7.1 million
    in the prior year quarter. Excluding the impact of the restructuring
    costs noted above, results in the third quarter were lower than the
    prior year quarter due to higher operating costs partially offset by
    improved gross profits. 
--  Gross profit was $2.0 million higher than the prior year quarter as a
    result of improved sales volumes. Gross profit and sales volumes within
    the commercial and industrial insulation segment benefitted from
    improved demand due in part to increased sales and marketing efforts,
    offset by delays in Gulf Coast and international project activity. In
    addition, gypsum sales volumes increased over the prior year due to
    improved U.S. demand and the introduction of the full interiors product
    line into select U.S. markets that were previously acoustical ceiling
    focused. Gross margins as a percentage of sales were modestly lower than
    the prior year due to ongoing competitive pressures and manufacturer
    price increases. 
--  Operating expenses, including $2.7 million in one-time restructuring
    costs ($4.2 million year-to-date) were $5.5 million higher than the
    prior year. The increase in operating expenses excluding the impact of
    restructuring costs is due to higher sales volumes and inflationary
    increases on wages and other operating costs. Operating expenses as a
    percentage of sales, excluding restructuring costs, were consistent with
    the prior year quarter. 
--  The Construction Products Distribution business continues to review all
    aspects of operations to optimize its cost structure and improve gross
    margins. Superior anticipates that an additional $2.5 to $3.0 million in
    restructuring costs will be incurred in 2012 due principally to the
    ongoing reorganization or closure of additional branches. A total of 15
    branches will have been closed or restructured during 2012 at an
    anticipated cost of $6.5 to $7.0 million. Restructuring activities are
    being actively managed to minimize costs and the impact on customers. 
--  Initiatives to improve results in the Construction Products Distribution
    business continued during the third quarter. Business improvement
    projects for 2012/2013 will be focused on: a) assessment of overall
    logistics and existing branch network, b) review of supply chain
    management including procurement and transportation, c) review of
    product pricing, and d) working capital management. 
--  Superior expects business conditions in 2013 and for the remainder of
    2012 for its Construction Products Distribution business to be similar
    to year-to-date 2012 with slightly improving conditions in the U.S.
    EBITDA from operations is anticipated to be higher in 2013 than 2012 due
    in part to the absence of restructuring costs incurred in 2012. In
    addition, results will benefit from the business initiative activities
    noted above. Superior continues to see difficult market conditions in
    both the residential and commercial segments in both Canada and the U.S.
    Superior does not anticipate significant improvements in the end-use
    markets in the near term. 

 
Corporate Related 


 
--  Total interest expense for the third quarter was $18.3 million compared
    to $20.5 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 ongoing focus to reduce its total debt levels. 
--  Corporate costs were $5.3 million in the current quarter, a $3.8 million
    increase over the prior year qua
rter due to higher costs associated with
    Superior's long-term incentive plans as a result of the appreciation in
    Superior's share price during the third quarter of 2012. 
--  Superior's dividend re-investment program (DRIP) generated proceeds of
    $3.6 million during the third quarter ($10.6 million year-to-date).
    Proceeds from the DRIP will be used to reduce existing debt levels. The
    DRIP provides Superior's shareholders with the opportunity to reinvest
    their cash dividends in the future growth of the business at a 5%
    discount to the market price of Superior's common shares. 
--  Superior's total debt (including convertible debentures) to Compliance
    EBITDA improved to 4.1X as at September 30, 2012, compared to 5.2X as at
    September 30, 2011, and 5.1X as at December 31, 2011. Superior continues
    to make progress on reducing its total leverage by focusing on debt
    reduction, including reducing working capital requirements and improving
    business operations. 
--  On August 1, 2012, Superior redeemed its remaining $49.94 million, 5.75%
    2012 convertible debenture obligation. 

 
CRA Income Tax Update 
As disclosed by Superior on September 20, 2012, Superior has received
indications from the Canada Revenue Agency ("CRA") that the CRA will
be reassessing Superior's corporate conversion transaction. As of
November 1, 2012, Superior has not received a proposal letter from
the CRA challenging the tax consequences of Superior's corporate
conversion transaction which occurred on December 31, 2008.  
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 if and when a proposal
letter or notice of reassessment is received from the CRA. Superior
strongly believes that the general anti-avoidance rule does not apply
to the Conversion and intends to file its future tax returns on a
basis consistent with its view of the outcome of the Conversion. See
press release "Superior Plus Corp. Provides Update on Review of
Conversion Transaction and Settlement Related to Power Purchase
Agreement with TransCanada" dated September 20, 2012, for additional
details on this matter including the potential financial implications
of a potential reassessment. 
2012 Financial Outlook 
Based on year-to-date results, Superior anticipates its 2012
financial results will be at the high end of its previously disclosed
2012 financial outlook of AOCF per share of $1.45 to $1.80.
Superior's 2012 financial outlook of AOCF per share is unchanged from
the financial outlook provided at the end of the first quarter of
2012.  
2013 Financial Outlook 
Superior expects 2013 AOCF per share of $1.65 to $1.95. The increase
in the 2013 financial outlook relative to the 2012 financial outlook
is due to ongoing improvements in the businesses as a result of
Superior's business initiative projects, average weather, as measured
by degree days being consistent with the five year average, the
absence of one-time restructuring costs which are offset in part by
the absence of the one-time TransCanada payment received in 2012.  
Luc Desjardins, Superior's President and Chief Executive Officer
stated "I am pleased with the results for the third quarter and we
are encouraged that our businesses continue to perform strongly.
During 2012 we launched a number of business initiatives and
established the required talent necessary to execute on these
initiatives. As we move towards 2013, our goal is simple, continue to
improve the businesses by executing on our initiatives. Superior
remains committed to transforming into a best in class organization,
and while much work remains to achieve this goal, I want to ensure
our customers, employees and shareholders that we remain committed
and focused on meeting our goals.  
I am pleased to confirm that Superior is on track to meet its 2012
financial outlook of $1.45 to $1.80 of AOCF per share, we are
currently tracking towards the high end of this range based on
year-to-date results, the current state of the North American economy
and the assumption average temperatures for the last quarter of 2012
are consistent with historical levels. I am also pleased to introduce
Superior's financial outlook for 2013 of $1.65 to $1.95 of AOCF per
share. Based on the mid-point of Superior's 2013 financial outlook
this represents an approximate increase of 10% compared to the
mid-point of Superior's 2012 financial outlook, excluding the impact
of the one-time $12.5 million TransCanada payment. The improvement in
our 2013 financial outlook over 2012 reflects the confidence we have
in the execution of our business plans." 
For additional details on the assumptions underlying the 2012 and
2013 financial outlooks, see Superior's 2012 Third Quarter
Management's Discussion and Analysis.  
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 December 31, 2012 will be in the range of 4.2X to 4.4X. 
Superior's anticipated total debt and total debt to EBITDA leverage
ratio as at December 31, 2013, based on Superior's 2012 and 2013
financial outlooks and Superior's 2012 year-to-date results, is
detailed in the chart below.  


 
----------------------------------------------------------------------------
                                                 (Dollar Per   (Millions of 
                                                       Share)       Dollars)
----------------------------------------------------------------------------
2013 financial outlook AOCF per share - mid-                                
 point (1)                                              1.80          204.1 
Maintenance capital expenditures, net                  (0.21)         (24.0)
Capital lease obligation repayments                    (0.15)         (16.6)
----------------------------------------------------------------------------
Cash flow available for dividends and debt                                  
 repayment before growth capital                        1.44          163.5 
Expansion of Port Edward's and Saskatoon                                    
 facilities andone-time environmental costs            (0.30)         (34.0)
Other growth capital expenditures                      (0.19)         (21.0)
Proceeds from dividend reinvestment program             0.12           13.6 
----------------------------------------------------------------------------
Estimated 2013 free cash flow available for                                 
 dividend anddebt repayment                             1.07          122.1 
Dividends (annualized)                                 (0.60)         (68.1)
----------------------------------------------------------------------------
Total estimated debt repayment (including Q3                                
 2012 Actuals)                                          0.47           54.0 
Estimated total debt to EBTIDA as at December                               
 31, 2013                                        3.8X - 4.0X    3.8X - 4.0X 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Dividends (annualized)                                  0.60           68.1 
Calculated payout ratio after all capital                                   
 expenditures                                             56%            56%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See "Financial Outlooks" in Superior's 2012 Third Quarter Management's  
    Discussion and Analysis for additional details including assumptions,   
    definitions and risk factors.                                           
 
*
T
 
2012 Detailed Third Quarter Results
 
Superior's 2012 Third Quarter Management's Discussion and Analysis is
attached and is also available on Superior's website at:
www.superiorplus.com under the Investor Relations section.
 
Third Quarter Conference Call
 
Superior will be conducting a conference call and webcast for
investors, analysts, brokers and media representatives to discuss the
2012 Third Quarter Results at 8:30 a.m. MDT on Friday, November 2,
2012. To participate in the call, dial: 1-877-240-9772. An archived
recording of the call will be available for replay until midnight,
January 2, 2013. To access the recording, dial: 1-800-408-3053 and
enter pass code 5330418 followed by the # key. Internet users can
listen to the call live, or as an archived call, on Superior's
website at: www.superiorplus.com.
 
Superior Plus 2012 Annual Investor Day
 
Superior is pleased to announce its upcoming Annual Investor Day on
Friday, November 30, 2012 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 9:00AM EST, 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 to
rsvpinvestorday@superiorplus.com. Details of the event can also be
found on Superior's website at www.superiorplus.com.
 
Forward Looking Information
 
Certain information included herein is forward-looking, within the
meaning of applicable Canadian securities laws. Forward-looking
information includes, statements regarding business strategy, market
conditions, expenditures, results, plans and objectives of or
involving Superior and Superior Plus LP. Forward-looking information
is often, but not always, identified by the use of words such as
"anticipate", "believe", "could", "estimate", "expect", "plan",
"intend", "forecast", "future", "guidance", "may", "predict",
"project", "should", "strategy", "target", "will" or similar words
suggesting future outcomes or language suggesting an outlook.
Forward-looking information in this press release, including the
attached 2012 Third Quarter Management's Discussion and Analysis,
includes consolidated and business segment outlooks, product
production, expected EBITDA from operations, expected AOCF, expected
AOCF per share, expected leverage ratios and debt repayment, debt
management summary, future capital expenditures, future economic
conditions, future DRIP proceeds, dividend strategy and future
payments, payout ratio, future cash flows, anticipated taxes, future
tax horizon, expected tax consequences of the Conversion, the
expected challenge by the CRA of the tax consequences of the
Conversion (and the expected timing and financial impact of such
process), exchange rates, commodity prices and costs, development
plans and programs, business expansion and improvement projects,
effects of operational and technological improvements, restructuring
costs, demand for chemicals including sodium chlorate and
chloralkali, business strategy and objectives, benefits and synergies
resulting from acquisitions, expected life of facilities and
statements regarding the future financial position of Superior and
Superior Plus LP. Superior believes the expectations reflected in
such forward-looking information are reasonable but no assurance can
be given that these expectations will prove to be correct and such
forward-looking statements should not be unduly relied upon.
 
Forward-looking information is based on various assumptions. Those
assumptions are based on information currently available to Superior,
including information obtained from third party industry analysts and
other third party sources, the historic performance of Superior's
businesses, and 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, trading data, cost estimates, our
ability to obtain financing on acceptable terms, and the other
assumptions set forth under the "Outlook" sections contained in the
attached 2012 Third Quarter Management's Discussion and Analysis.
Readers are cautioned that the preceding list of assumptions is not
exhaustive.
 
Forward-looking information is not a guarantee of future performance.
By its very nature, forward-looking information involves inherent
risks and uncertainties, both general and specific, and risks that
predictions, forecasts, projections and other forward-looking
information will not be achieved, some of which are described herein
and in the attached 2012 Third Quarter Management's Discussion and
Analysis. Such risks and uncertainties may cause Superior's or
Superior Plus LP's actual performance and financial results in future
periods to differ materially from any projections of future
performance or results expressed or implied by such forward-looking
information. We caution readers not to place undue reliance on this
information as a number of important factors could cause the actual
results to differ materially from the beliefs, plans, objectives,
expectations and anticipations, estimates and intentions expressed in
such forward-looking information. These risks and uncertainties
include but are not limited to the risks referred to under the
section entitled "Risk Factors to Superior", in the attached 2012
Third Quarter Management's Discussion and Analysis, the risks
associated with the availability and amount of the tax basis and the
risks identified in Superior's 2011 Annual Information Form under the
heading "Risk Factors". Superior's 2011 Annual Information Form is
available at www.sedar.com and from Superior's website at
www.superiorplus.com.
 
Readers are cautioned that the foregoing list of factors that may
affect future results is not exhaustive. Forward-looking information
is provided for the purpose of providing information about
management's expectations and plans about the future. When relying on
our forward-looking information to make decisions with respect to
Superior, investors and others should carefully consider the
foregoing factors and other uncertainties and potential events. Any
forward-looking information is made as of the date hereof and, except
as required by law, Superior does not undertake any obligation to
publicly update or revise such information to reflect new
information, subsequent or otherwise. For more information about
Superior, visit our website at www.superiorplus.com.
 
Management's Discussion and Analysis of 2012 Third Quarter Results 
 
November 1, 2012
 
The following Management's Discussion and Analysis (MD&A) is a review
of the financial performance and position of Superior Plus Corp.
(Superior) as at September 30, 2012 and for the three and nine months
ended September 30, 2012 and 2011. The information in this MD&A is
current to November 1, 2012. This MD&A should be read in conjunction
with Superior's audited consolidated financial statements and notes
to those statements as at and for the twelve months ended December
31, 2011 and its December 31, 2011 MD&A.
 
The accompanying unaudited condensed consolidated financial
statements of Superior have been prepared by and are the
responsibility of Superior's management. Superior's unaudited
condensed consolidated financial statements have been prepared in
accordance with International Accounting Standard 34 Interim
Financial Reporting as issued by the International Accounting
Standards Board (IASB). Dollar amounts in this MD&A are expressed in
Canadian dollars and millions except where otherwise noted. 
 
Overview of Superior 
 
Superior is a diversified business corporation. Superior holds 99.9%
of Superior Plus LP (Superior LP), a limited partnership formed
between Superior General Partner Inc. (Superior 
GP) as general
partner and Superior as limited partner. Superior owns 100% of the
shares of Superior GP and Superior GP hold 0.1% of Superior LP. The
cash flow of Superior is solely dependent on the results of Superior
LP and is derived from the allocation of Superior LP's income to
Superior by means of partnership allocations. Superior, through its
ownership of Superior LP and Superior GP, has three operating
segments: the Energy Services segment which includes a Canadian
propane distribution business, a U.S. refined fuels distribution
business, a fixed-price energy services business and a supply
portfolio management business; the Specialty Chemicals segment; and
the Construction Products Distribution segment.
 
Third Quarter Results
 
Summary of Adjusted Operating Cash Flow

 
---------------------------------------------------------------------------- 
Three months ended   Nine months ended  
September 30,       September 30, 
(millions of dollars except per                                             
 share amounts)                          2012      2011      2012      2011 
----------------------------------------------------------------------------
EBITDA from operations: (1)                                                 
  Energy Services                        13.3       8.1      88.1      87.1 
  Specialty Chemicals                    41.5      30.2      98.4      80.7 
  Construction Products Distribution      3.6       7.1      13.0      17.3 
---------------------------------------------------------------------------- 
58.4      45.4     199.5     185.1 
Interest                                (18.3)    (20.5)    (55.1)    (59.8)
Cash income tax expense                  (0.3)      0.1      (0.8)     (0.1)
Corporate costs                          (5.3)     (1.5)    (12.7)     (8.6)
----------------------------------------------------------------------------
Adjusted operating cash flow(1)          34.5      23.5     130.9     116.6 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
----------------------------------------------------------------------------
Adjusted operating cash flow per                                            
 share (2), basic (2)(3)                $0.31     $0.21     $1.17     $1.07 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Earnings before interest, taxes, depreciation and amortization (EBITDA)  
and adjusted operating cash flow are not IFRS measures. See "Non-IFRS    
Financial Measures".                                                    
(2) The weighted average number of shares outstanding for the three months   
ended September 30, 2012, is 112.2 million (2011 - 109.5 million) and    
for the nine months ended September 30, 2012, is 111.6 million (2011 -   
108.8 million).                                                         
(3) Superior did not provide its adjusted operating cash flow per share on a 
fully diluted basis as Superior's share price is below the current       
exercise price of Superior's Debentures, it is therefore unlikely that   
any material conversions will occur.                                     


 
Adjusted Operating Cash Flow Reconciled to Net Cash Flow from
Operating Activities (1)

 
---------------------------------------------------------------------------- 
Three months ended   Nine months ended  
September 30,       September 30, 
(millions of dollars)                    2012      2011      2012      2011 
----------------------------------------------------------------------------
Net cash flow from operating                                                
 activities                              64.4     113.2     326.3     275.3  
Add: Non cash interest expense            1.0       1.7       4.3       5.0 
Less: Decrease in non-cash working                                          
 capital                                (11.3)    (69.3)   (139.5)    (98.8)
  Income tax (expense) recovery          (0.3)      0.1      (0.8)     (0.1)
  Finance costs recognized in net                                            
earnings                             (19.3)    (22.2)    (59.4)    (64.8)
----------------------------------------------------------------------------
Adjusted operating cash flow             34.5      23.5     130.9     116.6 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See the Unaudited Condensed Consolidated Financial Statements for net    
cash flows from operating activities and changes in non-cash working     
capital.                                                                 


 
Third quarter adjusted operating cash flow was $34.5 million, an
increase of $11.0 million or 47% from the prior year quarter. The
increase in adjusted operating cash flow was primarily due to higher
operating results at Energy Services and Specialty Chemicals offset
in part by lower Construction Products Distribution results and
higher corporate costs. Adjusted operating cash flow of $0.31 per
share, increased by $0.10 per share as compared to the prior year
quarter due to a 47% increase in adjusted operating cash flow as
noted above offset in part by a 2% increase in the weighted average
number of shares outstanding. The average number of shares
outstanding increased in 2012 as a result of shares issued from
Superior's Dividend Reinvestment Program and Optional Share Purchase
Plan (DRIP).
 
Adjusted operating cash flow for the nine months ended September 30,
2012 was $130.9 million, an increase of $14.3 million or 12% compared
to the prior year period. The increase in adjusted operating cash
flow was due to increased EBITDA from operations of Specialty
Chemicals offset in part by lower Construction Products Distribution
results. Adjusted operating cash flow per share was $1.17 per share
for the nine months ended September 30, 2012, an increase of $0.10
per share or 9% due to the increase in adjusted operating cash flow
as noted above offset in part by a 3% increase in the weighted
average number of shares outstanding. The average number of shares
outstanding increased in 2012 as a result of shares issued from the
DRIP.
 
The net earnings for the third quarter were $36.7 million, compared
to a net loss of $113.4 million in the prior year quarter. Net
earnings were primarily impacted by higher gross profits, reduction
in impairments as the prior year quarter included an impairment
charge of $78.0 million and unrealized gains on financial instruments
in the current quarter as compared to unrealized financial instrument
losses in the prior year quarter. The change in the unrealized gains
on financial instruments was due principally to gains in the current
quarter on Superior's natural gas financial derivatives compared to
the prior year quarter as a result of an increase in the spot price
of natural gas. Revenues of $790.1 million were $54.9 million lower
than the prior year quarter due to lower Energy Services revenue as a
result of lower propane prices offset in part by higher revenue at
Specialty Chemicals due to increased pricing and higher revenue at
Construction Products Distribution as a result of increased demand.
Gross profit of $195.9 million was $17.4 million higher than the
prior year quarter primarily due to increased Specialty Chemical
gross profits due to lower electricity costs and the one-time net
benefit from the Tr
ansCanada settlement of $12.5 million (see
"Settlement" below for further details) which has been included with
cost of goods sold. Operating expenses of $171.1 million in the third
quarter were $1.6 million lower than in the prior year quarter due to
reduced amortization expense offset in part by restructuring costs
and higher corporate costs. Total income tax expense for the third
quarter was $7.6 million compared to income tax recovery of $19.7
million in the prior year quarter. The increased in income tax
expense was due to higher net earnings in the third quarter of 2012
as the prior year quarter included an impairment charge of $78.0
million which resulted in an income tax recovery.
 
Net earnings for the nine months ended September 30, 2012 were $78.9
million, compared to a net loss of $71.2 million in the prior year
period. Net earnings were impacted by $46.2 million in unrealized
gains on financial instruments in the current period, compared to
unrealized losses of $10.0 million in the prior year period. The
change in the unrealized gains and losses on financial instruments
was due principally to gains on Energy Services natural gas financial
derivatives compared to the prior year as a result of an increase in
the spot price for natural gas. Revenues of $2,690.3 million were
$191.9 million lower than the prior year period principally due to
reduced Energy Services revenue as a result of lower commodity prices
and sales volumes offset in part by higher Specialty Chemicals and
Construction Products Distribution revenues due to increased sales
volumes and demand. Gross profit of $618.1 million was $25.2 million
higher than the prior year period due to improved gross profit at
Specialty Chemicals primarily due to the one-time net benefit from
the TransCanada settlement of $12.5 million (see "Settlement" below
for further details) and higher revenues at Construction Products
Distribution offset in by lower Energy Services gross profits due to
lower sales volumes. Operating expenses of $516.1 million were $1.9
million lower than in the prior year period due to reduced
amortization expense offset in part by restructuring costs and higher
corporate costs. Total income tax expense for the nine months ended
September 30, 2012 was $9.9 million compared to an income tax
recovery of $6.7 million in the prior year period. The increased in
income tax expense in 2012 was due higher net earnings in 2012 as the
prior year period included an impairment charge of $78.0 million
which resulted in an income tax recovery.
 
Energy Services 
 
Energy Services' condensed operating results for 2012 and 2011 are
provided in the following table.

 
---------------------------------------------------------------------------- 
Three months ended   Nine months ended  
September 30,       September 30, 
(millions of dollars)                    2012      2011      2012      2011 
----------------------------------------------------------------------------
Revenue(1)                              453.8     522.6   1,699.4   1,958.5 
Cost of sales(1)                       (368.4)   (440.3) (1,381.6) (1,633.1)
----------------------------------------------------------------------------
Gross profit                             85.4      82.3     317.8     325.4 
Less: Cash operating and                                                    
 administration costs(1)                (72.1)    (74.2)   (229.7)   (238.3)
----------------------------------------------------------------------------
EBITDA from operations                   13.3       8.1      88.1      87.1 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) In order to better reflect the results of its operations, Superior has   
reclassified certain amounts for purposes of this MD&A to present its    
results as if it had accounted for various transactions as accounting    
hedges. See "Reconciliation of Divisional Segmented Revenue and Cost of  
Sales to EBITDA" for detailed amounts.                                   


 
Revenues for the third quarter of 2012 were $453.8 million, a
decrease of $68.8 million from revenues of $522.6 million in 2011.
The decrease in revenues is primarily due to lower commodity prices
and sales volumes as compared to the prior year quarter. Total gross
profit for the third quarter of 2012 was $85.4 million, an increase
of $3.1 million or 4% over the prior year quarter. The increase in
gross profit is primarily due to higher gross margins within the
Canadian propane segment and gross profits in the Supply portfolio
management segment offset in part by lower fixed-price energy
services gross profits. A summary and detailed review of gross profit
is provided below. 
 
Gross Profit Detail

 
---------------------------------------------------------------------------- 
Three months ended   Nine months ended 
September 30,       September 30,
(millions of dollars)                     2012      2011      2012      2011
----------------------------------------------------------------------------
Canadian propane distribution             47.3      45.4     167.6     160.7
U.S. refined fuels distribution           16.5      15.7      85.8      99.8
Other services                             9.7       9.8      28.2      29.4
Supply portfolio management                3.9       1.9      11.8       8.7
Fixed-price energy services                8.0       9.5      24.4      26.8
----------------------------------------------------------------------------
Total gross profit                        85.4      82.3     317.8     325.4
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 


 
Canadian Propane Distribution 
 
Canadian propane distribution gross profit for the third quarter was
$47.3 million, an increase of $1.9 million or 4% from 2011, due to
higher gross margins and slightly higher sales volumes. Residential
and commercial sales volumes decreased by 2 million litres or 4%, due
to fewer active customers, warm weather and the ongoing impact of
record or near record temperatures during the first quarter which has
negatively impacted fill rates in the third quarter. Average weather
across Canada for the third quarter, as measured by degree days, was
6% warmer than the prior year and 12% warmer than the five-year
average. However, heating related volumes in the second and third
quarters are generally not materially impacted by average weather due
to the seasonality of Canadian propane distributions operations.
Industrial volumes increased by 5 million litres or 3%, due to
increased oilfield sales volumes as a result of continued strength in
the energy sector offset in part by lower mining demand
. Automotive
propane volumes declined by 2 million litres or 8%, due to the
continued structural decline in this end-use market although the
decline was lower than expected due to favourable price spread
between propane and gasoline.
 
Average propane sales margins for the third quarter increased to 19.7
cents per litre from 19.0 cents per litre in the prior year quarter.
The increase in average margins compared to the prior year quarter is
principally due to the implementation of price increases to
industrial and commercial sales contracts during the first quarter of
2012 and improved pricing management offset in part by sales mix as
the current quarter included a higher proportion of lower margin
sales volumes. 
 
Canadian Propane Distribution Sales Volumes

 
Volumes by End-Use Application(1)      Volumes by Region(2)                 
---------------------------------------------------------------------------- 
Three months ended September 30,       Three months ended September 30,
(millions of                           (millions of                         
litres)                2012      2011  litres)                2012      2011
----------------------------------------------------------------------------
Residential              15        16  Western Canada          138       130
Commercial               36        37  Eastern Canada           83        87
Agricultural              7         7  Atlantic Canada          19        22
Industrial              159       154                                       
Automotive               23        25                                       
---------------------------------------------------------------------------- 
240       239                          240       239
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Volumes by End-Use Application(1)      Volumes by Region(2)                 
---------------------------------------------------------------------------- 
Nine months ended September 30,        Nine months ended September 30,
(millions of                           (millions of                         
litres)                2012      2011  litres)                2012      2011
----------------------------------------------------------------------------
Residential              79        88  Western Canada          524       520
Commercial              176       190  Eastern Canada          311       337
Agricultural             30        36  Atlantic Canada          74        80
Industrial              566       560                                       
Automotive               58        63                                       
---------------------------------------------------------------------------- 
909       937                          909       937
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
(1) Regions: Western Canada region consists of British Columbia, Alberta,    
Saskatchewan, Manitoba, Northwest Ontario, Yukon and Northwest           
Territories; Eastern Canada region consists of Ontario (except for       
Northwest Ontario) and Quebec; and Atlantic Canada consists of New       
Brunswick, Newfoundland & Labrador, Nova Scotia and Prince Edward        
Island.                                                                  


 
U.S. Refined Fuels Distribution 
 
U.S. refined fuels distribution gross profit for the third quarter
was $16.5 million, an increase of $0.8 million from the prior year
quarter. The increase in gross profit is due to higher gross margins
offset in part by lower sales volumes. Sales volumes of 335 million
litres, decreased by 9 million litres or 3% as compared to the prior
year quarter. The decrease in sales volumes was primarily due to
higher in-tank customer volumes due to the unseasonably warm weather
experienced in the first and second quarters of 2012 which has
impacted the timing of residential customers first tank fill of the
upcoming heating season, lower customer aggregation and lower demand
from the drilling sector. Weather as measured by heating degree days
for the third quarter was modestly warmer than the prior year
quarter, however heating related volumes in the second and third
quarters are generally not materially impacted by average weather due
to the seasonality of U.S. refined fuels distributions operations.
Average U.S. refined fuels sales margins of 4.9 cents per litre
increased from 4.6 cents per litre in the prior year quarter. The
increase in sales margins is primarily due to maintaining pricing
levels during a decreasing supply cost environment, favourable sales
mix and the impact of discontinuing lower margins sales contracts.
 
U.S. Refined Fuels Distribution Sales Volumes

 
Volumes by End-Use Application(1)      Volumes by Region (2)                
---------------------------------------------------------------------------- 
Three months ended September 30,       Three months ended September 30,
(millions of                           (millions of                         
litres)                2012      2011  litres)                2012      2011
---------------------------------------------------------------------------- 
Northeast United                     
Residential              23        27  States                  335       344
Commercial              164       183                                       
Automotive              148       134                                       
---------------------------------------------------------------------------- 
335       344                          335       344
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Volumes by End-Use Application(1)      Volumes by Region (2)                
---------------------------------------------------------------------------- 
Nine months ended September 30,        Nine months ended September 30,
(millions of                           (millions of                         
litres)                2012      2011  litres)                2012      2011
---------------------------------------------------------------------------- 
Northeast United                     
Residential             186       246  States                1,170     1,300
Commercial              564       662                                       
Automotive              420       393                                       
---------------------------------------------------------------------------- 
1,170     1,300                        1,170     1,300
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
(1) Volume: Volume of heating oil, propane, diesel and gasoline sold         
(millions of litres).                                                   
(2) Regions: Northeast United States region consists of Pennsylvania,        
Connecticut, New York, and Rhode Island.                                 


 
Other Services 
 
Other services gross profit was $9.7 million in the third quarter and
consistent with the prior year quarter.
 
Supply Portfolio Management 
 
Supply portfolio management gross profits were $3.9 million in the
third quarter, an increase of $2.0 million from the prior year
quarter due to increased market opportunities and favourable
settlements on fixed priced sales.
 
Fixed-Price Energy Services
 
Fixed-Price Energy Services Gross Profit 

 
---------------------------------------------------------------------------- 
Three months ended            Three months ended 
September 30, 2012            September 30, 2011
(millions of                                                                
 dollars except                                                             
 volume and per    Gross                         Gross                      
 unit amounts)    Profit    Volume    Per Unit  Profit    Volume    Per Unit
----------------------------------------------------------------------------
Natural Gas (1)                         126.1                         152.9  
5.8    4.6 GJ    cents/GJ     7.8    5.1 GJ    cents/GJ
Electricity (2)                          0.90                          1.00  
2.2 244.9 KWh   cents/KWh     1.7 176.5 KWh   cents/KWh
----------------------------------------------------------------------------
Tot
al                8.0                           9.5                      
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
---------------------------------------------------------------------------- 
Nine months ended             Nine months ended 
September 30, 2012            September 30, 2011
(millions of                                                                
 dollars except                                                             
 volume and per    Gross                         Gross                      
 unit amounts)    Profit    Volume    Per Unit  Profit    Volume    Per Unit
----------------------------------------------------------------------------
Natural Gas (1)                         125.7                         137.7  
17.6   14.0 GJ    cents/GJ    22.3   16.2 GJ    cents/GJ
Electricity (2)                          1.10                          1.02  
6.8 616.8 KWh   cents/KWh     4.5 439.7 KWh   cents/KWh
----------------------------------------------------------------------------
Total               24.4                          26.8                      
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
(1) Natural gas volumes and per unit amounts are expressed in millions of    
gigajoules (GJ).                                                        
(2) Electricity volumes and per unit amounts are expressed in millions of    
kilowatt hours (KWh).                                                    


 
Fixed-price energy services gross profit was $8.0 million in the
third quarter, a decrease of $1.5 million (16%) from $9.5 million in
the prior year quarter. Natural gas gross profit was $5.8 million, a
decrease of $2.0 million from the prior year quarter due to lower
gross margins and sales volumes. Gross profit per unit was 126.1
cents per gigajoule (GJ), a decrease of 26.8 cents per GJ (18%) from
the prior year quarter. The decrease in natural gas gross margin was
due to sales mix as the existing customer base contains a lower
proportion of higher margin residential customers. Sales volumes of
natural gas were 4.6 million GJ, 0.5 million GJ (10%) lower than the
prior year quarter due to a continued decline in residential volumes
and slower customer aggregation as a result of continued historically
low system price for natural gas. Electricity gross profit in the
third quarter of 2012 was $2.2 million, an increase of $0.5 million
or 29% from the prior year quarter due to the aggregation of
additional commercial customers in the Ontario market, aggregation of
additional residential customers in Pennsylvania and increased
customer electricity usage.
 
Operating costs 
 
Cash operating and administrative costs were $72.1 million in third
quarter of 2012, a decrease of $2.1 million or 3% from the prior year
quarter. The decrease in expenses was primarily due to cost reduction
programs at Canadian Propane Distribution and U.S. Refined Fuels. 
 
Outlook 
 
Superior expects business conditions in 2013 and the last quarter of
2012 for its Energy Services segment to be similar to year-to-date
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 the business initiative activities noted
below. 
 
Initiatives to improve results in the Energy Services business
continued during the third quarter in conjunction with Superior's
goal for each of its businesses to become best in class. Business
improvement projects for 2012/2013 will be focused on: a) improving
customer service levels, b) improving overall logistics and
procurement functions, c) enhancing the management of margins through
intelligent pricing, d) working capital management, and e) improving
existing and implementing new technologies to facilitate improvements
to the business.
 
In addition to the significant assumptions detailed above, refer to
"Risk Factors to Superior" for a detailed review of significant
business risks affecting the Energy Services' businesses. 
 
Specialty Chemicals 
 
Specialty Chemicals' condensed operating results for 2012 and 2011
are provided in the following table.

 
----------------------------------------------------------------------------
(millions of dollars                                                        
 except per metric           Three months ended           Nine months ended 
 tonne (MT) amounts)              September 30,               September 30,  
2012        2011         2012          2011     
---------------------------------------------------------------------------- 
$ per MT    $ per MT     $ per MT      $ per MT   
Chemical Revenue(1)     132.6   686 134.2   681   403.1   706   390.7   668 
Chemical Cost of Sales                                                      
 (1)                    (59.8) (309)(73.4) (372) (207.8) (364) (219.0) (374)
----------------------------------------------------------------------------
Chemical Gross Profit    72.8   377  60.8   309   195.3   342   171.7   294 
Less: Cash operating                                                        
 and administrative                                                         
 costs(1)               (31.3) (162)(30.6) (155)  (96.9) (170)  (91.0) (156)
----------------------------------------------------------------------------
EBITDA from operations   41.5   215  30.2   154    98.4   172    80.7   138 
Chemical volumes sold                                                       
 (thousands of MTs)          193        197          571           585      
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
(1) In order to better reflect the results of its operations, Superior has   
reclassified certain amounts for purposes of this MD&A related to        
derivative financial instruments, non-cash amortization and foreign      
currency translation losses/gains related to U.S.-denominated working    
capital. See "Reconciliation of Divisional Segmented Revenue and Cost of 
Sales to EBITDA" for detailed amounts.                                   


 
Chemical revenue for the third quarter of $132.6 million was $1.6
million or 1% lower than the prior year quarter primarily due to
foreign exchange losses on the translation of U.S. denominated net
working capital offset in part by slightly higher sales volumes for
Chloralkali/potassium products. Third quarter gross profit of $72.8
million was $12.0 million higher than the prior year quarter due to
increased sodium chlorate gross profits and the one-time favourable
net contribution from the settlement payment received from
TransCanada during August of 2012 (see 'Settlement" below for further
details). Sodium chlorate gross profits (excluding the Settlement)
were higher than the prior year quarter due to increased realized
pricing on contract renewals and lower electrical power costs at some
production facilities offset in part by lower sales volumes. Sod
ium
chlorate sales volumes decreased by 4,000 tonnes or 4% compared to
the prior year quarter due to lower offshore customer demand.
Chloralkali/potassium products gross profits were modestly lower than
the prior year quarter as weaker average prices, particularly for
chlorine, more than offset a slight increase in sales volumes.
 
Cash operating and administrative costs of $31.3 million were $0.7
million or 2% higher than the prior year quarter due to increased
employee costs and general inflationary increases.
 
Settlement 
 
During August 2012, Specialty Chemicals received a payment of $15.8
million from TransCanada Energy Ltd., a subsidiary of TransCanada, in
connection with the arbitration ruling related to the Sundance Power
Purchase Agreement (PPA) between TransAlta Corporation and
TransCanada. The payment resulted from the Electrical Sales Agreement
(ESA) between TransCanada and Superior whereby TransCanada supplies
Superior with fixed-priced energy from the PPA. A one-time gain of
$12.5 million, representing the payment net of certain settlement
costs, is recorded in cost of goods sold. 
 
Major Capital Projects 
 
As previously announced in the first quarter of 2012, Superior has
approved an $18 million expansion of the hydrochloric acid production
capacity of the Port Edwards, Wisconsin chloralkali facility. The
existing capacity of 110,000 wet metric tonnes (WMT), or 36,000 dry
metric tonnes, will increase to approximately 220,000 WMT upon
completion of the expansion. The project will be completed through
2012 and 2013 with commercial production expected in the second
quarter of 2014, a total of $1.8 million has been spent on the
expansion project. Upon completion of both projects, Superior will
have total hydrochloric acid production capacity of 360,000 WMT. 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.
 
Superior's Board of Directors has approved a $25 million expansion of
the hydrochloric acid production capacity at the Saskatoon,
Saskatchewan chloralkali facility. The existing capacity of 70,000
wet metric tonnes (WMT), or 24,500 dry metric tonnes, will increase
to approximately 140,000 WMT upon completion of the expansion. The
project will be completed through 2013 and 2014 with commercial
production expected in the fourth quarter of 2014.
 
Outlook 
 
Superior expects business conditions in 2013 and for the last quarter
of 2012 for its Specialty Chemicals business will be similar to
year-to-date 2012. EBITDA from operations, excluding the impact of
the $12.5 million one-time payment from TransCanada, is anticipated
to be modestly higher in 2013 due to improved performance of the
chloralkali product segment due to higher gross profits from
hydrochloric acid and modestly higher selling prices for caustic
soda, which will more than offset reduced pricing for chlorine.
Superior continues to see a stable market for sodium chlorate as a
result of the current market for pulp. Superior also expects a stable
market for chloralkali sales volumes and pricing as North American
supply demand fundamentals continue to be balanced. The market for
chloralkali continues to be supported by low natural gas prices.
 
In addition to the significant assumptions detailed above, refer to
"Risk Factors to Superior" for a detailed review of the significant
business risks affecting Superior's Specialty Chemicals' segment. 
 
Construction Products Distribution 
 
Construction Products Distribution's condensed operating results for
2012 and 2011 are provided in the following table. 

 
---------------------------------------------------------------------------- 
Three months ended   Nine months ended  
September 30,       September 30, 
(millions of dollars)                    2012      2011      2012      2011 
----------------------------------------------------------------------------
Revenue                                                                     
  Gypsum Specialty Distribution                                              
(GSD) revenue                        141.0     131.2     395.5     364.3 
  Commercial and Industrial                                                  
Insulation (C&I) revenue              60.8      58.1     190.2     169.4 
Cost of sales                                                               
  GSD cost of sales                    (110.2)   (101.4)   (309.1)   (282.5)
  C&I cost of sales                     (44.9)    (43.2)   (140.3)   (124.2)
----------------------------------------------------------------------------
Gross profit                             46.7      44.7     136.3     127.0 
Less: Cash operating and                                                    
 administrative costs                   (43.1)    (37.6)   (123.3)   (109.7)
----------------------------------------------------------------------------
EBITDA from operations                    3.6       7.1      13.0      17.3 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
(1) In order to better reflect the results of its operations, Superior has   
reclassified certain amounts for purposes of this MD&A to present its    
results as if it had accounted for various transactions as accounting    
hedges. See "Reconciliation of Divisional Segmented Revenue and Cost of  
Sales to EBITDA" for detailed amounts.                                   


 
GSD and C&I revenues of $201.8 million for the third quarter of 2012
were $12.5 million (7%) higher than the prior year quarter. GSD
revenue increased due to higher demand and sales volumes in some
Canadian and U.S. based regions and from the expansion of the GSD
product line into existing U.S. based branches. C&I revenues
increased slightly from the prior year quarter due to targeted sale
efforts and higher demand offset in part by delays in Gulf Coast and
international project activity. 
 
Gross profits of $46.7 million in the third quarter were $2.0 million
higher than the prior year quarter primarily due to the impact of
higher revenues and higher C&I gross margins offset in part by lower
GSD gross margins in Canada. The increase in revenue was due to sales
volumes and price increases. C&I sales margins increased due to a
more favourable sales mix. GSD gross margins decreased due to
manufacturer price increases and difficulty passing those on to
customers.
 
Cash operating and administration costs were $43.1 million in the
third quarter, an increase of $5.5 million or 15% from the prior year
quarter. The increase in operating costs was primarily due to higher
costs associated with increased sales volumes, higher fuel costs and
restructuring charges of $2.7 million related to the closing of
Ontario based branches and consolidation of several British Columbia
based branches. These were partially offset by savings resulting from
branches that were closed earlier in the year.
 
Outlook 
 
Superior expects business conditions in 2013 and for the remainder of
2012 for its Construction Products Distribution business to be
similar to year-to-date 2012 with slightly improving conditions in
the U.S. EBITDA from operations is anticipated to be higher in 2013
than 2012 due in part to the absence of restructuring costs incurred
in 2012 and the benefit from the business initiative activities noted
below. Superior continues to see difficult market conditions in both
the residential and commercial segments in both Canada and the U.S.
Superior does not anticipate significant improvements in the end-use
markets in the near term.
 
The Construction Products Distribution business continues to review
all aspects of operations to optimize its cost structure and improve
 
gross margins. Superior anticipates that an additional $2.5 to $3.0
million in restructuring costs will be incurred in 2012 due to the
ongoing reorganization or closure of additional branches. A total of
15 branches will have been closed or restructured during 2011 and
2012 in total at an anticipated cost of $6.5 to $7.0 million.
Restructuring activities are being actively managed to minimize costs
and the impact on customers.
 
Initiatives to improve results in the Construction Products
Distribution business continued during the third quarter. Business
improvement projects for 2012/2013 will be focused on: a) assessment
of overall logistics and existing branch network, b) review of supply
chain management including procurement and transportation, c) review
of product pricing, and d) working capital management.
 
In addition to the Construction Products Distribution segment's
significant assumptions detailed above, refer to "Risk Factors to
Superior" for a detailed review of the significant business risks
affecting Superior's Construction Products Distribution segment. 
 
See press release "Superior Plus Corp. Provides Update on Review of
Conversion Transaction and Settlement Related to Power Purchase
Agreement with TransCanada" dated September 20, 2012, for additional
details on this matter including the potential financial implications
of a potential reassessment.
 
Consolidated Capital Expenditure Summary

 
---------------------------------------------------------------------------- 
Three months ended   Nine months ended  
September 30,       September 30, 
(millions of dollars)                    2012      2011      2012      2011 
----------------------------------------------------------------------------
Efficiency, process improvement and                                         
 growth related                           4.4       3.5       6.7      10.9 
Other capital                             4.1       5.5      15.0      12.7 
---------------------------------------------------------------------------- 
8.5       9.0      21.7      23.6 
Other acquisitions                        5.5       8.8       5.5      13.7 
Proceeds on disposition of capital       (0.4)     (0.6)     (4.1)     (2.2)
----------------------------------------------------------------------------
Total net capital expenditures           13.6      17.2      23.1      35.1 
Investment in finance leases              1.5       3.9       5.3       8.1 
----------------------------------------------------------------------------
Total expenditures                       15.1      21.1      28.4      43.2 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 


 
Efficiency, process improvement and growth related expenditures were
$4.4 million in the third quarter compared to $3.5 million in the
prior year quarter. These were incurred primarily in relation to
Energy Services' purchases of rental assets and truck related
expenditures. Other capital expenditures were $4.1 million in the
third quarter compared to $5.5 million in the prior year quarter,
consisting primarily of required maintenance and general capital
across all of Superior's segments. Proceeds on the disposal of
capital were $0.4 million in the third quarter and consisted of
Superior's disposition of surplus tanks, cylinders and other assets.
The Energy Services segment completed the acquisition of the assets
of a small regional propane distribution business during July for
$5.5 million excluding $1.0 million in net working capital. During
the third quarter Superior entered into new leases with capital
equivalent value of $1.5 million primarily related to delivery
vehicles for the Energy Services and Construction Products
Distribution segments.
 
Corporate and Interest Costs 
 
Corporate costs for the third quarter were $5.3 million, compared to
$1.5 million in the prior year quarter. The increase in corporate
costs was primarily due to higher long term incentive costs as a
result of an increase in Superior's share price and the year over
year impact of the long term incentive cost recovery recorded in the
prior year quarter and higher employee costs and professional fees.
 
Interest expense on borrowings and finance lease obligations for the
third quarter was $9.5 million compared to $10.6 million in the prior
year quarter. The decrease of $1.1 million in interest expense was
due to a lower average debt levels as a result of lower commodity
prices which reduced the net working capital requirements of the
Energy Services segment and reduction in accounts receivable balances
within the Canadian propane business. See "Liquidity and Capital
Resources" discussion for further details on the change in average
debt levels.
 
Interest on Superior's convertible unsecured subordinated debentures
("Debentures" which includes all series of convertible unsecured
subordinated debentures) for the third quarter was $8.8 million and
lower than the prior year quarter of $9.8 million. The decrease in
debenture interest costs was due to the redemptions of Superior's
5.75% convertible subordinated debentures due December 31, 2012 on
December 12, 2011 and August 1, 2012.
 
Taxation 
 
Total income tax expense for the third quarter was $7.6 million and
consists of $0.3 million in cash income tax expense and $7.3 million
in deferred income tax expense, compared to a total income tax
recovery of $19.7 million in the prior year quarter, which consisted
of $0.1 million in cash income tax recovery and a $19.6 million
deferred income tax recovery. 
 
Cash income tax expense for the third quarter was $0.3 million and
consisted of income tax expense in the U.S. of $0.3 million (2011 Q3
- $0.1 million of U.S. cash tax recovery). Deferred income tax
expense for the third quarter was $7.3 million (2011 Q3 - $19.6
million deferred income tax recovery), resulting in a corresponding
net deferred income tax asset of $303.2 million as at September 30,
2012. Deferred income tax expense for the third quarter due to higher
net earnings in the third quarter of 2012 as the prior year quarter
included an impairment charge of $78.0 million which resulted in an
income tax recovery.
 
Update on Review of Conversion Transaction 
 
Since the beginning of 2010, the Canada Revenue Agency ("CRA") has
requested information relating to Superior's conversion transaction
which occurred on December 31, 2008 (the "Conversion") and Superior
has responded to such requests and engaged in extensive discussions,
including detailed settlement discussions, with representatives of
the CRA. The CRA has now advised Superior that the CRA believes it
does not have authority to settle the matter in this context. If the
CRA does not change its current position, the CRA has advised
Superior that it should expect that the matter will be directed back
to the local tax office which is expected, in the normal course, to
issue a proposal letter challenging the tax consequences of the
Conversion. During the discussions, the CRA indicated that the
general anti-avoidance rule of the Income Tax Act (Canada) is
available to the CRA as a basis upon which to challenge the tax
consequences of the Conversion. 
 
Based on these developments, unless the CRA subsequently determines
it has the authority to settle this matter, Superior expects to
receive a proposal letter and thereafter a notice of reassessment
challenging the tax consequences of the Conversion. 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 if and when a proposal letter or notice of
reassessment is received from the CRA. Superior strongly believes
that the general anti-avoidance rule does not apply to the Conversion
and intends to file its future tax re
turns on a basis consistent with
its view of the outcome of the Conversion.
 
If Superior receives such a reassessment, in order to appeal it,
Superior will be required to make a payment of 50% of the taxes the
CRA claims are owed for such years. Based on Superior's 2009, 2010
and 2011 taxation years, that 50% amount is approximately $15
million. Superior would also be required to make a payment of 50% of
the taxes the CRA claims are owed in any future tax year if the CRA
issues a similar notice of reassessment for such years and Superior
appeals it. If Superior is ultimately successful in defending its
position, such payments plus applicable interest, will be refunded to
Superior. If the CRA is successful, Superior will be required to pay
the balance of the taxes claimed plus applicable interest and
penalties. 
 
Superior's 2012 and 2013 financial outlooks as provided this MD&A
does not include the impact of a potential reassessment as any
interim tax payments made by Superior will be recorded to the balance
sheet and will not impact either AOCF or net earnings.
 
If the tax pools from the Conversion were not available to Superior,
the estimated impact would be an increase to cash income taxes of
approximately $0.14 per share in fiscal 2012. Based on the midpoint
of Superior's current 2013 financial outlook of AOCF per share of
$1.80, if the tax pools from the Conversion were not available to
Superior, the impact would be an increase to cash income taxes of
approximately $0.15 per share. As previously stated, Superior intends
to file its future income tax returns on a basis consistent with the
assumption that any Conversion related tax basis is fully deductible.
 
Financial Outlooks 
 
Superior's outlook for cash flow from operations for 2012 is expected
to be between $1.45 and $1.80 per share, consistent with Superior's
financial outlook as provided in the 2012 second quarter Management's
Discussion and Analysis. Based on year-to-date results, Superior
anticipates its 2012 results will be at the high end of this guidance
range. Superior's outlook for cash flow from operations for 2013 is
expected to be between $1.65 and $1.95 per share, previously Superior
had not disclosed its expectations for 2013. Superior's consolidated
adjusted operating cash flow outlook is dependent on the operating
results of its three operating segments. 
 
In addition to the operating results of Superior's three operating
segments, significant assumptions underlying Superior's current 2012
and 2013 outlooks are:

 
--  Current economic growth rates in Canada and the U.S. are expected to 
prevail for the remainder of 2012 and 2013; 
--  Superior is expected to continue to attract capital and obtain financing 
on acceptable terms; 
--  The foreign currency exchange rate between the Canadian and U.S. dollar 
is expected to average par for the remainder of 2012 and 2013 on all 
unhedged foreign currency transactions; 
--  Financial and physical counterparties are expected to continue 
fulfilling their obligations to Superior; 
--  Regulatory authorities are not expected to impose any new regulations 
impacting Superior; 
--  Superior's current average interest rates on floating-rate debt is 
expected to remain consistent for the remainder of 2012 and 2013; and 
--  Canadian and U.S. based cash taxes are expected to be minimal for the 
remainder of 2012 and 2013 based on existing statutory income tax rates. 


 
Energy Services

 
--  Average temperatures across Canada and the Northeast U.S. are expected 
to be consistent with the recent five-year average for the remainder of 
2012 and 2013; 
--  Total propane and U.S. refined fuels-related sales volumes for the 
remainder of 2012 are anticipated to increase due to marketing 
initiatives and colder weather as compared to the prior year quarter. 
Total annual sales volumes are expected to increase in 2013 due to the 
assumption that weather will be consistent with the 5-year average; 
--  Wholesale propane, and U.S. refined fuels-related prices are not 
anticipated to significantly impact demand for propane, refined fuels 
and related services; 
--  Supply portfolio management market opportunities are expected to remain 
strong for the remainder of 2012 although growth is expected to be 
moderate. Results in 2013 are expected to increase as compared to fiscal 
2012 due to capital expenditures which will enable management to further 
leverage market opportunities and higher sales volumes; and 
--  Fixed price energy services is expected to be able to access sales 
channel agents on acceptable contract terms and expects gross profit are 
expected to moderately decrease during the remainder of 2012 and 2013. 
The decrease in gross profit is primarily related to lower natural gas 
gross margins as transportation related gross profits and contribution 
from residential customer renewals continue to decrease. Total new 
customer aggregation volumes are expected to continue declining as the 
system price for natural gas remains low.  


 
Specialty Chemicals

 
--  Supply and demand fundamentals for sodium chlorate are expected to 
remain balanced for the remainder of 2012. Pricing is expected to remain 
consistent or slightly improve due to contract renewals completed during 
the first half of 2012. Sales volumes, pricing and margins in 2013 are 
expected to be consistent with 2012; and 
--  Chloralkali revenues, gross profits and sales volumes for the remainder 
of 2012 are expected to decline as market conditions are expected to 
remain challenging for the remainder of the year. Sales volumes, pricing 
and margins are expected to increase in 2013 due to improved 
contribution from both hydrochloric acid and caustic soda.  


 
Construction Products Distribution

 
--  GSD sales revenue from Canada is expected to increase during the 
remainder of 2012 and 2013 due to the continued success from the 
introduction of new products and modest market improvements in some 
regions. GSD sales revenue from the United States is expected to 
increase during the remainder of 2012 and 2013 due to continued 
expansion of existing product lines into U.S. branches, emphasis on 
specific product opportunities, pricing initiatives and market 
improvements in some regions. C&I sales revenue is expected to increase 
in both the remainder of 2012 and 2013 due to emphasis on specific 
product opportunities, pricing initiatives and commencement of major 
Gulf Coast and international projects that have been delayed; 
--  Sales margins for both GSD and C&I are expected to decrease slightly 
during the remainder of 2012 due to sales mix, competitive pressures, 
market pricing dynamics and general market conditions. Sales margins for 
2013 are expected to be comparable to 2012; and 
--  Construction Products Distribution has performed a detailed review of 
its existing operations and expects to reorganize 15 branches before the 
end of fiscal 2012 as part of its restructuring efforts. Benefits from 
these restructurings have already reduced operating costs and Superior 
expects to further benefit from the operational restructuring and 
business initiatives in 2013.  


 
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 December 31, 2012 will be in the range of 4.2X to 4.4X,
slightly lower than the range provided in Superior's second quarter
MD&A.
 
Superior's anticipated total debt and total debt to EBITDA leverage
ratio as at December 31, 2013, based on Superior's 2013 financial
outlook and Superior's 2012 third quarter year-to-date results, is
detailed in the chart below.
 
Debt Management Summary

 
---------------------------------------------------------------------------- 
(Millions of  
(Per Share)       dollars)
----------------------------------------------------------------------------
2013 financial outlook AOCF per share - mid-                                
 point (1)                                             $1.80          204.1 
Maintenance capital expenditures, net                  (0.21)         (24.0)
Capital lease obligation repayments                    (0.15)         (16.6)
----------------------------------------------------------------------------
Cash flow available for dividends and debt                                  
 repayment before growth capital                       $1.44          163.5 
Expansion of Port Edward's and Saskatoon                                    
 facilities and one-time environmental costs           (0.30)         (34.0)
Other growth capital expenditures                      (0.19)         (21.0)
Proceeds from dividend reinvestment program             0.12           13.6 
----------------------------------------------------------------------------
Estimated 2013 free cash flow available for                                 
 dividend and debt repayment                           $1.07          122.1 
Dividends (annualized)                                $(0.60)         (68.1)
----------------------------------------------------------------------------
Total estimated debt repayment (including year                              
 to date actuals)                                      $0.47           54.0 
Estimated total debt to EBITDA as at December                               
 31, 2013                                        3.8X - 4.0X    3.8X - 4.0X 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Dividend per share (annualized)                        $0.60           68.1 
Calculated payout ratio after all capital                                   
 expenditures                                             56%            56%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See "Financial Outlooks" for additional details including assumptions,   
definitions and risk factors.                                            


 
In addition to Superior's significant assumptions detailed above,
refer to the section "Risk Factors to Superior" for a detailed review
of Superior's significant business risks. 
 
Liquidity and Capital Resources 
 
Superior's revolving syndicated bank facility (Credit Facility), term
loans and finance lease obligations (collectively "Borrowings")
before deferred financing fees totaled $590.3 million as at September
30, 2012, a decrease of $171.8 million from December 31, 2011. The
decrease in Borrowings was primarily due to lower net working capital
funding requirements as a result of the seasonality of the Energy
Services segment and proceeds from the DRIP offset in part by the
$49.9 million redemption of 5.75% convertible unsecured subordinated
debentures, finance lease repayments, dividends payments and net
capital expenditures.
 
On March 28, 2012, Superior completed an extension of its Credit
Facility with eight lenders and reduced the size of the facility from
$615 million to $570 million. The Credit Facility matures on June 27,
2015 and can be expanded up to $750 million. The Credit Facility was
reduced to reflect Superior's anticipated credit requirements as a
result of Superior's ongoing debt reduction plan. Financial covenant
ratios were unchanged with Consolidated Secured Debt to Consolidated
EBITDA ratio and Consolidated Debt to Consolidated EBITDA ratio of
3.0x and 5.0x, respectively. See "Summary of Cash Flows" for details
on Superior's sources and uses of cash. 
 
As at September 30, 2012, Debentures (before deferred issue costs)
issued by Superior totaled $541.5 million which was $49.9 million
lower than the balance outstanding as at December 31, 2011 due to the
redemption of the 5.75% convertible unsecured subordinated debentures
during the third quarter, see Redemption below for further details.
See Note 12 to the Unaudited Condensed Consolidated Financial
Statements for additional details on Superior's Debentures. 
 
Redemption 
 
On August 1, 2012, Superior completed the previously announced
redemption of the remaining $49.9 million principal amount of its
previously issued 5.75% convertible subordinated debentures (2012
Debentures) due December 31, 2012. Superior used funds from its
credit facility to fund the redemption of the 2012 Debentures. The
5.75% convertible subordinated debentures were, in accordance with
their terms, redeemed at the redemption price of $1,000 in cash per
$1,000 principal amount of 2012 Debentures plus accrued and unpaid
interest thereon up to the redemption date of August 1, 2012, being
$1,005.0411 per $1,000 principal amount of 2012 Debentures. 
 
As at September 30, 2012, approximately $287.7 million was available
under the Credit Facility which Superior considers sufficient to meet
its net working capital funding requirements, expected capital
expenditures and refinancing requirements. 
 
Consolidated net working capital was $218.3 million as at September
30, 2012, a decrease of $182.6 million from net working capital of
$400.9 million as at December 31, 2011. The decrease in net working
capital was primarily due to increased cash collections of accounts
receivable within the Canadian propane distribution segment and the
impact of lower inventory levels and commodity prices on the Energy
Services segment. Also contributing to the decrease in net working
capital was higher accounts payable with the Construction Products
Distribution segment due to payment term initiatives and higher
accruals at corporate due to the timing of interest payments.
Superior's net working capital requirements are financed from
revolving term bank credit facilities.
 
Proceeds received from the DRIP were $3.6 million for the three
months ended September 30, 2012 (three months ended September 30,
2011 $7.0 million), a decrease of $3.4 million from the year prior
quarter due to a reduction in Superior's dividend rate during 2011.
Proceeds received from the DRIP were $10.6 million for the nine
months ended September 30, 2012 as compared to 23.4 million during
the nine months ended September 30, 2011.
 
As at September 30, 2012, when calculated in accordance with the
Credit Facility, the Consolidated Secured Debt to Compliance EBITDA
ratio was 1.6 to 1.0 (December 31, 2011 - 2.3 to 1.0) and the
Consolidated Debt to Compliance EBITDA ratio was 2.2 to 1.0 (December
31, 2011 - 2.9 to 1.0). For both of these covenants all outstanding
Debentures are not included. These ratios are within the requirements
contained in Superior's debt covenants. In accordance with the Credit
Facility, Superior must maintain a Consolidated Secured Debt to
Compliance EBITDA ratio of not more than 3.0 to 1.0 and not more than
3.5 to 1.0 as a result of acquisitions. In addition, Superior must
maintain a Consolidated Debt to Compliance EBITDA ratio of not more
than 5.0 to 1.0, excluding Debentures. Also, Superior is subject to
several distribution tests and the most restrictive stipulates that
Distributions (including Debenture holders and related payments)
cannot exceed Compliance EBITDA less cash income taxes, plus $35.0
million on a trailing twelve month rolling basis. On a twelve month
rolling basis as at September 30, 2012, Superior's available
distribution amount was $65.0 million under the above noted
distribution test.
 
On March 30, 2012, Standard and Poor's confirmed both Superior and
Superior LP's long-term corporate credit rating as BB- and the
secured debt rating to BB+. The outlook rating for both Superior and
Superior LP remains stable and 
the credit rating on Superior's
unsecured debt is unchanged at BB-. On September 12, 2011, DBRS
lowered Superior LP's senior secured rating to BB (high) from
BBB(low) and lowered Superior LP's senior unsecured rating to BB
(low) from BB (high). The trend for both ratings has been changed to
stable from negative.
 
As at September 30, 2012, Superior had an estimated defined benefit
pension solvency deficiency of approximately $38.7 million (December
31, 2011 - $36.3 million) and a going concern solvency deficiency of
approximately $13.2 million (December 31, 2011 - $16.6 million).
Funding requirements required by applicable pension legislation are
based upon going concern and solvency actuarial assumptions. These
assumptions differ from the going concern actuarial assumptions used
in Superior's financial statements. Superior has sufficient liquidity
through existing revolving term bank credits and anticipated future
operating cash flow to fund this deficiency over the prescribed
funding period. 
 
In the normal course of business, Superior is subject to lawsuits and
claims. Superior believes the resolution of these matters will not
have a material adverse effect, individually or in the aggregate, on
Superior's liquidity, consolidated financial position or results of
operations. Superior records costs as they are incurred or when they
become determinable. 
 
Shareholders' Capital 
 
The weighted average number of shares outstanding during the third
quarter was 112.2 million shares, an increase of 2.7 million shares
compared to the prior year quarter due to the issuance of 2,453,345
common shares over the past twelve months and the resulting impact on
weighted average number of shares outstanding. The following table
provides a detailed breakdown of the common shares issued over the
last twelve months:

 
---------------------------------------------------------------------------- 
Average                  
Issuance Issued Number of 
Price per    Common Shares 
Closing Date        Share       (Millions)
----------------------------------------------------------------------------
As at September 30, 2011                                               109.9
  Issuance of common shares   October 15, 2011                               
under Superior's DRIP               through                               
September 15,                               
2012        $6.72              2.5
----------------------------------------------------------------------------
As at September 30, 2012                                               112.4
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 


 
As at November 1, 2012, September 30, 2012 and December 31, 2011, the
following common shares and securities convertible into common shares
were outstanding: 

  
November 1,       September 30,       December 31,    
2012               2012               2011       
(millions)         Convertible        Convertible        Convertible         
Securities  Shares Securities  Shares Securities  Shares
----------------------------------------------------------------------------
Common shares                                                               
 outstanding (1)                 112.0              111.9              110.8
5.75% Debentures                                                            
 (2)                         -       -          -       -      $49.9     1.4
5.85% Debentures                                                            
 (3)                     $75.0     2.4      $75.0     2.4      $75.0     2.4
7.50% Debentures                                                            
 (4)                     $69.0     5.3      $69.0     5.3      $69.0     5.3
5.75% Debentures                                                            
 (5)                    $172.5     9.1     $172.5     9.1     $172.5     9.1
6.00% Debentures                                                            
 (6)                    $150.0     9.9     $150.0     9.9     $150.0     9.9
7.50% Debentures                                                            
 (7)                     $75.0     6.6      $75.0     6.6      $75.0     6.6
----------------------------------------------------------------------------
Shares outstanding                                                          
 and issuableupon                                                           
 conversion of                                                              
 Debentures                      146.7              146.6              145.5
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
(1) Common shares outstanding as at November 1, 2012, includes 140,455       
common shares issued under Superior's DRIP program during the month of   
October.                                                                
(2) Convertible at $36.00 per share.                                        
(3) Convertible at $31.25 per share.                                        
(4) Convertible at $13.10 per share.                                        
(5) Convertible at $19.00 per share.                                        
(6) Convertible at $15.10 per share.                                        
(7) Convertible at $11.35 per share.                                         


 
Dividends Paid to Shareholders 
 
Dividends paid to Superior's shareholders are dependent on its cash
flow from operating activities with consideration for changes in
working capital requirements, investing activities and financing
activities of Superior. See "Summary of Adjusted Operating Cash Flow"
and "Summary of Cash Flows" for additional details on the sources and
uses of Superior's cash flow. 
 
Dividends paid to shareholders in the third quarter were $16.8
million (before DRIP proceeds of $3.6 million) or $0.15 per share, a
decrease of $16.0 million as compared to the third quarter of 2011
due to the revision of Superior's dividend rate to $0.05 per share
per month effective with the November 2011 dividend. On November 2,
2011, Superior announced that the monthly dividend has been reduced
to $0.05 per share or $0.60 per share on an annualized basis which
decreased from the prior level of $0.10 per share per month or $1.20
per share on an annualized basis. Superior has made the determination
that it is prudent to accelerate its debt reduction plan by reducing
its monthly dividend. See Superior's "Debt Management and Dividend
Payout Ratio" section for further details. Dividends to shareholders
are declared at the discretion of the board of directors of Superior.
 
 
Superior's primary sources and uses of cash are detailed below:
 
Summary of Cash Flows (1)

 
---------------------------------------------------------------------------- 
Three months ended   Nine months ended  
September 30,       September 30, 
(millions of dollars)                    2012      2011      2012      2011 
---------------------------------------------------------------------------- 
Cash flows from operating activities     43.8     109.2     281.4     230.9  
Investing activities:                                                       
  Purchase of property, plant and          
equipment (2)                         (8.5)     (9.0)    (21.7)    (23.6)
  Proceeds on disposal of property,                                          
plant and equipment                    0.4       0.6       4.1       2.2 
  Other acquisitions                     (5.5)     (8.8)     (5.5)    (13.7)
----------------------------------------------------------------------------
Cash flows used in investing                                                
 activities                             (13.6)    (17.2)    (23.1)    (35.1)
---------------------------------------------------------------------------- 
Financing activities:                                                       
  Net proceeds (repayment) of                                                
borrowings                            33.3     (61.9)   (153.3)      6.9 
  Repayment of finance lease                                                 
obligation                            (4.7)     (2.9)    (12.3)    (10.8)
  Net proceeds (repayment) of                                                
accounts receivable                                                       
securitization program                   -         -         -     (90.1)
  Redemption of the 5.75%                                                    
convertible debentures               (49.9)        -     (49.9)        - 
  Proceeds from the dividend                                                 
reinvestment plan                      3.6       7.0      10.6      23.4 
  Dividends paid to shareholders        (16.8)    (32.8)    (50.2)   (109.1)
----------------------------------------------------------------------------
Cash flows used in financing                                                
 activities                             (34.5)    (90.6)   (255.1)   (179.7)
---------------------------------------------------------------------------- 
----------------------------------------------------------------------------
Net (decrease) increase in cash and                                         
 cash equivalents                        (4.3)      1.4       3.2      16.1 
Cash and cash equivalents, beginning                                        
 of period                               12.5      23.2       5.2       8.9 
Effect of translation of foreign                                            
 denominated cash and cash                                                  
 equivalents                             (0.5)      1.4      (0.7)      1.0 
----------------------------------------------------------------------------
Cash and cash equivalents, end of                                           
 period                                   7.7      26.0       7.7      26.0 
----------------------------------------------------------------------------
(1) See the Consolidated Statement of Cash Flows for additional details.    
(2) See "Consolidated Capital Expenditure Summary" for additional details.   


 
Financial Instruments - Risk Management 
 
Derivative and non-financial derivatives are used by Superior to
manage its exposure to fluctuations in foreign currency exchange
rates, interest rates and commodity prices. Superior assesses the
inherent risks of these instruments by grouping derivative and
non-financial derivatives related to the exposures these instruments
mitigate. Superior's policy is not to use derivative or non-financial
derivative instruments for speculative purposes. Superior does not
formally designate its derivatives as hedges and, as a result,
Superior does not apply hedge accounting and is required to designate
its derivatives and non-financial derivatives as held for trading.
Refer to Superior's 2011 Annual MD&A for further details on financial
instrument risk management.
 
Overall Superior has hedged approximately 100% of its estimated US
dollar exposure for the remainder of 2012 and approximately 90% for
2013. The estimated sensitivity on adjusted operating cash flow for
Superior, including divisional US exposures and the impact on
US-denominated debt with respect to a $0.01 change in the Canadian to
United States exchange rate for 2012 is $nil million and 2013 is $0.2
million after giving effect to United States forward contracts for
2012 and 2013, as shown in the table below. Superior's sensitivities
and guidance are based on an anticipated average Canadian to US
dollar foreign currency exchange rate for 2012 and 2013 at par with
the US dollar.

 
----------------------------------------------------------------------------
(US$ millions except                                        2017 and        
 exchange rates)        2012   2013   2014    2015   2016 Thereafter  Total 
----------------------------------------------------------------------------
Energy Services - US$                                                       
 forward sales          15.4   44.0   26.0    26.0      -          -  111.4 
Construction Products                                                       
 Distribution - US$                                                         
 forward sales           6.0   24.0   12.0    12.0      -          -   54.0 
Specialty Chemicals -                                                       
 US$ forward sales      47.0  150.0  118.0   106.0   56.4          -  477.4 
Corporate - US$                                                             
 forward purchases     (36.7) (39.0) (27.0)      -      -          - (102.7)
----------------------------------------------------------------------------
Net US $ forward sales  31.7  179.0  129.0   144.0   56.4          -  540.1 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Energy Services -                                                           
 Average US$ forward                                                        
 sales rate             1.05   1.06   1.01    1.01      -          -   1.03 
Construction Products                                                       
 Distribution -                                                             
 Average US$ forward                                                        
 sales rate             1.06   1.07   1.00    1.00      -          -   1.04 
Specialty Chemicals -                                                       
 US$ forward sales                                                          
 rate                   1.03   1.04   1.03    1.00   1.04          -   1.03 
Corporate - US$                                                             
 forward purchases      1.01   1.01   1.01       -      -          -   1.01 
----------------------------------------------------------------------------
Net average external                                                        
 US$/Cdn$ exchange                                                          
 rate                   1.04   1.05   1.03    1.00   1.04          -   1.03 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 


 
For additional details on Superior's financial instruments, including
the amount and classification of gains and losses recorded in
Superior's first quarter Condensed Consolidated Financial Statements,
summary of fair values, notional balances, effective rates and terms,
and significant assumptions used in the calculation of the fair value
of Superior's financial instruments, see Note 13 to the Unaudited
Condensed Consolidated Financial Statements. 
 
Disclosure Controls and Procedures and Internal Controls Over
Financial Reporting 
 
No changes have been made in Superior's internal control
 over
financial reporting that have materially affected, or are reasonably
likely to materially affect, Superior's internal control over
financial reporting in the quarter ended September 30, 2012.
 
Critical Accounting Policies and Estimates 
 
Superior's Unaudited Condensed Consolidated Financial Statements have
been prepared in accordance with IFRS. The significant accounting
policies are described in the unaudited Condensed Consolidated
Financial Statements for the period ended September 30, 2012. Certain
of these accounting policies, as well as estimates made by management
in applying such policies, are recognized as critical because they
require management to make subjective or complex judgments about
matters that are inherently uncertain. Our critical accounting
estimates relate to the allowance for doubtful accounts, employee
future benefits, future income tax assets and liabilities, the
valuation of derivatives and non-financial derivatives and asset
impairments and the assessment of potential asset retirement
obligations. 
 
Quarterly Financial and Operating Information 

 
----------------------------------------------------------------------------
(millions                                                                   
 of dollars                                                                 
 except per                                                                 
 share              2012                        2011                 2010   
 amounts)          Quarters                   Quarters             Quarters  
----------------------------------------------------------------- 
Third  Second   First  Fourth  Third   Second   First    Fourth 
----------------------------------------------------------------------------
Canadian                                                                    
 propane                                                                    
 sales                                                                      
 volumes                                                                    
 (millions                                                                  
 of litres)   240     255     413     368    239      260     439       372 
U.S.                                                                        
 refined                                                                    
 fuels                                                                      
 sales                                                                      
 volumes                                                                    
 (millions                                                                  
 of litres)   335     363     473     440    344      405     552       499 
Natural gas                                                                 
 sales                                                                      
 volumes                                                                    
 (millions                                                                  
 of GJs)        5       5       5       5      5        6       6         6 
Electricity                                                                 
 sales                                                                      
 volumes                                                                    
 (millions                                                                  
 of KwH)      245     187     185     167    176      146     117       133 
Chemical                                                                    
 sales                                                                      
 volumes                                                                    
 (thousands                                                                 
 of metric                                                                  
 tonnes)      193     190     188     187    197      192     196       193 
Revenues    790.1   834.3 1,065.9 1,043.4  845.0    898.4 1,138.8   1,011.2 
Gross                                                                       
 profit     195.9   184.8   238.1   234.6  178.5    176.0   238.4     224.7 
Net                                                                         
 earnings                                                                   
 (loss)      36.7    13.5    28.7  (231.4)(113.4)     1.1    41.1     (56.0)
Per share,                                                                  
 basic      $0.33   $0.12   $0.26  ($2.10)($1.04)   $0.01   $0.38    ($0.53)
Per share,                                                                  
 diluted    $0.31   $0.12   $0.24  ($2.10)($1.04)   $0.01   $0.34    ($0.53)
Adjusted                                                                    
 operating                                                                  
 cash flow   34.5    29.0    67.4    63.8   23.5     19.8    73.3      62.5 
Per share,                                                                  
 basic and                                                                  
 diluted    $0.31   $0.26   $0.61   $0.58  $0.21    $0.18   $0.68     $0.58 
Net working                                                                 
 capital                                                                    
 (1)                                                                        
 (millions                                                                  
 of                                                                         
 dollars)   218.3   234.4   325.3   377.3  295.0    365.3   416.1     400.9 
----------------------------------------------------------------------------
(1) Net working capital reflects amounts as at the quarter-end and is        
comprised of accounts receivable and inventories, less trade and other   
payables and deferred revenue.                                           


 
Non-IFRS Financial Measures
 
Adjusted Operating Cash Flow 
 
Adjusted operating cash flow 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 to its calculation of adjusted operating cash flow;
these items would generally, but not necessarily, be items of a
non-recurring nature. Adjusted operating cash flow is the main
performance measure used by management and investors to evaluate the
performance of Superior. Readers are cautioned that adjusted
operating cash flow is not a defined performance measure under IFRS
and that adjusted operating cash flow cannot be assured. Superior's
calculation of adjusted operating cash flow may differ from similar
calculations used by comparable entities. Adjusted operating cash
flow 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. 
 
The seasonality of Superior's individual quarterly results must be
assessed in the context of annualized adjusted operating cash flow.
Adjustments recorded by Superior as part of its calculation of
adjusted operating cash flow include, but are not limited to, the
impact of the seasonality of Superior's businesses, principally the
Energy Services 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
expense, which can differ significantly from quarter to quarter.
Adjustments are also made to reclassify the cash flows related to
natural gas and electricity customer contract related costs in a
manner consistent with the income statement recognition of these
costs. Adjusted operating cash flow is reconciled to cash flow from
operating activities on page 13.
 
EBITDA 
 
EBITDA re
presents earnings before taxes, depreciation, amortization,
finance expense and other non-cash expenses, and is used by Superior
to assess its consolidated results and the results of its operating
segments. EBITDA is not a defined performance measure under IFRS.
Superior's calculation of EBITDA may differ from similar calculations
used by comparable entities. EBITDA of Superior's operating segments
may be referred to as EBITDA from operations. Net earnings are
reconciled to EBITDA from operations on page 32.
 
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. See Note 15 to the Unaudited Condensed Consolidated
Financial Statements for a reconciliation of net earnings (loss) to
Compliance EBITDA.
 
Payout Ratio 
 
Payout ratio represents dividends as a percentage of adjusted
operating cash flow less other capital expenditures and is used by
Superior to assess its financial results and leverage. Payout ratio
is not a defined performance measure under IFRS. Superior's
calculation of Payout ratio may differ from similar calculations used
by comparable entities.
 
Reconciliation of Net Earnings (Loss) to EBITDA from Operations (1)
(2) 

 
---------------------------------------------------------------------------- 
Construction 
For the three months ended             Energy       Specialty      Products 
 September 30, 2012                  Services       Chemicals  Distribution 
----------------------------------------------------------------------------
Net earnings                             25.8            28.8           1.7 
Add: Amortization of property,                                              
 plant and equipment and                                                    
 intangible assets                       13.1             1.7           1.7 
  Amortization included in cost                                              
of sales                                 -            10.9             - 
  Losses on the disposition of                                               
property, plant and                                                       
equipment                              0.3               -             - 
  Amortization of customer                                                   
contract costs                         0.9               -             - 
  Customer contract related                                                  
costs                                 (0.3)              -             - 
  Finance costs                           1.3             0.1           0.2 
  Unrealized gains on                                                        
derivative financial                                                      
instruments                          (27.8)              -             - 
----------------------------------------------------------------------------
EBITDA from operations                   13.3            41.5           3.6 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Construction 
For the three months ended             Energy       Specialty      Products 
 September 30, 2011                  Services       Chemicals  Distribution 
----------------------------------------------------------------------------
Net earnings (loss)                      (3.1)           17.3         (73.5)
Add: Amortization of property,                                              
 plant and equipment and                                                    
 intangible assets                       19.1             1.6           2.2 
  Amortization included in cost                                              
of sales                                 -            11.2             - 
  Losses on the disposition of                                               
property, plant and                                                       
equipment                              0.1               -             - 
  Amortization of customer                                                   
contract costs                         1.3               -             - 
  Customer contract related                                                  
costs                                 (0.8)              -             - 
  Impairment of property, plant                                              
and equipment                          3.4               -             - 
  Impairment of intangible                                                   
assets and goodwill                      -               -          78.0 
  Finance costs                           0.9             0.1           0.4 
  Unrealized gains on                                                        
derivative financial                                                      
instruments                          (12.8)              -             - 
----------------------------------------------------------------------------
EBITDA from operations                    8.1            30.2           7.1 
---------------------------------------------------------------------------- 
Construction 
For the nine months ended              Energy       Specialty      Products 
 September 30, 2012                  Services       Chemicals  Distribution 
----------------------------------------------------------------------------
Net earnings                             85.3            59.8           7.7 
Add: Amortization of property,                                              
 plant and equipment,                                                       
 intangible assets and                                                      
 accretion                               40.7             5.0           4.7 
  Amortization included in cost                                              
of sales                                 -            33.4             - 
  (Gains) losses on the                                                      
disposition of property,                                                  
plant and equipment                   (0.8)              -           0.1 
  Amortization of customer                                                   
contract costs                         2.6               -             - 
  Customer contract related                                                  
costs                                 (0.9)              -             - 
  Finance costs                           3.3             0.2           0.5 
  Unrealized gains on                                                        
derivative financial                                                      
instruments                          (42.1)              -             - 
----------------------------------------------------------------------------
EBITDA from operations                   88.1            98.4          13.0 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Construction 
For the nine months ended              Energy       Specialty      Products 
 September 30, 2011                  Services       Chemicals  Distribution 
-------
---------------------------------------------------------------------
Net earnings (loss)                      63.7            36.7         (68.5)
Add: Amortization of property,                                              
 plant and equipment,                                                       
 intangible assets and                                                      
 accretion                               49.5             4.9           7.0 
  Amortization included in cost                                              
of sales                                 -            33.5             - 
  Losses (gains) on the                                                      
disposition of property,                                                  
plant and equipment                    1.5               -          (0.1)
  Amortization of customer                                                   
contract costs                         3.7               -             - 
  Customer contract related                                                  
costs                                 (1.8)              -             - 
  Impairment of property, plant                                              
and equipment                          3.4               -             - 
  Impairment of intangible                                                   
assets and goodwill                      -               -          78.0 
  Finance costs                           2.9             0.2           0.9 
  Unrealized (gains) losses on                                               
derivative financial                                                      
instruments                          (35.8)            5.4             - 
----------------------------------------------------------------------------
EBITDA from operations                   87.1            80.7          17.3 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See the Unaudited Condensed Consolidated Financial Statements for net    
earnings (loss), amortization of property, plant and equipment,          
intangible assets and accretion of convertible debenture issue costs,    
amortization included in cost of sales, amortization of customer         
contract costs, customer contract related costs and unrealized (gains)   
losses on derivative financial instruments.                             
(2) See "Non-IFRS Financial Measures" for additional details.                


 
Reconciliation of Segmented Revenue, Cost of Sales and cash operating
and administrative costs included in this MD&A

 
---------------------------------------------------------------------------- 
For the three months ended  
September 30, 2012  
Construction  
Energy      Specialty       Products  
Services      Chemicals   Distribution 
----------------------------------------------------------------------------
Revenue per Financial                                                       
 Statements                             453.8          134.5          201.8 
 Foreign currency gains                                                     
  (losses) related to working                                               
  capital                                   -            0.2              - 
----------------------------------------------------------------------------
Revenue per the MD&A                    453.8          134.7          201.8 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Cost of products sold per                                                   
 Financial Statements                  (368.4)         (70.7)        (155.1)
 Risk reserve recovery                                                      
  reclassification                          -              -              - 
 Non-cash amortization                      -           10.9              - 
----------------------------------------------------------------------------
Cost of products sold per the                                               
 MD&A                                  (368.4)         (59.8)        (155.1)
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Gross profit                             85.4           74.9           46.7  
Cash operating and                                                          
 administrative costs per                                                   
 Financial Statements                   (86.1)         (34.9)         (44.8)
 Amortization and depreciation                                              
  expenses                               13.1            1.7            1.7 
 Losses on the disposition of                                               
  property, plant and equipment           0.3              -              - 
 Amortization of customer                                                   
  contract related costs                  0.9              -              - 
 Customer contract related                                                  
  costs                                  (0.3)             -              - 
 Impairment of property, plant                                              
  and equipment, intangible                                                 
  assets and goodwill                       -              -              - 
 Risk reserve recovery                                                      
  reclassification                          -              -              - 
 Reclassification of foreign                                                
  currency (gains) and losses                                               
  related to working capital                -           (0.2)             - 
----------------------------------------------------------------------------
Cash operating and                                                          
 administrative costs per the                                               
 MD&A                                   (72.1)         (33.4)         (43.1)
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
---------------------------------------------------------------------------- 
For the three months ended  
September 30, 2011  
Construction  
Energy      Specialty       Products  
Services      Chemicals   Distribution 
----------------------------------------------------------------------------
Revenue per Financial                                                       
 Statements                             522.6          133.1          189.3 
 Foreign currency gains                                                     
  (losses) related to working                                               
  capital                                   -            1.1              - 
----------------------------------------------------------------------------
Revenue per the MD&A                    522.6          134.2          189.3 
----------------------------
------------------------------------------------
---------------------------------------------------------------------------- 
Cost of products sold per                                                   
 Financial Statements                  (437.3)         (84.6)        (144.6)
 Risk reserve recovery                                                      
  reclassification                       (3.0)             -              - 
 Non-cash amortization                      -           11.2              - 
----------------------------------------------------------------------------
Cost of products sold per the                                               
 MD&A                                  (440.3)         (73.4)        (144.6)
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Gross profit                             82.3           60.8           44.7  
Cash operating and                                                          
 administrative costs per                                                   
 Financial Statements                  (100.3)         (31.1)         (39.8)
 Amortization and depreciation                                              
  expenses                               19.1            1.6            2.2 
 Losses on the disposition of                                               
  property, plant and equipment           0.1              -              - 
 Amortization of customer                                                   
  contract related costs                  1.3              -              - 
 Customer contract related                                                  
  costs                                  (0.8)             -              - 
 Impairment of property, plant                                              
  and equipment, intangible                                                 
  assets and goodwill                     3.4              -              - 
 Risk reserve recovery                                                      
  reclassification                        3.0              -              - 
 Reclassification of foreign                                                
  currency (gains) and losses                                               
  related to working capital                -           (1.1)             - 
----------------------------------------------------------------------------
Cash operating and                                                          
 administrative costs per the                                               
 MD&A                                   (74.2)         (30.6)         (37.6)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
For the nine months ended  
September 30, 2012  
Construction  
Energy      Specialty       Products  
Services      Chemicals   Distribution 
----------------------------------------------------------------------------
Revenue per Financial                                                       
 Statements                           1,699.4          405.2          585.7 
 Foreign currency gains                                                     
  (losses) related to working                                               
  capital                                   -              -              - 
----------------------------------------------------------------------------
Revenue per the MD&A                  1,699.4          405.2          585.7 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Cost of products sold per                                                   
 Financial Statements                (1,381.6)        (241.2)        (449.4)
 Risk reserve recovery                                                      
  reclassification                          -              -              - 
 Non-cash amortization                      -           33.4              - 
----------------------------------------------------------------------------
Cost of products sold per the                                               
 MD&A                                (1,381.6)        (207.8)        (449.4)
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Gross profit                            317.8          197.4          136.3  
Cash operating and                                                          
 administrative costs per                                                   
 Financial Statements                  (271.3)        (104.0)        (128.1)
 Amortization and depreciation                                              
  expenses                               40.7            5.0            4.7 
 (Gains) losses on disposition                                              
  of property, plant and                                                    
  equipment                              (0.8)             -            0.1 
 Amortization of customer                                                   
  contract related costs                  2.6              -              - 
 Customer contract related                                                  
  costs                                  (0.9)             -              - 
 Impairment of property, plant                                              
  and equipment, intangible                                                 
  assets and goodwill                       -              -              - 
 Risk reserve recovery                                                      
  reclassification                          -              -              - 
 Reclassification of foreign                                                
  currency (gains) and losses                                               
  related to working capital                -              -              - 
----------------------------------------------------------------------------
Cash operating and                                                          
 administrative costs per the                                               
 MD&A                                  (229.7)         (99.0)        (123.3)
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
---------------------------------------------------------------------------- 
For the nine months ended  
September 30, 2011  
Construction  
Energy      Specialty       Products  
Services      Chemicals   Distribution 
----------------------------------------------------------------------------
Revenue per Financial        
Statements                           1,958.5          390.0          533.7 
 Foreign currency gains                                                     
  (losses) related to working                                               
  capital                                   -            0.7              - 
----------------------------------------------------------------------------
Revenue per the MD&A                  1,958.5          390.7          533.7 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Cost of products sold per                                                   
 Financial Statements                (1,630.1)        (252.5)        (406.7)
 Risk reserve recovery                                                      
  reclassification                       (3.0)             -              - 
 Non-cash amortization                      -           33.5              - 
----------------------------------------------------------------------------
Cost of products sold per the                                               
 MD&A                                (1,633.1)        (219.0)        (406.7)
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Gross profit                            325.4          171.7          127.0  
Cash operating and                                                          
 administrative costs per                                                   
 Financial Statements                  (297.6)         (95.2)        (116.6)
 Amortization and depreciation                                              
  expenses                               49.5            4.9            7.0 
 (Gains) losses on disposition                                              
  of property, plant and                                                    
  equipment                               1.5              -           (0.1)
 Amortization of customer                                                   
  contract related costs                  3.7              -              - 
 Customer contract related                                                  
  costs                                  (1.8)             -              - 
 Impairment of property, plant                                              
  and equipment, intangible                                                 
  assets and goodwill                     3.4              -              - 
 Risk reserve recovery                                                      
  reclassification                        3.0              -              - 
 Reclassification of foreign                                                
  currency (gains) and losses                                               
  related to working capital                -           (0.7)             - 
----------------------------------------------------------------------------
Cash operating and                                                          
 administrative costs per the                                               
 MD&A                                  (238.3)         (91.0)        (109.7)
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 


 
Risk Factors to Superior 
 
The risks factors and uncertainties detailed below are a summary of
Superior's assessment of its material risk factors as identified in
Superior's 2011 Annual Information Form under the heading "Risk
Factors". For a detailed discussion of these risks, see Superior's
2011 Annual Information Form filed on the Canadian Securities
Administrator's website, www.sedar.com and Superior's website,
www.superiorplus.com.
 
Risks to Superior 
 
Superior is entirely dependent upon the operations and assets of
Superior LP. Superior's ability to make dividend payments to
shareholders is dependent upon the ability of Superior LP to make
distributions on its outstanding limited partnership units as well as
the operations and business of Superior LP.  
 
There is no assurance regarding the amounts of cash to be distributed
by Superior LP or generated by Superior LP and therefore funds
available for dividends to shareholders. The actual amount
distributed in respect of the limited partnership units will depend
on a variety of factors including, without limitation, the
performance of Superior LP's operating businesses, the effect of
acquisitions or dispositions on Superior LP, and other factors that
may be beyond the control of Superior LP or Superior. In the event
significant sustaining capital expenditures are required by Superior
LP or the profitability of Superior LP declines, there would be a
decrease in the amount of cash available for dividends to
shareholders and such decrease could be material. 
 
Superior's dividend policy and the distribution policy of Superior LP
are subject to change at the discretion of the board of directors of
Superior or the board of directors of Superior General Partner Inc.,
as applicable. Superior's dividend policy and the distribution policy
of Superior LP are also limited by contractual agreements including
agreements with lenders to Superior and its affiliates and by
restrictions under corporate law. 
 
The credit facilities and U.S. Notes of Superior LP contain covenants
that require Superior LP to meet certain financial tests and that
restrict, among other things, the ability of Superior LP to incur
additional debt, dispose of assets or pay dividends/distributions in
certain circumstances. These restrictions may preclude Superior LP
from returning capital or making distributions on the limited
partnership units.  
 
The payout by Superior LP of approximately half of its available cash
flow means that significant capital expenditures to fund growth
opportunities can only be made in the event that other sources of
financing are available. Lack of access to such additional financing
could limit the future growth of the business of Superior LP and,
over time, have a material adverse effect on the amount of cash
available for dividends to Shareholders. 
 
To the extent that external sources of capital, including public and
private markets, become limited or unavailable, Superior's and
Superior LP's ability to make the necessary capital investments to
maintain or expand the current business, to make necessary principal
payments and debenture redemptions under its term credit facilities
may be impaired.
 
Superior maintains a substantial floating interest rate exposure
through a combination of floating interest rate borrowings and the
use of derivative instruments. Demand levels for approximately half
of Energy Services' sales and substantially all of Specialty
Chemicals' and Construction Products Distribution's sales are
affected by general economic trends. Generally speaking, when the
economy is strong, interest rates increase as does sales demand from
Superior's customers, thereby increasing Superior's ability to pay
higher interest costs and vice versa. In this way, there is a common
relationship between economic activity levels, interest rates and
Superior's ability to pay higher or lower rates. However, increased
interest rates can affect Superior's borrowing costs, which may have
an adverse effect on Superior.
 
A portion of Superior's net cash flows is denominated in US dollars.
Accordingly, fluctuations in the Canadian/US dollar exchange rate can
impact profitability. Superior attempts to mitigate this risk by
hedging. 
 
The timing and amount of capital expenditures incurred by Superior L
P
or by its subsidiaries will directly affect the amount of cash
available to Superior for dividends to shareholders. Dividends may be
reduced, or even eliminated, at times when significant capital
expenditures are incurred or other unusual expenditures are made.
 
If the board of directors of Superior decides to issue additional
common shares, preferred shares or securities convertible into common
shares, existing shareholders may suffer significant dilution. 
 
There can be no assurances that income tax laws in the numerous
jurisdictions in which Superior operates will not be changed,
interpreted or administered in a manner which adversely affects
Superior and its shareholders. In addition, there can be no assurance
that the Canada Revenue Agency (or provincial tax agency), U.S.
Internal Revenue Service (or a state or local tax agency), or the
Chilean Internal Revenue Service (collectively the "Tax Agencies")
will agree with how Superior calculates its income for tax purposes
or that the various Tax Agencies will not change their administrative
practices to the detriment of Superior or its Shareholders.
 
Without limiting the generality of the foregoing, since the beginning
of 2010, the Canada Revenue Agency has requested and reviewed
information from Superior relating to the plan of arrangement
(Arrangement) involving the Fund and Ballard Power Systems Inc. and
the conversion of the Fund to a corporation (Conversion). As
disclosed by Superior on September 20, 2012, Superior has received
indications from the Canada Revenue Agency that the Canada Revenue
Agency will be reassessing Superior's corporate conversion
transaction. As of November 1, 2012, Superior has not received a
proposal letter from the Canada Revenue Agency challenging the tax
consequences of Superior's corporate conversion transaction which
occurred on December 31, 2008. 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 if and when a proposal letter or notice of reassessment is
received from the Canada Revenue Agency. Superior strongly believes
that the general anti-avoidance rule does not apply to the Conversion
and intends to file its future tax returns on a basis consistent with
its view of the outcome of the Conversion.
 
Risks to Superior's segments 
 
Energy Services
 
Canadian Propane Distribution and U.S. Refined Fuels 
 
Propane is sold in competition with other energy sources such as fuel
oil, electricity and natural gas, some of which are less costly on an
energy equivalent basis. While propane is usually more cost effective
than electricity, electricity is a major competitor in most areas.
Fuel oil is also used as a residential, commercial and industrial
source of heat and, in general, is less costly on an equivalent
energy basis, although operating efficiencies, environmental and air
quality factors help make propane competitive with fuel oil. Except
for certain industrial and commercial applications, propane is
generally not competitive with natural gas in areas where natural gas
already exists. Other alternative energy sources such as compressed
natural gas, methanol and ethanol are available or could be further
developed and could have an impact on the propane industry and
Superior Propane in the future. The trend towards increased
conservation measures and technological advances in energy efficiency
may have a detrimental effect on propane demand and Superior
Propane's sales. Demand for automotive uses is presently declining at
a rate of approximately 10% to 15% per year due to the development of
more fuel efficient and complicated engines which increase the cost
of converting engines to propane and reduce the savings per kilometre
driven. Propane commodity prices are affected by crude oil and
natural gas commodity prices. 
 
Competition in the U.S. Refined Fuels business markets generally
occurs on a local basis between large full service, multi-state
marketers and smaller local independent marketers. Although the
industry has seen a continued trend of consolidation over the past
several years, the top ten multi-state marketers still generate only
one-third of total retail sales in the United States. Marketers
primarily compete based upon price and service and tend to operate in
close proximity to customers, typically within a 35-mile marketing
radius from a central depot, to lower delivery costs and provide
prompt service.
 
Weather and general economic conditions affect propane and refined
fuels market volumes. Weather influences the demand for propane and
heating oil used primarily for space heating uses and also for
agricultural applications.
 
The trend towards increased conservation measures and technological
advances in energy efficiency may have a detrimental effect on
propane and heating oil demand and Superior's sales. Further,
increases in the cost of propane encourage customers to conserve fuel
and to invest in more energy-efficient equipment, reducing demand.
Changes in propane supply costs are normally passed through to
customers, but timing lags (the time between when Superior purchases
the propane and when the customer purchases the propane) may result
in positive or negative gross margin fluctuations.
 
Superior offers its customers various fixed-price propane and heating
oil programs. In order to mitigate the price risk from offering these
services, Superior uses its physical inventory position, supplemented
by forward commodity transactions with various third parties having
terms and volumes substantially the same as its customers' contracts.
In periods of high propane price volatility the fixed price programs
create exposure to over or under supply positions as the demand from
customers may significantly exceed or fall short of supply procured.
In addition, if propane prices decline significantly subsequent to
customers signing up for a fixed price program there is a risk that
customers will default on their commitments.
 
Superior's operations are subject to the risks associated with
handling, storing and transporting propane in bulk. Slight quantities
of propane may also be released during transfer operations. To
mitigate risks, Superior has established a comprehensive program
directed at environmental, health and safety protection. This program
consists of an environmental policy, codes of practice, periodic
self-audits, employee training, quarterly and annual reporting and
emergency prevention and response.
 
The U.S. refined fuels business, through a centralized safety and
environment management system, ensures that safety practices and
regulatory compliance are an important part of its business. The
storage and delivery of refined fuels poses the potential for spills
which impact the soils and water of storage facilities and customer
properties.
 
Superior's fuel distribution businesses are based and operate in
Canada and the United States, and, as a result, such operations could
be affected by changes to laws, rules or policies which may either be
more favourable to competing energy sources or increase costs or
otherwise negatively affect the operations of Energy Services in
comparison to such competing energy sources. Any such changes could
have an adverse effect on the operations of Energy Services.
 
Approximately 12% of Superior's Canadian propane distribution and
U.S. refined fuels distribution businesses employees are unionized.
Collective bargaining agreements are renegotiated in the normal
course of business. While labour disruptions are not expected, there
is always risk associated with the re-negotiation process that could
have an adverse impact to Superior.
 
Fixed-price energy services business 
 
New entrants in the energy retailing business may enter the market
and compete directly for the customer base that Superior targets,
slowing or reducing its market share. 
 
SEM purchases natural gas to meet its estimated commitments to its
customers based upon the histor
ical consumption of gas of its
customers. Depending on a number of factors, including weather,
customer attrition and poor economic conditions affecting commercial
customers' production levels, customer natural gas consumption may
vary from the volume purchased. This variance must be reconciled and
settled at least annually and may require SEM to purchase or sell
natural gas at market prices which may have an adverse impact on the
results of this business. To mitigate potential balancing risk, SEM
closely monitors its balancing position and takes measures such as
adjusting gas deliveries and transferring gas between pools of
customers, so that imbalances are minimized. The reserve is reviewed
on a monthly basis to ensure that it is sufficient to absorb any
losses that might arise from balancing. 
 
SEM matches its customers estimated electricity requirements by
entering into electricity swaps in advance of acquiring customers.
Depending on several factors, including weather, customer's energy
consumption may vary from the volumes purchased by SEM. SEM is able
to invoice existing commercial electricity customers for balancing
charges when the amount of energy used is greater than or less than
the tolerance levels set initially. In certain circumstances, there
can be balancing issues for which SEM is responsible when customer
aggregation forecasts are not realized. 
 
Fixed-price energy services resources its fixed-price term natural
gas sales commitments by entering into various physical natural gas
and US dollar foreign exchange purchase contracts for similar terms
and volumes to create an effective Canadian dollar fixed-price cost
of supply. Superior transacts with eight financial and physical
natural gas counterparties. There can be no assurance that any of
these counterparties will not default on any of their obligations to
Superior. However, the financial condition of each counterparty is
evaluated and credit limits are established to minimize Superior's
exposure to this risk. There is also a risk that supply commitments
and foreign exchange positions may become unmatched; however, this is
monitored daily in compliance with Superior's risk management policy.
 
 
Fixed-price energy services must retain qualified sales agents in
order to properly execute its business strategy. The continued growth
of fixed-price energy services is reliant on the services of agents
to sign up new customers. There can be no assurance that competitive
conditions will allow these agents to achieve these customer
additions. Lack of success in the marketing programs of fixed-price
energy services would limit future growth of cash flow.
 
Fixed-price energy services operates in the highly regulated energy
industry in Ontario, Quebec, British Columbia and the Northeastern
U.S. Changes to existing legislation could impact this business'
operations. As part of the current regulatory framework, local
delivery companies are mandated to perform certain services on behalf
of fixed-price energy services, including invoicing, collection,
assuming specific bad debt risks and storage and distribution of
natural gas. Any elimination or changes to these rules could have a
significant adverse effect on the results of this business.
 
The Ontario Energy Board issued an update to the revised Codes of
Conduct supporting the Energy Consumer Protection Act. Although the
industry had anticipated automatic renewal of natural gas accounts on
a month-to-month basis, the OEB has confirmed that the automatic
renewal of natural gas contracts will be allowed for a period of one
year capped at the customer's existing rate. Only one automatic
renewal will be allowed emphasizing the need to positively convert
automatic renewals to other products before the customer is returned
to the utility at the end of the renewal term. Renewal notifications
will require a standard disclosure form and a price comparison
between fixed-price energy service's renewal price and the utility
default rate.
 
Specialty Chemicals 
 
Specialty Chemicals competes with sodium chlorate, chloralkali and
potassium producers on a worldwide basis. Key competitive factors
include price, product quality, logistics capability, reliability of
supply, technical capability and service. The end-use markets for
products are correlated to the general economic environment and the
competitiveness of customers, all of which are outside of its control
along with market pricing for pulp. Also, market participants such as
China are a significant purchaser of pulp and impact market pricing.
 
Specialty Chemicals has long-term electricity contracts or
electricity contracts that renew automatically with power producers
in each of the jurisdictions where its plants are located. There is
no assurance that Specialty Chemicals will continue to be able to
secure adequate supplies of electricity at reasonable prices or on
acceptable terms.
 
Potassium chloride (KCL) is a major raw material used in the
production of potassium hydroxide at the Port Edwards, Wisconsin
facility. Substantially all of Specialty Chemicals KCL is received
from Potash Corporation of Saskatchewan (Potash). Specialty Chemicals
currently has a limited ability to source KCL from additional
suppliers.
 
Specialty Chemicals is exposed to fluctuations in the US dollar and
the euro versus the Canadian dollar. Specialty Chemicals manages its
exposure to fluctuations between the United States and Canadian
dollar by entering into hedge contracts with external third parties
and internally with other Superior businesses.
 
Specialty Chemicals' operations involve the handling, production,
transportation, treatment and disposal of materials that are
classified as hazardous and are regulated by environmental and health
and safety laws, regulations and requirements. The potential exists
for the release of highly toxic and lethal substances, including
chlorine. Equipment failure could result in damage to facilities,
death or injury and liabilities to third parties. If at any time the
appropriate regulatory authorities deem any of the facilities unsafe,
they may order that such facilities be shut down.
 
Specialty Chemicals' operations and activities in various
jurisdictions require regulatory approvals for the handling,
production, transportation and disposal of chemical products and
waste substances. The failure to obtain or comply fully with such
applicable regulatory approvals may materially adversely affect
Specialty Chemicals.
 
Specialty Chemicals' production facilities maintain complex process
and electrical equipment. The facilities have existed for many years
and undergone upgrades and improvements over time. Routine
maintenance is regularly completed to ensure equipment is operated
within appropriate engineering and technical requirements.
Notwithstanding Specialty Chemicals' operating standards and history
of limited downtime, breakdown of electrical transformer or rectifier
equipment would temporarily reduce production capacity at the
affected facility. Although insurance coverage exists to mitigate
substantial loss due to equipment outage, Specialty Chemicals'
reputation and its ability to meet customer requirements could be
negatively affected due to a major electrical equipment failure.
 
Approximately 23% of Specialty Chemicals' employees are unionized.
Collective bargaining agreements are renegotiated in the normal
course of business. While labour disruptions are not expected, there
is always risk associated with the re-negotiation process that could
have an adverse impact to Superior.
 
Construction Products Distribution 
 
Activity in the Construction Products Distribution segment is subject
to changes in the level of general economic activity and in
particular to the level of activity in residential and
non-residential construction subsectors. New construction in
residential markets is subject to such factors as household income,
employment levels, customer confidence, interest rates, population
changes and the supply of residential units i
n any local area.
Residential renovation is not as sensitive to these factors and can
provide some balance in the demand for residential construction
product distribution. Non-residential activity can be subdivided into
commercial, industrial and institutional. New construction activity
in these sectors is subject to many of the same general economic
factors as for residential activity. In the industrial and
institutional subsectors, government and regulatory programs can also
have a significant impact on the outlook for product distribution,
particularly as related to our insulation businesses. As a result,
changes to the level of general economic activity or any of the above
mentioned factors that affect the amount of construction or
renovations in residential and non-residential markets can have an
adverse affect on the CPD business and Superior. 
 
Construction Products Distribution competes with other specialty
construction distributors servicing the builder/contractor market, in
addition to big-box home centres and independent lumber yards. The
ability to remain competitive depends on its ability to provide
reliable service at competitive prices. 
 
The gypsum specialty distributor (GSD) market is driven largely by
residential and non-residential construction. Demand for wall and
ceiling building materials is affected by changes in general and
local economic factors including demographic trends, employment
levels, interest rates, consumer confidence and overall economic
growth. These factors in turn impact the level of existing housing
sales, new home construction, new non-residential construction, and
office/commercial space turnover, all of which are significant
factors in the determination of demand for products and services. 
 
The commercial & industrial (C&I) market is driven largely by C&I
construction spending and economic growth. Sectors within the C&I
market that are particularly influential to demand include:
commercial construction and renovation, the construction, maintenance
and expansion of industrial process facilities (i.e. oil refineries
and petrochemical plants, power generation facilities) and
institutional facilities (i.e. government, healthcare and education).
 
The distribution of walls and ceilings and C&I products involves
risks, including the failure or substandard performance of equipment,
human error, natural disasters, suspension of operations and new
governmental statutes, regulations, guidelines and policies.
Operations are also subject to various hazards incidental to the
handling, processing, storage and transportation of certain hazardous
materials, including industrial chemicals. These hazards can result
in personal injury including fatalities, damage to and destruction of
property and equipment and environmental damage. There can be no
assurance that as a result of past or future operations, there will
not be claims of injury by employees or members of the public due to
exposure, or alleged exposure, to these materials. There can be no
assurance as to the actual amount of these liabilities or the timing
of them, if any. The business maintains safe working practices
through proper procedures and direction and utilization of equipment
such as forklifts, boom trucks, fabrication equipment and
carts/dollies. The business handles and stores a variety of
construction materials and maintains appropriate material handling
compliance programs in accordance with local, state/provincial and
federal regulations. 
 
Approximately 4% of Construction Products Distribution's employees
are unionized. Collective bargaining agreements are renegotiated in
the normal course of business. While labour disruptions are not
expected, there is always risk associated with the re-negotiation
process that could have an adverse impact to Superior.

 
SUPERIOR PLUS CORP.                                                         
Condensed Consolidated Balance Sheets                                       
----------------------------------------------------------------------------
(unaudited, millions of Canadian               September 30,   December 31, 
 dollars)                                Notes          2012           2011 
----------------------------------------------------------------------------
Assets                                                                      
Current Assets                                                              
Cash and cash equivalents                                7.7            5.2 
Trade and other receivables             5 & 13         347.3          472.9 
Prepaid expenses                                        15.4           20.7 
Inventories                                            193.3          203.1 
Unrealized gains on derivative                                              
 financial instruments                      13          21.7           13.3 
----------------------------------------------------------------------------
Total current assets                                   585.4          715.2 
---------------------------------------------------------------------------- 
Non-Current Assets                                                          
Property, plant and equipment                7         831.8          885.0 
Intangible assets                                       43.6           65.6 
Goodwill                                               189.1          186.1 
Notes and finance lease receivables                      9.9           10.0 
Deferred tax                                14         304.8          315.5 
Unrealized gains on derivative                                              
 financial instruments                      13          17.0           16.0 
----------------------------------------------------------------------------
Total non-current assets                             1,396.2        1,478.2 
---------------------------------------------------------------------------- 
Total assets                                         1,981.6        2,193.4 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Liabilities and Equity                                                      
Current Liabilities                                                         
Trade and other payables                     9         299.7          297.6 
Deferred revenue                            10          22.1           14.2 
Borrowings                                  11          47.4           54.3 
Convertible unsecured subordinated                                          
 debentures                                 12             -           49.3 
Dividends and interest payable                          15.9            7.6 
Unrealized losses on derivative                                             
 financial instruments                      13          39.7           61.7 
----------------------------------------------------------------------------
Total current liabilities                              424.8          484.7 
---------------------------------------------------------------------------- 
Non-Current Liabilities                                                     
Borrowings                                  11         537.2          701.4 
Convertible unsecured subordinated                                          
 debentures                                 12         524.3          521.7 
Other liabilities                                        0.6              - 
Provisions                                   8          18.3           17.2 
Employee future benefits                                70.8           65.3 
Deferred tax                                14           1.6            5.9 
Unrealized losses on derivative                                             
 financial instruments                      13          36.9           47.6 
----------------------------------------------------------------------------
Total non-current liabilities                        1,189.7        1,359.1 
---------------------------------------------------------------------------- 
----------------------------------------------------------------------------
Total liabilities                                    1,614.5        1,843.8 
---------------------------------------------------------------------------- 
Equity                                                                      
Capital                                              1,642.9        1,633.1 
Deficit         
(1,199.6)      (1,228.2)
Accumulated other comprehensive loss                   (76.2)         (55.3)
----------------------------------------------------------------------------
Total equity                                15         367.1          349.6 
---------------------------------------------------------------------------- 
Total liabilities and equity                         1,981.6        2,193.4 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(See Notes to the Condensed Consolidated Financial Statements) 
SUPERIOR PLUS CORP.                                                         
Condensed Consolidated Statement of Changes in Equity                       
----------------------------------------------------------------------------
(unaudited                                               Accumulated        
 millions of                                                   other        
 Canadian         Share  Contributed   Total           comprehensive        
 dollars)        Capital   Surplus(1) Capital  Deficit          loss  Total 
----------------------------------------------------------------------------
January 1, 2011  1,600.9         5.5  1,606.4   (797.9)        (54.1) 754.4 
Net loss               -           -        -    (71.2)            -  (71.2)
Share issued                                                                
 under Dividend                                                             
 Reinvestment                                                               
 Plan               23.4           -     23.4        -             -   23.4 
Dividends                                                                   
 declared to                                                                
 shareholders          -           -            (105.6)            - (105.6)
Unrealized                                                                  
 foreign                                                                    
 currency gains                                                             
 on translation                                                             
 of foreign                                                                 
 operations            -           -        -        -          24.6   24.6 
Actuarial                                                                   
 defined benefit                                                            
 losses                -           -        -        -         (20.1) (20.1)
Reclassification                                                            
 of derivative                                                              
 losses                                                                     
 previously                                                                 
 deferred              -           -        -        -           5.3    5.3 
Income tax on                                                               
 other                                                                      
 comprehensive                                                              
 loss                  -           -        -        -           3.5    3.5 
----------------------------------------------------------------------------
September 30,                                                               
 2011            1,624.3         5.5  1,629.8   (974.7)        (40.8) 614.3 
----------------------------------------------------------------------------
Net loss               -           -        -   (231.4)            - (231.4)
Option value                                                                
 associated with                                                            
 redemption of                                                              
 convertible                                                                
 debentures            -        (2.2)    (2.2)       -             -   (2.2)
Shares issued                                                               
 under Dividend                                                             
 Reinvestment                                                               
 Plan                5.5           -      5.5        -             -    5.5 
Dividends                                                                   
 declared to                                                                
 shareholders          -           -        -    (22.1)            -  (22.1)
Unrealized                                                                  
 foreign                                                                    
 currency losses                                                            
 on translation                                                             
 of foreign                                                                 
 operations            -           -        -        -         (11.0) (11.0)
Actuarial                                                                   
 defined benefit                                                            
 losses                -           -        -        -          (5.4)  (5.4)
Reclassification                                                            
 of derivative                                                              
 losses                                                                     
 previously                                                                 
 deferred              -           -        -        -           0.6    0.6 
Income tax on                                                               
 other                                                                      
 comprehensive                                                              
 loss                  -           -        -        -           1.3    1.3 
----------------------------------------------------------------------------
December 31,                                                                
 2011            1,629.8         3.3  1,633.1 (1,228.2)        (55.3) 349.6 
----------------------------------------------------------------------------
Net earnings           -           -        -     78.9             -   78.9 
Option value                                                                
 associated with                                                            
 redemption of                                                              
 convertible                                                                
 debentures            -        (0.8)    (0.8)       -             -   (0.8)
Shares issued                                                               
 under Dividend                                                             
 Reinvestment                                                               
 Plan               10.6           -     10.6        -             -   10.6 
Dividends                                                                   
 declared to                                                                
 shareholders          -           -        -    (50.3)            -  (50.3)
Unrealized                                                                  
 foreign                                                                    
 currency losses                                                            
 on translation                                                             
 of foreign                                                                 
 operations            -           -        -        -         (13.5) (13.5)
Actuarial                                                                   
 defined benefit                              
losses                -           -        -        -         (10.1) (10.1)
Income tax on                                                               
 other                                                                      
 comprehensive                                                              
 loss                  -           -        -        -           2.7    2.7 
----------------------------------------------------------------------------
September 30,                                                               
 2012            1,640.4         2.5  1,642.9 (1,199.6)        (76.2) 367.1 
----------------------------------------------------------------------------
(See Notes to the Condensed Consolidated Financial Statements)              
(1) Contributed surplus represents Superior's equity reserve for the option  
value associated with the issuance of convertible unsecured subordinated 
debentures and warrants.                                                 
SUPERIOR PLUS CORP.                                                         
Condensed Consolidated Statement of Net Earnings (Loss) and Total           
Comprehensive Income (Loss)                                                 
---------------------------------------------------------------------------- 
Three months ended   Nine Months Ended  
September 30,       September 30, 
(unaudited, millions of                                                     
 Canadian dollars except per                                                
 share amounts)                Notes     2012      2011      2012      2011 
---------------------------------------------------------------------------- 
REVENUES                          18    790.1     845.0   2,690.3   2,882.2 
Cost of sales (includes                                                     
 products & services)             18   (594.2)   (666.5) (2,072.2) (2,289.3)
----------------------------------------------------------------------------
Gross profit                            195.9     178.5     618.1     592.9 
---------------------------------------------------------------------------- 
EXPENSES                                                                    
  Selling, distribution and                                                  
administrative costs           18    171.1     172.7     516.1     518.0 
  Finance expense                 18     19.3      22.2      59.4      64.8 
  Impairment of intangible                                                   
assets and goodwill                      -      78.0         -      78.0 
  Unrealized (gains) losses                                                  
on derivative financial                                                   
instruments                    13    (38.8)     38.7     (46.2)     10.0 
---------------------------------------------------------------------------- 
151.6     311.6     529.3     670.8 
---------------------------------------------------------------------------- 
Net earnings (loss) before                                                  
 income taxes                            44.3    (133.1)     88.8     (77.9)
Income tax (expense) recovery     14     (7.6)     19.7      (9.9)      6.7 
----------------------------------------------------------------------------
Net earnings (loss)                      36.7    (113.4)     78.9     (71.2)
---------------------------------------------------------------------------- 
Net earnings (loss)                      36.7    (113.4)     78.9     (71.2)
Other comprehensive income:                                                 
  Unrealized foreign currency                                                
(losses) gains on                                                         
translation of foreign                                                    
operations                           (15.1)     43.0     (13.5)     24.6 
  Actuarial defined benefit                                                  
losses                                (4.9)    (14.5)    (10.1)    (20.1)
  Reclassification of                                                        
derivative losses                                                         
previously deferred                      -       1.8         -       5.3 
  Income tax expense on other                                                
comprehensive loss                     1.3       3.1       2.7       3.5 
----------------------------------------------------------------------------
Total comprehensive income                                                  
 (loss) for the period                   18.0     (80.0)     58.0     (57.9)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net Earnings (loss) per Share                                               
From operations:                                                            
  Basic                           16    $0.33    $(1.04)    $0.71    $(0.65)
  Diluted                         16    $0.31    $(1.04)    $0.70    $(0.65)
----------------------------------------------------------------------------
(See Notes to the Condensed Consolidated Financial Statements)               
SUPERIOR PLUS CORP.                                                         
Condensed Consolidated Statement of Cash Flows                              
---------------------------------------------------------------------------- 
Three months ended   Nine Months Ended  
September 30,       September 30, 
(unaudited, millions of                                                     
 Canadian dollars)             Notes     2012      2011      2012      2011 
----------------------------------------------------------------------------
OPERATING ACTIVITIES                                                        
Net earnings (loss) for the                                                 
 period                                  36.7    (113.4)     78.9     (71.2)
Adjustments for:                                                            
  Depreciation included in                                                   
selling, distribution and                                                 
administrative costs            7     10.5       9.5      31.7      32.7 
  Amortization of intangible                                                 
assets                                 6.0      16.8      18.7      32.1 
  Depreciation included in                                                   
cost of sales                   7     10.9      11.2      33.4      33.5 
  Amortization of customer                                                   
related costs                          0.9       1.3       2.6       3.7 
  Losses (gains) on disposal                                                 
of assets                              0.3       0.1      (0.7)      1.4 
  Impairment of intangible                                                   
assets and goodwill                      -      78.0         -      78.0 
  Unrealized (gains) losses                                                  
on derivative financial                                                   
instruments                    13    (38.8)  
38.7     (46.2)     10.0 
  Customer contract related                                                  
costs                                 (0.3)     (0.8)     (0.9)     (1.8)
  Finance costs recognized in                                                
net earnings (loss)                   19.3      22.2      59.4      64.8 
  Income tax expense                                                         
(recovery) recognized in                                                  
net earnings                           7.6     (19.7)      9.9      (6.7)
Decrease in non-cash                                                        
 operating working capital                                                  
 items                            17     11.3      69.3     139.5      98.8 
----------------------------------------------------------------------------
Net cash flows from operating                                               
 activities                              64.4     113.2     326.3     275.3 
Income taxes received (paid)                -         -       0.4      (0.4)
Interest paid                           (20.6)     (4.0)    (45.3)    (44.0)
----------------------------------------------------------------------------
Cash flows from operating                                                   
 activities                              43.8     109.2     281.4     230.9 
---------------------------------------------------------------------------- 
INVESTING ACTIVITIES                                                        
Purchase of property, plant                                                 
 and equipment                           (8.5)     (9.0)    (21.7)    (23.6)
Proceeds from disposal of                                                   
 property, plant and                                                        
 equipment                                0.4       0.6       4.1       2.2 
Acquisitions                       4     (5.5)     (8.8)     (5.5)    (13.7)
----------------------------------------------------------------------------
Cash flows used in investing                                                
 activities                             (13.6)    (17.2)    (23.1)    (35.1)
---------------------------------------------------------------------------- 
FINANCING ACTIVITIES                                                        
Net proceeds (repayment) of                                                 
 borrowings and loans                    33.3     (61.9)   (153.3)      6.9 
Repayment of finance lease                                                  
 obligations                             (4.7)     (2.9)    (12.3)    (10.8)
Net repayment of the accounts                                               
 receivable sales program                   -         -         -     (90.1)
Redemption of 5.75%                                                         
 convertible debentures                 (49.9)        -     (49.9)        - 
Proceeds from the dividend                                                  
 reinvestment program                     3.6       7.0      10.6      23.4 
Dividends paid to                                                           
 shareholders                           (16.8)    (32.8)    (50.2)   (109.1)
----------------------------------------------------------------------------
Cash flows used in from                                                     
 financing activities                   (34.5)    (90.6)   (255.1)   (179.7)
---------------------------------------------------------------------------- 
----------------------------------------------------------------------------
Net (decrease) increase in                                                  
 cash and cash equivalents               (4.3)      1.4       3.2      16.1 
Cash and cash equivalents,                                                  
 beginning of period                     12.5      23.2       5.2       8.9 
Effect of translation of                                                    
 foreign denominated cash and                                               
 cash equivalents                        (0.5)      1.4      (0.7)      1.0 
----------------------------------------------------------------------------
Cash and cash equivalents,                                                  
 end of period                            7.7      26.0       7.7      26.0 
----------------------------------------------------------------------------
(See Notes to the Condensed Consolidated Financial Statements)               


 
Notes to the Unaudited Condensed Consolidated Financial Statements
 
(unaudited, Tabular amounts in millions of Canadian dollars, unless
noted otherwise, except per share amounts.)
 
1. Organization
 
Superior Plus Corp. (Superior) is a diversified business corporation,
incorporated under the Canada Business Corporations Act. The address
of the registered office is 840 - 7th Avenue SW, Calgary, Alberta.
Superior holds 100% of Superior Plus LP (Superior LP), a limited
partnership formed between Superior General Partner Inc., as general
partner and Superior as limited partner. Superior holds 100% of the
interest of Superior General Partner Inc. Superior does not conduct
active business operations but rather distributes to shareholders the
income it receives from Superior Plus LP in the form of partnership
allocations, net of expenses and interest payable on the convertible
unsecured subordinated debentures (the debentures). Superior's
investments in Superior Plus LP are financed by share capital and
debentures. Superior is a publicly traded company with its common
shares trading on the Toronto Stock Exchange ("TSX") under the
exchange symbol SPB. 
 
The accompanying Unaudited Condensed Consolidated Financial
Statements (Consolidated Financial Statements) of Superior as at
September 30, 2012 and the three and nine months ended September 30,
2012 and 2011 were authorized for issue by the Board of Directors on
November 1, 2012.
 
Reportable Operating Segments 
 
Superior operates three distinct reportable operating segments:
Energy Services, Specialty Chemicals and Construction Products
Distribution. Superior's Energy Services operating segment provides
distribution, wholesale procurement and related services in relation
to propane, heating oil and other refined fuels. Energy Services also
provides fixed-price natural gas and electricity supply services.
Superior's Specialty Chemicals operating segment is a leading
supplier of sodium chlorate and technology to the pulp and paper
industries and a regional supplier of potassium and chloralkali
products to the U.S. Midwest. Superior's Construction Products
Distribution operating segment is one of the largest distributors of
commercial and industrial insulation in North America and the largest
distributor of specialty construction products to the walls and
ceilings industry in Canada (See Note 20).
 
2. Basis of Presentation
 
The accompanying Consolidated Financial Statements have been prepared
in accordance and comply with International Accounting Standards 34
Interim Financial Reporting (IAS 34) as issued by the International
Accounting Standard Board (IASB) using the accounting policies
Superior adopted in its annual consolidated financial statements as
at and for the year ended December 31, 2011. Those accounting
policies are based on the International Financial Reporting Standards
(IFRS) and International Financial Reporting Interpretations
Committee (IFRIC) interpretations that were applicable at that time.
These accounting policies have been applied consistently to all
periods presented in these consolidated financial statements, and
have been applied consistently throughout the co
nsolidated entities.
 
These Consolidated Financial Statements are presented in Canadian
dollars, which is Superior's functional and presentation currency.
All financial information presented in Canadian dollars has been
rounded to the nearest hundred thousand. These Consolidated Financial
Statements should be read in conjunction with Superior's 2011 annual
consolidated financial statements. 
 
The Consolidated Financial Statements have been prepared on the
historical cost basis except for certain financial instruments that
are measured at fair value as explained in Superior's 2011 annual
consolidated financial statements and incorporate the accounts of
Superior and its wholly-owned subsidiaries. Subsidiaries are all
entities over which Superior has the power to govern the financial
and operating policies generally accompanying a shareholding of more
than one half of the voting rights. The results of subsidiaries are
included in Superior's income statement from date of acquisition, or
in the case of disposals, up to the date of disposal. All
transactions and balances between Superior and Superior's
subsidiaries have been eliminated on consolidation. Superior's
subsidiaries are all wholly owned directly or indirectly by Superior
Plus Corp.
 
Significant Accounting Policies
 
(a) Significant Accounting Judgments, Estimates and Assumptions
 
The preparation of Superior's Consolidated Financial Statements in
accordance with IFRS requires management to make judgments, estimates
and assumptions that affect the reported amounts of assets,
liabilities, net earnings (loss) and related disclosures. The
estimates and associated assumptions are based on historical
experience and various other factors that are deemed to be reasonable
under the circumstances, the results of which form the basis of
making the judgments about carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may
differ from these estimates. The areas involving a higher degree of
judgment or complexity, or areas where assumptions and estimates are
significant to the financial statements are consistent with those
disclosed in Superior's 2011 annual consolidated financial
statements. 
 
(b) Recent Accounting Pronouncements 
 
Certain new standards, interpretations, amendments and improvements
to existing standards were issued by the IASB or International
Financial Reporting Interpretations Committee ("IFRIC") that are
mandatory for accounting periods beginning January 1, 2012 or later
periods. The standards are consistent with those disclosed in
Superior's 2011 annual consolidated financial statements. 
 
Superior adopted the following standard on January 1, 2012:
 
IAS 12 - Income Taxes, amendments regarding Deferred Tax: Recovery of
Underlying Assets; 
 
IAS 12, Income Taxes, was amended in December 2010 to remove
subjectivity in determining on which basis an entity measures the
deferred tax relating to an asset. The amendment introduces a
presumption that an entity will assess whether the carrying amount of
an asset will be recovered through the sale of the asset. The
amendment to IAS 12 is effective for reporting periods beginning on
or after January 1, 2012. The adoption of IAS 12 did not impact
Superior's financial results and financial position.
 
3. Seasonality of Operations
 
Energy Services
 
Energy Services sales typically peak in the first quarter when
approximately one-third of annual propane and other refined fuels
sales volumes and gross profits are generated due to the demand from
heating end-use customers. They then decline through the second and
third quarters rising seasonally again in the fourth quarter with
heating demand. Similarly, net working capital levels are typically
at seasonally high levels during the first and fourth quarters, and
normally decline to seasonally low levels in the second and third
quarters. Net working capital levels are also significantly
influenced by wholesale propane prices and other refined fuels. 
 
Construction Products Distribution 
 
Construction Products Distribution sales typically peak during the
second and third quarters with the seasonal increase in building and
remodeling activities. They then decline through the first and fourth
quarters. Similarly, net working capital levels are typically at
seasonally high levels during the second and third quarters, and
normally decline to seasonally low levels in the first and fourth
quarters.
 
4. Acquisitions
 
On July 17, 2012, Superior completed the acquisition of certain
assets which constitute a propane distribution business for an
aggregate purchase price of $5.5 million including adjustments for
net working capital. The primary purposes of the acquisition is to
expand Energy Services business in British Columbia and benefit from
synergies. The below noted fair values have been prepared on a
provisional basis pending finalization of net working capital
adjustments.

  
Fair Value 
Recognized on
Propane Acquisition                                              Acquisition
----------------------------------------------------------------------------
Trade and other receivables(1)                                           0.9
Inventories                                                              0.1
Property, plant and equipment                                            1.9
---------------------------------------------------------------------------- 
2.9 
Net identifiable assets and liabilities                                  2.9
Goodwill arising on acquisition                                          2.6
----------------------------------------------------------------------------
Total consideration                                                      5.5
---------------------------------------------------------------------------- 
The components of the purchase consideration are as follows:                
  Cash (paid on August 2, 2012)                                          5.5
----------------------------------------------------------------------------
Total purchase consideration                                             5.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The gross amount of trade and other receivables is $0.9 million, of      
which $nil is expected to be uncollectible.                              


 
Revenue and net earnings for the nine months ended September 30, 2012
would have been $5.3 million and $1.0 million, respectively, if the
acquisition had occurred on January 1, 2012. Subsequent to the
acquisition date of July 17, 2012, the acquisition contributed
revenue and net earnings of $1.4 million and $0.6 million to Energy
Services, respectively for the nine months ended September 30, 2012. 
 
5. Trade and Other Receivables
 
A summary of trade and other receivables are as follows:

  
Notes  September 30, 2012  December 31, 2011
----------------------------------------------------------------------------
Trade receivables, net of                                                   
 allowances                        13               322.7              427.1
Accounts receivable - other                          23.8               45.1
Finance lease receivable                              0.8                0.7
----------------------------------------------------------------------------
Trade and other receivables                         347.3              472.9
----------------------------------------------------------------------------
-----------------------------------------
----------------------------------- 


 
6. Inventories 
 
The cost of inventories recognized as an expense during the three and
nine months ended September 30, 2012 was $541.7 million (September
30, 2011 - $584.3 million) and $1,879.9 million (September 30, 2011 -
$2,026.7 million). Superior recorded an inventory write down during
the three and nine months ended September 30, 2012 of $3.6 million
(September 30, 2011 - $nil million) and $2.9 million (September 30,
2011 - $nil million), respectively. Superior recorded no reversals of
inventory write downs during the three and nine months ended
September 30, 2012 and 2011.
 
7. Property, Plant and Equipment

  
Specialty      Energy 
Chemicals    Services 
Plant &   Retailing 
Land   Buildings   Equipment   Equipment
----------------------------------------------------------------------------
Cost                                                                        
----------------------------------------------------------------------------
Balance at December 31, 2011        29.7       147.3       728.4       591.5
----------------------------------------------------------------------------
Balance at September 30, 2012       29.6       145.6       730.0       585.1
---------------------------------------------------------------------------- 
Accumulated Depreciation and Impairment                                     
----------------------------------------------------------------------------
Balance at December 31, 2011           -        38.8       308.2       285.8
----------------------------------------------------------------------------
Balance at September 30, 2012          -        41.8       336.3       300.8
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Carrying Amount                                                             
----------------------------------------------------------------------------
Balance at December 31, 2011        29.7       108.5       420.2       305.7
----------------------------------------------------------------------------
Balance at September 30, 2012       29.6       103.8       393.7       284.3
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Construction                            
Products                            
Distribution        Leasehold           
Equipment     Improvements     Total
----------------------------------------------------------------------------
Cost                                                                        
----------------------------------------------------------------------------
Balance at December 31, 2011                 41.2              9.6   1,547.7
----------------------------------------------------------------------------
Balance at September 30, 2012                42.2             10.0   1,542.5
---------------------------------------------------------------------------- 
Accumulated Depreciation and Impairment                                     
----------------------------------------------------------------------------
Balance at December 31, 2011                 22.4              7.5     662.7
----------------------------------------------------------------------------
Balance at September 30, 2012                24.5              7.3     710.7
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Carrying Amount                                                             
----------------------------------------------------------------------------
Balance at December 31, 2011                 18.8              2.1     885.0
----------------------------------------------------------------------------
Balance at September 30, 2012                17.7              2.7     831.8
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Depreciation per cost category:                                              
Three months ended   Nine Months Ended 
September 30,       September 30, 
2012      2011      2012      2011
----------------------------------------------------------------------------
Cost of sales                             10.9      11.2      33.4      33.5
Selling, distribution and                                                   
 administrative costs                     10.5       9.5      31.7      32.7
----------------------------------------------------------------------------
Total                                     21.4      20.7      65.1      66.2
---------------------------------------------------------------------------- 


 
The carrying amount of Superior's property, plant, and equipment
includes $69.7 million as at September 30, 2012 (December 31, 2011 -
$74.2 million) of leased assets.

 
8. Provisions                                                               
---------------------------------------------------------------------------- 
Decommissioning   Environmental            
Costs    Expenditures     Total 
----------------------------------------------------------------------------
Balance at December 31, 2011                 15.5             1.7      17.2 
  Additions                                   0.6               -       0.6 
  Utilization                                   -            (0.2)     (0.2)
  Unwinding of discount                       0.2               -       0.2 
  Impact of change in discount                                               
rate                                       0.5               -       0.5 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance at September 30, 2012                16.8             1.5      18.3 
---------------------------------------------------------------------------- 


 
Decommissioning costs
 
Specialty Chemicals 
 
Superior makes full provision for the future cost of decommissioning
Specialty Chemicals' chemical facilities. The provision for
decommissioning costs is on a discounted basis and is based on
existing technologies at current prices or long-term price
assumptions, depending on the expected timing of the activity. As at
September 30, 2012, the discount rate used in Superior's calculation
was 2.3% (December 31, 2011 - 2.5%). Superior estimates the total
undiscounted amount of expenditures required to settle its
decommissioning liabilities is approximately $20.0 million (December
31, 2011 - $20.3 million) which will be paid out over the next twenty
to twenty eight years. While Superior's provision for decommissioning
costs is based on the best estimate of future costs 
and the economic
lives of the chemical facilities, there is uncertainty regarding both
the amount and timing of incurring these costs. 
 
Energy Services 
 
Superior makes full provision for the future costs of decommissioning
certain assets associated with Superior's Energy Services operating
segment. Superior estimates the total undiscounted amount of
expenditures required to settle its decommissioning liabilities is
approximately $8.8 million (December 31, 2011 - $9.2 million) which
will be paid out over the next twenty to twenty five years. The
risk-free rate of 2.3% (December 31, 2011 - 2.5%) was used to
calculate the present value of the estimated cash flows.
 
Environmental Expenditures 
 
Provisions for environmental remediation are made when a clean-up is
probable and the amount of the obligation can be reliably estimated.
Generally, this coincides with commitment to a formal plan of action
or, if earlier, on divestment or on closure of inactive sites. The
provision for environmental liabilities has been estimated using
existing technology, at current prices and discounted using a
risk-free discount rate of 2.3% (December 31, 2011 -2.5%). The
majority of these costs are expected to be incurred over the next 2
years. The extent and cost of future remediation programs are
inherently difficult to estimate. They depend on the scale of any
possible contamination, the timing and extent of corrective actions,
and also Superior's share of the liability. 
 
9. Trade and Other Payables
 
A summary of trade and other payables is as follows:

  
September 30,   December 31, 
2012           2011
----------------------------------------------------------------------------
Trade payables                                          230.3          243.9
Other payables                                           56.1           47.8
Amounts due to customers under construction                                 
 contracts                                                1.9            2.2
Share based payments                                     11.4            3.7
----------------------------------------------------------------------------
Trade and other payables                                299.7          297.6
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
10. Deferred Revenue                                                         
September 30,   December 31,  
2012           2011 
----------------------------------------------------------------------------
Balance at beginning of the period                      14.2            6.8 
  Deferred during the period                            24.7           21.4 
  Released to net earnings                             (16.4)         (14.5)
  Foreign exchange impact                               (0.4)           0.5 
----------------------------------------------------------------------------
Balance at end of period                                22.1           14.2 
---------------------------------------------------------------------------- 


 
The deferred revenue relates to Energy Services unearned service
revenue and deferred sales to a customer within the Specialty
Chemicals segment.

 
11. Borrowings                                                               
Year of   Effective Interest September 30, December 31,  
Maturity                 Rate          2012         2011 
----------------------------------------------------------------------------
Revolving term bank                                                         
 credits(1)                                                                 
 Bankers               2015     Floating BA rate                            
  Acceptances (BA)               plus applicable         159.7        219.5  
credit spread                            
 Canadian Prime        2015      Prime rate plus                            
  Rate Loan                        credit spread           8.0         19.8 
 LIBOR Loans           2015  Floating LIBOR rate                             
plus applicable                             
credit spread          70.2        141.3 
 (US$71.4 million;                                                          
  2011- US$138.9                                                            
  million)                                                                  
 US Base Rate Loan     2015   US Prime rate plus                             
credit spread          13.8         29.7 
 (US$14.0 million;                                                          
  2011- US$29.2                                                             
  million)                                                                  
---------------------------------------------------------------------------- 
251.7        410.3 
----------------------------------------------------------------------------
Other Debt                                                                  
 Deferred             2012- Non-interest bearing           2.9          4.0 
  consideration        2016                                                 
---------------------------------------------------------------------------- 
2.9          4.0 
----------------------------------------------------------------------------
Senior Secured                                                              
 Notes(2)                                                                   
----------------------------------------------------------------------------
 Senior secured       2012-                7.65%         122.0        126.1 
  notes subject to     2015                                                 
  fixed interest                                                            
  rates (US$124.0                                                           
  million; 2011 -                                                           
  US$124.0 million)                                                         
---------------------------------------------------------------------------- 
Senior Unsecured                                                            
 Debentures                                                                 
----------------------------------------------------------------------------
 Senior unsecured      2016                8.25%         150.0        150.0 
  debentures                                                                
---------------------------------------------------------------------------- 
Finance Lease                                                               
 Obligations                                                                
----------------------------------------------------------------------------
 Finance lease                                            63.7         71.7 
  obligations                                                               
---------------------------------------------------------------------------- 
----------------------------------------------------------------------------
Total Borrowings before                                  590.3        762.1 
 deferred financing fees        
Deferred financing fees                                   (5.7)        (6.4)
----------------------------------------------------------------------------
Borrowings                                               584.6        755.7 
Current maturities                                       (47.4)       (54.3)
----------------------------------------------------------------------------
Borrowings                                               537.2        701.4 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Superior and its wholly-owned subsidiaries, Superior Plus Financing Inc. 
and Commercial E Industrial (Chile) Limitada, reduced the revolving term 
bank credit borrowing capacity to $570 million from $615 million on      
March 28, 2012. The credit facilities mature on June 27, 2015 and are    
secured by a general charge over the assets of Superior and certain of   
its subsidiaries. As at September 30, 2012, Superior had $30.5 million   
of outstanding letters of credit (December 31, 2011 - $34.8 million) and 
approximately $106.0 million of outstanding financial guarantees         
(December 31, 2011 - $84.2 million). The fair value of Superior's        
revolving term bank credits, other debt, letters of credit, and          
financial guarantees approximates their carrying value as a result of    
the market based interest rates, the short-term nature of the underlying 
debt instruments and other related factors.                              
(2) Senior secured notes (the Notes) totaling US$124.0 million and US$124.0  
million (respectively, Cdn$122.0 million at September 30, 2012 and       
Cdn$126.1 million at December 31, 2011) secured by a general charge over 
the assets of Superior and certain of its subsidiaries. Principal        
repayments began in the fourth quarter of 2009. Management has estimated 
the fair value of the Notes based on comparisons to treasury instruments 
with similar maturities, interest rates and credit risk profiles. The    
estimated fair value of the Notes as at September 30, 2012 was Cdn$130.8 
million (December 31, 2011 - Cdn$121.1 million).                         
Repayment requirements of Borrowings before deferred financing costs are as 
 follows:                                                                   
Current maturities                                                      47.5
Due in 2013                                                             49.9
Due in 2014                                                             45.2
Due in 2015                                                            289.7
Due in 2016                                                            154.8
Due in 2017                                                              3.2
Subsequent to 2017                                                         -
----------------------------------------------------------------------------
Total                                                                  590.3
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 


 
12. Convertible Unsecured Subordinated Debentures 
 
Superior's debentures are as follows:

 
---------------------------------------------------------------------------- 
December   October  December      June 
Maturity                                 2012      2015      2014      2017 
Interest rate                            5.75%     5.85%     7.50%     5.75%
Conversion price per share             $36.00    $31.25    $13.10    $19.00 
----------------------------------------------------------------------------
Debentures outstanding as at                                                
 September 30, 2012                         -      74.1      67.2     167.3 
Debentures outstanding as at                                                
 December 31, 2011                       49.3      73.9      66.6     166.6 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Quoted market value as at September                                         
 30, 2012                                   -      75.9      70.0     163.9 
Quoted market value as at December                                          
 31, 2011                                50.0      63.0      65.2     122.5 
---------------------------------------------------------------------------- 
---------------------------------------------------------------------------- 
June       October             
Maturity                                     2018       2016(1)        Total
Interest rate                                 6.0%          7.5%    Carrying
Conversion price per share                 $15.10        $11.35        Value
----------------------------------------------------------------------------
Debentures outstanding as at                                                
 September 30, 2012                         143.7          72.0        524.3
Debentures outstanding as at                                                
 December 31, 2011                          143.1          71.5        571.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Quoted market value as at September                                         
 30, 2012                                   143.3          80.4        533.5
Quoted market value as at December                                          
 31, 2011                                   105.6          62.3        468.6
----------------------------------------------------------------------------
(1) Superior issued $75.0 million in 7.5% convertible unsecured subordinated 
debentures during the fourth quarter of 2011.                            
(2) Superior redeemed $49.9 million being the outstanding amount on the      
5.75% December 2012 convertible unsecured subordinated debentures, on    
August 2, 2012.                                                          


 
The debentures may be converted into shares at the option of the
holder at any time prior to maturity and may be redeemed by Superior
in certain circumstances. Superior may elect to pay interest and
principal upon maturity or redemption by issuing shares to a trustee
in the case of interest payments, and to the debenture holders in the
case of payment of principal. The number of any shares issued will be
determined based on market prices for the shares at the time of
issuance. Also Superior has a cash conversion put option which allows
Superior to settle any conversion of debentures in cash, in lieu of
delivering common shares to the debenture holders of the June 2018
and October 2016 convertible debentures. The cash conversion put
option has been classified as an embedded derivative and measured at
fair value through net earnings (loss) (FVTNL) (see Note 13 for
further details).
 
13. Financial Instruments 
 
IFRS requires disclosure around fair value and specifies a hierarchy
of valuation techniques based on whether the inputs to those
valuation techniques are observable or unobservable. Observable
inputs reflect market data obtained from independent sources, while
unobservable inputs reflect Superior's market assumptions. These two
types of inputs create the following fair value hierarchy:

 
--  Level 1 - quoted prices in active markets for ide
ntical instruments. 
--  Level 2 - quoted prices for similar instruments in active markets; 
quoted prices for identical or similar instruments in markets that are 
not active; and model-derived valuations in which all significant inputs 
and significant value drivers are observable in active markets. 
--  Level 3 - valuations derived from valuation techniques in which one or 
more significant inputs or significant value drivers are unobservable.  


 
The fair value of a financial instrument is the amount of
consideration that would be estimated to be agreed upon in an
arm's-length transaction between knowledgeable, willing parties who
are under no compulsion to act. Fair values are determined by
reference to quoted bid or asking prices, as appropriate, in the most
advantageous active market for that instrument to which Superior has
immediate access. Where bid and ask prices are unavailable, Superior
uses the closing price of the most recent transaction of the
instrument. In the absence of an active market, Superior estimates
fair values based on prevailing market rates (bid and ask prices, as
appropriate) for instruments with similar characteristics and risk
profiles or internal or external valuation models, such as discounted
cash flow analysis using, to the extent possible, observable
market-based inputs. 
 
Fair values determined using valuation models require the use of
assumptions concerning the amount and timing of estimated future cash
flows and discount rates. In determining those assumptions, Superior
looks primarily to available readily observable external market
inputs including factors such as forecast commodity price curves,
interest rate yield curves, currency rates, and price and rate
volatilities as applicable. 
 
During August 2012, Specialty Chemicals received a payment of $15.8
million from TransCanada Energy Ltd., a subsidiary of TransCanada
Corporation, in connection with the arbitration ruling related to the
Sundance Power Purchase Agreement (PPA) between TransAlta Corporation
and TransCanada Corporation. The payment resulted from the Electrical
Sales Agreement (ESA) between TransCanada Corporation and Superior
whereby TransCanada Corporation supplies Superior with fixed-priced
energy from the PPA. A one-time gain of $12.5 million, representing
the payment, net of certain settlement costs, is recorded in cost of
goods sold. This settlement relates to Specialty Chemicals
fixed-price electricity purchase agreement which expires in 2017.

 
---------------------------------------------------------------------------- 
Asset (Liability)
----------------------------------------------------------------------------
Description                          Notional(1)       Term   Effective Rate
---------------------------------------------------------------------------- 
CDN$4.11/
Natural gas financial swaps-AECO     26.91 GJ(2)  2012-2017               GJ
Foreign currency forward                                                    
 contracts, net sale                 US$631.0(3)  2012-2015             1.03
Foreign currency forward                                                    
 contracts, balance sheet related        US$91.0  2012-2014             1.01 
Six month BA rate
Interest rate swaps - CDN$                $150.0  2012-2017       plus 2.65%
Debenture embedded derivative             $255.0  2012-2018                -
Energy Services Propane wholesale                                           
 purchase and sale contracts, net                                           
 sale                                7.61 USG(4)  2012-2013        $0.93/USG
Energy Services Butane wholesale                                            
 purchase and sale contracts, net                                           
 sale                                1.48 USG(4)  2012-2013        $1.48/USG
Energy Services Diesel wholesale                                            
 purchase and sale contracts, net                                           
 sale                                4.12 USG(4)       2012        $4.12/USG
Energy Services electricity swaps     0.85MWh(5)  2012-2016       $39.65/MWh
Energy Services swaps and option           19.74                            
 purchase and sale contracts          Gallons(4)       2012  $2.88 US/Gallon
---------------------------------------------------------------------------- 
---------------------------------------------------------------------------- 
Asset (Liability)
---------------------------------------------------------------------------- 
Fair Value  September 30, December 31,
Description                          Input Level           2012         2011
----------------------------------------------------------------------------
Natural gas financial swaps-AECO         Level 1         (43.5)       (78.9)
Foreign currency forward                                                    
 contracts, net sale                     Level 1           19.7          5.7
Foreign currency forward                                                    
 contracts, balance sheet related        Level 1          (1.3)            -
Interest rate swaps - CDN$               Level 2           11.0         10.9
Debenture embedded derivative            Level 3         (13.4)        (0.6)
Energy Services Propane wholesale                                           
 purchase and sale contracts, net                                           
 sale                                    Level 2            0.5        (0.6)
Energy Services Butane wholesale                                            
 purchase and sale contracts, net                                           
 sale                                    Level 2            0.7          0.2
Energy Services Diesel wholesale                                            
 purchase and sale contracts, net                                           
 sale                                    Level 2            0.1            -
Energy Services electricity swaps        Level 2         (11.7)       (16.0)
Energy Services swaps and option                                            
 purchase and sale contracts             Level 2              -        (0.7)
----------------------------------------------------------------------------
(1) Notional values as at September 30, 2012 (2) Millions of gigajoules     
purchased (3) Millions of dollars purchased (4) Millions of United States   
gallons purchased (5) Millions of mega watt hours (MWh)                     
---------------------------------------------------------------------------- 


 
All financial and non-financial derivatives are designated as fair
value through net earnings or loss upon their initial recognition.

 
---------------------------------------------------------------------------- 
Current Long-term     Current   Long-term
Description                         Assets    Assets Liabilities Liabilities
----------------------------------------------------------------------------
Natural gas financial swaps -                                               
 NYMEX and AECO                        0.1       0.1        27.7        16.0
Energy Services electricity                                                 
 swaps                                   -         -         6.4         5.3
Foreign currency forward                                                    
 contracts, net sale                  13.1       8.4         0.2         1.6
Foreign currency forward                                                    
 contracts, balance sheet                                                   
 related                                 -       0.1         0.8         0.6
Interest rate
 swaps                    2.6       8.4           -           -
Debenture embedded derivative            -         -           -        13.4
Energy Services propane                                                     
 wholesale purchase and sale                                                
 contracts                             4.2         -         3.7           -
Energy Services butane wholesale                                            
 purchase and sale contracts           0.7         -           -           -
Energy Services heating oil                                                 
 purchase and sale contracts           0.9         -         0.9           -
Energy Services diesel purchase                                             
 and sale contracts                    0.1         -           -           -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
As at September 30, 2012              21.7      17.0        39.7        36.9
As at December 31, 2011               13.3      16.0        61.7        47.6
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
---------------------------------------------------------------------------- 
For the three months   For the three months  
ended                  ended  
September 30, 2012     September 30, 2011  
Realized               Realized              
gain  Unrealized       gain  Unrealized 
Description                       (loss)  gain(loss)     (loss) gain (loss) 
----------------------------------------------------------------------------
Natural gas financial swaps -                                               
 NYMEX and AECO                    (13.9)       20.0      (14.9)        9.8 
Energy Services electricity                                                 
 swaps                              (2.2)        5.7       (1.9)        0.6 
Foreign currency forward                                                    
 contracts, net sale                 4.1        19.9        3.6       (46.2)
Foreign currency forward                                                    
 contracts, balance sheet                                                   
 related                               -        (2.4)       1.2         8.1 
Interest rate swaps                    -         1.6          -        (4.4)
Energy Services propane                                                     
 wholesale purchase and sale                                                
 contracts                             -        (0.5)         -        (1.9)
Energy Services butane                                                      
 wholesale purchase and sale                                                
 contracts                             -         0.9          -         2.9 
Energy Services heating oil                                                 
 purchase and sale contracts        (6.1)        1.6       (0.6)        1.3 
Energy Services diesel                                                      
 purchase and sale contracts           -         0.1          -           - 
Specialty Chemicals fixed-                                                  
 price power purchase                                                       
 agreements                         (0.4)          -       (1.3)          - 
----------------------------------------------------------------------------
Total realized and unrealized                                               
 (losses) gains on financial                                                
 and non-financial derivatives     (18.5)       46.9      (13.9)      (29.8)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Foreign currency translation                                                
 of senior secured notes               -         4.4          -       (11.6)
Change in fair value of                                                     
 debenture embedded derivative         -       (12.5)         -         2.7 
----------------------------------------------------------------------------
Total realized and unrealized                                               
 (losses) gains                    (18.5)       38.8      (13.9)      (38.7)
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
For the nine months    For the nine months  
ended                  ended  
September 30, 2012     September 30, 2011  
Realized               Realized              
gain  Unrealized       gain  Unrealized 
Description                       (loss)  gain(loss)     (loss) gain (loss) 
----------------------------------------------------------------------------
Natural gas financial swaps -                                               
 NYMEX and AECO                    (44.3)       35.4      (50.3)       32.4 
Energy Services electricity                                                 
 swaps                              (9.3)        4.3       (4.9)        1.1 
Foreign currency forward                                                    
 contracts, net sale                 6.7        14.0       15.2       (46.2)
Foreign currency forward                                                    
 contracts, balance sheet                                                   
 related                               -        (1.3)       1.2         9.3 
Interest rate swaps                  1.2         0.1          -         1.6 
Energy Services propane                                                     
 wholesale purchase and sale                                                
 contracts                             -         1.1          -           - 
Energy Services butane                                                      
 wholesale purchase and sale                                                
 contracts                             -         0.5          -         3.1 
Energy Services heating oil                                                 
 purchase and sale contracts        (5.6)        0.7       (1.1)       (0.8)
Energy Services diesel                                                      
 purchase and sale contracts           -         0.1          -           - 
Specialty Chemicals fixed-                                                  
 price power purchase                                                       
 agreements                         (1.8)          -       (2.5)       (5.4)
----------------------------------------------------------------------------
Total realized and unrealized                                               
 (losses) gains on financial                                                
 and non-financial derivatives     (53.1)       54.9      (42.4)       (4.9)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Foreign currency translation                                                
 of senior secured notes               -         4.1          -        (6.9)
Change in fair value of                                                     
 debenture embedded derivative         -       (12.8)         -         1.8 
----------------------------------------------------------------------------
Total realized 
and unrealized                                               
 (losses) gains                    (53.1)       46.2      (42.4)      (10.0)
---------------------------------------------------------------------------- 


 
Realized gains (losses) on financial and non-financial derivatives
and foreign currency translation gains (losses) on the revaluation of
Canadian domiciled US-denominated working capital have been
classified on the statement of net earnings (loss) based on the
underlying nature of the financial statement line item and/or the
economic exposure being managed. 
 
The following summarizes Superior's classification and measurement of
financial assets and liabilities:

 
---------------------------------------------------------------------------- 
Classification     Measurement
----------------------------------------------------------------------------
Financial Assets                                                            
Cash and cash equivalents              Loans and receivables  Amortized cost
Trade and other receivables            Loans and receivables  Amortized cost
Derivative assets                                      FVTNL      Fair Value
Notes and finance lease receivables    Loans and receivables  Amortized cost
Financial liabilities                                                       
Trade and other payables                   Other liabilities  Amortized cost
Dividends and interest payable             Other liabilities  Amortized cost
Borrowings                                 Other liabilities  Amortized cost
Convertible unsecured subordinated                                          
 debentures(1)                             Other liabilities  Amortized cost
Derivative liabilities                                 FVTNL      Fair Value
----------------------------------------------------------------------------
(1) Except for derivatives embedded in the related financial instruments     
that are classified as FVTNL and measured at fair value.                 


 
Non-Derivative Financial Instruments
 
The fair value of Superior's cash and cash equivalents, trade and
other receivables, notes and finance lease receivables, trade and
other payables, and dividends and interest payable approximates their
carrying value due to the short-term nature of these amounts. The
carrying value and the fair value of Superior's borrowings and
debentures, are provided in Notes 11 and 12.
 
Financial Instruments - Risk Management
 
Market Risk 
 
Financial derivatives and non-financial derivatives are used by
Superior to manage its exposure to fluctuations in foreign currency
exchange rates, interest rates and commodity prices. Superior
assesses the inherent risks of these instruments by grouping
derivative and non-financial derivatives related to the exposures
these instruments mitigate. Superior's policy is not to use financial
derivative or non-financial derivative instruments for speculative
purposes. Superior does not formally designate its derivatives as
hedges; as a result, Superior does not apply hedge accounting and is
required to designate its financial derivatives and non-financial
derivatives as fair value through net earnings or loss. Details on
Superior's market risk policies are consistent with those disclosed
in Superior's 2011 annual consolidated financial statements. 
 
Credit Risk 
 
Superior utilizes a variety of counterparties in relation to its
derivative and non-financial derivative instruments in order to
mitigate its counterparty risk. Superior assesses the credit
worthiness of its significant counterparties at the inception and
throughout the term of a contract. Superior is also exposed to
customer credit risk. Energy Services deals with a large number of
small customers, thereby reducing this risk. Specialty Chemicals, due
to the nature of its operations, sells its products to a relatively
small number of customers. Specialty Chemicals mitigates its customer
credit risk by actively monitoring the overall credit worthiness of
its customers. Energy Services has minimal exposure to customer
credit risk as local natural gas and electricity distribution
utilities have been mandated, for a nominal fee, to provide Energy
Services with invoicing, collection and the assumption of bad debts
risk for residential customers. Energy Services actively monitors the
credit worthiness of its commercial customers. Overall, Superior's
credit quality is enhanced by its portfolio of customers which is
diversified across both geographic (primarily Canada and North
America) and end-use (primarily commercial, residential and
industrial) markets.
 
Allowance for doubtful accounts and past due receivables are reviewed
by Superior at each reporting date. Superior updates its estimate of
the allowance for doubtful accounts based on the evaluation of the
recoverability of trade receivable balances of each customer taking
into account historic collection trends of past due accounts and
current economic conditions. Trade receivables are written-off once
it is determined they are not collectable. 
 
Pursuant to their respective terms, trade receivables, before
deducting an allowance for doubtful accounts, are aged as follows:

  
September 30,   December 31, 
2012           2011
----------------------------------------------------------------------------
Current                                                 229.3          280.3
Past due less than 90 days                               88.0          128.1
Past due over 90 days                                    16.7           39.5
----------------------------------------------------------------------------
Trade Receivable                                        334.0          447.9
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 


 
The current portion of Superior's trade receivable is neither
impaired nor past due and there are no indications as of the
reporting date that the debtors will not meet their obligations to
pay.
 
Superior's trade receivables are stated after deducting a provision
of $11.3 million as at September 30, 2012 (December 31, 2011 - $20.8
million). The movement in the provision for doubtful accounts was as
follows:

  
September 30,   December 31,  
2012           2011 
----------------------------------------------------------------------------
Allowance for doubtful accounts, opening               (20.8)         (14.0)
  Opening adjustment due to acquisitions                   -            0.3 
  Impairment losses recognized on receivables           (3.3)         (10.8)
  Amounts recovered                                      0.3            3.7 
  Amounts written off during the period as                                   
uncollectible                                        12.5              - 
----------------------------------------------------------------------------
Allowance for doubtful accounts, ending                (11.3)         (20.8)
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 


 
Liquidity Risk
 
Liquidity risk is the risk that Superior cannot meet a demand for
cash or fund an obligation as it comes due. Liquidity risk also
includes the risk of not being able to liquidate assets in a timely
manner at a reasonable price.
 
To ensure Superior is able to react to contingencies and investment
opportunities quickly, Superior maintains sources of liquidity at the
corporate and subsidiary level. The primary source of liquidity
consists of cash and other financial assets, undrawn committed
revolving term bank credit facility, equity market
s and debenture
markets.
 
Superior is subject to the risks associated with debt financing,
including the ability to refinance indebtedness at maturity. Superior
believes these risks are mitigated through the use of long-term debt
secured by high quality assets, maintaining debt levels that in
management's opinion are appropriate, and by diversifying maturities
over an extended period of time. Superior also seeks to include in
its agreements terms that protect it from liquidity issues of
counterparties that might otherwise impact liquidity.
 
Superior's contractual obligations associated with its financial
liabilities are as follows:

  
2017 and         
2012   2013   2014   2015  2016 Thereafter  Total 
----------------------------------------------------------------------------
Revolving term bank                                                         
 credits and term loans   47.5   49.9   45.2  289.7 154.8        3.2  590.3 
Convertible unsecured                                                       
 subordinated debentures     -      -   69.0   75.0  75.0      322.5  541.5 
US$ foreign currency                                                        
 forward sales contracts                                                    
 (US$)                    68.4  218.0  156.0  144.0  56.4          -  642.8 
US$ foreign currency                                                        
 forward purchases                                                          
 contracts (US$)         (36.7) (39.0) (27.0)     -     -          - (102.7)
CDN$ natural gas                                                            
 purchases                 6.7   11.7    2.9    0.5   0.4        0.3   22.5 
CDN$ butane purchases      0.4    0.1      -      -     -          -    0.5 
CDN$ propane purchases                                                      
 (CDN$)                    4.3    4.3    0.1    0.1     -          -    8.8 
US$ propane purchases                                                       
 (US$)                     1.5    1.1      -      -     -          -    2.6 
CDN$ diesel purchases                                                       
 (CDN$)                    0.1      -      -      -     -          -    0.1 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 


 
Superior's contractual obligations are considered to be normal course
operating commitments and do not include the impact of mark-to-market
fair values on financial and non-financial derivatives. Superior
expects to fund these obligations through a combination of cash flow
from operations, proceeds on revolving term bank credits and proceeds
on the issuance of share capital. Superior's financial instruments'
sensitivities as at September 30, 2012 are consistent with those
disclosed in Superior's 2011 annual consolidated financial
statements.
 
14. Income Taxes 
 
Consistent with prior periods, Superior recognizes a provision for
income taxes for its subsidiaries that are subject to current and
deferred income taxes, including United States income tax and Chilean
income tax. 
 
Total income tax (expense) recovery, comprised of current taxes and
deferred taxes for the three and nine months ended September 30, 2012
was $(7.6) million and $(9.9) million, respectively, compared to
$19.7 million and $6.7 million in the comparative periods. Income
taxes were impacted by higher net earnings and the prior year period
was impacted by the impairment charge of $78.0 million. For the three
and nine months ended September 30, 2012, deferred income tax expense
from operations in Canada, the United States and Chile was $7.3
million and $9.1 million, respectively, which resulted in a
corresponding total net deferred income tax asset of $303.2 million.
The deferred income tax recovery for the three and nine months ended
September 30, 2011 was a $19.6 million and $6.8 million,
respectively.
 
15. Total Equity
 
Superior is authorized to issue an unlimited number of common shares
and an unlimited number of preferred shares. The holders of common
shares are entitled to dividends if, as and when, declared by the
Board of Directors: to one vote per share at meetings of the holders
of common shares; and upon liquidation, dissolution or winding up of
Superior to receive pro rata the remaining property and assets of
Superior, subject to the rights of any shares having priority over
the common shares, of which none are outstanding. 
 
Preferred shares are issuable in series with each class of preferred
share having such rights as the Board of Directors may determine.
Holders of preferred shares are entitled, in priority to holders of
common shares, to be paid ratably with holders of each other series
of preferred shares the amount of accumulated dividends, if any,
specified to be payable preferentially to the holders of such series
upon liquidation, dissolution or winding up of Superior. Superior
does not have any preferred shares outstanding.

  
Issued Number of           
Common Shares    Total  
(Millions)   Equity 
----------------------------------------------------------------------------
Total equity, December 31, 2011                              110.8    349.6 
  Net earnings for the period                                    -     78.9 
  Option value associated with the issuance of                               
the convertible debentures                                    -     (0.8)
  Other comprehensive loss                                       -    (20.9)
  Issuance of common shares for the dividend                                 
reinvestment plan                                           1.6     10.6 
  Dividends declared to shareholders (1)                         -    (50.3)
----------------------------------------------------------------------------
Total equity, September 30, 2012                             112.4    367.1 
----------------------------------------------------------------------------
(1) Dividends to shareholders are declared at the discretion of Superior.    
During the nine months ended September 30, 2012, Superior paid dividends 
of $50.2 million or $0.45 per share (September 30, 2011 - $109.1 million 
or $0.96 per share).                                                     


 
Other Capital Disclosures
 
Additional Capital Disclosures 
 
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 Superior's assets while at the
same time 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) (AOCL), 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 and/or increase or decrease the amount of securitized
accounts receivable. 
 
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 other public reports of Superior.
 
Superior is subject to various financial covenants in its credit
facility agreements, including senior debt and total debt to EBITDA
ratios, which are measured on a quarterly basis. As at September 30,
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 have 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: 

 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
September 30,   December 31, 
As at                                                   2012           2011 
----------------------------------------------------------------------------
Total shareholders' equity                             367.1          349.6 
Exclude accumulated other comprehensive loss            76.2           55.3 
----------------------------------------------------------------------------
Shareholders' equity (excluding AOCL)                  443.3          404.9  
Current borrowings (1)                                  47.4           54.3 
Borrowings (1)                                         542.9          707.8 
Less: Senior unsecured notes                          (150.0)        (150.0)
----------------------------------------------------------------------------
Consolidated secured debt                              440.3          612.1 
Add: Senior unsecured notes                            150.0          150.0 
----------------------------------------------------------------------------
Consolidated debt                                      590.3          762.1 
Current portion of convertible unsecured                                    
 subordinated debentures(1)                                -           49.9 
Convertible unsecured subordinated debentures                               
 (1)                                                   541.5          539.3 
----------------------------------------------------------------------------
Total debt                                           1,131.8        1,351.3  
----------------------------------------------------------------------------
Total capital                                        1,575.1        1,756.2 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Borrowings and convertible unsecured subordinated debentures are before  
deferred issue costs and option value.                                   
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
September 30,   December 31, 
Twelve months ended                                     2012           2011 
----------------------------------------------------------------------------
Net loss                                              (152.5)        (302.6)
Adjusted for:                                                               
  Finance expense                                       80.1           85.5 
  Realized gains on derivative financial                                     
instruments included in finance expense               2.2            2.3 
  Depreciation of property, plant and                                        
equipment                                            46.9           47.9 
  Depreciation and amortization included in                                  
cost of sales                                        44.8           44.9 
  Amortization of intangible assets                     28.5           41.9 
  (Gains) losses on disposal of assets                  (1.6)           0.5 
  Impairment of intangible assets and goodwill         300.6          378.6 
  Impairment of property, plant and equipment            3.4            3.4 
  Income tax recovery                                  (33.8)         (50.4)
  Unrealized (gains) losses on derivative                                    
financial instruments                               (46.5)           9.7 
  Proforma impact of acquisitions                        1.2            1.5 
----------------------------------------------------------------------------
Compliance EBITDA (1)                                  273.3          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.                                                                
September 30,   December 31, 
2012           2011
----------------------------------------------------------------------------
Consolidated secured debt to Compliance EBITDA          1.6:1          2.3:1
Consolidated debt to Compliance EBITDA                  2.2:1          2.9:1
Total debt to Compliance EBITDA                         4.1:1          5.1:1
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
16. Net Earnings (Loss) per Share                                            
Three months ended   Nine months ended  
September 30,       September 30,  
2012     2011       2012     2011 
----------------------------------------------------------------------------
Net earnings (loss) per share                                               
 computation, basic                                                         
  Net earnings (loss) for the period      36.7   (113.4)      78.9    (71.2)
  Weighted average shares                                                    
outstanding                           112.2    109.5      111.6    108.8 
----------------------------------------------------------------------------
Net earnings (loss) per share, basic   $  0.33  $ (1.04)   $  0.71  $ (0.65)
----------------------------------------------------------------------------
------------------------
---------------------------------------------------- 
Three months ended   Nine months ended  
September 30,       September 30,  
2012     2011       2012     2011 
----------------------------------------------------------------------------
Net earnings (loss) per share                                               
 computation, diluted (1)                                                   
  Diluted Net earnings (loss) for                                            
the period                             39.8   (113.4)      88.0    (71.2)
  Diluted Weighted average shares                                            
outstanding                           126.5    109.5      126.0    108.8 
----------------------------------------------------------------------------
Net earnings (loss) per share,                                              
 diluted                               $  0.31  $ (1.04)   $  0.70  $ (0.65)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The following convertible debentures have been excluded from this        
calculation as they were anti-dilutive; 5.85% convertible debentures,    
6.00% convertible debentures, and the 7.5% convertible debentures.       
17. Supplemental Disclosure of Non-Cash Operating Working Capital Changes    
Three months ended   Nine months ended  
September 30,       September 30,  
2012      2011      2012      2011 
----------------------------------------------------------------------------
Changes in non-cash working capital                                         
  Trade receivable and other             (3.7)     48.8     131.0     136.8 
  Inventories                           (32.0)    (40.7)      9.8     (29.7)
  Trade and other payables               55.0      45.7       7.6     (12.4)
  Purchased working capital               1.1      (0.5)      1.1      39.5 
  Other                                  (9.1)     15.5     (10.0)      4.1 
---------------------------------------------------------------------------- 
11.3      69.3     139.5      98.8 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 


 
18. Supplemental Disclosure of Condensed Consolidated Statement of
Comprehensive Income

  
Three months ended  Nine months ended   
September 30,       September 30,  
2012      2011      2012      2011 
----------------------------------------------------------------------------
Revenues                                                                    
  Revenue from products                 767.2     817.3   2,620.3   2,801.9 
  Revenue from the rendering of                                              
services                              13.4      16.0      40.9      44.8 
  Rental revenue                          7.1       7.1      18.4      21.5 
  Construction contract revenue           0.1      (0.1)      5.4       0.2 
  Realized gains on derivative                                               
financial instruments                  2.3       4.7       5.3      13.8 
---------------------------------------------------------------------------- 
790.1     845.0   2,690.3   2,882.2 
---------------------------------------------------------------------------- 
Cost of sales (includes products and                                        
 services)                                                                  
  Cost of products and services        (562.5)   (636.7) (1,979.3) (2,198.4)
  Depreciation of property, plant                                            
and equipment                        (10.9)    (11.2)    (33.4)    (33.5)
  Realized losses on derivative                                              
financial instruments                (20.8)    (18.6)    (59.5)    (57.4)
---------------------------------------------------------------------------- 
(594.2)   (666.5) (2,072.2) (2,289.3)
---------------------------------------------------------------------------- 
Selling, distribution and                                                   
 administrative costs                                                       
  Other selling, distribution and                                            
administrative costs                  85.7      85.3     252.8     242.6 
  Employee costs                         66.1      61.3     209.5     207.1 
  Employee future benefit expense         0.7       0.8       2.2       2.3 
  Depreciation of property, plant                                            
and equipment                         11.5       9.5      31.7      32.7 
  Amortization of intangible assets       6.0      16.8      18.7      32.1 
  (Gains) losses on disposal of                                              
assets                                (0.7)      0.1      (0.7)      1.4 
  Realized (gains) losses on the                                             
translation of U.S. denominated                                           
net working capital                    1.8      (1.1)      1.9      (0.2)
---------------------------------------------------------------------------- 
171.1     172.7     516.1     518.0 
---------------------------------------------------------------------------- 
Finance expense                                                             
  Interest on borrowings                  8.0       9.4      25.2      28.2 
  Interest on convertible unsecured                                          
subordinated debentures                8.8       9.8      27.3      29.0 
  Interest on obligations under                                              
finance leases                         1.5       1.3       3.7       3.8 
  Gain on debenture redemption           (0.8)        -      (0.8)        - 
  Unwind of discount on debentures,                                          
borrowing anddecommissioning                                              
liabilities                            1.8       1.7       5.1       5.0 
  Realized gains on derivative                                               
financial instruments                    -         -      (1.1)     (1.2)
---------------------------------------------------------------------------- 
19.3      22.2      59.4      64.8 
---------------------------------------------------------------------------- 


 
19. Related Party Transactions
 
Transactions between Superior and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed
in this note.
 
For the three and nine months ended September 30, 2012, Superior
incurred $0.2 million (September 30, 2011 - $0.2 million) and $0.6
million (September 30, 2011- $1.3 million), respectively in legal
fees respectively with Norton Rose Canada LLP. Norton Rose Canada LLP
is a related party with Superior as a board member is a Partner at
the 
law firm.
 
20. Reportable Segment Information
 
Superior has adopted IFRS 8 Operating Segments, which requires
operating segments to be identified on the basis of internal reports
about components of the Company that are regularly reviewed by the
chief operating decision maker in order to allocate resources to the
segments and to assess their performance. Segment revenues reported
below represents revenues generated from external customers.

 
----------------------------------------------------------------------------
For the three                                                               
 months ended                          Construction                         
 September 30,       Energy  Specialty     Products                   Total 
 2012              Services  Chemicals Distribution Corporate  Consolidated 
----------------------------------------------------------------------------
Revenues              453.8      134.5        201.8         -         790.1 
Cost of sales                                                               
 (includes product                                                          
 & services)         (368.4)     (70.7)      (155.1)        -        (594.2)
----------------------------------------------------------------------------
Gross Profit           85.4       63.8         46.7         -         195.9 
Expenses                                                                    
  Selling,                                                                   
distribution                                                              
and                                                                       
administrative                                                            
costs               86.1       34.9         44.8       5.3         171.1 
  Finance expense       1.3        0.1          0.2      17.7          19.3 
  Unrealized gains                                                           
on derivative                                                             
financial                                                                 
instruments        (27.8)         -            -     (11.0)        (38.8)
---------------------------------------------------------------------------- 
59.6       35.0         45.0      12.0         151.6 
----------------------------------------------------------------------------
Net earnings                                                                
 (loss) before                                                              
 income taxes          25.8       28.8          1.7     (12.0)         44.3 
Income tax expense        -          -            -      (7.6)         (7.6)
----------------------------------------------------------------------------
Net earnings                                                                
 (loss)                25.8       28.8          1.7     (19.6)         36.7 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
----------------------------------------------------------------------------
For the three                                                               
 months ended                          Construction                         
 September 30,       Energy  Specialty     Products                   Total 
 2011              Services  Chemicals Distribution Corporate  Consolidated 
----------------------------------------------------------------------------
Revenues              522.6      133.1        189.3         -         845.0 
Cost of sales                                                               
 (includes product                                                          
 & services)         (437.3)     (84.6)      (144.6)        -        (666.5)
----------------------------------------------------------------------------
Gross Profit           85.3       48.5         44.7         -         178.5 
Expenses                                                                    
  Selling,                                                                   
distribution                                                              
and                                                                       
administrative                                                            
costs              100.3       31.1         39.8       1.5         172.7 
  Finance expense       0.9        0.1          0.4      20.8          22.2 
  Impairment of                                                              
intangible                                                                
assets and                                                                
goodwill               -          -         78.0         -          78.0 
  Unrealized                                                                 
(gains) losses                                                            
on derivative                                                             
financial                                                                 
instruments        (12.8)         -            -      51.5          38.7 
---------------------------------------------------------------------------- 
88.4       31.2        118.2      73.8         311.6 
----------------------------------------------------------------------------
Net earnings                                                                
 (loss) before                                                              
 income taxes          (3.1)      17.3        (73.5)    (73.8)       (133.1)
Income tax                                                                  
 recovery                 -          -            -      19.7          19.7 
----------------------------------------------------------------------------
Net earnings                                                                
 (loss)                (3.1)      17.3        (73.5)    (54.1)       (113.4)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
For the nine                                                                
 months ended                          Construction                         
 September 30,       Energy  Specialty     Products                   Total 
 2012              Services  Chemicals Distribution Corporate  Consolidated 
----------------------------------------------------------------------------
Revenues            1,699.4      405.2        585.7         -       2,690.3 
Cost of sales                                                               
 (includes product                                                          
 & services)       (1,381.6)    (241.2)      (449.4)        -      (2,072.2)
----------------------------------------------------------------------------
Gross Profit          317.8      164.0        136.3         -         618.1 
Expenses                                                                    
  Selling,                                                                   
distribution                                                              
and                                                                       
administrative                                                            
costs              271.3      104.0        128.1      12.7         516.1 
  Finance expense       3.3        0.2          0.5      55.4          59.4 
  Unrealized gains                                                           
on derivative                                                             
financial                                                                 
instr
uments        (42.1)         -            -      (4.1)        (46.2)
---------------------------------------------------------------------------- 
232.5      104.2        128.6      64.0         529.3 
----------------------------------------------------------------------------
Net earnings                                                                
 (loss) before                                                              
 income taxes          85.3       59.8          7.7     (64.0)         88.8 
Income tax expense        -          -            -      (9.9)         (9.9)
----------------------------------------------------------------------------
Net earnings                                                                
 (loss)                85.3       59.8          7.7     (73.9)         78.9 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
----------------------------------------------------------------------------
For the nine                                                                
 months ended                          Construction                         
 September 30,       Energy  Specialty     Products                   Total 
 2011              Services  Chemicals Distribution Corporate  Consolidated 
----------------------------------------------------------------------------
Revenues            1,958.5      390.0        533.7         -       2,882.2 
Cost of sales                                                               
 (includes product                                                          
 & services)       (1,630.1)    (252.5)      (406.7)        -      (2,289.3)
----------------------------------------------------------------------------
Gross Profit          328.4      137.5        127.0         -         592.9 
Expenses                                                                    
  Selling,                                                                   
distribution                                                              
and                                                                       
administrative                                                            
costs              297.6       95.2        116.6       8.6         518.0 
  Finance expense       2.9        0.2          0.9      60.8          64.8 
  Impairment of                                                              
intangible                                                                
assets and                                                                
goodwill               -          -         78.0         -          78.0 
  Unrealized                                                                 
losses (gains)                                                            
on derivative                                                             
financial                                                                 
instruments        (35.8)       5.4            -      40.4          10.0 
---------------------------------------------------------------------------- 
264.7      100.8        195.5     109.8         670.8 
----------------------------------------------------------------------------
Net earnings                                                                
 (loss) before                                                              
 income taxes          63.7       36.7        (68.5)   (109.8)        (77.9)
Income tax expense        -          -            -       6.7           6.7 
----------------------------------------------------------------------------
Net earnings                                                                
 (loss)                63.7       36.7        (68.5)   (103.1)        (71.2)
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 


 
Net working capital, Total assets, Total liabilities, Acquisitions
and Purchase of property, plant and equipment

 
---------------------------------------------------------------------------- 
Construction                          
Energy  Specialty     Products                    Total 
Services  Chemicals Distribution Corporate   Consolidated
----------------------------------------------------------------------------
As at September                                                             
 30, 2012                                                                   
 Net working                                                                
  capital (1)         126.5       15.2        113.4     (36.8)         218.3
 Total assets         653.0      583.5        214.4     530.7        1,981.6
 Total                                                                      
  liabilities         294.7      180.1         88.3   1,051.4        1,614.5
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As at December                                                              
 31, 2011                                                                   
 Net working                                                                
  capital (1)         239.8       25.7        129.8     (18.0)         377.3
 Total assets       1,008.3      618.8        218.8     347.5        2,193.4
 Total                                                                      
  liabilities         369.2      208.3         68.8   1,197.5        1,843.8
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For the three                                                               
 months ended                                                               
 September 30,                                                              
 2012                                                                       
 Acquisitions           4.5          -            -         -            4.5
 Purchase of                                                                
  property, plant                                                           
  and equipment         4.5        3.5          0.5         -            8.5
----------------------------------------------------------------------------
For the three                                                               
 months ended                                                               
 September 30,                                                              
 2011                                                                       
 Acquisitions           9.3          -            -         -            9.3
 Purchase of                                                                
  property, plant                                                           
  and equipment         4.3        4.3          0.4         -            9.0
----------------------------------------------------------------------------
For the nine                                                                
 months ended                                                               
 September 30,                                                              
 2012                                                                       
 Acquisitions           4.5          -            -         -            4.5
 Purchase of                                                                
  property, plant                                                           
  and equipment         9.8       10.7          1.2         -           21.7
----------------------------------------------------------------------------
For the nine                                                                
 months ended                       
September 30,                                                              
 2011                                                                       
 Acquisitions          13.1          -            -         -           13.1
 Purchase of                                                                
  property, plant                                                           
  and equipment        11.7       10.4          1.5         -           23.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Net working capital reflects amounts as at the quarter end and is        
comprised of trade and other receivables, prepaid expenses and           
inventories, less trade and other payables, deferred revenue and         
dividends and interest payable.                                          


 
Geographic Information

  
United                    Total 
Canada    States     Other   Consolidated
----------------------------------------------------------------------------
Revenues for the three months                                               
 ended September 30, 2012           292.3     476.2      21.6          790.1
Revenues for the nine months                                                
 ended September 30, 2012         1,060.1   1,552.3      77.9        2,690.3
Property, plant and equipment                                               
 as at September 30, 2012           460.5     326.0      45.3          831.8
Intangible assets as at                                                     
 September 30, 2012                  17.6      26.0         -           43.6
Goodwill as at September 30,                                                
 2012                               188.3       0.8         -          189.1
Total assets as at September                                                
 30, 2012                         1,334.0     585.1      62.5        1,981.6
----------------------------------------------------------------------------
Revenues for the three months                                               
 ended September 30, 2011           363.0     459.5      22.5          845.0
Revenues for the nine months                                                
 ended September 30, 2011         1,252.3   1,564.0      65.9        2,882.2
Property, plant and equipment                                               
 as at December 31, 2011            486.5     349.3      49.2          885.0
Intangible assets as at                                                     
 December 31, 2011                   26.9      38.7         -           65.6
Goodwill as at December 31,                                                 
 2011                               185.6       0.5         -          186.1
Total assets as at December 31,                                             
 2011                             1,337.9     788.3      67.1        2,193.4
---------------------------------------------------------------------------- 


 
Contacts:
Superior Plus Corp.
Wayne Bingham
Executive Vice-President and Chief Financial Officer
(403) 218-2951
(403) 218-2973 (FAX)
wbingham@superiorplus.com
 
Superior Plus Corp.
Jay Bachman
Vice-President, Investor Relations and Treasurer
(403) 218-2957
(403) 218-2973 (FAX)
Toll Free: 1-866-490-PLUS (7587)
jbachman@superiorplus.com


 
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