Parkland Fuel Corporation Reports Record Results for 2012
- Strength of Progress on Parkland Penny Plan Leads to Two Cent Dividend Increase for an Annualized Dividend of $1.04 Commencing in March. Parkland to Provide Update on Penny Plan and 2014 - 2016 Forecast at March 18, 2013 Analyst and Investor Day -
RED DEER, AB, Feb. 26, 2013 /CNW/ - Parkland Fuel Corporation ("Parkland" or the "Corporation") (TSX: PKI), Canada's largest independent distributor and marketer of fuels and lubricants, today announced the financial and operating results for the three and twelve months ended December 31, 2012.
2012 Q4 and Total Year Operational Highlights:
For the three months ended For the twelve months ended December 31, December 31, 2012 2011 % Change 2012 2011 % Change (in millions of litres) Total fuel 1,062 1,096 (3) 4,241 4,161 2 volume Retail fuel 443 464 (5) 1,807 1,687 7 volume Commercial 382 476 (20) 1,502 1,784 (16) fuel volume* (in millions of Canadian dollars) Net earnings 9.5 7.4 28 84.9 43.9 93 EBITDA ((1)) 41.2 36.0 14 199.0 150.9 32 Distributable 20.8 26.1 (20) 129.9 126.2 3 cash flow ((1) (2)) Dividend to 83% 62% 52% 48% distributable cash flow payout ratio ______________________________________________________________ |*Fuel volumes of 40 million litres and 161 million litres for | |the three and twelve months ended December 31 | |respectively were re-allocated from the commercial division to| |the wholesale division in 2012. | |______________________________________________________________| Grow -- Volume up 80.0 million litres primarily due to an additional 109.7 million litres from the acquisition of Cango in the second quarter of 2011, partially offset by lower Commercial volumes including home heat; -- Acquisition of Elbow River Marketing in 2013 will add annual EBITDA of approximately $20 million; and -- Reduced costs and strong margins from Retail offset challenging Commercial Fuels business environment. Supply -- Acquisition of Elbow River Marketing enhances Parkland's ability to take advantage of North American supply and demand imbalances and extends relationships with refiners, fuel suppliers, and fuel customers; -- Bowden Terminal, with a storage capacity of 35 million litres (220,000 barrels), became operational in the third quarter on schedule and on budget; and -- Strong refiners' margins in the fourth quarter helped establish record high refiners' margins in 2012. Operate -- 7% year-over-year reduction in net unit operating costs ("NUOC") due to reduced operating costs, reduced marketing general and administrative costs and the elimination of $11.3 million in one-time items reported in 2011, partially offset by reductions in non-fuel commercial and other non-fuel gross profits; and -- Strong operating cash flow continues to improve balance sheet. "2012 was another record year for Parkland with EBITDA hitting $199 million, a 93% increase in earnings to $85 million, and a 73% increase in earnings per share. As a result of the traction we have achieved with the Parkland Penny Plan, the corporation is announcing an increase in its annual dividend of two cents to $1.04 per year for our shareholders beginning in March," said Bob Espey, President and Chief Executive Officer of Parkland. "Through the recent acquisition of Elbow River Marketing, we continue to strengthen our supply capability. Our commercial operating team continues to make significant improvements to the business that will not only continue to reduce costs but also improve customer service. Record profits from refiners` margins in 2012 have added tremendous strength and flexibility to our balance sheet, and we remain well positioned to grow through further acquisitions in 2013." "Although we experienced some softness in our core commercial markets due to a slower natural resource sector our sales team was able to partially offset the impact with new sales wins. While the contraction in our base business in commercial was contrary to the organic growth aspirations outlined in the Penny Plan, we are well positioned for growth when the industries we support pick up again." added Mr. Espey. Consolidated Highlights: Three months ended December 31, Year ended December 31, (in millions of Canadian dollars, except volume and per Share amounts) 2012 2011 % Change 2012 2011 % Change Income Statement Summary Sales and 998.4 1,014.3 (2) 4,133.6 3,980.5 4 operating revenues Gross profit 104.0 103.1 1 437.0 408.4 7 Operating 39.8 44.5 11 152.9 172.7 11 costs Marketing, 21.7 22.4 3 79.5 86.9 9 general and administrative Depreciation 16.0 16.7 4 54.7 68.4 20 and amortzation expense 26.5 19.5 36 149.9 80.5 86 Customer (1.0) (0.7) 43 (3.5) (2.8) 25 finance income Finance costs 4.2 10.5 60 20.2 36.7 45 Loss (gain) on 0.2 (1.1) 0.3 (15.9) disposal of property, plant and equipment Loss on put 2.3 0.9 9.1 0.8 options contract Earnings 20.8 9.8 112 123.8 61.6 101 before income taxes Income tax 11.3 2.4 (371) 38.9 17.7 (120) expense Net earnings 9.5 7.4 28 84.9 43.9 93 Net earnings per share - Basic 0.14 0.12 20 1.28 0.74 73 - Diluted ( 0.15 0.12 26 1.22 0.73 68 (1)) Non-GAAP Financial Measures: EBITDA ((2) 41.2 36.0 14 199.0 150.9 32 (3)) Distributable 20.8 26.1 (20) 129.9 126.2 3 cash flow ((2) (4)) Distributable 0.31 0.41 (26) 1.91 1.96 (2) cash flow per share ((2)(4)) Dividends 17.3 16.3 6 67.8 60.5 12 Dividend to 83% 62% 52% 48% distributable cash flow payout ratio ( (2)(4)) Key Metrics: Fuel volume 1,062.0 1,096.0 (3) 4,241.0 4,161.0 2 (millions of litres) Return on 24.9% 12.9% capital employed (ROCE) ((2) (5)) Net unit 3.83 3.52 (9) 3.54 3.82 7 operating cost (NUOC) ((2) (6)) Employees 1,179 1,267 (7) Fuel Key Metrics - Cents per litre: Average Retail 5.35 5.04 6 4.91 5.08 (3) fuel gross profit Average 10.45 8.61 21 9.78 8.51 15 Commercial fuel gross profit Operating 3.75 4.06 8 3.61 4.15 13 costs Marketing, 2.04 2.04 0 1.87 2.09 10 general and administrative Depreciation 1.50 1.52 2 1.29 1.64 22 and amortization expense Liquidity and bank ratios: Net Debt: 1.39 2.26 EBITDA ((2) (6)) Senior 0.70 1.32 Debt:EBITDA ( (2)(6)) Interest 7.56 3.99 coverage ((2) (6)) ((1)) Diluted earnings (loss) per share can be impacted by an anti-dilutive impact of conversion of the debentures. Quarterly diluted earnings (loss) per share may therefore not accumulate to the same per share value as the year-to-date calculation. ((2)) Please refer to the Non-GAAP Measures section in the MD&A for definitions. ((3)) Please see EBITDA discussion in the MD&A. ((4)) Please see Distributable Cash Flow reconciliation table in the MD&A. ((5)) Please see ROCE discussion in the MD&A. ((6)) Please refer to the Non-GAAP Measures section in the MD&A for reconciliations. Parkland Penny Plan Update The Parkland Penny Plan, announced on May 15, 2012, is targeting: -- Growth to seven billion litres in fuel volumes by 2016 through organic growth and acquisitions; and -- 1 cent per litre in additional EBITDA margin by 2016 through economies of scale, better supply options, and efficiencies. Penny Plan Scorecard Summary: _____________________________________________________________________ |Area |Commitment |Analysis | 2016 | 2012 | 2011 | | | | | Target | | | |_______|______________|____________|___________|________|____________| | | |Holding | | | | | | |Steady | | | | | | |Base volumes| | | | | | |were down in| | | | | | |2012 after | | | | | | |removing the| | | | | | |impact of | | | | | | |109.7 | | | | | | |million | | | | | | |litres from | | | | | | |the Cango | | | | | | |network in | | | | | | |2012. | | | | | | |Parkland | | | | | | |Commercial |0.5 |(29.7) |224 | | |Organic growth|experienced |billion |million |million | | | |warmer than |litres |litres |litres | | | |normal | | | | | | |conditions, | | | | | | |an early | | | | | | |spring | | | | | | |break-up, | | | | | | |and | | | | | | |softness | | | | | | |across | | | | | | |several | | | | | | |industrial | | | | | | |sectors | | | | | | |partially | | | | | | |offset with | | | | | | |strong sales| | | | | | |efforts. | | | | |Grow |______________|____________|___________|________|____________| | | |$20 million | | | | | | |in EBITDA | | | | | | |added | | | | | | |While Elbow | | | | | | |River | | | | | | |Marketing's | | | | | | |volumes will| | | | | | |not | | | | | | |be | | | | | | |considered | | | | | | |part of the | | | | | | |2.5 billion | | | | | | |litre | | | | | | |target, | | | | | | |the | | |425 | | |Major |acquisition |2.5 | |million | | |acquisitions |will |billion |- |litres | | | |contribute |litres | |(annualized | | | |towards the | | |volumes) | | | |$55 | | | | | | |million in | | | | | | |EBITDA | | | | | | |Parkland | | | | | | |wants to | | | | | | |achieve | | | | | | |through | | | | | | |acquisitions| | | | | | |by 2016. The| | | | | | |mergers and | | | | | | |acquisitions| | | | | | |environment | | | | | | |remains very| | | | | | |active. | | | | |_______|______________|____________|___________|________|____________| | | |On Track | | | | | | |Parkland | | | | | | |continues to| | | | | | |extend its | | | | | | |progress on | | | | | | |replacing | | | | | | |the average | | | | | | |normalized | | | | | | |profit | | | | | | |(†) of| | | | | | |its | | | | | | |refiners' | | | | | | |margin |100% | | | | | |contract |Normalized | | | |Supply |Supply Margins|through the |profit plus|On Track|N/A | | | |negotiation |1/3 | | | | | |of supply |cent | | | | | |contracts, | | | | | | |supply | | | | | | |management, | | | | | | |terminals, | | | | | | |and the | | | | | | |addition of | | | | | | |Elbow River | | | | | | |Marketing. | | | | | | |No problems | | | | | | |are foreseen| | | | | | |in | | | | | | |replacing | | | | | | |the volume. | | | | |_______|______________|____________|___________|________|____________| | | |Deeper | | | | | | |efficiencies| | | | | | |achieved | | | | | | |Operating | | | | | | |costs have | | | | | | |improved | | | | | | |8.1% on a | | | | | | |cpl | | | | | | |basis | | | | | | |relative to | | | | | | |normalized | | | | | | |2011 costs | | | | | | |due to | | | | | | |increased | | | | | |Operating |efficiencies|3.60 cpl |3.61 cpl|3.93 cpl(*) | | |costs |and the | | |(normalized)| | | |divestment | | | | | | |of the | | | | | | |long-haul | | | | | | |division in | | | | | | |2011. These| | | | | | |targets will| | | | | | |be | | | | | | |lowered in | | | | | | |2013 to | | | | | | |reflect | | | | | | |Parkland's | | | | | | |new | | | | | | |business | | | | | | |mix. | | | | | |______________|____________|___________|________|____________| | | |Slow but | | | | | | |steady | | | | | | |progress on | | | | | | |MGA | | | | | | |Normalized | | | | | | |twelve | | | | | | |trailing | | | | | | |months MGA | | | | | | |costs | | | | |Operate| |have | | | | | |Marketing, |decreased | | | | | |General and |2.6% on a |1.59 cpl |1.87 cpl|1.92 cpl* | | |Administration|cpl basis | | |(normalized)| | |costs |relative to | | | | | | |normalized | | | | | | |2011 MGA | | | | | | |costs. | | | | | | |Management | | | | | | |will | | | | | | |be looking | | | | | | |for more | | | | | | |progress on | | | | | | |this in | | | | | | |2013. | | | | | |______________|____________|___________|________|____________| | | |Safety | | | | | | |continues to| | | | | | |improve | | | | | | |Lost time | | | | | | |injury | | | | | | |frequency | | | | | | |fell to 0.50| | | | | | |in 2012 | | | | | | |compared | | | | | | |with 1.80 in| | | | | |Total |2011, | | | | | |Recordable |surpassing |Less than | | | | |Injury |the |2 |2.33 |2.70 | | |Frequency |2016 target | | | | | | |of 0.75. At| | | | | | |these | | | | | | |levels, it | | | | | | |is now | | | | | | |more | | | | | | |appropriate | | | | | | |to use Total| | | | | | |Recordable | | | | | | |Injury | | | | | | |Frequency | | | | | | |("TRIF") | | | | |_______|______________|____________|___________|________|____________| * Normalized for Cango and one-time costs; (†)The average annualized benefit under this contract excluding performance from outlier years Note: 2016 cost targets will be updated in the event of a significant change to Parkland's business mix. Abbreviations: CPL = Cents per litre YTD = Year-to-date TTM = Trailing twelve months This five year strategic plan aims to double 2011 normalized EBITDA of $125 million by the end of 2016. (Normalized EBITDA ignores one-time costs and irregular profits). $70 million is expected to be derived through a one cent increase in EBITDA margin, $55 million is expected to be derived through acquisitions. A more detailed explanation of the Parkland Penny Plan and the full scorecard can be found in this quarter's Management's Discussion and Analysis. Increased Tax Expenses Lead to an Increased Pay Out Ratio Q4 2012 vs. Q4 2011 Distributable cash flow decreased 20% to $20.8 million in the fourth quarter of 2012 compared with $26.1 million in the fourth quarter of 2011. The decrease in distributable cash flow and increase in the dividend payout ratio are primarily due to an $8.8 million increase in tax expense, a $2.7 million increase in maintenance capital and a $1.5 million increase in cash expenditures on asset retirement obligations, partially offset by a $5.3 million increase in EBITDA, a $1.1 million decrease in share incentive compensation and a $1.1 million decrease in interest expense. The dividend payout ratio for the fourth quarter of 2012 was 83% compared with 62% in the fourth quarter of 2011. The increase in the dividend payout ratio is due to a $5.4 million decrease in distributable cash flow and a $1.0 million increase in dividends paid. Total Year 2012 vs. 2011 Distributable cash flow increased 3% to $129.9 million in 2012 compared with $126.2 million in 2011. The increase in distributable cash flow is primarily due to a $48.1 million year-over-year increase in EBITDA, and a $6.8 million decrease in interest expense, partially offset by a $21.2 million increase in tax expense, a $2.5 million increase in cash expenditures on asset retirement obligations, a $8.0 million increase in maintenance capital and a $19.6 million decrease in proceeds on disposal of assets. The dividend payout ratio for the year ended December 31, 2012 was 52% compared with 48% for the year ended December 31, 2011. The increase in the dividend payout ratio was principally due to the $7.2 million increase in dividends from 2011 to 2012. Commercial Team Experiences Headwinds Across Multiple Industrial Segments Q4 2012 vs. Q4 2011 For the three months ended December 31, 2012, Parkland Commercial Fuels' volumes decreased 20% to 382 million litres compared with 476 million litres in 2011 principally as a result of: -- the reallocation of 40 million litres of high volume low margin accounts to the Wholesale, Supply and Distribution Division; and -- lower year-over-year industrial activity in key sectors including oil and gas and construction in addition to the impact from the closure of two pulp mills in the Maritimes. Strong sales activities with a focus on diversifying Parkland's customer mix helped to offset the impact of the foregoing challenges in the quarter. When volumes that were allocated to Wholesale, Supply and Distribution are added back to Commercial Fuels, volumes decreased by 11% in the fourth quarter compared to the same period in 2011. Lower activity in Eastern Canada was the result of the closure of pulp mills in Nova Scotia as well as lower infrastructure spending on roads and major projects compared with 2011. Falling commodity prices in Western Canada for natural gas and crude continued to reduce oil field activity in the fourth quarter of 2012. The average rig utilization rate for the three months ended December 31, 2012 decreased to 42% compared with 61% for the same period in 2011 according to the Canadian Association of Oilwell Drilling Contractors. Average net fuel gross profit on a cents per litre basis for the fourth quarter of 2012 was 10.45 cpl, an increase of 21% or 1.84 cpl compared with 8.61 cpl in the fourth quarter of 2011 due to the re-allocation of high-volume, low-margin accounts to the Wholesale, Supply, and Distribution Division. Total Year 2012 vs. 2011 For the year ended December 31, 2012, Parkland Commercial Fuels' volumes decreased 16% to 1,502 million litres compared with 1,784 million litres for the same period in 2011 due to the reallocation of 160.8 million litres of high volume low margin accounts to the Wholesale, Supply and Distribution Division, the loss of approximately 12 million litres in heating oil volume due to a warmer than normal year, customer conversions to alternative heat sources and a pullback in key industries as outlined in the fourth quarter review. Average net fuel gross profit on a cents per litre basis for the year ended December 31, 2012 was 9.78 cpl, an increase of 15% or 1.27 cpl compared with 8.51 cpl in 2011. The year to year increase is due to the same reasons described for the quarter. Divisional Outlook There is a risk that the reduction in activity within the oil and gas and construction sectors experienced by Parkland's commercial operations in the fourth quarter will continue into 2013. Oil and gas activity will be contingent on the approval of pipelines to increase access to international markets for Canadian crude. The focus on fuel sales and customer diversification will continue in 2013 to offset lower activity levels in some industries. The opportunity in the current business environment for growth exists through Parkland's focussed sales efforts within specific industry sectors. Management expects that while operational changes made in the Commercial Division during 2012 had an impact on volumes, this impact will be short lived and the changes will position the Commercial Division for growth. These changes include the consolidation of branches, changes in branded distribution agreements, the roll out of Parkland's multi-product commercial offering at additional branches, and the simplification and standardization of procedures and process. Business simplification will also continue to be a source of savings for Parkland, reducing operating costs on a cents per litre basis. The focus will remain on cost management, strong sales activity, and superior customer service. Retail Team Continues Winning Streak Q4 2012 vs. Q4 2011 For the three months ended December 31, 2012, Parkland Retail Fuels' volumes decreased 5% to 443 million litres compared with 464 million litres for the same period in 2011. The decrease was primarily the result of a 20 million litre reduction in volume contribution from the Cango network due to site rationalization, temporary closures for the purpose of upgrades, competitive pressures in certain markets partially offset by network growth in Parkland's company-owned and dealer network. The fourth quarter of 2012 financial results for Parkland Retail Fuels continued to benefit from lower costs that helped offset the contraction in volumes described above and the impact of rising crude prices on margins during the period. Disciplined management of repair, maintenance, travel, advertising and other costs, reductions in staffing, and a refined approach to commission and dealer agreements continued to drive significant savings in operating and marketing, general and administrative costs in the quarter. Average gross profit on a cents per litre basis increased by 6% to 5.35 cpl in the fourth quarter of 2012 compared with 5.04 cpl in the fourth quarter of 2011 due to strong corporate store margins, partially offset by an increase in the proportion of dealer operated sites versus company owned. Total Year 2012 vs. 2011 For the year ended December 31, 2012, Parkland Retail Fuels' volumes increased 7% to 1,807 million litres compared with 1,687 million litres in 2011. The increase was the result of 109.7 million litres in additional fuel volumes attributable to the acquisition of Cango. Retail Fuels' gross profit decreased by 4% to 4.91 cpl for the year ended December 31, 2012 compared with 5.08 cpl in 2011 which reflects the addition of Cango`s Ontario locations to Parkland`s results in the first two quarters of 2012. Cango`s network is dominated by dealers and its locations have higher volume throughput but lower margin compared to Parkland`s Western network. Divisional Outlook Management expects the 2013 retail fuel market to be comparable to 2012, subject to unforeseen movements in retail margins and will continue to focus on managing prudently to maintain operating efficiencies, growing same store sales, site acquisitions and signing additional dealer business. Refiners' Margins Remain High in Fourth Quarter Wholesale, Supply and Distribution is responsible for managing Parkland's fuel supply contracts, purchasing fuel from refiners, distribution through third party long-haul carriers, and serving wholesale and reseller customers. This division includes profits from Parkland's participation in refiners' margins, profits derived through superior supply management, and profits from wholesale fuel sales. Q4 2012 vs. Q4 2011 For the three months ended December 31, 2012 Parkland Wholesale, Supply and Distribution fuel volumes (factoring out intersegment sales) increased 52% to 237 million litres compared with 156 million litres for the same period in 2011 primarily due to the reallocation of 40 million litres of high-volume low-margin accounts from Commercial Fuels and organic volume growth of 41 million litres (26%) through the division's sales activities despite a diesel supply disruption in the fourth quarter affecting Western Canada and Ontario that limited the amount of diesel available for sale to wholesale customers. The supply group made full use of Parkland's strategic supply assets, including rail capacity and storage infrastructure, to shore up supply in regions impacted by the diesel shortage to keep customers of Parkland's fuel marketing divisions served. For example, Parkland's ability to rail imported product from Vancouver into Fort Nelson enabled the Corporation to shield most of its customers from the supply disruption. Fuel gross profits for the three months ended December 31, 2012 increased 88% to $19.6 million compared with $10.4 million for the same period in 2011 primarily due to increased refiners' margins, supply management activities and wholesale profits. This was partially offset by a $3.1 million fall in inventory valuation related to the decrease in price for Edmonton Par Crude in the fourth quarter, in contrast to the increase in price for West Texas Intermediate during the fourth quarter. Parkland recorded a $2.3 million expense related to put option contracts in place to hedge and secure a portion of the future economic benefit that Parkland receives on its refiners' margins based contract. This is expected to protect against the potential earnings volatility that would be caused by a normalization of refiners' margins from their current highs. Refiners' margins refer to the profit made between the cost of the crude oil required to produce fuel and the wholesale price received by refiners for the fuel they sell. The Wholesale Division continues the process of optimizing the entire wholesale portfolio to achieve an optimal mix between volume, margin and capital employed. By managing trade terms on accounts Parkland targets improved return on capital employed. Total Year 2012 vs. 2011 For the year ended December 31, 2012 Parkland Wholesale, Supply and Distribution fuel volumes (factoring out intersegment sales) increased 35% to 932 million litres compared with 690 million litres in 2011 primarily due to the reallocation of 160.8 million litres of high-volume low-margin accounts from Commercial Fuels and volume growth due to the division's sales activities. Fuel gross profits from Parkland Wholesale, Supply and Distribution for the year ended 2012 increased 70% to $119.4 million compared with $70.2 million in 2011 primarily due to historically high refiners' margins in 2012. Divisional Outlook Planned shut downs are coming this year to a number of refinery operators in Canada. While it is expected that these refiners have the ability to cover product demand during their shut down, Parkland has contingencies in place to provide supply options during these periods. In addition, Parkland is working closely with these refinery operators to ensure they have access to additional terminal and distribution options such as the Bowden terminal. Fuel supplies are therefore expected to be sufficient in all Canadian markets for 2013. While gasoline refiners' margins exceeded the five year maximum in nine out of twelve months of 2012, they have reduced significantly in January 2013 coming in at the lower end of the five year range. Diesel refiner margins also exceeded the five year maximum in nine out of twelve months in 2012 and started 2013 strong with margins coming in at the high end of the five year range in January 2013. For the remaining term of the refiners' margin based contract in 2013, should conditions be favourable, Parkland may enter into additional protective put options to hedge and secure a portion of the future economic benefit that Parkland receives on this contract. Weak Canadian crude prices relative to Brent crude prices drove record refiners' margins in 2012. While the fundamental economic factors giving rise to this pricing differential still exist, the differential weakened in the month of January negatively impacting gasoline margins. Simplification and Standardization Drive Operating Costs Improvements Q4 2012 vs. Q4 2011 Operating and direct costs decreased by 11% to $39.8 million (3.7 cpl) for the three months ended December 31, 2012, compared with $44.5 million (4.1 cpl) for the three months ended December 31, 2011, primarily due to business simplification and standardization in Parkland's Retail Fuel Division which led to cost reductions. YTD 2012 vs.2011 Operating and direct costs decreased by 11% to $152.9 million (3.6 cpl) in the year ended December 31, 2012, compared with $172.7 million (4.2 cpl) in 2011. Operating and direct expenses decreased primarily due to a $5.0 million charge incurred in the third quarter of 2011 for aging receivables and other provisions and a reduction in operating costs as a result of the disposal of the long-haul trucking assets in the third quarter of 2011. Steady Progress in Reducing Marketing, General and Administrative Costs Q4 2012 vs. Q4 2011 Marketing, general and administrative expenses ("MGA") decreased 3% to $21.7 million (2.0 cpl) in the fourth quarter of 2012 compared with $22.4 million (2.1 cpl) in the fourth quarter of 2011. Marketing, general and administrative costs decreased throughout the Corporation principally as a result of reduced costs for employee incentive compensation, quick wins from the Give Me Five! strategic cost initiative and enhanced cost control. Total Year 2012 vs. 2011 Marketing, general and administrative expenses decreased 9% to $79.5 million (1.9 cpl) in the year ended December 31, 2012, compared with $86.9 million (2.1 cpl) for the year ended December 31, 2011. The decrease in marketing, general and administrative expense is due in part to one-time expenses in 2011 of $3.3 million related to management changes and cost reduction initiatives. Auditing and consulting costs were also lower in 2012 compared with 2011 due to activities related to IFRS conversion in 2011. Annual EBITDA Rises by 32 Percent Q4 2012 vs. Q4 2011 EBITDA for the fourth quarter of 2012 increased by 14% to $41.2 million compared with $36.0 million in the fourth quarter of 2011. The increase in EBITDA is the result of higher refiners' margins, increased cent per litre margins in Commercial and Retail and cost reductions in the fourth quarter of 2012, partially offset by decreased volume. Total Year 2012 vs. 2011 EBITDA for the year ended December 31, 2012 was $199.0 million, an increase of 32% compared with $150.8 million for the year ended December 31, 2011, mainly due to higher fuel volumes, improved refiners' margins, and cost reductions. Annual Net Earnings Increase 93% Establishing New Record Q4 2012 vs. Q4 2011 Parkland's net earnings in the fourth quarter of 2012 were $9.6 million, an increase of $2.2 million compared with net earnings of $7.4 million in the fourth quarter of 2011. The increase in net earnings in the fourth quarter of 2012 compared with the prior year was due to a $5.2 million increase in EBITDA, a $0.7 million decrease in depreciation and amortization expense and a $6.3 million decrease in finance costs, partially offset by a $8.9 million increase in income taxes, a $1.4 million increase in risk management losses and a $1.3 million decrease in gain from the sale of property, plant and equipment. Total Year 2012 vs. 2011 Net earnings for the year ended December 31, 2012 were $84.9 million, an increase of $41.0 million compared with $43.9 million in 2011. The increase in net earnings was primarily due to $48.2 million in increased EBITDA, $16.5 million in decreased finance costs, $13.7 million in lower depreciation and amortization, partially offset by a $21.2 million increase in income taxes, an $8.1 million increase in risk management losses and a $16.2 million decrease in gain from the sale of property, plant and equipment, mainly due to the disposal of the long-haul trucking assets in the third quarter of 2011. MD&A and Financial Statements Management's Discussion and Analysis, the audited Consolidated Financial Statements, and the Notes to the Consolidated Financial Statements for the three and twelve months ended December 31, 2012 are available online at www.parkland.ca. Conference Call Information On February 26, 2013 (Today) Parkland Fuel Corporation will host a webcast and conference call at 2:00 p.m. Mountain Standard Time ("MST") (4:00 p.m. Eastern Standard Time ("EST") to discuss the results for the three and twelve months ended December 31, 2012. President and CEO Bob Espey and Senior Vice President and CFO Mike Lambert will discuss Parkland's financial results for the quarter and then take questions from securities analysts, brokers and investors. Please log into the webcast slide presentation 10 minutes before the start time at: http://www.snwebcastcenter.com/custom_events/parkland-20130226/site/ To access the conference call by telephone from within Canada dial toll free 1-888-241-0394. International callers or callers from the Toronto area should use (647) 427-3413. Please connect approximately 10 minutes prior to the beginning of the call and quote the conference ID: 9842 4066. The webcast will be available for replay two hours after the conference call ends. It will remain available at the link above for 90 days. 2013 Penny Plan Update On March 18, 2013 Parkland will host an investor event in Toronto for analysts and institutional investors to provide an update on the Parkland Penny Plan. This event, which will take place at 7:00 a.m. MST (9:00 a.m. EST), will: -- Provide a detailed forecast for 2014 to 2016 (Guidance beyond
Suncor); o Establish new cpl metrics aligned to Parkland's new business mix; o Explain how Parkland will report Elbow River Marketing; and
-- Provide a supply update - Parkland's progress to date on its
Investors interested in the webcast of this event are advised to log into the webcast slide presentation 10 minutes before the start time at:
To access the conference call by telephone from within Canada dial toll free 1- (888) 241-0394. International callers or callers from the Toronto area should use (647) 427-3413. Please connect approximately 10 minutes prior to the beginning of the call and quote the conference ID: 1302 4496.
The webcast will be available for replay two hours after the conference call ends. It will remain available at the link above one year.
2013 Annual & Special Meeting of Shareholders On May 8, 2013 the annual and special meeting of the common shareholders of Parkland Fuel Corporation will take place at 9:00 a.m. MST (11:00 a.m. EST) in the Kensington Room of the Calgary Marriott Downtown Hotel located at 110 9th Ave SE, Calgary, AB T2G 5A6.
CUSIP / ISIN: 70137T105 / CA70137T1057
Meeting Date: May 8, 2013
Record Date: March 22, 2013
Forward Looking Information Certain information included herein is forward-looking. Forward-looking statements include, without limitation, statements regarding Parkland's future financial position, business and growth strategies, including the manner in which such strategies will be implemented, budgets, projected costs, sources of growth, capital expenditures, financial results, taxes, future acquisitions and the efficiencies to be derived therefrom, effectiveness of internal controls, sources of funding for growth capital expenditures, anticipated dividends and the amount thereof, if any, to be declared by Parkland Fuel Corporation, and plans and objectives of or involving Parkland. Many of these statements can be identified by looking for words such as "believe", "expects", "expected", "will", "intends", "projects", "projected", "anticipates", "estimates", "continues", or similar words and include, but are not limited to, statements regarding the accretive effects of acquisitions and the anticipated benefits of acquisitions. Parkland believes the expectations reflected in such forward-looking statements 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 statements are not guarantees of future performance and involve a number of risks and uncertainties some of which are described in Parkland's annual information form and other continuous disclosure documents. Such forward-looking statements necessarily involve known and unknown risks and uncertainties and other factors, which may cause Parkland'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 statements. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities including increases in taxes; changes in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. Any forward-looking statements are made as of the date hereof and Parkland does not undertake any obligation, except as required under applicable law, to publicly update or revise such statements to reflect new information, subsequent or otherwise.
About Parkland Fuel Corporation Parkland Fuel Corporation is Canada's largest independent marketer and distributor of petroleum products, managing a nationwide network of sales channels. We are Canada's local fuel company, delivering gasoline, diesel fuel, lubricants, heating oil and other products to businesses, consumers and wholesale customers through community based operators who care.
For investor and media inquiries please contact Tom McMillan, Director of Corporate Communications at 1-800-662-7177 ext 2533 or http://bit.ly/PKIContact. To sign up for Parkland's investor information services, please go to http://bit.ly/PKI-Info or visit www.parkland.ca.
SOURCE: Parkland Fuel Corporation
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CO: Parkland Fuel Corporation ST: Alberta NI: RET ERN CONF
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