Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASDAQ 4,095.52 9.29 0.23%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,516.27 98.74 0.68%
TOPIX 1,173.37 6.78 0.58%
HANG SENG 22,760.24 64.23 0.28%

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

supply initiatives.

Investors interested in the webcast of this event are advised to log into the webcast slide presentation 10 minutes before the start time at:

http://www.snwebcastcenter.com/custom_events/parkland-20130318/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: 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

To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/February2013/26/c8409.html

CO: Parkland Fuel Corporation ST: Alberta NI: RET ERN CONF

-0- Feb/26/2013 13:00 GMT

Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement