Superior Plus Announces 2009 Annual and Fourth Quarter Financial Results

TSX: SPB

CALGARY, Feb. 18 /CNW/ -

    
    FOURTH QUARTER HIGHLIGHTS
    -------------------------
    -   Adjusted operating cash flow per share for the fourth quarter and
        year ended 2009 were $0.65 and $1.80 per share, respectively,
        compared to $0.74 and $2.18 per share in the comparative periods.
        Fourth quarter results were impacted by:
        -  The ongoing impact of the economic recession which reduced
           customer demand in all of Superior's businesses.
        -  The start-up of the Port Edwards chloralkali facility did not
           reach full capacity until late December, resulting in no net
           contribution to the Specialty Chemicals business in the fourth
           quarter. The facility is now operating above pre-expansion levels.
        -  Reduced Canadian propane sales volumes due to the impact of the
           economic recession and a delay in the arrival of cold weather,
           offset in part by the impact of the acquisitions of the U.S.
           refined fuels businesses.
        -  Propane margins were negatively impacted by contract delays in
           passing through the rapid rise in wholesale propane costs to our
           customers and the impact of competitive pressures.
    -   Superior continued to expand its Energy Services business; completing
        two U.S. refined fuels acquisitions. The US$125 million acquisition
        of Griffith Holdings, Inc. (Griffith Rochester) with operations in
        upstate New York on January 20, 2010, and the US$77.4 million
        acquisition of certain assets of Griffith Energy Services (GES) with
        operations throughout the northeast U.S. on December 11, 2009.
    -   Superior successfully closed $264.3 million of long-term financing,
        consisting of $114.3 million in equity financing and $150.0 million,
        8.25% Senior Unsecured Debentures, due October 27, 2016.
    -   The Specialty Chemicals business completed the US$138.0 million
        expansion and conversion of its Port Edwards, Wisconsin chloralkali
        facility from mercury based technology to membrane technology. During
        the fourth quarter, the facility was fully commissioned and began
        commercial operations, operating above pre-expansion levels. The
        project is expected to result in long-term incremental EBITDA of
        US$20-$30 million.


    FINANCIAL SUMMARY
    -------------------------------------------------------------------------
                                    Three months ended            Year ended
    (millions of dollars except            December 31,          December 31,
     per share amounts)                2009       2008       2009       2008
    -------------------------------------------------------------------------
    Revenue                           747.5      658.5    2,246.7    2,487.3
    Gross profit                      203.3      193.1      653.4      669.1
    -------------------------------------------------------------------------
    EBITDA from operations(1)          70.1       84.2      213.4      257.2
    Interest                           (6.7)      (9.6)     (34.8)     (36.5)
    Cash income tax recovery (expense)  4.2       (3.6)      (1.1)     (13.8)
    Corporate costs                    (3.2)      (6.0)     (13.6)     (14.6)
    -------------------------------------------------------------------------
    Adjusted operating cash flow(1)    64.4       65.0      163.9      192.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Adjusted operating cash flow per
     share, basic and
     diluted(1)(2)(3)                 $0.65      $0.74      $1.80      $2.18
    -------------------------------------------------------------------------
    Dividends/Distributions paid
     per share                       $0.405     $0.405      $1.62      $1.62
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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-GAAP Financial
        Measures" in Superior's 2009 Fourth Quarter Financial Discussion.
    (2) The weighted average number of shares outstanding for the three
        months ended December 31, 2009 is 98.5 million (2008 - 88.4 million)
        and for the year ended December 31, 2009, is 91.0 million (2008 -
        88.3 million).
    (3) For the three and twelve months ended December 31, 2009 and 2008,
        there were no dilutive instruments.


    SEGMENTED INFORMATION
    -------------------------------------------------------------------------
                                    Three months ended            Year ended
                                           December 31,          December 31,
    (millions of dollars)              2009       2008       2009       2008
    -------------------------------------------------------------------------
    EBITDA from operations:
      Energy Services                  40.6       37.8       97.6      103.3
      Specialty Chemicals              18.6       32.9       93.0      116.5
      Construction Products
       Distribution                    10.9       13.5       22.8       37.4
    -------------------------------------------------------------------------
                                       70.1       84.2      213.4      257.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Energy Services

    -   EBITDA from operations for the fourth quarter of $40.6 million was
        impacted by reduced sales volumes and gross margins at the Canadian
        propane distribution business, offset in part by the impact of the
        acquisition of the U.S. refined fuels business.

    -   Canadian propane distribution sales volumes were 4% lower than the
        prior year quarter due principally to weaker industrial sales volumes
        due to the ongoing impact of the economic recession. In addition, the
        winter heating season did not develop until later in the fourth
        quarter compared to prior years.

    -   Canadian propane margins were 17.5 cents per litre in the fourth
        quarter compared to 18.6 cents per litre in the prior year quarter.
        The decrease in margins was due to the approximate 44% rise in the
        wholesale cost of propane throughout the fourth quarter as previously
        noted, in addition to general competitive pressures.

    -   The U.S. refined fuels business generated gross profits of
        $15.3 million in the fourth quarter, consisting of gross profits from
        the effective date of the close of the various acquisitions. The U.S.
        refined fuels gross profits were consistent with Superior's
        acquisition assumptions. Superior continues to focus on integrating
        its U.S. refined fuels business to generate operational efficiencies.

    -   The fixed-price energy services business generated gross profits of
        $8.4 million, which was consistent with management's expectations.
        The improvement over the prior year quarter was due principally to
        the one-time prior year impact of foreign currency translation losses
        and utility transportation settlements.

    Specialty Chemicals

    -   EBITDA from operations for the fourth quarter of $18.6 million was
        impacted by reduced chloralkali/potassium gross profits as a result
        of reduced sales volumes and weaker pricing due principally to the
        impact of the economic recession. Additionally, gross profits were
        negatively impacted by the start-up of the Port Edwards chloralkali
        facility as previously noted.

    -   Sodium chlorate gross profits were consistent with the prior year as
        a 7% increase in sales volumes due principally to improved
        international sales, was fully offset by a decrease in the average
        selling price due to the appreciation of the Canadian dollar on US-
        denominated sales.

    Construction Products Distribution

    -   EBITDA from operations for the fourth quarter of $10.9 million was
        impacted by reduced sales volumes due to the ongoing economic
        recession which has resulted in reduced residential and commercial
        construction activity. Reduced sales volumes have also resulted in
        increased competitive pressures which has negatively impacted
        percentage sales margins.

    -   The acquisition of SPI on September 24, 2009, positively impacted
        results for the fourth quarter. The results of SPI for the fourth
        quarter were consistent with Superior's acquisition assumptions. The
        acquisition of SPI enhances the construction products distribution
        business by broadening its customer, product and geographic base. SPI
        operates in 28 states through 71 operations centres and 11 primary
        fabrication facilities.

    Corporate Related

    -   Total interest expense for the fourth quarter was $6.7 million
        compared to $9.6 million in the prior year quarter. Interest was
        impacted by the one-time benefit of a $6.1 million gain related to
        the termination of an interest rate swap and the impact of the
        appreciation of the Canadian dollar on US-denominated interest costs,
        offset in part by the impact of higher average debt levels due to
        acquisitions completed in the third and fourth quarters.

    -   Cash income taxes were a recovery of $4.2 million in the fourth
        quarter compared to a $3.6 million expense in the prior year quarter.
        Cash income taxes were impacted by the reversal of certain U.S. cash
        income taxes due to additional U.S. tax basis associated with the
        successful start-up of the Port Edwards facility during the fourth
        quarter.

    -   On January 20, 2010, Superior completed the expansion of its
        syndicated revolving term credit facility to $600 million from
        $570 million. See "Expansion of Superior's Credit Facility" for
        additional details.

    -   In conjunction with the acquisition of Griffith Rochester and GES,
        Superior entered into a $69.3 million bought deal equity financing
        for 5,002,500 shares at $13.85 per share that closed on February 10,
        2010. Superior also closed a $45 million bought deal equity financing
        for 4,166,667 shares at $12.00 per share during the fourth quarter of
        2009. Additionally, Superior, through Superior Plus LP, successfully
        accessed the private placement market, closing a $150 million, 8.25%
        Senior Unsecured Debenture financing on October 27, 2009.

    -   Four quarter trailing compliance EBITDA was $267.9 million resulting
        in a Senior Debt to compliance EBITDA ratio of 2.8x and a Total Debt
        to compliance EBITDA ratio of 3.9x as at December 31, 2009. The
        compliance EBITDA includes the impact of acquisitions completed
        during 2009.
    

Message to Superior's Shareholders

A Year of Challenges and Achievements

For Superior, 2009 was a year of significant achievements accomplished within the framework of an extremely challenging business environment. The year was defined by the global financial turmoil that began in the latter half of 2008 and the recession that continued through 2009 and included one of the most uncertain economic environments of the last half-century.

Superior's businesses were not immune to the difficult operating environment, but despite these challenges, our businesses continued to perform strongly. The relative strength of Superior's results in the worst economic environments in recent times provides strong evidence of the merits of Superior's diversified business model and the ongoing execution of our growth strategy.

Throughout 2009 Superior continued to execute the growth strategy originally outlined in 2007. The ability of Superior to implement its growth strategy and achieve its objectives in a year of serious financial turmoil is a testament to Superior's strong financial and operational foundation that was solidified in 2007 and 2008. Significant achievements or highlights during 2009 were:

Corporate

    
    -   Superior began 2009 as a corporation, having completed its conversion
        from an income trust to a corporation on December 31, 2008.

    -   The conversion to a corporation benefited Superior's shareholders by
        eliminating the uncertainty of the impending 2011 SIFT taxation rules
        and provided increased Canadian tax pools, in addition to the fact
        that the dividends that are now being paid in place of the previous
        trust distributions are considered to be eligible dividends for
        Canadian income tax purposes.

    -   Superior had well-supported access to the capital markets throughout
        2009, and was able to extend its bank facility, issue $134.5 million
        of common equity, issue $69.0 million of convertible debentures and
        issue $150 million of senior unsecured debentures.

    -   Superior's shareholders realized a total rate of return (share
        appreciation plus dividends) of 49% for 2009 compared to the average
        return on the TSX of 31%.

    Energy Services' Acquisition of Refined Fuel Assets

    -   Superior's Energy Services business completed the acquisition of two
        significant refined fuels assets located in the northeast United
        States for consideration of approximately US$167.4 million; these
        acquisitions are anticipated to be accretive for our shareholders.

    -   The aforementioned acquisitions are an important component of
        Superior's overall growth strategy. The nature and location of these
        assets represent a complementary fit to Superior's existing propane
        distribution network and provide the platform for expansion of our
        propane business into the United States.

    Specialty Chemicals' Completion of its Port Edwards, Wisconsin Facility
    Expansion

    -   Superior's Specialty Chemicals business completed the
        US$138.0 million expansion and conversion of its Port Edwards,
        Wisconsin chloralkali facility from mercury-based technology to
        membrane technology.

    -   Completion of the project results in increased diversification of the
        Specialty Chemicals business, expands the Port Edwards facility's
        capacity and increases its operating efficiency, provides significant
        environmental benefits, and extends the life of the facility by 25 to
        30 years.

    Construction Products Distributions' Acquisition of Specialty Products &
    Insulation Inc. (SPI)

    -   Superior expanded its Construction Products Distribution business
        with the US $132.1 million acquisition of SPI, a leading U.S.
        nationwide distributor of insulation and architectural named brand
        products that is focused on the commercial and industrial insulation
        markets in the United States.

    -   The acquisition of SPI expanded Superior's geographical footprint in
        the U.S. from four to 31 states, provided increased diversification
        from residential construction to commercial and industrial
        construction, and will allow for the integration of various product
        lines with expected operating efficiencies due to the complementary
        nature of SPI and our existing Construction Products Distribution
        business.
    

Financial Performance

In 2009 Superior generated adjusted operating cash flow of $163.9 million or $1.80 per share, compared to $192.3 million or $2.18 per share in the prior year. Although operating results were lower than in the prior year, Superior was not disappointed with these results when considered in the context of the global recession as well as the three-month downtime required to complete the Port Edwards project.

Long-Term Dividend Stability

Superior's confidence in its operating businesses allowed us to maintain our dividend throughout 2009 at a rate of $0.135 per share per month, which amounted to $1.62 per share on an annualized basis. Superior understands the importance of our dividend to our shareholders and we continue to maintain the strict management discipline of ensuring that our short- and long-term decisions are made with the purpose of providing our shareholders with a stable long-term dividend.

Our Strategy Moving Forward

The achievements of Superior in 2009 solidified the foundation for our future success and growth by increasing the size and scope of our three operating businesses: Superior Energy Services, Specialty Chemicals and Construction Products Distribution. As we move forward in 2010 and beyond, we are optimistic that the recent economic turmoil will subside and that we will soon return to reasonable growth levels throughout the North American and global economies. Renewed economic growth will allow us to profitably grow our businesses.

To ensure that Superior grows in a measured and profitable manner, we anticipate taking advantage of additional consolidation opportunities within our existing businesses while conducting the integration and refinement of acquisitions made throughout 2009 and executing internal growth projects. We are confident that executing our strategy will provide us with continued strong and stable cash flows, providing the foundation for the long-term stability of Superior's dividend and total return for our shareholders.

Superior anticipates that the growth initiatives completed throughout 2009 and a gradual continued improvement in the overall economy will result in an improvement to our operating results. As a result, Superior anticipates that its 2010 adjusted operating cash flow per share will be between $1.95 and $2.15 per share.

Acknowledgements

Superior continues to execute its growth strategy and achieve success thanks to the hard work and dedication of over 4,200 employees. I would like to thank all of our employees for their commitment to their respective businesses. I also welcome all of the new employees to the Superior organization. In addition, I would like to thank each of our directors for your guidance, stewardship and efforts in ensuring the success of Superior. Finally, on behalf of the entire organization, I would like to thank our securityholders for your continued support and confidence in Superior.

    
    On behalf of the Board of Directors,
    Grant D. Billing
    Chairman and Chief Executive Officer


    2010 Financial Outlook(1)(2)
    -------------------------------------------------------------------------
    (millions of dollars, except per share amounts)             2010 Outlook
    -------------------------------------------------------------------------
    EBITDA from operations:
      Energy Services                                                140-150
      Specialty Chemicals                                            105-115
      Construction Products Distribution                               40-50
    -------------------------------------------------------------------------
    Adjusted operating cash flow per share                       $1.95-$2.15
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) The assumptions, definitions, and risk factors relating to the 2010
        Financial Outlook are discussed in Superior's 2009 Fourth Quarter
        Financial Discussion.
    (2) Superior's 2010 Financial Outlook is unchanged from the update
        provided in the press release "Superior Plus announces a
        US$125 million acquisition expanding its U.S. Refined Fuels business,
        preliminary unaudited 2009 year end results and an updated 2010
        outlook" on January 20, 2010.
    

2009 Fourth Quarter Results

Superior's 2009 Fourth Quarter Financial Discussion is attached and is also available on Superior's website at: www.superiorplus.com under the investor information section.

Conference Call

Superior will be conducting a conference call and webcast for investors, analysts, brokers and media representatives to discuss the 2009 Fourth Quarter Results at 8:30 a.m. MST on Friday, February 19, 2010. To participate in the call, dial: 1-888-231-8191. A recording of the call will be available for replay until midnight, March 19, 2010. To access the recording, dial: 1-800-642-1687 and enter pass code: 49432834. Internet users can listen to the call live, or as an archived call, 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 can be identified by looking for words such as "believe", "expects", "expected", "will", "intends", "projects", "anticipates", "estimates", "continues" or similar words. Forward-looking information in this press release, including the attached 2009 Fourth Quarter Financial Discussion, includes but is not limited to, consolidated and business segment outlooks, expected EBITDA from operations, expected EBITDA and facility life resulting from the Port Edwards conversion, expected adjusted operating cash flow, expected adjusted operating cash flow per share, future capital expenditures, business strategy and objectives, dividend strategy, future cash flows, anticipated taxes, expected results 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 and include, the historic performance of Superior's businesses, current business and economic trends, availability and utilization of tax basis, foreign currency, exchange and interest rates, trading data, cost estimates and the other assumptions set forth under the "Outlook" sections contained in the attached 2009 Fourth Quarter Financial Discussion. Readers are cautioned that the preceding list of assumptions is not exhaustive.

Forward-looking information is not a guarantee of future performance and involves a number of risks and uncertainties some of which are described herein and in the attached 2009 Fourth Quarter Financial Discussion. Such forward-looking information necessarily involves known and unknown risks and uncertainties, which may cause Superior's or Superior 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. 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 2009 Fourth Quarter Financial Discussion, the risks associated with the availability and amount of the tax basis and the risks identified in Superior's 2008 Annual Information Form under the heading "Risk Factors". 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.

2009 Annual Financial Statements and Management's Discussion and Analysis

Superior intends to file its 2009 Annual Report, 2009 Annual Management's Discussion and Analysis, 2009 Annual Financial Statements and 2009 Annual Information Form with securities regulators on or about March 10, 2010. Hard copies of the 2009 Annual Report are expected to be available on or about March 10, 2010.

    
    Financial Discussion of 2009 Fourth Quarter and 2009 Year End Results
    February 18, 2010

    Non-GAAP Financial Measures
    Adjusted Operating Cash Flow
    

Adjusted operating cash flow is equal to cash flow from operating activities as defined by Canadian generally accepted accounting principles (GAAP), adjusted for changes in non-cash working capital and customer contract related 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 GAAP 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 8.

EBITDA

EBITDA represents earnings before interest, taxes, depreciation, amortization 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 GAAP. 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 (loss) are reconciled to EBITDA from operations on page 25.

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 GAAP. Superior's calculation of compliance EBITDA may differ from similar calculations used by comparable entities. See Note 12 to the unaudited Fourth Quarter Consolidated Financial Statements (Consolidated Financial Statements) for a reconciliation of net earnings (loss) to compliance EBITDA.

Overview of Superior

Superior is a diversified business corporation. 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 owns 100% of the shares of Superior General Partner Inc. 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 has three operating segments: the Energy Services segment which includes a Canadian propane distribution business and 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.

    
    Fourth Quarter and Year-to-Date Results
    ---------------------------------------

    Summary of Adjusted Operating Cash Flow
    -------------------------------------------------------------------------
                                    Three months ended            Year ended
    (millions of dollars except            December 31,          December 31,
     per share amounts)                2009       2008       2009       2008
    -------------------------------------------------------------------------
    EBITDA from operations:(1)
      Energy Services                  40.6       37.8       97.6      103.3
      Specialty Chemicals              18.6       32.9       93.0      116.5
      Construction Products
       Distribution                    10.9       13.5       22.8       37.4
    -------------------------------------------------------------------------
                                       70.1       84.2      213.4      257.2
    Interest                           (6.7)      (9.6)     (34.8)     (36.5)
    Cash income tax recovery
     (expense)                          4.2       (3.6)      (1.1)     (13.8)
    Corporate costs                    (3.2)      (6.0)     (13.6)     (14.6)
    -------------------------------------------------------------------------
    Adjusted operating cash flow       64.4       65.0      163.9      192.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Adjusted operating cash flow
     per share, basic(2) and
     diluted(3)                       $0.65      $0.74      $1.80      $2.18
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) EBITDA and adjusted operating cash flow are not GAAP measures. See
        "Non-GAAP Financial Measures"
    (2) The weighted average number of shares outstanding for the three
        months ended December 31, 2009, is 98.5 million (2008 - 88.4 million)
        and for the twelve months ended December 31, 2009, is 91.0 million
        (2008 - 88.3 million).
    (3) For the three and twelve months ended December, 2009 and 2008, there
        were no dilutive instruments.


    Adjusted Operating Cash Flow Reconciled to Cash Flow from Operating
    Activities(1)
    -------------------------------------------------------------------------
                                    Three months ended            Year ended
                                           December 31,          December 31,
    (millions of dollars)              2009       2008       2009       2008
    -------------------------------------------------------------------------
    Cash flows from operating
     activities                         3.6       53.5      191.3      207.6

    Add:  Customer contract related
           costs capitalized            1.0        1.8        4.0        6.8
          Corporate conversion/
           strategic plan costs           -        5.0          -        5.0
          Increase in non-cash
           working capital             61.7        6.3          -          -

    Less: Decrease in non-cash
           working capital                -          -      (24.4)     (20.6)
          Amortization of customer
           contract related costs      (1.9)      (1.6)      (7.0)      (6.5)
    -------------------------------------------------------------------------
    Adjusted operating cash flow       64.4       65.0      163.9      192.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) See the fourth quarter Consolidated Financial Statements for cash
        flows from operating activities, customer contract related costs and
        changes in non-cash working capital.
    

Fourth quarter adjusted operating cash flow was $64.4 million, a decrease of $0.6 million or 1% compared to the prior year quarter. The decrease in adjusted operating cash flow was due to reduced EBITDA from operations at Specialty Chemicals and Construction Products Distribution, offset in part by improved EBITDA from Energy Services, lower interest costs, cash income taxes and corporate costs. Adjusted operating cash flow per share was $0.65 per share in the fourth quarter, a decrease of 12% from $0.74 per share in the prior year quarter due to an increase of the weighted average number of shares outstanding of 10.1 million related to the issuance of common shares to partially finance the acquisition of Specialty Products and Insulation Co. (SPI) on September 24, 2009, the acquisition of certain assets that comprise a U.S. heating oil and propane distribution business from Sunoco Inc. (Sunoco U.S. refined fuels assets) on September 30, 2009 and the acquisition of certain assets that comprise a retail heating oil, propane and motor fuels distribution business from Griffith Energy Services Inc. (Griffith CH U.S. refined fuels assets) on December 11, 2009 (the Sunoco U.S. refined fuels assets and the Griffith CH U.S. refined fuels assets, collectively referred to as the "U.S. refined fuels assets"). A comprehensive review of EBITDA from operations for all of Superior's businesses is contained in this financial discussion.

Adjusted operating cash flow for the twelve months ended December 31, 2009 was $163.9 million, a decrease of $28.4 million or 15% compared to the prior year period. The decrease in adjusted operating cash flow was due to reduced EBITDA from operations at all of Superior's operations, offset in party by reduced cash income taxes. Adjusted operating cash flow per share was $1.80 per share for the twelve months ended December 31, 2009, a decrease of $0.38 per share or 17% due to the decrease in adjusted operating cash flow as noted above. Also contributing to the decrease was a higher weighted average number of shares outstanding as compared to the prior year period due to the issuance of common shares to finance acquisitions completed during the year.

Net earnings for the fourth quarter were $17.4 million, compared to a net loss of $19.9 million in the prior year quarter. Net earnings were impacted by $0.2 million in unrealized losses on financial instruments in the current quarter, compared to unrealized losses of $83.6 million in the prior year quarter. The change in the unrealized gains and losses on financial instruments was due principally to gains in the current quarter on Superior's natural gas financial derivatives compared to losses in the prior year as a result of fluctuations in the spot and forward price for natural gas. Revenues of $747.5 million were $89.0 million higher than the prior year quarter due principally to higher Energy Services revenue from the acquisitions of the U.S. refined fuels assets and higher Construction Products Distribution revenue due to the acquisition of SPI, offset in part by reduced propane and chemical sales volumes. Gross profit of $203.3 million was $10.2 million higher than the prior year quarter due principally to contribution of the acquisitions completed in 2009, offset in part by reduced sales volumes at Energy Services and Construction Products Distribution, and lower Specialty Chemicals gross margin. Total income tax for the fourth quarter was an expense of $21.0 million compared to an income tax recovery of $15.8 million in the prior year quarter. Income taxes were impacted by the commissioning of the Port Edwards expansion and acquisitions completed in 2009. The prior year income tax recovery was primarily due to Superior's conversion to a corporation on December 31, 2008, the reversal of Superior's deferred tax credit and financial instrument losses. Additionally, fourth quarter net earnings were affected for the same reasons as the analysis of adjusted operating cash flow for the fourth quarter which is detailed by operating business throughout this financial discussion.

Net earnings for the twelve months ended December 31, 2009 were $68.3 million, compared to net earnings of $67.7 million in the prior year period. Net earnings were impacted by $20.6 million in unrealized losses on financial instruments in the current period, compared to unrealized losses of $61.2 million in the prior year period. The decrease from the prior year is primarily due to lower unrealized losses in the current year on Superior's natural gas derivative contracts due to changes in the spot price of natural gas as compared to the prior year, offset in part by increased unrealized losses on Specialty Chemicals fixed-price electricity contracts. Revenues of $2,246.7 million were $240.6 million lower than the prior year period due principally to a decrease in the selling price of propane as a result of a reduction in the wholesale cost of propane and reduced volumes. In addition to reduced sales volumes and selling prices within the Construction Products Distribution segment, offset in part by the contribution from the acquisition of SPI and from the acquisition of the U.S. refined fuels assets. Gross profit of $653.4 million was $15.7 million lower than the prior year period, primarily due to reduced sales volumes across all businesses offset in part by the contribution from the acquisition of SPI and the acquisition of the U.S. refined fuels assets. Total income tax expense was $12.7 million compared to an income tax expense of $9.9 million in 2008. Income taxes were impacted by lower U.S. cash income taxes due to the tax benefit associated with commissioning the Port Edwards conversion, while future income taxes were primarily impacted by the acquisitions completed during 2009.

Energy Services

Energy Services' condensed operating results for the three months and years ended December 31, 2009 and 2008 are provided in the following table.

    
    -------------------------------------------------------------------------
                                    Three months ended            Year ended
    (millions of dollars except            December 31,          December 31,
     per litre amounts)                2009       2008       2009       2008
    -------------------------------------------------------------------------
    Revenue(1)                        466.1      409.4    1,312.1    1,491.2
    Cost of sales(2)                 (353.9)    (311.1)    (971.9)  (1,159.3)
    -------------------------------------------------------------------------
    Gross profit                      112.2       98.3      340.2      331.9
    Less: Cash operating and
     administration costs             (71.6)     (60.5)    (242.6)    (228.6)
    -------------------------------------------------------------------------
    EBITDA from operations             40.6       37.8       97.6      103.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Effective January 1, 2007, Superior discontinued hedge accounting for
        all economic hedging activities, as such, amounts related to these
        contracts must be accounted for separately on Superior's financial
        statements (see Notes 10 and 14 to the unaudited Consolidated
        Financial Statements). In order to better reflect the results of its
        operations, Superior has reclassified these amounts for purposes of
        this financial discussion to present its results as if it had
        accounted for these transactions as accounting hedges. As such,
        included in revenue for the three and twelve months ended December
        31, 2009 is $1.1 million and $0.1 million in realized foreign
        currency forward contract gains, and included in revenue for the
        three and twelve months ended December 31, 2008 is $2.4 million and
        $2.8 million in realized foreign currency forward contract losses.
        For the three and twelve months ended December 31, 2009 for purposes
        of the financial discussion, Superior has reclassified $0.1 million
        and $0.1 million, of foreign currency translation losses related to
        US-denominated working capital from operating and administrative
        expense to revenue, and for the three and twelve months ended
        December 31, 2008 has reclassified $0.2 million and $0.8 million of
        foreign currency translation losses related to US-denominated working
        capital from operating and administrative expense to revenue.
        Reclassification of the translation gains or losses provides improved
        matching to the income statement recognition of the underlying
        working capital item that resulted in the translation gains or
        losses.
    (2) For the three and twelve months ended December 31, 2009 for purposes
        of the financial discussion, Superior has reclassified $0.1 million
        and $1.0 million, of foreign currency translation gains related to
        US-denominated working capital from operating and administrative
        expense to cost of sales, and for the three and twelve months ended
        December 31, 2008 has reclassified $1.8 million and $4.0 million of
        foreign currency translation losses related to US-denominated working
        capital from operating and administrative expense to cost of sales.
        Included in cost of sales for the three and twelve months ended
        December 31, 2009, is $3.5 million and $6.6 million in realized
        foreign currency forward contract losses and $24.4 million and
        $102.6 million related to natural gas commodity realized fixed price
        losses. Included in cost of sales for the three and twelve months
        ended December 31, 2008, is $0.6 million and $(17.6) million in
        realized foreign currency forward contract gains (losses) and
        $(4.3) million and $34.3 million in related to natural gas commodity
        realized fixed price gains (losses).
    

Revenues for the fourth quarter of 2009 were $466.1 million, an increase of $56.7 million from revenues of $409.4 million in 2008. The increase in revenues was due to the contribution from the acquisition of the Sunoco U.S. refined fuels assets on September 30, 2009 and acquisition of the Griffith CH U.S. refined fuels assets on December 11, 2009 (the Sunoco U.S. refined fuels assets and the Griffith CH U.S. refined fuels assets, collectively referred to as the "U.S. refined fuels assets"), offset in part by lower propane sales volumes. Total gross profit for the fourth quarter of 2009 was $112.2 million, an increase of $13.9 million or 14% over the prior year quarter. The increase in gross profit was due to the contribution from the U.S. refined fuels assets acquisitions and increased fixed-price energy services gross profit. A summary and detailed review of gross profit by segment is provided below.

    
    Gross Profit Detail
    -------------------------------------------------------------------------
                                    Three months ended            Year ended
                                           December 31,          December 31,
    (millions of dollars)              2009       2008       2009       2008
    -------------------------------------------------------------------------
    Canadian propane distribution      65.2       72.6      236.4      253.3
    U.S. refined fuels                 15.3          -       15.3          -
    Other services                     10.6        9.7       29.0       29.4
    Supply portfolio management        12.7       12.4       27.9       21.6
    Fixed-price energy services         8.4        3.6       31.6       27.6
    -------------------------------------------------------------------------
    Total gross profit                112.2       98.3      340.2      331.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Canadian propane distribution gross profit for the fourth quarter was $65.2 million, a decrease of $7.4 million or 10% from the prior year quarter, due principally to a 17 million litre or 4% reduction in sales volumes and modestly lower average sales margins. Residential and commercial volumes decreased by 3 million litres or 2% and were negatively impacted by a weaker overall economic environment throughout most of Canada and the ongoing impact of the customer conservation trend which began in 2008. Ongoing marketing efforts have been successful in acquiring new customers, partially offsetting the impact of reduced volumes due to the weaker economic environment. Average weather across Canada as measured by degree days, for the fourth quarter was 1% warmer than the prior year and 4% colder than the five-year average, negatively impacting heating related volumes. Industrial volumes decreased by 17 million litres or 9%, due principally to the impact of a weaker economic environment as noted above. In particular, volumes were negatively impacted by customer cutbacks and closures in the manufacturing and mining sectors, throughout eastern Canada and western Canada in addition to the impact of reduced activity levels in the oil and natural gas sector. Automotive propane volumes declined by 1 million litres or 4%, which was below the historical decline trend in this end-use market due to a favourable pricing differential between propane and retail gasoline.

    
    Canadian Propane Distribution Sales Volumes

    Volumes by End-Use Application(1)   Volumes by Region(2)
    -------------------------------------------------------------------------
                  Three months ended                      Three months ended
    (millions of         December 31,                            December 31,
     litres)          2009      2008                          2009      2008
    ---------------------------------   -------------------------------------
    Residential         49        50     Western Canada        204       222
    Commercial          83        85     Eastern Canada        142       144
    Agricultural        46        42     Atlantic Canada        27        24
    Industrial         173       190
    Automotive          22        23
    ---------------------------------   -------------------------------------
                       373       390                           373       390
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Volumes by End-Use Application(1)  Volumes by Region(2)
    -------------------------------------------------------------------------
                          Year ended                              Year ended
    (millions of         December 31,                            December 31,
     litres)          2009      2008                          2009      2008
    ---------------------------------   -------------------------------------
    Residential        151       159     Western Canada        699       772
    Commercial         286       299     Eastern Canada        480       510
    Agricultural        86        86     Atlantic Canada        98        95
    Industrial         651       719
    Automotive         103       114
    ---------------------------------   -------------------------------------
                     1,277     1,377                         1,277     1,377
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Volume: Volume of propane sold (millions of litres).

    (2) 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.
    

Superior continued to actively manage sales margins in the fourth quarter, resulting in an average Canadian propane distribution sales margin of 17.5 cents per litre, which was lower than the prior year quarter average margin of 18.6 cents per litre. Average margins compared to the prior year quarter were negatively impacted as a result of contract delays in passing through the rapid wholesale price increases experienced in December to customers and competitive market pressures.

U.S. refined fuels gross profit for 2009 was $15.3 million and represents the contribution from the previously announced acquisitions of the U.S. refined fuels assets. The gross profit was generated by the sale of heating oil, propane and other refined fuels throughout the northeast United States. Volume contribution from the U.S. refined fuels assets was 153 million litres from October 1, 2009 through December 31, 2009. U.S. refined fuels also offers a broad range of services including heating, ventilation and air conditioning repair, and other related services which contributed $3.0 million in gross profits included within the other services segment.

    
    U.S. Refined Fuels Sales Volumes

    Volumes by End-Use Application(1)    Volumes by End-Use Application(1)
    -------------------------------------------------------------------------
                  Three months ended                              Year ended
    (millions of         December 31,    (millions of            December 31,
     litres)          2009      2008      litres)             2009      2008
    ---------------------------------   -------------------------------------
    Residential         61         -     Residential            61         -
    Commercial          74         -     Commercial             74         -
    Automotive          18         -     Automotive             18         -
    ---------------------------------   -------------------------------------
                       153         -                           153         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Volumes by Region(2)                 Volumes by Region(2)
    -------------------------------------------------------------------------
                  Three months ended                              Year ended
                         December 31,                            December 31,
                      2009      2008                          2009      2008
    ---------------------------------   -------------------------------------
    Northeast                            Northeast
     United States     153         -      United States        153         -
    ---------------------------------   -------------------------------------
                       153         -                           153         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 gross profit was $10.6 million in the fourth quarter, an increase of $0.9 million over the prior year quarter due primarily to the contribution from the acquisitions of the U.S. refined fuels assets.

Supply portfolio management related gross profits were $12.7 million in the fourth quarter, an increase of $0.3 million compared to the prior year quarter due to higher gross profits within the supply portfolio management business as a result of strong trading conditions offset in part by tight supply conditions.

Fixed-price energy services gross profit was $8.4 million in the fourth quarter, an increase of $4.8 million compared to the prior year quarter. Gross profit from natural gas was $7.5 million in the fourth quarter, an increase of $4.1 million or 121% compared to the prior year quarter, as gross profit of 93.8 cents per millions of gigajoules (GJ) was 129% higher than the prior year quarter, more than offsetting a 2% decrease in natural gas volumes sold. The prior year quarter natural gas gross profit was negatively impacted by a one-time, $2.4 million adjustment for utility transportation charges and settlements that was determined during the account reconciliation process. Additionally, the prior year natural gas gross profit was also impacted by approximately $2.0 million in foreign currency translation losses due to the dramatic appreciation of the US dollar relative to the Canadian dollar during the fourth quarter of 2008. Excluding the impact of the utility transportation charges and settlement along with the foreign exchange loss of $2.0 million in the prior year quarter, gross margins were consistent with the prior year quarter. Electricity gross profit in the fourth quarter of 2009 was $0.9 million, $0.7 million higher than the prior year quarter due to the aggregation of additional commercial customers over the past twelve months.

    
    Fixed-Price Energy Services Gross Profit

    -------------------------------------------------------------------------
    (millions of
     dollars except      Three months ended           Three months ended
     volume and           December 31, 2009            December 31, 2008
     per unit      Gross                         Gross
     amounts)     Profit     Volume   Per Unit  Profit     Volume   Per Unit
    -------------------------------------------------------------------------
    Natural Gas(1)  7.5      8.0 GJ       93.8     3.4     8.2 GJ       41.0
                                      cents/GJ                      cents/GJ
    Electricity(2)  0.9    68.0 KWh       1.32     0.2    27.6KWh       0.87
                                     cents/KWh                     cents/KWh
    -------------------------------------------------------------------------
    Total           8.4                            3.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    (millions of
     dollars except             Year ended                     Year ended
     volume and          December 31, 2009              December 31, 2008
     per unit      Gross                         Gross
     amounts)     Profit     Volume   Per Unit  Profit     Volume   Per Unit
    -------------------------------------------------------------------------
    Natural Gas(1)  29.6    32.8 GJ       90.2    26.7    33.2 GJ       80.5
                                      cents/GJ                      cents/GJ
    Electricity(2)   2.0  193.0 KWh       1.04     0.9    69.9KWh       1.23
                                     cents/KWh                     cents/KWh
    -------------------------------------------------------------------------
    Total           31.6                          27.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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).
    

Cash operating and administrative costs of $71.6 million increased by $11.1 million or 18% from the prior year quarter. The increase in expenses was due primarily to the contribution from the acquisition of the U.S. refined fuels assets, offset in part by lower wages and benefits and fuel costs. Energy Services continues to actively manage expenses, particularly wages and benefits in response to fluctuations in volumes.

Acquisition of U.S. Refined Fuels Assets

On September 30, 2009, Superior acquired certain assets which make up a U.S. retail heating oil and propane distribution business (Sunoco U.S. refined fuels assets) from Sunoco, Inc. (R&M), and Sunoco, Inc. both of which are Pennsylvania corporations, for an aggregate purchase price of $96.5 million (US$90.0 million), inclusive of transaction related costs. The Sunoco U.S. refined fuels assets distribute a broad range of liquid fuels and propane gas and related services, serving markets in Pennsylvania and New York.

On December 11, 2009, Superior acquired certain assets which make up a retail heating oil, propane and motor fuels distributions business (Griffith CH U.S. refined fuels assets) from Griffith Energy Services Inc., for an aggregate purchase price of $82.0 million (US$77.4 million), inclusive of transaction related costs. The Griffith CH U.S. refined fuels assets distribute a broad range of liquid fuels and propane gas, serving markets in Connecticut, Pennsylvania and Rhode Island.

On January 20, 2010, Superior completed its acquisition of the shares of Griffith Holdings, Inc. (Griffith) for consideration of approximately US$125.0 million before adjustments for working capital. Griffith is a retail and wholesale distributor of retail propane, heating oil and motor fuels in upstate New York.

Together, the above acquisitions form the foundation for Superior's U.S. refined fuels distribution platform. The acquisitions are complementary to Superior's existing Energy Services business and will expand Energy Services' customer base and product diversification.

Outlook

Energy Services' expects EBITDA from operations for 2010 to be between $140 million and $150 million consistent with the previous outlook provided in Superior's press release dated January 20, 2010. Significant assumptions underlying its current outlook are:

    
    -   Average temperatures across Canada and the northeast United States
        are expected to be consistent with the most recent five-year average;

    -   Total propane, and U.S. refined fuels related sales volumes compared
        to 2009 are anticipated to increase due to increased economic
        activity and resulting demand;

    -   Wholesale propane, and U.S. refined fuels related prices will not
        significantly impact demand for propane, refined fuels and related
        services;

    -   Supply portfolio management and fixed-price energy services gross
        profit will be consistent with 2009 assuming normal volatility in the
        wholesale markets;

    -   Fixed price energy services will be able to access sales channel
        agents on acceptable contract terms;

    -   Natural gas markets in Ontario, Quebec and British Columbia will
        provide growth opportunities for fixed-priced energy services; and

    -   The commercial electricity market in Ontario and the retail
        electricity market in the northeastern U.S. are expected to provide
        additional growth opportunities for fixed-price energy services.
    

Energy Services' EBITDA from operations of $97.6 million for 2009 was lower than the outlook provided in Superior's 2009 third quarter MD&A of $104 million to $117 million due to reduced Canadian propane distribution gross profits and volumes throughout the fourth quarter as a result of lower than expected heating degree days and the continued general economic slowdown.

In addition to the significant assumptions detailed above, refer to the section "Risk Factors to Superior" for a detailed review of significant business risks affecting Energy Services' businesses.

Specialty Chemicals

Specialty Chemicals' condensed operating results for the three months and years ended December 31, 2009 and 2008 are provided in the following table.

    
    -------------------------------------------------------------------------
    (millions of dollars except           Three months ended December 31,
     per metric tonne (MT) amounts)         2009                  2008
    -------------------------------------------------------------------------
    Revenue                                   $ per MT              $ per MT
      Chemical(1)(3)                  105.2        657      115.5        722
      Technology                        1.4          9        9.6         60
    Cost of Sales
      Chemical(1)(2)                  (60.1)      (376)     (52.1)      (325)
      Technology                       (0.2)        (1)      (6.5)       (41)
    -------------------------------------------------------------------------
    Gross Profit                       46.3        289       66.5        416
    Less: Cash operating and
     administrative costs(3)          (27.7)      (173)     (33.6)      (210)
    -------------------------------------------------------------------------
    EBITDA from operations             18.6        116       32.9        206
    Chemical volumes sold
     (thousands of MTs)                      160                   160
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    (millions of dollars except               Year ended December 31,
     per metric tonne (MT) amounts)         2009                  2008
    -------------------------------------------------------------------------
    Revenue                                    $ per MT             $ per MT
      Chemical(1)(3)                  448.6        708      460.1        633
      Technology                        8.2         13       19.5         27
    Cost of Sales
      Chemical(1)(2)                 (243.9)      (385)    (232.3)      (319)
      Technology                       (2.9)        (5)     (12.0)       (17)
    -------------------------------------------------------------------------
    Gross Profit                      210.0        331      235.3        324
    Less: Cash operating and
     administrative costs(3)         (117.0)      (184)    (118.8)      (164)
    -------------------------------------------------------------------------
    EBITDA from operations             93.0        147      116.5        160
    Chemical volumes sold
     (thousands of MTs)                      634                   727
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Effective January 1, 2007, Superior discontinued hedge accounting for
        all economic hedging activities. As such, amounts related to these
        contracts must be accounted for separately on Superior's financial
        statements (see Notes 10 and 14 to the unaudited Consolidated
        Financial Statements). In order to better reflect the results of its
        operations, Superior has reclassified these amounts for purposes of
        this financial discussion to present its results as if it had
        accounted for these transactions as accounting hedges. As such,
        included in revenue for the three and twelve months ended December
        31, 2009 is $1.1 million and $(6.2) million in realized foreign
        currency forward contract gains (losses) and included in chemical
        cost of sales and for the three and twelve months ended December 31,
        2009 is $(0.3) million and $0.1 million in realized fixed-price
        electricity gains (losses). Included in revenue for the three and
        twelve months ended December 31, 2008 is $(2.3) million and
        $4.0 million in realized foreign currency forward contract gains
        (losses) and included in chemical cost of sales for the three and
        twelve months ended December 31, 2008 is $4.8 million and
        $22.0 million in realized fixed-price electricity gains.
    (2) Effective January 1, 2008, Superior adopted a revised Canadian
        Institute of Chartered Accountants (CICA) Handbook section related to
        Inventory. This section impacts the calculation of the cost of
        inventory at Specialty Chemicals, due to the requirement to inventory
        the cost of certain fixed overhead items, principally the
        amortization of property, plant and equipment. Additionally, this
        section requires that the amortization that is inventoried be
        classified as a component of cost of products sold once sold. As
        such, for the three and twelve months ended December 31, 2009, for
        purposes of the financial discussion, Superior has excluded
        $10.2 million and $37.5 million in non-cash amortization from cost of
        sales in the calculation of Specialty Chemicals EBITDA from
        operations and for the three and twelve months ended December 31,
        2008, Superior has excluded $10.1 million and $38.9 million.
    (3) For the three and twelve months ended December 31, 2009 for purposes
        of the financial discussion, Superior has reclassified $0.7 million
        and $2.6 million, of foreign currency translation losses related to
        US-denominated working capital from operating and administrative
        expense to revenue and for the three and twelve months ended December
        31, 2008 has reclassified $4.8 million and $5.9 million of foreign
        currency translation gains related to US-denominated working capital
        from operating and administrative expense to revenue.
        Reclassification of the translation gains or losses provides improved
        matching to the income statement recognition of the underlying
        working capital item that resulted in the translation gains or
        losses.
    

Chemicals and technology revenues for the fourth quarter of $106.6 million were $18.5 million or 15% lower than the prior year quarter as result of reduced average selling prices and lower mix of chloralkali/potassium sales during the Port Edwards conversion. Technology revenues were below the prior year quarter as technology revenues and gross profits are dependent on the timing and number of projects. Fourth quarter gross profit was $46.3 million, comprised of $45.1 million from chemical sales and $1.2 million from technology projects. Chemical gross profit was $18.3 million lower than the prior year quarter due principally to reduced chloralkali/potassium gross profits as sodium chlorate gross profits were consistent with the prior year quarter. Chloralkali/potassium gross profits were impacted by reduced sales volumes due to the general economic slow down and reduced production due to the Port Edwards conversion project. In addition to lower sales volumes, gross profits were negatively impacted by higher input costs resulting from an increase in the price of potash, the primary input in the production of potassium products and increased finished products purchases to meet customer requirements during the Port Edwards conversion. Sodium chlorate gross profits were consistent with the prior year quarter as a 7% increase in sales volumes was offset by a decrease in the average selling price of sodium chlorate due to the appreciation of the Canadian dollar relative to the US dollar on US-denominated sales. Sodium chlorate sales volumes increased by 7,500 tonnes or 7% compared to the prior year quarter due principally to increased sales volumes in North America as a result of increased demand for pulp and higher overall sales volumes. Improved pulp market fundamentals led to pulp mill restarts in some operating areas. Sodium chlorate average selling prices were 6% lower than the prior year quarter due to the appreciation of the Canadian dollar relative to the US dollar on US-denominated sales and contract renewals at lower average selling prices. Notwithstanding strength in the North American pulp market, sodium chlorate producer capacity exceeded overall demand which also contributed to lower selling prices. Additionally lower average power rates due to reduced economic activity in North America also put pressure on sodium chlorate selling prices. Technology gross profit was $1.9 million lower than the prior year quarter due to a decrease in the number of projects being completed and normal course expiration of royalty revenues.

Cash operating and administrative costs of $27.7 million were $5.9 million or 18% lower than the prior year quarter due to lower compensation costs, bad debt provisions and the impact of the appreciation of the Canadian dollar on US-denominated expenses.

Port Edwards Conversion Project Completion

Superior's project to convert its Port Edwards, Wisconsin chloralkali facility from mercury based technology to membrane technology was completed and fully commissioned in the fourth quarter of 2009. Production was curtailed during most of the fourth quarter while final equipment installation, testing and commissioning were completed. Production was restarted in November 2009 and the facility was operating at full load production levels in December.

The conversion project maintains the facility's ability to produce sodium and potassium products, increases the production capacity by approximately 30%, provides a significant extension of the plant life and enhances the efficiency of electrical energy use. The total costs to complete the conversion were US$138.0 million, slightly above the revised estimate of US$130 million included in Superior's 2009 third quarter MD&A due to scope changes identified and addressed during the final stages of construction. See "Consolidated Capital Expenditure Summary" for additional details on costs incurred related to Port Edwards.

Outlook

Superior expects 2010 EBITDA from operations from its Specialty Chemicals business to be between $105 million and $115 million, consistent with the previous outlook provided in Superior's press release dated January 20, 2010. Significant assumptions underlying the current outlook are:

    
    -   Supply and demand fundamentals for sodium chlorate will be stronger
        than in 2009, resulting in increased sales volumes for 2010;
    -   Chloralkali/potassium revenues will be higher than 2009 due to the
        expansion of the Port Edwards project in late 2009 and increased
        economic activity resulting in increased sales volumes for 2010; and
    -   Average plant utilization for 2010 will be approximately 85-90%.
    

Specialty Chemicals EBITDA from operations of $93.0 million for 2009 was modestly lower than the outlook provided in Superior's 2009 third quarter MD&A of $95 million to $105 million due principally to the delayed start-up of the Port Edwards expansion which negatively impacted chloralkali/potassium product gross profit in the fourth quarter.

In addition to the significant assumptions detailed above, refer to the section "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 the three months and years ended December 31, 2009 and 2008 are provided in the following table.

    
    -------------------------------------------------------------------------
                                    Three months ended            Year ended
                                           December 31,          December 31,
    (millions of dollars)              2009       2008       2009       2008
    -------------------------------------------------------------------------
    Distribution and direct sales
     revenue(1)                       176.7      124.1      469.5      523.6
    Distribution and direct sales
     cost of sales                   (130.0)     (83.3)    (347.2)    (382.9)
    -------------------------------------------------------------------------
    Distribution and direct sales
     gross profit                      46.7       40.8      122.3      140.7
    Less: Cash operating and
     administrative costs             (35.8)     (27.3)     (99.5)    (103.3)
    -------------------------------------------------------------------------
    EBITDA from operations             10.9       13.5       22.8       37.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Effective January 1, 2007, Superior discontinued hedge accounting for
        all economic hedging activities. As such, amounts related to these
        contracts must be accounted for separately on Superior's financial
        statements (see Notes 10 and 14 to the unaudited Consolidated
        Financial Statements). In order to better reflect the results of its
        operations, Superior has reclassified these amounts for purposes of
        this financial discussion to present its results as if it had
        accounted for these transactions as accounting hedges. As such,
        included in revenue for the three and twelve months ended December
        31, 2009 is $0.5 million and $0.5 million in realized foreign
        currency forward contract gains. Included in revenue for the three
        and twelve months ended December 31, 2008 is $nil million and
        $nil million in realized foreign currency forward contract gains.
    

Distribution and direct sales revenues of $176.7 million for the fourth quarter of 2009 was $52.6 million or 42% higher than the prior year quarter due primarily to the contribution from the acquisition of SPI offset in part by reduced sales volumes and lower selling prices. Distribution and direct sales gross profit of $46.7 million in the fourth quarter was $5.9 million or 14% higher than the prior year quarter, due principally to the contribution of the acquisition of SPI, offset in part by the impact of reduced sales volumes and lower percentage sales margins. Distribution drywall sales volumes, an indicator of overall distribution sales volumes, decreased by 18% from the prior year quarter. The decrease in distribution sales volumes was largely due to the ongoing slowdown in new home residential housing starts and commercial building activity which negatively impacted volumes in most operating regions, particularly in British Columbia and the U.S. Sales volumes were also negatively impacted by the general economic slowdown throughout North America. Percentage sales margins were lower than the prior year quarter as a result of competitive pressures and lower margin sales contribution from SPI. Cash operating and administrative costs of $35.8 million were $8.5 million or 31% higher than the prior year quarter due to the contribution of the acquisition of SPI, offset in part by the impact of aggressive cost reduction programs and lower warehouse wages and fleet costs due to reduced sales volumes.

Acquisition of Specialty Products & Insulation Co. (SPI)

On September 24, 2009, Superior completed its acquisition of the shares of SPI for consideration of approximately $142.1 million (US$132.1 million), inclusive of transaction related costs. SPI is a US national distributor of insulation and architectural products in the commercial and industrial markets. The acquisition of SPI further diversifies Superior's Construction Products Distribution segment through SPI's leading market position in 28 states, served by its 71 operation centres and 11 primary fabrication facilities.

Outlook

Superior expects Construction Products Distribution's EBITDA from operations for 2010, inclusive of the acquisition of SPI, to be between $40 million and $50 million, consistent with the previous outlook provided in Superior's press release dated January 20, 2010. Significant assumptions underlying its current outlook are:

    
    -   Sales volumes in 2010 compared to 2009 are expected to modestly
        improve as suggested by positive leading indicators in new home
        residential activity in both Canada and the United States; and

    -   Sales volumes for industrial insulation products in 2010 will be
        consistent with the prior year while commercial volumes in 2010 will
        be lower due to reduced commercial economic activity compared to the
        prior year.
    

Construction Products Distribution's EBITDA from operations of $22.8 million for 2009 was consistent with the outlook provided in Superior's 2009 third quarter MD&A of $20 million to $25 million.

In addition to the Construction Products Distribution segment's significant assumptions detailed above, refer to the section "Risk Factors to Superior" for a detailed review of the significant business risks affecting Superior's Construction Products Distribution segment.

    
    Consolidated Capital Expenditure Summary
    -------------------------------------------------------------------------
                                    Three months ended            Year ended
                                           December 31,          December 31,
    (millions of dollars)              2009       2008       2009       2008
    -------------------------------------------------------------------------
    Efficiency, process improvement
     and growth related                 5.0       11.3       22.9       26.3
    Other capital                       4.0        2.7        9.9        7.6
    Port Edwards conversion project    19.2       32.3      106.5       49.8
    -------------------------------------------------------------------------
                                       28.2       46.3      139.3       83.7
    Acquisition of SPI(1)               0.3          -      142.1          -
    Acquisition of  U.S. refined
     fuels assets                      82.4          -      178.5          -
    Other acquisitions                  0.1          -        0.8       24.5
    Earn-out payment on prior
     acquisition                          -          -        0.6        0.5
    Transaction with Ballard Power
     Systems Inc. (Ballard)               -       46.3          -       46.3
    Proceeds on disposal of facility      -          -          -        4.0
    Proceeds on disposition of
     capital                           (0.9)      (4.9)      (4.8)      (7.5)
    -------------------------------------------------------------------------
    Total net capital expenditures    110.1       87.7      456.5      143.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Includes the issuance of $32.6 million of common shares that were
        issued by way of private placement at a deemed price of $11.63 per
        share.
    

Efficiency, process improvement and growth related expenditures were $5.0 million in the fourth quarter compared to $11.3 million in the prior year quarter. Efficiency, process improvement and growth related expenditures were incurred in relation to Specialty Chemicals' electrical cell replacement program, other efficiency projects and Energy Services' business transformation project. Other capital expenditures were $4.0 million in the fourth quarter compared to $2.7 million in the prior year quarter, consisting primarily of required maintenance and general capital at Energy Services and Specialty Chemicals. Specialty Chemicals incurred $19.2 million (US$18.2 million) in the fourth quarter of 2009 related to its Port Edwards conversion project, and has incurred US$138.0 million cumulatively on the project which is $8.0 million higher than the previously estimated cost of US$130.0 million. The Port Edwards conversion project was fully commissioned in the fourth quarter of 2009, although it is likely that a small amount of capital will be required in 2010 as non-critical items are completed, see Specialty Chemicals for further details. During the fourth quarter, as previously discussed, Superior completed the acquisition of certain Griffith CH U.S. refined fuels assets for $82.4 million. Proceeds on the disposal of capital were $0.9 million in the fourth quarter and consisted of Superior's disposition of surplus tanks and cylinders; the prior year quarter included the non-recurring sale of excess land at Specialty Chemicals.

Corporate and Interest Costs

Corporate costs for the fourth quarter were $3.2 million, compared to $6.0 million in the prior year quarter. The decrease in corporate costs compared to the prior year quarter was due principally to $0.3 million in foreign currency translation gains on the revaluation of US dollar cash transactions and US dollar-denominated interest payable compared to losses of $2.1 million in prior year quarter. Excluding the impact of foreign currency translation gains and losses, the decrease in corporate costs was impacted by reduced employee compensation and long-term incentive plan costs due to quarter-over-quarter fluctuations in the market value of Superior's share price as compared to the prior year quarter.

Interest expense on revolving term bank credits and term loans for the fourth quarter was $1.6 million, a decrease of $4.4 million from the prior year quarter. The decrease in interest costs was primarily due to the inclusion of $6.1 million in realized gains due to the early termination of Superior's interest rate swaps in December of 2009. Excluding the realized gains on the early termination, interest costs increased primarily due to the impact of higher average debt levels due to the acquisitions completed in the third and fourth quarters and higher interest costs associated with the issuance of 8.25% senior unsecured debentures on October 27, 2009. 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) was $5.1 million for the fourth quarter of 2009, $1.5 million higher than the prior year quarter of $3.6 million. The increase in debenture interest is due to the issuance of $69.0 million, 7.50% convertible debentures on August 28, 2009, due in part to the acquisition of SPI and the U.S. refined fuels assets as previously discussed.

Taxation

Total income tax expense for the fourth quarter was $21.0 million, and consists of $4.2 million in cash income tax recoveries and $25.2 million in future income taxes, compared to a total income tax recovery of $15.8 million in the prior year quarter, which consisted of $3.6 million in cash income taxes and a $19.4 million future income tax recovery.

Cash income and withholding taxes for the fourth quarter were a recovery of $4.2 million and consisted of a cash tax recovery in the US of $4.6 million and a Canadian capital and withholding tax expense of $0.4 million (2008 Q4 - $3.6 million of US cash taxes expense and withholding taxes of nil). The decrease in US cash income taxes was primarily due to the tax amortization resulting from the commissioning of the Port Edwards conversion in the fourth quarter of 2009. Future income tax expense for the fourth quarter of 2009 was $25.2 million (2008 Q4 - $19.4 million future income tax recovery), resulting in a corresponding net future income tax asset of $322.8 million as at December 31, 2009 and a net deferred credit of $270.9 million. Future income taxes were impacted by the acquisitions completed during the fourth quarter.

Consolidated Outlook

Superior expects adjusted cash flow from operations for 2010 to be between $1.95 and $2.15 per share. Superior's previous outlook for 2010 as provided in the 2009 third quarter MD&A was between $2.05 and $2.25 per share. Superior's consolidated adjusted operating cash flow outlook is dependent on the operating results of its three operating segments. See the discussion of operating results by segment for additional details on Superior's 2010 guidance. In addition to the operating results of Superior's three operating segments, significant assumptions underlying Superior's current 2010 outlook are:

    
    -   The economic conditions in Canada and the United States are expected
        to improve in 2010 compared to 2009;
    -   Superior continues to attract capital and obtain financing on
        acceptable terms;
    -   The foreign currency exchange rate between the Canadian and US dollar
        is expected to average 1.05  in 2010 on all unhedged foreign currency
        transactions;
    -   Financial and physical counterparties continue to fulfill their
        obligations to Superior;
    -   Regulatory authorities do not impose any new regulations impacting
        Superior;
    -   The 2010 average floating interest rates and floating debt are
        expected to increase modestly over 2009; and
    -   US based cash taxes for 2010 are expected to be minimal in 2010 as a
        result of the tax basis associated with the completion of the Port
        Edwards conversion.
    

Consolidated adjusted operating cash flow for 2009 of $1.80 per share was below Superior's outlook provided in its 2009 third quarter MD&A of $1.90 to $2.05. The shortfall was due principally to lower than expected operating results from Energy Services due to reduced propane margins along with lower operating results from Specialty Chemicals due primarily to lower gross margin on chloralkali/potassium products. Refer to the Energy Services and Specialty Chemicals sections for a detailed review of their operating results.

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 term bank credit (Credit Facility) and term loans before deferred financing fees, including $92.7 million related to Superior's accounts receivable securitization program totaled $738.1 million as at December 31, 2009, an increase of $160.4 million from December 31, 2008. The increase in revolving term bank credits and terms loans is predominately due to Superior's acquisition of SPI, Sunoco U.S. refined fuels assets, and Griffith CH U.S. refined fuels assets in addition to capital expenditures related to the Port Edward's conversion, offset in part by the non-cash impact of the depreciation of the US dollar relative to the Canadian dollar on US-denominated debt (approximately $40 million), the issuance of equity during the year, the issuance of $69.0 million in convertible unsecured subordinated debentures and by operating cash flow in excess of dividends for the year. See "Summary of Cash Flows" for a complete summary of Superior's sources and uses of cash.

As at December 31, 2009, Debentures before deferred issue costs issued by Superior totaled $316.7 million, which is $69.1 million higher than the balance as at December 31, 2008. The increase in Debentures is due to the issuance of $69.0 million in 7.50% convertible unsecured subordinated debentures during the third quarter, issued in part to finance the acquisition of SPI. The 7.50% debentures mature December 31, 2014. See Note 8 to the unaudited Consolidated Financial Statements for additional details on Superior's Debentures.

As at December 31, 2009, approximately $223.6 million was available under the Credit Facility and accounts receivable securitization program, which Superior considers sufficient to meet its net working capital funding requirements and expected capital expenditures.

Consolidated net working capital was $183.8 million as at December 31, 2009, an increase of $37.1 million from net working capital of $146.7 million as at December 31, 2008. The increase in net working capital from the prior year is due to higher net working capital at Energy Services as a result of the acquisition of the U.S. refined fuels assets, offset in part by a year over year reduction in the retail cost of propane and lower sales volumes. Higher net working capital levels at Construction Products Distribution are due primarily to the impact of the acquisition of SPI offset in part by reduced sales activity and inventory management initiatives, while net working capital at Specialty Chemicals was impacted by reduced sales volumes. Superior's net working capital requirements are financed from revolving term bank credit facilities and by proceeds raised from a trade accounts receivable sales program.

As at December 31, 2009, Superior's senior debt and total debt to compliance EBITDA ratios are 2.7 and 3.8 times, respectively (December 31, 2008, 2.3 and 3.4 times, respectively), after taking into account the impact of the off-balance sheet receivable sales program amounts and the impact of cash on hand. These ratios are within the requirements contained in Superior's debt covenants, which restrict its ability to pay dividends. In accordance with Superior's credit facilities, Superior must maintain a consolidated debt to compliance EBITDA ratio of not more than 5.0 to 1.0. In addition, Superior must maintain a consolidated senior 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. Distributions (including payments to debenture holders) cannot exceed compliance EBITDA, less cash income taxes and certain capital expenditures, plus $25.0 million on a trailing twelve month rolling basis. At December 31, 2009, the senior debt ratio when calculated in accordance with Superior's senior banking agreements was 2.8 times to 1.0 (December 31, 2008 - 2.4 times) and the total debt ratio when calculated in accordance with Superior's senior bank agreements was 2.8 times to 1.0 (December 31, 2008 - 2.4 times). The total debt to compliance EBITDA for purposes of senior credit agreements does not include the Debentures. See "Expansion of Superior's Credit Facility".

Superior has entered into an agreement to sell, with limited recourse, certain accounts receivable on a 30-day revolving basis to an entity sponsored by a Canadian chartered bank to finance a portion of its working capital requirements, which represents an off-balance sheet obligation. The receivables are sold at a discount to face value based on prevailing money market rates. As at December 31, 2009, proceeds of $92.7 million (December 31, 2008 - $100.0 million) had been raised from this program and were used to repay revolving term bank credits. (See Note 5 to the unaudited Consolidated Financial Statements). Superior is able to adjust the size of the sales program on a seasonal basis in order to match the fluctuations of its accounts receivable funding requirements. The program requires Superior to maintain a minimum secured credit rating of BB and meet certain collection performance standards. Superior is currently fully compliant with program requirements. Effective April 30, 2009, Superior extended the maturity of its accounts receivable securitization program until June 29, 2010.

On October 16, 2009, DBRS confirmed Superior LP's senior secured notes rating at BBB(low) and issued a new rating on Superior LP's senior unsecured debentures of BB(high). On October 19, 2009, Standard and Poor's confirmed Superior LP's senior secured long-term debt credit rating at BBB- and a corporate credit rating of BB+ with a negative outlook. Standard and Poor's issued a new rating on Superior LP's senior unsecured debentures of BB-.

On January 20, 2010, DBRS confirmed Superior LP's senior secured notes and senior unsecured debenture ratings at BBB(low) and BB(high), respectively, both with stable trends. On January 21, 2010, Standard and Poor's confirmed Superior LP's credit ratings were unaffected upon the announcement by Superior to acquire Griffith Holdings Inc. on January 20, 2010.

Expansion of Superior's Credit Facility

On January 27, 2010, Superior and its subsidiaries, Superior LP and Superior Plus U.S. Holdings Inc., completed an expansion of the Credit Facility from $570 million to $600 million. In addition, certain debt definitions used in the calculation of Superior's financial covenant ratios in the Credit Facility have been amended, together with corresponding amendments to the related financial covenant ratios. The previous consolidated senior debt coverage ratio requirement has been replaced with a consolidated secured debt (as defined in the Credit Facility) coverage ratio requirement. The new definition of consolidated secured debt under the Credit Facility excludes the $150 million of senior unsecured debentures of Superior Plus LP issued on October 27, 2009, which are still included in the calculation of total debt for the purposes of the total debt coverage ratio requirement. As a result of the new definition of consolidated secured debt, Superior must maintain a consolidated secured debt to compliance EBITDA ratio of not more than 3.0 to 1.0 compared to the previous senior debt to compliance EBITDA ratio which was 3.5 to 1.0. Superior is permitted, as a result of acquisitions, to increase its consolidated secured debt to compliance EBITDA ratio to 3.5 to 1.0 for a period of 90 days. Superior's total debt, excluding convertible unsecured subordinated debentures, to compliance EBITDA coverage ratio requirement for compliance purposes is unchanged at not more than 5.0 to 1.0.

At December 31, 2009, Superior had an estimated defined benefit pension solvency deficiency of approximately $24 million. Funding requirements required by applicable pension legislation are based upon 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 fourth quarter was 98.5 million shares, an increase of 10.1 million shares compared to the prior year quarter, due to the issuance of 4,166,667 common shares for gross consideration of $50,000,004 or $12.00 per common share, and the issuance of 595,500 common shares for gross proceeds of $6.8 million during the fourth quarter. In addition to the common shares issued in the fourth quarter, 6,773,135 common shares were issued in the third quarter to partially finance the SPI acquisition and Sunoco U.S. refined fuel assets acquisition.

As at February 18, 2010, December 31, 2009, and December 31, 2008, the following shares and securities convertible into shares were outstanding:

    
    -------------------------------------------------------------------------
                     February 18, 2010  December 31, 2009  December 31, 2008
                       Convert-           Convert-           Convert-
                          ible               ible               ible
                        Securi-            Securi-            Securi-
    (millions)            ties  Shares       ties  Shares       ties  Shares
    -------------------------------------------------------------------------
    Common shares
     outstanding(1)              104.9               99.9               88.4
    5.75% Debentures
     (convertible at
     $36.00 per share)  $174.9     4.9     $174.9     4.9    $174.9      4.9
    5.85% Debentures
     (convertible at
     $31.25 per share)   $75.0     2.4      $75.0     2.4     $75.0      2.4
    7.50% Debentures
     (convertible at
     $13.10 per share)   $69.0     5.3      $69.0     5.3        $-        -
    -------------------------------------------------------------------------
    Shares outstanding,
     and issuable upon
     conversion of
     debentures                  117.5              112.5               95.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Common shares outstanding as at February 18, 2010, includes 5,002,500
        of common shares issued subsequent to December 31, 2009 in relation
        to the acquisition of Griffith.
    

Dividends/Distributions Paid to Shareholders/Unitholders

Superior's dividends/distributions to its shareholders/unitholders 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" on page 8 and "Summary of Cash Flows" on page 21 for additional details on the sources and uses of Superior's cash flow.

Dividends paid to shareholders for the quarter ended December 31, 2009 totaled $39.9 million or $0.405 per share, an increase of $4.1 million as compared to the fourth quarter of 2008 due to the issuance of common shares during the third and fourth quarters. Superior's current monthly dividend is $0.135 per share ($1.62 on an annualized basis). Dividends to shareholders are declared at the discretion of Superior.

Superior's primary sources and uses of cash have been detailed in the table below:

    
    Summary of Cash Flows(1)
    -------------------------------------------------------------------------
                                    Three months ended            Year ended
                                           December 31,          December 31,
    (millions of dollars)              2009       2008       2009       2008
    -------------------------------------------------------------------------

    Cash flows from operating
     activities                         3.6       53.5      191.3      207.6

    Investing activities:
      Purchase of property,
       plant and equipment(2)         (28.2)     (46.3)    (139.3)     (84.2)
      Proceeds on disposal of
       property, plant and
       equipment                        0.9        0.9        4.8        7.5
      Proceeds on disposal of
       facility                           -        4.0          -        4.0
      Acquisition of SPI(1)            (0.3)         -     (109.5)         -
      Acquisition of U.S. refined
       fuels assets                   (82.4)         -     (178.5)         -
      Other acquisitions               (0.1)         -       (0.8)     (24.5)
      Transactions with Ballard           -      (46.3)         -      (46.3)
      Earn-out payment on prior
       acquisition                        -          -       (0.6)         -
    -------------------------------------------------------------------------
    Cash flows from investing
     activities                      (110.1)     (87.7)    (423.9)    (143.5)
    -------------------------------------------------------------------------

    Financing activities:
      Dividends to shareholders       (39.9)     (35.8)    (148.2)    (142.2)
      Revolving term bank credits
       and term loans                  72.7       (7.6)     210.1       82.6
      Issuance of 7.50%
       convertible debentures             -          -       65.8          -
      Issuance of common shares        54.8          -       97.8          -
      Net proceeds of accounts
       receivable securitization
       program                         25.9      100.0       (7.3)         -
      Realized gain on financial
       instruments                        -          -        7.7          -
      Other                            (2.0)     (11.4)      14.9      (11.4)
      Proceeds from distribution
       reinvestment plan                  -          -          -        8.9
    -------------------------------------------------------------------------
    Cash flows from financing
     activities                       111.5       45.2      240.8      (62.1)
    -------------------------------------------------------------------------

    Net increase (decrease)
     in cash                            5.0       11.0        8.2        2.0
    Cash beginning of period           19.3        5.1       16.1       14.1
    -------------------------------------------------------------------------
    Cash end of period                 24.3       16.1       24.3       16.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) See the unaudited Consolidated Statements 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, as a result, Superior does not apply hedge accounting and is required to designate its derivatives and non-financial derivatives as held for trading.

Effective 2008, Energy Services entered into natural gas financial swaps primarily with Macquarie Cook Energy Canada Ltd. (formerly, Constellation Energy Commodities Group Inc.) for distributor billed natural gas business in Canada to manage its economic exposure of providing fixed-price natural gas to its customers. Additionally, Energy Services maintains its natural gas swap positions with seven additional counterparties. Energy Services monitors its fixed-price natural gas positions on a daily basis to evaluate compliance with established risk management policies. Superior maintains a substantially balanced fixed-price natural gas position in relation to its customer supply commitments.

Energy Services entered into electricity financial swaps with three counterparties to manage the economic exposure of providing fixed-price electricity to its customers. Energy Services monitors its fixed-price electricity positions on a daily basis to evaluate compliance with established risk management policies. Energy Services maintains a substantially balanced fixed-price electricity position in relation to its customer supply commitments.

Energy Services entered into various propane forward purchase and sale agreements with more than twenty counterparties to manage the economic exposure of its wholesale customer supply contracts. Energy Services monitors its fixed-price propane positions on a daily basis to monitor compliance with established risk management policies. Energy Services maintains a substantially balanced fixed-price propane gas position in relation to its wholesale customer supply commitments.

Specialty Chemicals has entered into fixed-price electricity purchase agreements to manage the economic exposure of certain of its chemical facilities to changes in the market price of electricity, in markets where the price of electricity is not fixed. Substantially all of the fair value with respect to these agreements is with a single counterparty.

Superior, on behalf of its operating divisions, entered into foreign currency forward contracts with ten counterparties to manage the economic exposure of Superior's operations to movements in foreign currency exchange rates. Energy Services contracts a portion its fixed-price natural gas, propane and heating oil purchases and sales in US dollars and enters into forward US dollar purchase contracts to create an effective Canadian dollar fixed-price purchase cost. Specialty Chemicals enters into US dollar forward sales contracts on an ongoing basis to mitigate the impact of foreign exchange fluctuations on sales margins on production from its Canadian plants that is sold in US dollars. Interest expense on Superior's US dollar debt is also used to mitigate the impact of foreign exchange fluctuations.

As at December 31, 2009, Energy Services had hedged approximately 100% of its US dollar natural gas and propane purchase (sales) obligations and Specialty Chemicals had hedged 94% and 61% of its estimated US dollar exposure for the remainder of 2010 and 2011. Energy Services had hedged approximately 45% of its estimated US dollar exposure for the remainder of 2010 and 2011. Construction Products Distribution had hedged approximately 95% and 62% of its estimated US dollar exposure for the remainder of 2010 and 2011. 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 2010 is $0.2 million, after giving effect to United States forward contracts for 2010, as shown in the table below. Superior's sensitivities and guidance are based on an anticipated Canadian to USD foreign currency exchange rate for 2010 of 1.05.

    
    -------------------------------------------------------------------------
                                                                 2015
                                                                  and
                                                                There-
    (US$ millions)            2010   2011   2012   2013   2014  after  Total
    -------------------------------------------------------------------------
    Energy Services - US$
     forward purchases(1)    (54.8)  (5.4)     -      -      -      -  (60.2)
    Energy Services - US$
     forward sales            28.9   24.6   24.0   24.0      -      -  101.5
    Construction Products
     Distribution - US$
     forward sales            23.5   18.0   24.0   24.0      -      -   89.5
    Specialty Chemicals -
     US$ forward sales       117.4   82.5   56.5   33.0      -      -  289.4
    -------------------------------------------------------------------------
    Net US $ forward
     sales                   115.0  119.7  104.5   81.0      -      -  420.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Energy Services -
     Average US$ forward
     purchase rate(1)         1.16   1.11      -      -      -      -   1.15
    Energy Services -
     Average US$ forward
     rate                     1.09   1.06   1.06   1.06      -      -   1.07
    Construction Products
     Distribution - Average
     US$ forward sales rate   1.08   1.06   1.06   1.07      -      -   1.07
    Specialty Chemicals -
     Average US$ forward
     sales rate               1.08   1.17   1.10   1.08      -      -   1.11
    -------------------------------------------------------------------------
    Net average external
     US$/Cdn$ exchange rate   1.10   1.13   1.08   1.07      -      -   1.10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Specialty Chemicals -
     Euro forward sales        5.1    0.3      -      -      -      -    5.4
    -------------------------------------------------------------------------
    Specialty Chemicals -
     Average Euro forward
     sales rate               1.58   1.58      -      -      -      -   1.58
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Energy services is now sourcing its fixed-price natural gas
        requirements in Canadian dollars, as such, it will no longer be
        required to use United States dollar forward contracts to fix its
        Canadian dollar exposure.
    

Superior manages its overall liquidity risk in relation to its general funding requirements by utilizing a mix of short-term and longer-term maturity debt instruments. Superior reviews its mix of short-term and longer-term debt instruments on an on-going basis to ensure it is able to meet its liquidity requirements.

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 and Construction Products Distribution deal 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 and small commercial customers. Energy Services actively monitors the credit worthiness of its direct bill industrial customers.

For additional details on Superior's financial instruments, including the amount and classification of gains and losses recorded in Superior's third quarter 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 10 to the unaudited Consolidated Financial Statements.

Internal Control over Financial Reporting

The certifying officers have limited the scope of their interim certification under National Instrument 52-109 for the design of Disclosure Controls & Procedures and Internal Controls over Financial Reporting to exclude controls, policies and procedures due to the acquisition of Griffith CH U.S. refined fuels assets on December 11, 2009. The results of operations in the quarter are immaterial and are described in the Energy Services - U.S. Refined Fuels sections of this financial discussion. The asset and liabilities acquired are described in Note 4 to the unaudited Consolidated Financial Statements.

Critical Accounting Policies and Estimates

Superior's unaudited Consolidated Financial Statements have been prepared in accordance with GAAP. The significant accounting policies are described in the Consolidated Financial Statements, see Note 2 on pages 61 to 66 of the 2008 annual report. 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.

Changes in Accounting Policies

Financial Assets and Financial Liabilities

On January 1, 2009, Superior adopted the requirements of guidance provided by the CICA related to the application of credit risk and the determination of the fair value of financial assets and liabilities. Superior adopted the guidance retrospectively, but did not restate prior periods. Accordingly, Superior decreased the carrying value of its net financial instrument assets and liabilities as at January 1, 2009, by $0.4 million, with a corresponding increase of $0.1 million to Superior's future income tax asset and an increase of $0.3 million to Superior's opening accumulated deficit; comparative earnings and financial assets and liabilities for prior periods have not been restated. See the unaudited Consolidated Financial Statements for additional details.

Financial Instruments - Disclosure

The CICA has amended Handbook Section 3862 Financial Instruments - Disclosure. These amendments require enhanced disclosure on the fair value of certain financial instruments. The amendments are effective for annual financial statements on or after September 30, 2009. Superior adopted these changes amendments in the fourth quarter of 2009. See the unaudited Consolidated Financial Statements for additional details.

Goodwill and Intangible Assets

On January 1, 2009, Superior adopted CICA Handbook Section 3064 Goodwill and Intangible Assets. This standard provides more specific guidance on the recognition of internally developed intangible assets and requires that research and development expenditures be evaluated against the same criteria as expenditures for intangible assets. The Section harmonizes GAAP with International Financial Reporting Standards (IFRS). Adoption of this standard did not have an impact on Superior.

Future Accounting Changes

International Financial Reporting Standards

The Accounting Standards Board of Canada (AcSB) has announced plans that will require the convergence of GAAP with International Financial Reporting Standards (IFRS) for publicly accountable enterprises, including Superior Plus Corp. The changeover date from GAAP to IFRS is for annual and interim financial statements relating to fiscal years beginning on or after January 1, 2011.

During 2008, Superior formed an IFRS project team to develop an IFRS transition plan. Superior's approach is to assess and coordinate ongoing training requirements in conjunction with the development of a comprehensive diagnostic/planning document throughout the first and second quarters of 2009. Superior's diagnostic plan will include the assessment of differences between GAAP and IFRS, options available under IFRS, potential system requirements as a result of the adoption of IFRS, and the impact on internal controls and other business activities. During the fourth quarter of 2009, Superior completed the majority of its comprehensive diagnostic and began work on the development and execution of a detailed IFRS transition plan.

At this time, Superior is unable to reasonably estimate the impact that the adoption of IFRS may have on its future operating results or financial position. Superior's preliminary assessment of areas that may have a significant impact upon adoption of IFRS consist of, but may not be limited to:

    
    -   Property, plant and equipment may be impacted by the requirement to
        record and amortize on the basis of material components;
    -   Employee future benefit obligations will be impacted as IFRS does not
        allow the deferral of certain actuarial gains and losses which are
        currently deferred under GAAP;
    -   Asset impairments recorded in prior years, under certain
        circumstances, are eligible to be reversed under IFRS;
    -   The classification of a lease arrangement as either an operating
        lease or a finance/capital lease may differ under IFRS;
    -   The assessment and accounting treatment of off-balance sheet
        arrangements such as Superior's accounts receivable securitization
        program may differ under IFRS;
    -   The classification of financial statement items may differ under
        IFRS;
    -   Financial statement disclosures under IFRS tend to be more
        comprehensive than those under GAAP; and
    -   The impact on various credit agreements, if any.
    

Superior will continue to assess the impact of IFRS throughout 2010, including the impact on its consolidated financial statements, financial reporting systems and internal control systems, and Superior is expected to disclose the quantitative impact of IFRS during 2010.

    
    Quarterly Financial and Operating Information
    -------------------------------------------------------------------------
    (millions of dollars except                   2009 Quarters
     per trust unit amounts)         Fourth      Third     Second      First
    -------------------------------------------------------------------------
    Canadian propane sales
     volumes (millions of litres)       373        224        249        431
    U.S. refined fuels  sales
     volumes (millions of litres)       153          -          -          -
    Natural gas sales volumes
     (millions of GJs)                    8          8          8          8
    Electricity sales volumes
     (millions of KwH)                   68         56         38         31
    Chemical sales volumes
     (thousands of metric tonnes)       160        163        155        155
    Gross profit                      203.3      126.9      134.9      188.3
    Net earnings (loss)                17.4       33.0       23.4       (5.5)
    Per share, basic                  $0.17      $0.37      $0.26     $(0.06)
    Per share, diluted                $0.17      $0.37      $0.26     $(0.06)
    Adjusted operating cash flow       64.4       19.3       18.9       61.3
    Per share, basic and diluted      $0.65      $0.22      $0.21      $0.69
    Net working capital(1)            183.8      132.0       72.0       83.7
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    (millions of dollars except                   2008 Quarters
     per trust unit amounts)         Fourth      Third     Second      First
    -------------------------------------------------------------------------
    Canadian propane sales
     volumes (millions of litres)       390        244        274        469
    U.S. refined fuels  sales
     volumes (millions of litres)         -          -          -          -
    Natural gas sales volumes
     (millions of GJs)                    8          8          8          9
    Electricity sales volumes
     (millions of KwH)                   28         18         14         10
    Chemical sales volumes
     (thousands of metric tonnes)       160        188        188        191
    Gross profit                      193.1      152.8      153.3      169.9
    Net earnings (loss)               (19.9)    (203.9)     164.3      127.2
    Per share, basic                 $(0.23)    $(2.31)     $1.86      $1.44
    Per share, diluted               $(0.23)    $(2.31)     $1.86      $1.44
    Adjusted operating cash flow       65.0       33.5       38.1       55.7
    Per share, basic and diluted      $0.74      $0.38      $0.43      $0.63
    Net working capital(1)            152.2      227.4      217.6      256.3
    -------------------------------------------------------------------------
    (1) Net working capital reflects amounts as at the quarter end and is
        comprised of cash and cash equivalents, accounts receivable and
        inventories, less bank indebtedness, accounts payable and accrued
        liabilities, current portion of term loans and dividends and interest
        payable to shareholders and debentureholders.



    Reconciliation of Net Earnings to EBITDA from Operations(1)(2)
    -------------------------------------------------------------------------

                                                                Construction
    For the three months ended            Energy     Specialty      Products
     December 31, 2009                  Services     Chemicals  Distribution
    -------------------------------------------------------------------------
    Net earnings                            34.6           3.8           9.0
    Add: Amortization of property,
          plant and equipment,
          intangible assets and
          accretion of convertible
          debenture issue costs              6.5           1.2           1.9
         Amortization included
          in cost of sales                     -          10.2             -
         Energy Services non-cash
          pension expense                    0.6             -             -
         Unrealized (gains) losses
          on financial instruments          (1.1)          3.4             -
    -------------------------------------------------------------------------
    EBITDA from operations                  40.6          18.6          10.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                                Construction
    For the three months ended            Energy     Specialty      Products
     December 31, 2008                  Services     Chemicals  Distribution
    -------------------------------------------------------------------------
    Net earnings (loss)                    (37.3)         18.9          12.3
    Add: Amortization of property,
          plant and equipment,
          intangible assets and
          accretion of convertible
          debenture issue costs              1.2           2.4           1.2
         Amortization included
          in cost of sales                     -          10.1             -
         Energy Services non-cash
          pension expense                    0.5             -             -
         Unrealized (gains) losses
          on financial instruments          73.4           1.5             -
         Gain on disposal of facility          -             -             -
    -------------------------------------------------------------------------
    EBITDA from operations                  37.8          32.9          13.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------

                                                                Construction
    For the year ended                    Energy     Specialty      Products
     December 31, 2009                  Services     Chemicals  Distribution
    -------------------------------------------------------------------------
    Net earnings                            53.1          19.6          17.6
    Add: Amortization of property,
          plant and equipment,
          intangible assets and
          accretion of convertible
          debenture issue costs             19.9           4.8           5.2
         Amortization included in
          cost of sales                        -          37.5             -
         Energy Services non-cash
          pension expense                    1.7             -             -
         Unrealized (gains) losses
          on financial instruments          22.9          31.1             -
    -------------------------------------------------------------------------
    EBITDA from operations                  97.6          93.0          22.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                                Construction
    For the year ended                    Energy     Specialty      Products
     December 31, 2008                  Services     Chemicals  Distribution
    -------------------------------------------------------------------------
    Net earnings                            14.2          90.3          33.0
    Add: Amortization of property,
          plant and equipment,
          intangible assets and
          accretion of convertible
          debenture issue costs             12.7           6.5           4.4
         Amortization included in
          cost of sales                        -          38.9             -
         Energy Services non-cash
          pension expense                    2.4             -             -
         Unrealized (gains) losses on
          financial instruments             74.0         (15.2)            -
         Gain on disposal of facility          -          (4.0)            -
    -------------------------------------------------------------------------
    EBITDA from operations                 103.3         116.5          37.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) See the unaudited 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 sale, non-cash pension expense,
        unrealized (gains) losses on financial instruments and gain on
        disposal of facility.
    (2) See "Non-GAAP Financial Measures" for additional details.
    

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 2008 Annual Information Form under the heading "Risk Factors". For a detailed discussion of these risks, see Superior's 2008 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.

Although Superior intends to distribute the income allocated from Superior LP, less the amount of its expenses, indebtedness and other obligations and less amounts, if any, Superior pays in connection with the redemption of common shares, 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 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 substantially all of its available cash flow means that 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 and to make necessary principal payments, uncertainties and assumptions 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.

A portion of Superior's net cash flows are 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 LP 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.

Superior has, through the contractual provisions in the Arrangement Agreement, the Indemnity Agreement and the Divestiture Agreement, and through securing certain insurance coverage, attempted to ensure that the liabilities and obligations relating to the business of Ballard are transferred to and assumed by New Ballard, that Superior is released from any such obligations and, even where such transfer or release is not effective or is not obtained, Superior is indemnified by New Ballard for all such obligations. However, in the event New Ballard fails or is unable to meet such contractual obligations to Superior, Superior could be exposed to liabilities and risks associated with the operations of Ballard which include, without limitation, risks relating to claims with respect to intellectual property matters, product liability or environmental damages.

There can be no assurances that income tax laws in the numerous jurisdictions in which Superior operates will not be changed in a manner which adversely affects Superior and its shareholders. In addition, there can be no assurance that the Canadian 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. In particular, there is the possibility that the Canada Revenue Agency could challenge the tax consequences of the Plan of Arrangement or prior Ballard transactions which could potentially affect the availability or amount of the tax basis or other tax accounts of Superior.

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, along with alternative energy sources that are currently under development. In addition to competition from other energy sources, Superior competes with other retail marketers. Superior's ability to remain an industry leader depends on its ability to provide reliable service at competitive selling 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 contribute 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 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 safety practices and regulatory compliance are an important part of its business. The storage and delivery of refined fuels posses 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 18% of Superior's propane and U.S. refined fuels distribution business's employees are unionized. Collective bargaining agreements are renegotiated in the normal course of business.

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.

Fixed-price energy services purchases natural gas to meet its estimated commitments to its customers based upon their historical consumption. Depending on a number of factors, including weather, customer attrition and poor economic conditions affecting commercial customers' production levels, customers'combined natural gas consumption may vary from the volume purchased. This variance must be reconciled and settled at least annually and may require Superior to purchase or sell natural gas at market prices which may have an adverse impact on the results of this business. To mitigate balancing risk, Superior 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. In addition, Superior maintains a reserve for potential balancing costs. The reserve is reviewed on a monthly basis to ensure that it is sufficient to absorb any losses that might arise from balancing.

Fixed-price energy services 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 Superior. Superior 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 Superior 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 nine 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, British Columbia and Quebec. Changes to existing legislation could impact this business's 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.

In November 2009 the Ontario government introduced a new piece of legislation (Bill 235) to address energy consumer protection. Bill 235 proposes a new Energy Consumer Protection Act (ECPA) that, if passed, would affect how fixed-price energy services maintains its existing Ontario residential and small commercial base and acquires new small commercial customers that fall within the low volume definition of the OEB Codes of Conduct for Gas Marketers and Electricity Retailers (less than 50,000m3 annually for natural gas and less than 150,000 kWh annually for electricity). The new ECPA could also influence any potential plans for fixed-price energy services to re-enter the Ontario residential energy market in the future.

The Bill passed first reading on December 8, 2009. The second reading and comment period is anticipated early in 2010 and, if passed, will likely take affect toward the middle of 2010. The bill includes limitations on renewals; increased marketer accountability, including licensing of individual sales agents; the elimination of telemarketing; increased cancellation alternatives for residential consumers; rules regarding smart sub-metering, and a requirement for retailers to offer time-of-use products.

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 its customers, all of which are outside of its control.

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 to the Canadian dollar.

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.

Approximately 25% of Specialty Chemicals employees are unionized. Collective bargaining agreements are renegotiated in the normal course of business.

Construction Products Distribution

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.

Demand for walls and ceilings 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, construction or expansion of industrial process facilities, such as oil refineries and petrochemical plants, as well as institutional facilities (eg. government, healthcare and schools).

Approximately 4% of Construction Products Distribution's employees are unionized. Collective bargaining agreements are renegotiated in the normal course of business.

    
    SUPERIOR PLUS CORP.
    Consolidated Balance Sheets
    -------------------------------------------------------------------------
    As at December 31
    (unaudited, millions of dollars)                       2009         2008
    -------------------------------------------------------------------------
    Assets
    Current Assets
      Cash and cash equivalents                            24.3         16.1
      Accounts receivable and other (Note 5 and 10)       313.8        246.8
      Inventories                                         145.7        128.0
      Future income tax asset (Note 11)                    59.0         65.9
      Current portion of unrealized gains on
       financial instruments (Note 10)                     22.2         42.0
    -------------------------------------------------------------------------
                                                          565.0        498.8

    Property, plant and equipment (Note 4)                668.0        562.3
    Customer contract related costs                        14.7         17.7
    Intangible assets (Note 4)                            165.3         28.8
    Goodwill (Note 4)                                     528.4        472.7
    Accrued pension asset                                  18.2         19.5
    Future income tax asset (Note 11)                     165.7        185.9
    Investment tax credits                                120.2        133.1
    Long-term portion of unrealized gains on
     financial instruments (Note 10)                       28.5        108.1
    -------------------------------------------------------------------------

                                                        2,274.0      2,026.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
    Current Liabilities
      Accounts payable and accrued liabilities            280.7        230.5
      Unearned revenue                                      5.8            -
      Current portion of term loans (Note 7)                5.1         13.0
      Dividends and interest payable to shareholders
       and debentureholders                                14.2          0.7
      Current portion of deferred credit (Note 11)         24.5         37.9
      Current portion of unrealized losses on
       financial instruments (Note 10)                     77.8         87.8
    -------------------------------------------------------------------------
                                                          408.1        369.9

    Revolving term bank credits and term loans
     (Note 7)                                             633.2        462.8
    Convertible unsecured subordinated debentures
     (Note 8)                                             309.0        241.7
      Employee future benefits                             17.2         18.0
    Asset retirement obligation (Note 9)                    0.9            -
    Future income tax liability (Note 11)                  22.1            -
    Deferred credit (Note 11)                             246.4        269.8
    Long-term portion of unrealized losses on
     financial instruments (Note 10)                       52.6         90.5
    -------------------------------------------------------------------------
    Total Liabilities                                   1,689.5      1,452.7

    Shareholders' Equity
      Shareholders' capital (Note 12)                   1,502.0      1,370.9
      Contributed surplus (Note 12)                         5.3          4.8

      Accumulated deficit                                (883.3)      (803.1)
      Accumulated other comprehensive income (loss)
       (Note 12)                                          (39.5)         1.6
    -------------------------------------------------------------------------
                                                         (922.8)      (801.5)
    -------------------------------------------------------------------------
    Total Shareholders' Equity                            584.5        574.2
    -------------------------------------------------------------------------

                                                        2,274.0      2,026.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See Notes to the Fourth quarter Consolidated Financial Statements)



    SUPERIOR PLUS CORP.
    Consolidated Statements of Net Earnings (Loss), Comprehensive Income
    and Deficit

    -------------------------------------------------------------------------
    (unaudited, millions of         Three months ended            Year ended
     dollars except per                    December 31,          December 31,
     share amounts                     2009       2008       2009       2008
    -------------------------------------------------------------------------

    Revenues                          747.5      658.5    2,246.7    2,487.3
    Cost of products sold            (526.3)    (462.4)  (1,495.3)  (1,860.1)
    Realized gains (losses) on
     financial instruments (Note 10)  (17.9)      (3.0)     (98.0)      41.9
    -------------------------------------------------------------------------
    Gross profit                      203.3      193.1      653.4      669.1
    -------------------------------------------------------------------------

    Expenses
      Operating and administrative    139.6      131.0      476.1      470.8
      Amortization of property,
       plant and equipment              6.7        3.3       22.6       18.3
      Amortization of intangible
       assets                           3.5        1.5        7.9        5.3
      Interest on revolving term
       bank credits and term loans      9.2        5.5       27.0       23.7
      Interest on convertible
       unsecured subordinated
        debentures                      5.1        3.6       16.8       14.8
      Accretion of convertible
       debenture issue costs            0.6        0.3        1.4        1.4
      Gain on disposal of facility        -          -          -       (4.0)
      Unrealized losses on financial
       instruments (Note 10)            0.2       83.6       20.6       61.2
    -------------------------------------------------------------------------
                                      164.9      228.8      572.4      591.5
    -------------------------------------------------------------------------

    Net earnings (loss) before
     income taxes                      38.4      (35.7)      81.0       77.6
    Income tax recovery (expense)
     (Note 11)                        (21.0)      15.8      (12.7)      (9.9)
    -------------------------------------------------------------------------
    Net Earnings (Loss)                17.4      (19.9)      68.3       67.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings (loss)                17.4      (19.9)      68.3       67.7
    Other comprehensive
     income (loss):
    Unrealized foreign currency
     gains (losses) on translation
     of self- sustaining foreign
     operations                       (11.5)      23.3      (39.4)      30.1
    Reclassification of derivative
     gains and (losses) previously
     deferred                           1.2       (0.8)      (1.7)      (8.2)
    -------------------------------------------------------------------------
    Comprehensive Income                7.1        2.6       27.2       89.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Deficit, Beginning of Period     (860.8)    (747.4)    (803.1)    (728.6)
    Cumulative impact of adopting
     new guidance on the valuation
     of financial instrument asset
     and liabilities (Note 2 (b))         -          -       (0.3)         -
    Net earnings (loss)                17.4      (19.9)      68.3       67.7
    Dividends to Shareholders
     (Note 2(a))                      (39.9)     (35.8)    (148.2)    (142.2)
    -------------------------------------------------------------------------
    Deficit, End of Period           (883.3)    (803.1)    (883.3)    (803.1)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings (loss) per share,
     basic and diluted (Note 13)      $0.18     ($0.23)     $0.75      $0.77
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See Notes to the Fourth quarter Consolidated Financial Statements)



    SUPERIOR PLUS CORP.
    Consolidated Statements of Cash Flows

    -------------------------------------------------------------------------
                                    Three months ended            Year ended
    (unaudited, millions of                December 31,          December 31,
     dollars)                          2009       2008       2009       2008
    -------------------------------------------------------------------------
    Operating Activities
    Net earnings (loss)                17.4      (19.9)      68.3       67.7
    Items not affecting cash:
      Amortization of property,
       plant and equipment,
       intangible assets and
       accretion of convertible
       debenture issue costs           10.8        5.1       31.9       25.0
      Amortization of customer
       contract related costs           1.9        1.6        7.0        6.5
      Amortization included in
       cost of sales                   10.2       10.1       37.5       38.9
      Pension expense                   0.6        0.5        1.7        2.4
      Unrealized losses on
       financial instruments            0.2       83.6       20.6       61.2
      Future income tax expense
       (recovery)                      25.2      (19.4)      11.6       (3.9)
    Customer contract related costs    (1.0)      (1.8)      (4.0)      (6.8)
    Realized gains on financial
     instruments                          -          -       (7.7)         -
    Proceeds on disposal of facility      -          -          -       (4.0)
    Decrease (increase) in non-cash
     operating working capital items  (61.7)      (6.3)      24.4       20.6
    -------------------------------------------------------------------------
    Cash flows from operating
     activities                         3.6       53.5      191.3      207.6
    -------------------------------------------------------------------------

    Investing Activities
      Purchase of property,
        plant and equipment           (28.2)     (46.3)    (139.3)     (84.2)
      Proceeds on disposal of
       property, plant and
       equipment                        0.9        4.9        4.8        7.5
      Acquisition of SPI (Note 4)      (0.3)         -     (109.5)         -
      Acquisition of U.S. refined
       fuels assets (Note 4)          (82.4)         -     (178.5)         -
      Proceeds on disposal of
       facility                           -          -          -        4.0
      Other acquisitions (Note 4)      (0.1)         -       (0.8)     (24.5)
      Transaction with Ballard
       Power Systems Inc.                 -      (46.3)         -      (46.3)
      Earn-out payment on prior
       acquisition                        -          -       (0.6)         -
    -------------------------------------------------------------------------
    Cash flows used in investing
     activities                      (110.1)     (87.7)    (423.9)    (143.5)
    -------------------------------------------------------------------------

    Financing Activities
      Revolving term bank
       credits and term loans         (74.3)      (7.6)      63.1       82.6
      Net repayment of accounts
       receivable sales program        25.9      100.0       (7.3)         -
      Dividends to shareholders       (39.9)     (35.8)    (148.2)    (142.2)
      Issuance of common shares
       (Note 12)                       54.8          -       97.8          -
      Issuance of 8.25% senior
       unsecured debentures
       (Note 7)                       147.0          -      147.0          -
      Issuance of 7.50% convertible
       debentures (Note 8)                -          -       65.8          -
      Proceeds from distribution
       reinvestment program               -          -          -        8.9
      Realized gains on financial
       instruments                        -          -        7.7          -
      Increase (decrease) in
       non-cash working capital        (2.0)     (11.4)      14.9      (11.4)
    -------------------------------------------------------------------------
    Cash flows from (used in)
     financing activities             111.5       45.2      240.8      (62.1)
    -------------------------------------------------------------------------

    Net increase in cash                5.0       11.0        8.2        2.0
    Cash and cash equivalents,
     beginning of period               19.3        5.1       16.1       14.1
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period                     24.3       16.1       24.3       16.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See Notes to the Fourth quarter Consolidated Financial Statements)



    Notes to the unaudited Fourth Quarter Consolidated Financial Statements
    (unaudited, tabular amounts in Canadian millions of 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. 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 shares 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.

    On December 31, 2008, Superior Plus Income Fund (the Fund) completed a
    transaction with Ballard Power Systems Inc. (Ballard) which resulted in
    Superior converting from a publicly traded income trust to a publicly
    traded corporation. The transaction resulted in the Unitholders of the
    Fund becoming Shareholders of Superior with no substantive changes to the
    underlying business operations.

    2.  Accounting Policies

    (a) Basis of Presentation

    The accompanying unaudited fourth quarter Consolidated Financial
    Statements (Consolidated Financial Statements) have been prepared
    according to Canadian generally accepted accounting principles (GAAP),
    applied on a consistent basis, and include the accounts of Superior and
    its wholly owned subsidiaries. Superior Plus Corp. is considered a
    continuation of Superior Plus Income Fund; as such, these consolidated
    financial statements follow the continuity of interests method of
    accounting. Under the continuity of interests method of accounting,
    Superior's transfer of the assets, liabilities and equity from the Fund
    to Superior upon the completion of its transaction with Ballard were
    recorded at their net book values. As a result of the application of the
    continuity of interests method of accounting, certain terms such as
    shareholder/unitholder and dividend/distribution may be used
    interchangeably throughout these unaudited Consolidated Financial
    Statements. For the period ended December 31, 2009, payments to
    Shareholders were in the form of dividends, whereas for the period ended
    December 31, 2008, payments to Unitholders were in the form of trust unit
    distributions. These unaudited Consolidated Financial Statements do not
    conform in all respects to the note disclosure requirement of GAAP for
    annual financial statements as certain information and disclosures
    included in the annual financial statements notes have been condensed or
    omitted. These unaudited Consolidated Financial Statements and notes
    thereto should be read in conjunction with Superior's financial
    statements for the year ended December 31, 2008, and the accounting
    policies applied are consistent with this period except as noted in
    Note 2(b). All significant transactions and balances between Superior and
    Superior's subsidiaries have been eliminated on consolidation.

    (b) Changes in Accounting Policies

    Financial Assets and Financial Liabilities

    On January 1, 2009, Superior adopted the requirements of guidance
    provided by the CICA related to the application of credit risk and the
    determination of the fair value of financial assets and liabilities.
    Superior adopted the guidance retrospectively, but did not restate prior
    periods. Accordingly, Superior decreased the carrying value of its net
    financial instrument assets and liabilities as at January 1, 2009 by
    $0.4 million, with a corresponding increase of $0.1 million to Superior's
    future income tax asset and an increase of $0.3 million to Superior's
    opening accumulated deficit; comparative earnings and financial assets
    and liabilities for prior periods have not been restated.

    Financial Instruments - Disclosure

    The CICA has amended Handbook Section 3862 Financial Instruments -
    Disclosure. These amendments require enhanced disclosure on the fair
    value of certain financial instruments. The amendments were effective for
    annual financial statements on or after September 30, 2009. These
    amendments to Section 3862 are to enhance the disclosures about the fair
    value measurements including the relative reliability of the inputs used
    in those measurements, and about the liquidity of financial instruments.
    Superior adopted these amendments in the fourth quarter of 2009. The
    required disclosures are incorporated in Note 10.

    Goodwill and Intangible Assets

    On January 1, 2009, Superior adopted CICA Handbook Section 3064 Goodwill
    and Intangible Assets. This standard provides more specific guidance on
    the recognition of internally developed intangible assets and requires
    that research and development expenditures be evaluated against the same
    criteria as expenditures for intangible assets. The section harmonizes
    GAAP with International Financial Reporting Standards (IFRS). Adoption of
    this standard did not have an impact on Superior.

    (c) Future Accounting Changes

    International Financial Reporting Standards

    The Accounting Standards Board of Canada (AcSB) has announced plans that
    will require the convergence of GAAP with IFRS for publicly accountable
    enterprises, including Superior. The changeover date from GAAP to IFRS is
    for annual and interim financial statements relating to fiscal years
    beginning on or after January 1, 2011. Superior is currently assessing
    the future impact of these new standards on its consolidated financial
    statements.

    Business Combinations

    In January 2009, the CICA issued section 1582, "Business Combinations,"
    which will replace CICA section 1581 of the same name. Under this
    guidance, the purchase price used in a business combination is based on
    the fair value of shares exchanged at their market price at the date of
    the exchange. Currently the purchase price used is based on the market
    price of the shares for a reasonable period before and after the date the
    acquisition is agreed upon and announced. This new guidance generally
    requires all acquisition costs to be expensed, which currently are
    capitalized as part of the purchase price. Contingent liabilities are to
    be recognized at fair value at the acquisition date and re-measured at
    fair value through earnings each period until settled. Currently only
    contingent liabilities that are resolved and payable are included in the
    cost to acquire the business. In addition, negative goodwill is required
    to be recognized immediately in earnings, unlike the current requirement
    to eliminate it by deducting it from non current assets in the purchase
    price allocation. Section 1582 is effective for Superior on January 1,
    2011 with prospective application and early adoption permitted. The
    adoption of this standard will impact the accounting treatment of future
    business combinations.

    Consolidated Financial Statements

    In January 2009, the CICA issued section 1601, "Consolidated Financial
    Statements," which will replace CICA section 1600 of the same name. This
    guidance requires uniform accounting policies to be consistent throughout
    all consolidated entities, which is not explicitly required under the
    current standard. Section 1601 is effective for Superior on January 1,
    2011 with early adoption permitted. The adoption of this standard should
    not have a material impact on Superior's Consolidated Financial
    Statements.

    Non-controlling Interests

    In January 2009, the CICA issued section 1602, "Non-controlling
    Interests," which will replace CICA section 1600, "Consolidated Financial
    Statements." Minority interest is now referred to as non-controlling
    interest, ("NCI"), and is presented within equity. Under this new
    guidance, when there is a loss or gain of control the Company's
    previously held interest is revalued at fair value. Currently an increase
    in an investment is accounted for using the purchase method and a
    decrease in an investment is accounted for as a sale resulting in a gain
    or loss in earnings. In addition, NCI may be reported at fair value or at
    the proportionate share of the fair value of the acquired net assets and
    allocation of the net income to the NCI will be on this basis. Currently,
    NCI is recorded at the carrying amount and can only be in a deficit
    position if the NCI has an obligation to fund the losses. Section 1602 is
    effective for Superior on January 1, 2011 with early adoption permitted.
    The adoption of this standard should not have a material impact on
    Superior's Consolidated Financial Statements.

    (d) Business Segments

    Superior operates three distinct 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. (Note 14)

    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 at the end of the first quarter, 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 quarter, and normally decline to
    seasonally low levels in the first and fourth quarters.

    4.  Acquisitions

    On December 11, 2009, Superior acquired certain assets that comprise a
    retail heating oil, propane and motor fuels distribution business
    (Griffith CH U.S. refined fuels assets) from Griffith Energy Services,
    Inc. for an aggregate purchase price of $82.0 million (US$77.4 million)
    inclusive of transaction related costs. Griffith CH U.S. refined fuels
    assets distribute a broad range of liquid fuels and propane gas, serving
    markets in Connecticut, Pennsylvania and Rhode Island. In addition
    Griffith CH U.S. refined fuels assets also distributes to a broad range
    of services, including heating, ventilation and air conditioning repair
    and other related services.

    On September 30, 2009, Superior acquired certain assets which make up a
    U.S. retail heating oil and propane distribution business (Sunoco U.S.
    refined fuels assets) from Sunoco, Inc. (R&M), and Sunoco, Inc. both of
    which are Pennsylvania corporations, for an aggregate purchase price of
    $96.5 million (US$90.0 million), inclusive of transaction related costs.
    The heating oil assets distribute a broad range of liquid fuels and
    propane gas and related services, serving markets in Pennsylvania and New
    York.

    On September 24, 2009, Superior acquired the shares of Specialty Products
    & Insulation Co. (SPI) for an aggregate purchase price of $142.1 million
    (US$132.1 million), inclusive of transaction related costs. SPI is a
    leading US national distributor of a comprehensive selection of
    insulation and architectural named brand products focused on the
    commercial and industrial markets.

    Using the purchase method of accounting for acquisitions, Superior
    consolidated the assets and liabilities from the acquisitions and
    included earnings as of the respective closing date. As a result of the
    timing of the completion of these acquisitions towards the end of 2009 it
    is likely that adjustments to the allocation of the assets and
    liabilities will be required.

                          Acquisition
                                   of  Acquisition  Acquisition
                          Griffith CH    of Sunoco       of SPI        TOTAL
    -------------------------------------------------------------------------
    Cash consideration
     paid                        79.3         91.6        107.0        277.9
    Transaction costs             2.7          4.9          2.5         10.1
    -------------------------------------------------------------------------
    Total cash consideration     82.0         96.5        109.5        288.0
    Common shares issued to
     former shareholders
     of SPI(1)                      -            -         32.6         32.6
    -------------------------------------------------------------------------
    Total consideration          82.0         96.5        142.1        320.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Working capital, net          1.7          3.0         55.6         60.3
    Property, plant and
     equipment                   12.2         52.5          3.7         68.4
    Intangible assets            63.5         34.9         43.6        142.0
    Goodwill(2)                   4.6          8.6         45.0         58.2
    Future income tax
     liability                    0.1         (1.7)        (5.8)        (7.4)
    Asset retirement
     obligations                 (0.1)        (0.8)           -         (0.9)
    -------------------------------------------------------------------------
                                 82.0         96.5        142.1        320.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Relates to the issuance of 2,803,135 common shares for gross
        consideration of $32,607,000 or $11.63 per common share.
    (2) The amount of goodwill that is expected to be deductible for tax
        purposes is approximately $58.2 million.

    The allocation of consideration paid for these acquisitions to
    intangibles is as follows:

                          Acquisition
                                   of  Acquisition  Acquisition
                          Griffith CH    of Sunoco       of SPI        TOTAL
    -------------------------------------------------------------------------
    Trademarks                   21.5          4.5         20.7         46.7
    Customer base                41.4         18.7         22.9         83.0
    Restrictive covenants         0.6         11.7            -         12.3
    -------------------------------------------------------------------------
    Total intangible assets      63.5         34.9         43.6        142.0
    -------------------------------------------------------------------------

    5.  Accounts Receivable and Other

    Superior sells, with limited recourse, certain trade accounts receivable
    on a revolving basis to an entity sponsored by a Canadian chartered bank.
    The accounts receivable are sold at a discount to face value based on
    prevailing money market rates. Superior has retained the servicing
    responsibility for the accounts receivable sold and has therefore
    recognized a servicing liability. The level of accounts receivable sold
    under the program fluctuates seasonally with the level of accounts
    receivable. As at December 31, 2009, proceeds of $92.7 million
    (December 31, 2008 - $100.0 million) had been received. The existing
    accounts receivable securitization program matures on June 29, 2010.

    Included in accounts receivable and other as at December 31, 2009 is
    $21.4 million (December 31, 2008 - $15.4 million) of prepaid expenses.

    December 31,                                           2009         2008
    -------------------------------------------------------------------------
    Accounts receivable trade                             270.4        225.5
    Accounts receivable other                              22.0          5.9
    Prepaid expenses                                       21.4         15.4
    -------------------------------------------------------------------------
    Accounts receivable and other                         313.8        246.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    6.  Inventories

    For the three and twelve months ended December 31, 2009 inventories of
    $452.3 million and $1,206.7 million were expensed through cost of
    products sold. For the three and twelve months ended December 31, 2008
    inventories of $358.2 million and $1,405.6 million were expensed through
    cost of products sold. No write-downs of inventory or reversals of write-
    downs were recorded during the three and twelve months ended December 31,
    2009 and 2008.

    7.  Revolving Term Bank Credits and Term Loans

                             Year of   Effective          December  December
                            Maturity   Interest Rate      31, 2009  31, 2008
    -------------------------------------------------------------------------
    Revolving term bank
     credits(1)

      Bankers'                  2011   Floating BA rate      174.6     168.9
       Acceptances (BA)                 plus applicable
                                        credit spread
      LIBOR Loans               2011   Floating LIBOR rate   152.4      90.1
       (US$145.5 million; 2008          plus applicable
        - US$71.6 million)              credit spread
    -------------------------------------------------------------------------
                                                             327.0     259.0
    -------------------------------------------------------------------------
    Other Debt
      Notes payable             2010   Prime                   0.6       6.2
      Deferred consideration    2010   Non-interest bearing    2.4       4.8
      Loan payable                     6.3%                      -      11.8
    -------------------------------------------------------------------------
                                                               3.0      22.8
    -------------------------------------------------------------------------
    Senior Secured Notes
      Senior secured notes
       subject to floating
       interest rates
       (US$nil; 2008 -                 Floating LIBOR
       US$60.0 million)(2)              rate plus 1.7%           -      73.5
      Senior secured notes
       subject to fixed
       interest rates
       (US$158.0 million;
       2008 - US$100.0
       million)(2)         2010-2015   6.65%                 165.4     122.4
    -------------------------------------------------------------------------
                                                             165.4     195.9
    -------------------------------------------------------------------------
    Senior Secured Notes
    -------------------------------------------------------------------------
      Senior unsecured
       debentures               2016   8.25%                 150.0         -
    -------------------------------------------------------------------------
    Total revolving term
     bank credits and term
     loans before deferred
     financing fees                                          645.4     477.7
    Deferred financing fees                                   (7.1)     (1.9)
    -------------------------------------------------------------------------
    Revolving term bank
     credits and term loans                                  638.3     475.8
    Current maturities                                        (5.1)    (13.0)
    -------------------------------------------------------------------------
    Revolving term bank
     credits and term loans                                  633.2     462.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Superior and its wholly-owned subsidiaries, Superior Plus US Holdings
        Inc. and Commercial e Industrial (Chile) Limitada, have revolving
        term bank credit borrowing capacity of $570.0 million. The credit
        facilities mature on June 28, 2011. These facilities are secured by a
        general charge over the assets of Superior and certain of its
        subsidiaries. As at December 31, 2009, Superior had $19.4 million of
        outstanding letters of credit (December 31, 2008 - $41.5 million).
        The fair value of Superior's revolving term bank credits and other
        debt approximates its carrying value as a result of the market based
        interest rates and the short-term nature of the underlying debt
        instruments.
    (2) Senior secured notes (the Notes) totaling US$158.0 million
        (Cdn$165.4 million at December 31, 2009 and Cdn$195.9 million at
        December 31, 2008) are 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 at December 31, 2009 was
        Cdn$161.5 million (December 31, 2008 - Cdn$208.3 million). During the
        fourth quarter of 2009 Superior's $60.0 million (Cdn $62.8 million)
        (December 31, 2008 - US$60.0 million (Cdn $73.5 million)) fixed to
        floating rate swap was terminated, as a result US$158.0 million in
        senior secured notes are subject to fixed rate interest.

    Repayment requirements of the revolving term bank credits and term loans
    are as follows:

    -------------------------------------------------------------------------
    Current Maturities                                                   5.1
    Due in 2011                                                        360.5
    Due in 2012                                                         33.5
    Due in 2013                                                         33.5
    Due in 2014                                                         31.4
    Subsequent to 2014                                                 181.4
    -------------------------------------------------------------------------
    Total                                                              645.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    8.  Convertible Unsecured Subordinated Debentures

    Superior has issued three series of debentures as follows:

                                                                       Total
                                                      Unamortized   Carrying
                                                         Discount      Value
    -------------------------------------------------------------------------
                        December   December   December
    Maturity Date       31, 2012   31, 2015  31, 2014(1)
    Interest rate          5.75%      5.85%      7.50%
    Conversion price
     per share            $36.00     $31.25     $13.10
    -------------------------------------------------------------------------
    Debentures
     outstanding as at
     December 31, 2008     174.9       75.0          -       (2.6)     247.3
    Issuance of 7.50%
     debentures                -          -       69.0       (0.5)      68.5
    Accretion of
     discount during 2009      -          -          -        0.9        0.9
    Deferred issue costs    (2.8)      (1.7)      (3.2)                 (7.7)
    -------------------------------------------------------------------------
    Debentures
     outstanding as at
     December 31, 2009     172.1       73.3       65.8       (2.2)     309.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Quoted market value
     as at December 31,
     2009                  177.1       74.4       78.3
    Quoted market value
     as at December 31,
     2008                  141.7       52.5          -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Superior issued $69.0 million 7.50% convertible debentures during the
        third quarter of 2009.

    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.

    9.  Asset Retirement Obligations

    The asset retirement obligations result from ownership of various assets
    associated with Superior's Energy Services operating segment. Superior
    estimates the total undiscounted amount of expenditures required to
    settle its asset retirement obligations is approximately $3.5 million
    which will be paid out over the next twenty to twenty five years. The
    credit-adjusted free-risk rate of 7.5% was used to calculate the present
    value of the estimated cash flows.

    A reconciliation of the asset retirement obligations is provided as
    follows:

                                                           2009         2008
    -------------------------------------------------------------------------
    Balance, beginning of year                                -            -
      Liabilities associated with the acquisition
       U.S. refined fuels assets (see Note 4)               0.9            -
      Accretion expense                                       -            -
    -------------------------------------------------------------------------
    Balance, end of year                                    0.9            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    10. Financial Instruments

    Effective October 1, 2009, Superior adopted the amended Handbook Section
    3862 Financial Instruments - Disclosure. These amendments require
    enhanced disclosure on the fair value of certain financial instruments.
    The amendments are effective for annual financial statements on or after
    September 30, 2009. The amended section expands the disclosure
    requirements 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 identical
            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 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 forecasted commodity price curves, interest
    rate yield curves, currency rates, and price and rate volatilities as
    applicable. With respect to the valuation of Specialty Chemical's fixed-
    price electricity agreement, the valuation of this agreement requires
    Superior to make assumptions about the long-term price of electricity in
    electricity markets for which active market information is not available.
    The impact of the assumption for the long-term forward price curve of
    electricity has a material impact on the fair value of this agreement. A
    $1/MWh change in the forecasted price of electricity would result in a
    change in the fair value of this agreement of $1.7 million, with a
    corresponding impact to net income before income taxes. Any changes in
    the fair values of financial instruments classified or designated as
    held-for-trading are recognized in net income.

    Financial and Non-Financial Derivatives
    -------------------------------------------------------------------------
                                                             Asset      Asset
                                                 Fair  (Liability)(Liability)
                                                 Value       as at      as at
                                      Effective  Input    December   December
    Description   Notional(1)  Term        Rate  Level    31, 2009   31, 2008
    -------------------------------------------------------------------------
    Natural gas
     financial                 2010-
     swaps-NYMEX    8.3 GJ(2)  2011  US$8.41/GJ  Level 1     (22.2)    (33.5)
    Natural gas
     financial                 2010-   CDN$7.51
     swaps-AECO    40.0 GJ(2)  2014         /GJ  Level 1     (69.3)    (34.8)
    Foreign
     currency
     forward
     contracts,                2010-
     net sale     US$420.2(3)  2015        1.10  Level 1      12.5     (11.5)
    Foreign
     currency
     forward            EURO   2010-
     contracts  (euro) 5.4(3)  2011        1.58  Level 1       0.4         -

                                       Floating
    Interest rate              2013- LIBOR rate
     swaps         US$60.0(3)  2015   plus 1.7%  Level 2         -      11.7
    Energy
     Services
     propane
     wholesale
     purchase
     and sale
     contracts,                2010-
     net sale     1.70 USG(4)  2011   $1.07/USG  Level 2      (2.2)     (1.3)
    Energy
     Services
     butane
     wholesale
     purchase
     and sale
     contracts,                2010-
     net sale     0.96 USG(4)  2011   $1.28/USG  Level 2      (0.2)        -
    Energy
     Services
     electricity               2010-
     swaps         0.6 MWh(5)  2014  $59.80/MWh  Level 2      (9.3)     (0.9)
    Heating oil
     swaps and
     option
     purchase
     and sale            2.2   2010-   $1.98 US
     contracts     Gallons(4)  2011     /Gallon  Level 2       0.1         -
    Specialty
     Chemical
     fixed-price
     electricity
     purchase                  2010-        $45-
     agreement       45 MW(6)  2017     $52/MWh  Level 3      10.5      42.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Notional values as at December 31, 2009
    (2) Millions of gigajoules purchased
    (3) Millions of dollars purchased/euros purchased
    (4) Millions of United States gallons purchased
    (5) Millions of mega watt hours (MWh)
    (6) Mega watts (MW) on a 24/7 continual basis per year purchased
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    All financial and non-financial derivatives are designated as held for
    trading upon their initial recognition.

    -------------------------------------------------------------------------
                              Current    Long-term      Current    Long-term
    Description                Assets       Assets  Liabilities  Liabilities
    -------------------------------------------------------------------------
    Natural gas financial
     swaps - NYMEX and AECO       9.2          4.2         58.5         46.4
    Energy Services
     electricity swaps            0.1            -          3.5          5.9
    Foreign currency forward
     contracts, net               6.7         13.9          7.4          0.3
    Energy Services Propane
     wholesale purchase and
     sale contracts               4.2            -          6.4            -
    Energy Services Butane
     wholesale purchase and
     sale contracts               1.4            -          1.6            -
    Energy Services Heating
     oil purchase and sale
     contracts                    0.5            -          0.4            -
    Specialty Chemicals
     fixed-price power
     purchase agreements          0.1         10.4            -            -
    -------------------------------------------------------------------------
    As at December 31, 2009      22.2         28.5         77.8         52.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    As at December 31, 2008      42.0        108.1         87.8         90.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                     For the three             For the three
                                      months ended              months ended
                                 December 31, 2009         December 31, 2008
                             Realized   Unrealized     Realized   Unrealized
                                 gain         gain         gain         gain
    Description                 (loss)       (loss)       (loss)       (loss)
    -------------------------------------------------------------------------
    Natural gas financial
     swaps - NYMEX and AECO     (22.0)         1.4         (1.8)       (67.7)
    Energy Services
     electricity swaps           (1.3)         0.9         (0.4)        (1.2)
    Foreign currency forward
     contracts, net              (0.8)         6.0         (6.2)         9.0
    Interest rate swaps           7.6         (8.0)         0.6          8.7
    Foreign currency forward
     contracts - balance
     sheet related                  -            -            -            -
    Energy Services Propane
     wholesale purchase and
     sale contracts                 -          0.6            -         (4.5)
    Energy Services Butane
     wholesale purchase and
     sale contracts                 -         (3.6)           -            -
    Energy Services Heating
     oil purchase and sale
     contracts                   (1.1)         1.8            -            -
    Specialty Chemicals
     fixed-price power
     purchase agreements         (0.3)        (3.4)         4.8          0.7
    -------------------------------------------------------------------------
    Total realized and
     unrealized gains
     (losses) on financial
     and non-financial
     derivatives                (17.9)        (4.3)        (3.0)       (55.0)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Foreign currency
     translation of senior
     secured notes                  -          4.1            -        (26.3)
    Foreign currency
     translation of Specialty
     Chemicals royalty assets       -            -            -         (2.3)
    -------------------------------------------------------------------------
    Total realized and
     unrealized gains (losses)  (17.9)        (0.2)        (3.0)       (83.6)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                For the year ended        For the year ended
                                 December 31, 2009         December 31, 2008
                             Realized   Unrealized     Realized   Unrealized
                                 gain         gain         gain         gain
    Description                 (loss)       (loss)       (loss)       (loss)
    -------------------------------------------------------------------------
    Natural gas financial
     swaps - NYMEX and AECO     (96.7)       (15.3)        34.7        (66.7)
    Energy Services
     electricity swaps           (4.8)        (8.4)        (0.4)        (0.5)
    Foreign currency forward
     contracts, net             (12.2)        17.4        (16.4)        26.5
    Interest rate swaps           9.0        (12.4)         2.0          9.0
    Foreign currency forward
     contracts - balance
     sheet related                7.7            -            -            -
    Energy Services Propane
     wholesale purchase and
     sale contracts                 -          3.4            -         (6.8)
    Energy Services Butane
     wholesale purchase and
     sale contracts                 -         (4.5)           -            -
    Energy Services Heating
     oil purchase and sale
     contracts                   (1.1)         1.8            -            -
    Specialty Chemicals
     fixed-price power
     purchase agreements          0.1        (31.1)        22.0         15.1
    -------------------------------------------------------------------------
    Total realized and
     unrealized gains
     (losses) on financial
     and non-financial
     derivatives                (98.0)       (49.1)        41.9        (23.4)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Foreign currency
     translation of senior
     secured notes                  -         28.5            -        (37.8)
    -------------------------------------------------------------------------
    Total realized and
     unrealized gains (losses)  (98.0)       (20.6)        41.9        (61.2)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Non-Derivative Financial Instruments

    Superior's accounts receivable have been designated as available for sale
    due to Superior's accounts receivable securitization program, Superior's
    accounts payable, dividends and interest payable to shareholders and
    debentureholders, revolving term bank credits and term loans and
    debentures have been designated as other liabilities. The carrying value
    of Superior's cash, accounts receivable, accounts payable, and dividends
    and interest payable to shareholders and debenture holders approximates
    their fair value due to the short-term nature of these amounts. The
    carrying value and the fair value of Superior's revolving term bank
    credits and term loans, and debentures, is provided in Notes 7 and 8.

    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,
    as a result, Superior does not apply hedge accounting and is required to
    designate its derivatives and non-financial derivatives as held for
    trading.

    Effective 2008, Energy Services enters into natural gas financial swaps
    primarily with Macquarie Cook Energy Canada Ltd. (formerly, Constellation
    Energy Commodities Group Inc.) for distributor billed natural gas
    business in Canada to manage its economic exposure of providing fixed-
    price natural gas to its customers. Additionally, Energy Services
    continues to maintain natural gas swap positions with seven additional
    counterparties. Energy Services monitors its fixed-price natural gas
    positions on a daily basis to monitor compliance with established risk
    management policies. Energy Services maintains a substantially balanced
    fixed-price natural gas position in relation to its customer supply
    commitments.

    Energy Services enters into electricity financial swaps with three
    counterparties to manage the economic exposure of providing fixed-price
    electricity to its customers. Energy Services monitors its fixed-price
    electricity positions on a daily basis to monitor compliance with
    established risk management policies. Energy Services maintains a
    substantially balanced fixed-price electricity position in relation to
    its customer supply commitments.

    Specialty Chemicals has entered into a fixed-price electricity purchase
    agreement to manage the economic exposure of certain of its chemical
    facilities to changes in the market price of electricity, in a market
    where the price of electricity is not fixed. The fair value with respect
    to this agreement is with a single counterparty.

    Energy Services also enters into various propane forward purchase and
    sale agreements with more than twenty counterparties to manage the
    economic exposure of its wholesale customer supply contracts. Energy
    Services monitors its fixed-price propane positions on a daily basis to
    monitor compliance with established risk management policies. Energy
    Services maintains a substantially balanced fixed-price propane gas
    position in relation to its wholesale customer supply commitments.

    Superior, on behalf of its operating divisions, enters into foreign
    currency forward contracts with ten counterparties to manage the economic
    exposure of Superior's operations to movements in foreign currency
    exchange rates. Energy Services contracts a portion of its fixed-price
    natural gas, and propane purchases and sales in US dollars and enter into
    forward US dollar purchase contracts to create an effective Canadian
    dollar fixed-price purchase cost. Specialty Chemicals enters into US
    dollar forward sales contracts on an ongoing basis to mitigate the impact
    of foreign exchange fluctuations on sales margins on production from its
    Canadian plants that is sold in US dollars. Interest expense on
    Superior's US dollar debt is also used to mitigate the impact of foreign
    exchange fluctuations.

    Superior had interest rate swaps with a single counterparty to manage the
    interest rate mix of its total debt portfolio and related overall cost of
    borrowing. Superior manages its overall liquidity risk in relation to its
    general funding requirements by utilizing a mix of short-term and longer-
    term maturity debt instruments. Superior reviews its mix of short-term
    and longer-term debt instruments on an on-going basis to ensure it is
    able to meet its liquidity requirements.

    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 and Construction Products Distribution deal 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.

    Allowance for doubtful accounts and past due receivables are reviewed by
    Superior at each balance sheet reporting date. Superior updates its
    estimate of the allowance for doubtful accounts based on the evaluation
    of the recoverability of accounts receivable balances of each customer
    taking into account historic collection trends of past due accounts and
    current economic conditions. Accounts receivable are written-off once it
    is determined they are not collectable. Superior's maximum amount of
    credit risk is approximately $343.1 million and includes accounts
    receivable trade, other receivables and unrealized gains on financial
    instruments.

    Pursuant to their respective terms, trade accounts receivable, before
    deducting an allowance for doubtful accounts, are aged as follows:

                                                    December 31, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Current                                               214.8        150.5
    Past due less than 90 days                             55.6         67.6
    Past due over 90 days                                  10.2         16.7
    -------------------------------------------------------------------------
    Trade accounts receivable, total                      280.6        234.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Superior's trade accounts receivable are stated after deducting a
    provision of $10.2 million as at December 31, 2009 (December 31, 2008 -
    $9.3 million). The movement in the provision for doubtful accounts was as
    follows:

                                                         Twelve       Twelve
                                                         months       months
                                                          ended        ended
                                                    December 31, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Allowance for doubtful accounts, opening               (9.3)        (5.1)
    Bad debt expense, net of recoveries                    (7.5)        (8.1)
    Written-off                                             6.6          3.9
    -------------------------------------------------------------------------
    Allowance for doubtful accounts, ending               (10.2)        (9.3)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Superior's contractual obligations associated with its financial
    liabilities are as follows:

                                                                 2015
                                                                  and
                                                                There-
                              2010   2011   2012   2013   2014  after  Total
    -------------------------------------------------------------------------

    Revolving term bank
     credits and term loans    5.1  360.5   33.5   33.5   31.4  181.4  645.4
    Convertible unsecured
     subordinated debentures     -      -  174.9      -   69.0   75.0  318.9
    Cdn$ equivalent of US$
     foreign currency
     forward purchase
     contracts                55.3    6.0      -      -      -      -   61.3
    US$ foreign currency
     forward sales
     contracts (US$)         162.4  124.5  104.5   81.0      -      -  472.4
    Euro (euro) foreign
     currency forward
     sales contracts (Euro)    5.1    0.3      -      -      -      -    5.4
    Fixed-price electricity
     purchase commitments     17.7   17.7   17.7   17.7   17.7   53.1  141.6
    Cdn$ natural gas
     purchases                74.0    9.3    7.5    6.9      -      -   97.7
    US$ natural gas
     purchases (US$)          34.7    2.0      -      -      -      -   36.7
    US$ heating oil
     purchases (US$)           1.5      -      -      -      -      -    1.5
    US$ propane
     purchases (US$)          13.6      -      -      -      -      -   13.6
    US$ butane
     purchases (US$)           1.9      -      -      -      -      -    1.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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' sensitivity to changes in foreign
    currency exchange rates, interest rates and various commodity prices and
    the impact to net earnings are detailed below:

                                                                Three months
                                                              and year ended
                                                           December 31, 2009
    -------------------------------------------------------------------------
    Increase (decrease) to net earnings of a
     $0.01 increase in the CDN$ to the US$                               5.6
    Increase (decrease) to net earnings of a
     0.5% increase in interest rates                                    (1.7)
    Increase (decrease) to net earnings of a
     $0.40/GJ increase in the price of natural gas                      17.8
    Increase (decrease) to net earnings of a
     $0.04/litre increase in the price of propane                        0.6
    Increase (decrease) to net earnings of a
     $1.00/KwH increase in the price of electricity                      1.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The calculation of Superior's sensitivity to changes in foreign currency
    exchange rates, interest rates and various commodity prices represent the
    change in fair value of the financial instrument without consideration of
    the value of the underlying variable, for example, the underlying
    customer contracts. The recognition of the sensitivities identified above
    would have impacted Superior's unrealized gain or loss on financial
    instruments and would not have a material impact on Superior's cash flow
    from operations.

    11. Income Taxes

    Consistent with prior periods, Superior recognizes a provision for income
    taxes for its subsidiaries that are subject to current and future income
    taxes, including United States income tax, United States non-resident
    withholding tax and Chilean income tax.

    Total income tax expense, comprised of current and future taxes for the
    three and twelve months ended December 31, 2009 was $21.0 million and
    $12.7 million, respectively, compared to a $15.8 million recovery and
    $9.9 million expense in the comparative period. Income taxes were
    impacted by the tax basis benefit associated with the start-up of the
    Port Edwards facility in the fourth quarter. For the three and twelve
    months ended December 31, 2009, future income tax expense from operations
    in Canada, the United States and Chile was a $25.2 million and
    $11.6 million expense, respectively, resulting in a corresponding total
    future income tax asset of $322.8 million and a total deferred credit of
    $270.9 million. Future income tax recovery for the three and twelve
    months ended December 31, 2008 was a $19.4 million and $3.9 million,
    respectively.

    12. Shareholders' Equity Authorized

    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 of holders of common
    shares, to be paid rateably 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 to be paid rateably
    with holders of each other series of preferred shares the amount, if any,
    specified as being payable preferentially to holders of such series.
    Superior does not have any preferred shares outstanding.

                                                  Issued Number
                                                      of Common        Share-
                                                         Shares      holders'
                                                   (Millions)(1)    Equity(1)
    -------------------------------------------------------------------------
    Shareholders' equity, December 31, 2008                88.4        574.2
    Net earnings                                              -         66.9
    Other comprehensive income (loss)                         -        (41.1)
    Issuance of common shares(2)                           11.5        131.1
    Option value associated with the issue of
     $69.0 million, 7.50% debentures                          -          0.5
    Cumulative impact of adopting new guidance
     on the valuation of financial instrument
     asset and liabilities (Note 2(b))                        -         (0.3)
    Dividends to Shareholders(3)                              -       (148.2)
    -------------------------------------------------------------------------
    Shareholders' equity, December 31, 2009                99.9        583.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) On December 31, 2008, Superior redeemed its outstanding trust units
        in exchange for shares as a result of its conversion from a publicly
        traded income trust to a publicly corporation. (See Note 1)
    (2) On September 23, 2009 Superior issued 3,970,000 common shares for net
        proceeds of $43.0 million related to its acquisition of certain US
        refined fuels assets. On September 24, 2009, Superior issued
        2,803,135 common shares valued at $32.6 million by way of private
        placement in consideration of the acquisition of SPI. Additionally,
        on October 8, 2009 Superior closed on the over-allotment option
        granted to the underwriters in connection with Superior's offering of
        3,970,000 common shares on September 23, 2009. The Over-Allotment
        Option was exercised in full resulting in the issuance of an
        additional 595,500 common shares for gross proceeds of $6.8 million.
        Lastly, on November 26, 2009, Superior issued 4,166,667 common shares
        for net proceeds of $50.0 million related to its acquisition of
        certain US refined fuels assets. The number of common shares issued
        was based on a specified weighted average value of Superiors existing
        common shares.
    (3)  Dividends to Shareholders are declared at the discretion of
        Superior.

    Shareholders' capital, deficit and accumulated other comprehensive income
    (loss) as at December 31, 2009 and December 31, 2008 consists of the
    following components:

                                                    December 31, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Shareholders' capital
      Share capital                                     1,502.0      1,370.9
    -------------------------------------------------------------------------
                                                        1,502.0      1,370.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Contributed Surplus
      Conversion feature on convertible debentures
       and expired warrants                                 5.3          4.8
    -------------------------------------------------------------------------
                                                            5.3          4.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accumulated deficit
      Retained earnings from operations                   601.1        532.8
      Cumulative impact of adopting new
       guidance on the valuation of financial
       instrument assets and liabilities                   (0.3)           -
       Accumulated dividends/distributions             (1,484.1)    (1,335.9)
    -------------------------------------------------------------------------
                                                         (883.3)      (803.1)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Accumulated other comprehensive income (loss)
      Balance at beginning of period                        1.6        (20.3)
      Unrealized foreign currency gains (losses)
       on translation of self-sustaining foreign
       operations                                         (39.4)        30.1
      Reclassification of derivative gains and
       losses previously deferred                          (1.7)        (8.2)
    -------------------------------------------------------------------------
                                                          (39.5)         1.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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)
    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 income) (AOCI), 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 December 31, 2009 and December
    31 2008, 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.

    The capital structure of the Superior and the calculation of its key
    capital ratios are as follows:

                                                    December 31, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Total shareholders' equity                            584.5        574.2
    Exclude accumulated other comprehensive
     loss (income)                                         39.5         (1.6)
    -------------------------------------------------------------------------
    Shareholders' equity (excluding AOCI)                 624.0        572.6

    Current portion of term loans                           5.1         13.0
    Revolving term bank credits and term loans(1)         640.3        464.7
    Accounts receivable securitization program             92.7        100.0
    -------------------------------------------------------------------------
    Total senior debt                                     738.1        577.7
    Convertible unsecured subordinated debentures(1)      316.7        247.6
    -------------------------------------------------------------------------
    Total debt                                          1,054.8        825.3

    Cash                                                  (24.3)       (16.1)

    -------------------------------------------------------------------------
    Total capital                                       1,654.5      1,381.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                         Twelve       Twelve
                                                         months       months
                                                          ended        ended
                                                    December 31, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Net earnings                                           68.3         67.7
    Adjusted for:
      Interest on revolving term bank credits and
       term loans                                          27.0         23.7
      Interest on convertible unsecured subordinated
       debentures                                          16.8         14.8
      Accretion of convertible debenture issue costs        1.4          1.4
      Amortization of property, plant and equipment        22.6         18.3
      Amortization included in cost of sales               37.5         38.9
      Amortization of intangible assets                     7.9          5.3
      Income tax expense                                   12.7          9.9
      Unrealized losses on financial instruments           20.6         61.2
      Gain on sale of facility                                -         (4.0)
      Non-cash pension expense                              1.7          2.4
      Proforma impact of acquisitions                      51.4          2.5
    -------------------------------------------------------------------------
    EBITDA(2)                                             267.9        242.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                   December 31,  December 31,
                                          Target          2009          2008
    -------------------------------------------------------------------------
    Senior debt to EBITDA(2)       1.5:1 - 2.0:1         2.8:1         2.4:1
    Total debt to EBITDA(2)        2.5:1 - 3.0:1         3.9:1         3.4:1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Revolving term bank credits and term loans and convertible unsecured
        subordinated debentures are before deferred issue costs.
    (2) EBITDA, as defined by Superior's revolving term credit facility, is
        calculated on a trailing twelve month basis taking into consideration
        the proforma impact of acquisitions and dispositions in accordance
        with the requirements of Superior's credit facility. Superior's
        calculation of EBITDA and debt to EBITDA may differ from those of
        similar entities.

    13. Net Earnings per Share

                                Three months ended       Twelve months ended
                                       December 31,              December 31,
                                 2009         2008         2009         2008
    -------------------------------------------------------------------------
    Net earnings per share
     computation, basic and
     diluted(1)
      Net earnings (loss)        17.4        (19.9)        68.3         67.7
      Weighted average shares
       outstanding               98.5         88.4         91.0         88.3
    -------------------------------------------------------------------------
    Net earnings (loss) per
     share, basic and diluted   $0.18       ($0.23)       $0.75        $0.77
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) All outstanding debentures have been excluded from this calculation
        as they were anti-dilutive.

    14. Business Segments

    Superior operates three distinct 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 is 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. Superior's corporate office arranges
    intersegment foreign exchange contracts from time to time between its
    business segments. Realized gains and losses pertaining to intersegment
    foreign exchange gains and losses are eliminated under the Corporate cost
    column. Certain reclassifications of prior year segments have been made
    to conform to current year presentation. Specifically, Energy Services'
    results include the operations of Superior Propane and Superior Energy
    Management, Specialty Chemicals results includes ERCO Worldwide and
    Construction Products Distribution results include Winroc results.

                                                   Con-
                                             struction
    For the three months                      Products                 Total
     ended December 31,   Energy  Specialty     Distri-              Consoli-
     2009               Services  Chemicals     bution  Corporate      dated
    -------------------------------------------------------------------------
    Revenues               465.1      106.2      176.2          -      747.5
    Cost of products
     sold                 (326.1)     (70.2)    (130.0)         -     (526.3)
    Realized gains
     (losses) on
     financial
     instruments           (26.8)       0.8        0.5        7.6      (17.9)
    -------------------------------------------------------------------------
    Gross profit           112.2       36.8       46.7        7.6      203.3
    Expenses
      Operating and
       administrative       72.2       28.4       35.8        3.2      139.6
      Amortization of
       property, plant
       and equipment         5.0          -        1.7          -        6.7
      Amortization of
       intangible assets     1.5        1.2        0.8          -        3.5
      Interest on
       revolving term
       bank credits and
       term loans              -          -          -        9.2        9.2
      Interest on
       convertible
       unsecured
       subordinated
       debentures              -          -          -        5.1        5.1
      Accretion of
       convertible
       debenture issue
       costs                   -          -          -        0.6        0.6
      Unrealized
       losses (gains)
       on financial
       instruments          (1.1)       3.4          -       (2.1)       0.2
    -------------------------------------------------------------------------
                            77.6       33.0       38.3       16.0      164.9
    -------------------------------------------------------------------------
    Net earnings (loss)
     before income taxes    34.6        3.8        8.4       (8.4)      38.4
    Income tax expense                                      (21.0)     (21.0)
    -------------------------------------------------------------------------
    Net Earnings (Loss)     34.6        3.8        8.4      (29.4)      17.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                                   Con-
                                             struction
    For the three months                      Products                 Total
     ended December 31,   Energy  Specialty     Distri-              Consoli-
     2008               Services  Chemicals     bution  Corporate      dated
    -------------------------------------------------------------------------
    Revenues               411.8      122.6      124.1          -      658.5
    Cost of products
     sold                 (305.6)     (73.5)     (83.3)         -     (462.4)
    Realized gains
     (losses) on
     financial
     instruments            (6.1)       2.5          -        0.6       (3.0)
    -------------------------------------------------------------------------
    Gross profit           100.1       51.6       40.8        0.6      193.1
    Expenses
      Operating and
       administrative       62.8       28.8       27.3       12.1      131.0
      Amortization of
       property, plant
       and equipment         1.1        1.1        1.1          -        3.3
      Amortization of
       intangible
       assets                0.1        1.3        0.1          -        1.5
      Interest on
       revolving term
       bank credits
       and term loans          -          -          -        5.5        5.5
      Interest on
       convertible
       unsecured
       subordinated
       debentures              -          -          -        3.6        3.6
      Accretion of
       convertible
       debenture issue
       costs                   -          -          -        0.3        0.3
      Unrealized
       losses (gains)
       on financial
       instruments          73.4        1.5          -        8.7       83.6
    -------------------------------------------------------------------------
                           137.4       32.7       28.5       30.2      228.8
    -------------------------------------------------------------------------
    Net earnings (loss)
     before income
     taxes                 (37.3)      18.9       12.3      (29.6)     (35.7)
    Income tax recovery        -          -          -       15.8       15.8
    -------------------------------------------------------------------------
    Net Earnings (Loss)    (37.3)      18.9       12.3      (13.8)     (19.9)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                                   Con-
                                             struction
                                              Products                 Total
    For the year ended    Energy  Specialty     Distri-              Consoli-
     December 31, 2009  Services  Chemicals     bution  Corporate      dated
    -------------------------------------------------------------------------
    Revenues             1,312.1      465.6      469.0          -    2,246.7
    Cost of products
     sold                 (863.7)    (284.4)    (347.2)         -   (1,495.3)
    Realized gains
     (losses) on
     financial
     instruments          (109.1)      (6.1)       0.5       16.7      (98.0)
    -------------------------------------------------------------------------
    Gross profit           339.3      175.1      122.3       16.7      653.4
    Expenses
      Operating and
       administrative      243.4      119.6       99.5       13.6      476.1
      Amortization of
       property, plant
       and equipment        18.1          -        4.5          -       22.6
      Amortization of
       intangible
       assets                1.8        4.8        1.3          -        7.9
      Interest on
       revolving term
       bank credits
       and term loans          -          -          -       27.0       27.0
      Interest on
       convertible
       unsecured
       subordinated
       debentures              -          -          -       16.8       16.8
      Accretion of
       convertible
       debenture
       issue costs             -          -          -        1.4        1.4
      Unrealized
       losses (gains)
       on financial
       instruments          22.9       31.1          -      (33.4)      20.6
    -------------------------------------------------------------------------
                           286.2      155.5      105.3       25.4      572.4
    -------------------------------------------------------------------------
    Net earnings (loss)
     before income
     taxes                  53.1       19.6       17.0       (8.7)      81.0
    Income tax expense                                      (12.7)     (12.7)
    -------------------------------------------------------------------------
    Net Earnings (Loss)     53.1       19.6       17.0      (21.4)      68.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                                   Con-
                                             struction
                                              Products                 Total
    For the year ended    Energy  Specialty     Distri-              Consoli-
     December 31, 2008  Services  Chemicals     bution  Corporate      dated
    -------------------------------------------------------------------------
    Revenues             1,494.0      469.7      523.6          -    2,487.3
    Cost of products
     sold               (1,172.0)    (305.2)    (382.9)         -   (1,860.1)
    Realized gains on
     financial
     instruments            13.9       26.0          -        2.0       41.9
    -------------------------------------------------------------------------
    Gross profit           335.9      190.5      140.7        2.0      669.1
    Expenses
      Operating and
       administrative      235.0      112.9      103.3       19.6      470.8
      Amortization of
       property, plant
       and equipment        12.4        2.0        3.9          -       18.3
      Amortization of
       intangible
       assets                0.3        4.5        0.5          -        5.3
      Interest on
       revolving term
       bank credits
       and term loans          -          -          -       23.7       23.7
      Interest on
       convertible
       unsecured
       subordinated
       debentures              -          -          -       14.8       14.8
      Accretion of
       convertible
       debenture
       issue costs             -          -          -        1.4        1.4
      Gain on disposal
       of facility             -       (4.0)         -          -       (4.0)
      Unrealized
       losses (gains)
       on financial
       instruments          74.0      (15.2)         -        2.4       61.2
    -------------------------------------------------------------------------
                           321.7      100.2      107.7       61.9      591.5
    -------------------------------------------------------------------------
    Net earnings (loss)
     before income
     taxes                  14.2       90.3       33.0      (59.9)      77.6
    Income tax expense         -          -          -       (9.9)      (9.9)
    -------------------------------------------------------------------------
    Net Earnings (Loss)     14.2       90.3       33.0      (69.8)      67.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Total Assets, Net Working Capital, Acquisitions and Purchase of Property,
    Plant and Equipment

                                                   Con-
                                             struction
                                              Products                 Total
                          Energy  Specialty     Distri-              Consoli-
                        Services  Chemicals     bution  Corporate      dated
    -------------------------------------------------------------------------
    As at December 31,
     2009
      Net working
       capital(1)           93.3        2.8      116.8      (29.1)     183.8
      Total assets         930.6      597.1      369.1      377.2    2,274.0
    -------------------------------------------------------------------------
    As at December 31,
     2008
      Net working
       capital(1)           65.5       27.6       76.5      (22.9)     146.7
      Total assets         727.7      618.3      211.3      469.6    2,026.9
    -------------------------------------------------------------------------
    For the three months
     ended December 31,
     2009
      Acquisitions          82.5          -        0.3          -       82.8
      Purchase of
       property, plant
       and equipment         5.5       22.5        0.2          -       28.2
    -------------------------------------------------------------------------
    For the three months
     ended December 31,
     2008
      Acquisitions             -          -          -          -          -
      Purchase of
       property, plant
       and equipment         4.7       41.4        0.2          -       46.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    For the year ended
     December 31, 2009
      Acquisitions         179.3          -      109.5          -      288.8
      Purchase of
       property, plant
       and equipment        13.7      124.2        1.4          -      139.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    For the year ended
     December 31, 2008
      Acquisitions           3.4          -       21.1          -       24.5
      Purchase of
       property, plant
       and equipment        10.2       72.2        1.8          -       84.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Net working capital reflects amounts as at the year end and is
        comprised of cash and cash equivalents, accounts receivable and
        inventories, less bank indebtedness, accounts payable and accrued
        liabilities, current portion of term loans and dividends and interest
        payable to shareholders and debentureholders.



    Geographic Information

                                                                       Total
                                            United                   Consoli-
                               Canada       States        Other        dated
    -------------------------------------------------------------------------
    Revenues for the three
     months ended December 31,
     2009                       471.1        258.8         17.6        747.5
    Revenues for the year
     ended December 31, 2009  1,638.9        526.7         81.1      2,246.7
    Property, plant and
     equipment as at
     December 31, 2009          365.8        243.7         58.5        668.0
    Goodwill as at
     December 31, 2009          470.7         57.7            -        528.4
    Total assets as at
     December 31, 2009        1,685.9        522.2         65.9      2,274.0
    -------------------------------------------------------------------------
    Revenues for the three
     months ended
     December 31, 2008          546.5         88.7         23.3        658.5
    Revenues for the year
     ended December 31, 2008  2,056.0        348.0         83.3      2,487.3
    Property, plant and
     equipment as at
     December 31, 2008          400.3         92.4         69.6        562.3
    Goodwill as at
     December 31, 2008          454.6         18.1            -        472.7
    Total assets as at
     December 31, 2008        1,761.1        188.7         77.1      2,026.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    15. Comparative Figures

    Certain reclassifications of prior year amounts have been made to conform
    to current year presentation. Specifically, $8.5 million has been
    reclassified to property, plant and equipment from inventory to provide
    comparative presentation of certain of Energy Services' rental assets.
    Additionally, $25.4 million has been reclassified from current portion of
    deferred credit to long-term portion of the deferred credit.

    16. Subsequent Events

    On January 20, 2010, Superior completed its acquisition of the shares of
    Griffith Holdings, Inc. (Griffith) for an aggregate purchase price of US
    $125.0 million before adjustments for working capital. Griffith is a
    retail and wholesale distributor of propane, heating oil and motor fuels
    in upstate New York. The acquisition was partially financed by the sale
    by Superior of 5,002,500 common shares for gross proceeds of $69.3
    million on February 10, 2010. The remaining acquisition cost has been
    financed through borrowings from Superior existing revolving term bank
    credits and term loans.

    On January 27, 2010, Superior expanded the credit facility from $570
    million to $600 million and certain amendments were made to Superior's
    financial covenant ratios. In particular, the previous consolidated
    senior debt coverage ratio requirement was replaced with a consolidated
    secured debt coverage ratio of not more than 3.0 to 1.0. Under the new
    test, senior unsecured debt, such as the senior unsecured debentures is
    excluded from the calculation but remain part of the total debt to
    compliance EBITDA calculation. Superior is permitted, as a result of
    acquisitions, to increase its consolidated secured debt to compliance
    EBITDA ratio to 3.5 to 1.0 for a period of 90 days. Superior's total debt
    to compliance EBITDA coverage ratio requirement remains unchanged at not
    more than 5.0 to 1.0. Superior is within its financial covenants before
    and after the above amendment as at December 31, 2009.
    

SOURCE SUPERIOR PLUS CORP.

For further information: For further information: about Superior, visit our website at www.superiorplus.com or contact: Wayne Bingham, Executive Vice-President and Chief Financial Officer, E-mail: wbingham@superiorplus.com, Phone: (403) 218-2951, Fax: (403) 218-2973, Toll Free: 1-866-490-PLUS (7587); Jay Bachman, Vice-President, Investor Relations and Planning, E-mail: jbachman@superiorplus.com, Phone: (403) 218-2957, Fax: (403) 218-2973, Toll Free: 1-866-490-PLUS (7587)

Organization Profile

SUPERIOR PLUS CORP.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890