Superior Plus Announces a 10% Increase in First Quarter Adjusted Operating Cash Flow per Share



    TSX: SPB

    CALGARY, May 6 /CNW/ -

    
    HIGHLIGHTS

    -   Revenue for the first quarter of 2009 was $603.5 million compared to
        the prior year quarter of $681.4 million, a decrease of 11% primarily
        due to the lower selling price of propane and lower sales volumes in
        all divisions as a result of the impact from the global economic
        recession.
    -   Gross profit increased by 11% to $188.3 million in the first quarter
        of 2009 from $169.9 million in the first quarter of 2008 as increased
        margins more than offset decreased sales volumes.
    -   First quarter 2009 EBITDA from operations increased by 13% to
        $80.0 million from the prior year quarter of $70.7 million reflecting
        stronger performance at Superior Propane and ERCO, which was
        partially offset by weaker performance at Winroc and SEM.
    -   Adjusted operating cash flow per share for the first quarter ending
        March 31, 2009 was $0.69, an increase of 10% from the prior year
        quarter.
    -   The Port Edwards expansion project continues to be on-budget and is
        expected to be placed into service during the third quarter of 2009.
    -   Four quarter trailing EBITDA was $251.9 million resulting in Senior
        Debt to EBITDA ratio of 2.2x and Total Debt to EBITDA ratio of 3.2x
        as at March 31, 2009.
    -   As of May 6, 2009, Superior had received $570 million of credit
        commitments relating to the extension of its $595 million syndicated
        credit facility from June 28, 2010 to June 28, 2011.

    FINANCIAL SUMMARY
    -------------------------------------------------------------------------
                                                          Three months ended
                                                                March 31
    (millions of dollars except per share amounts)         2009         2008
    -------------------------------------------------------------------------
    Revenue                                               603.5        681.4
    -------------------------------------------------------------------------
    Gross profit                                          188.3        169.9
    -------------------------------------------------------------------------
    EBITDA from operations(1)                              80.0         70.7
    -------------------------------------------------------------------------
    Interest                                              (10.3)        (9.8)
    Cash taxes                                             (5.0)        (1.7)
    Corporate costs                                        (3.4)        (3.5)
    -------------------------------------------------------------------------
    Adjusted operating cash flow(1)                        61.3         55.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Adjusted operating cash flow per share,
     basic (1),(2) and diluted(1),(3)                  $   0.69     $   0.63
    -------------------------------------------------------------------------
    Dividends/Distributions paid per share/unit        $  0.405     $  0.395
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    SEGMENTED INFORMATION
    -------------------------------------------------------------------------
                                                          Three months ended
                                                                March 31
    (millions of dollars)                                2009(1)      2008(1)
    -------------------------------------------------------------------------
    EBITDA from operations:
      Propane Distribution                                 44.9         37.9
      Specialty Chemicals                                  32.1         26.0
      Construction Products Distribution                    1.5          4.8
      Fixed-Price Energy Services                           1.5          2.0
    -------------------------------------------------------------------------
                                                           80.0         70.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) EBITDA from operations and adjusted operating cash flow are key
        performance measures used by management and investors to evaluate the
        performance of Superior. These measures are defined under Non-GAAP
        Financial Measures in Management's Discussion and Analysis of 2009
        First Quarter Results.
    (2) The weighted average number of shares outstanding for the three
        months ended March 31, 2009 is 88.4 million (2008 - 88.1 million)
    (3) For the three months ended March 31, 2009, there were no dilutive
        instruments.

    Propane Distribution

    -   EBITDA from operations was $44.9 million in the first quarter of
        2009, an increase of $7.0 million compared to the prior year quarter
        primarily due to a 10% increase in total gross profit.
    -   Total gross profit per litre for the first quarter of 2009 was
        23.4 cents, an increase of 3.9 cents per litre compared to the prior
        year quarter.
    -   Retail propane and delivery gross profit of $79.6 million decreased
        by $1.1 million in the first quarter of 2009 compared to the prior
        year quarter as an increase in average retail and delivery margin was
        more than offset by a reduction in sales volume due to the impact of
        the economic recession in Canada. Superior refocused its sales and
        marketing program in late 2008 producing positive initial results in
        the first quarter with the addition of over 30 million litres of
        annualized new customer volumes.
    -   Wholesale and related gross profits were $15.4 million in the first
        quarter of 2009, an increase of $9.7 million compared to the prior
        year quarter substantially due to improved wholesale gross profits
        resulting from the high level of volatility in supply and prices for
        propane experienced during the winter heating season.
    -   In response to the severe economic recession and continuing efforts
        to improve the business, Superior commenced implementation of its new
        routing and scheduling system which is expected to improve employee
        productivity. Superior also reduced fleet and employment levels to
        adjust to reduced volumes created by the economic recession. The 2009
        outlook includes $2.4 million to implement these changes and will
        have a positive impact on reducing cost structure in the future.
    -   EBITDA from operations is expected to be $95 - $105 million for 2009
        consistent with the previous outlook provided in the fourth quarter
        2008 Financial Discussion. The benefits of sales marketing
        initiatives and projected efficiency improvements in cost structure
        are expected to partially offset the impact of reduced economic
        activity.

    Specialty Chemicals

    -   EBITDA from operations was $32.1 million in the first quarter of
        2009, a $6.1 million increase over the prior year quarter driven by
        higher sales prices more than offsetting lower chemical sales
        volumes.
    -   Gross profit increased by $9.0 million to $62.7 million from
        $53.7 million due to strong pricing and the positive impact of
        foreign exchanges rates on chloralkali/potassium and sodium chlorate
        products partially offset by lower chemical sales volumes compared to
        the prior year quarter.
    -   Chemical sales volumes of 155,000 (MTs) were 36,000 (MTs) lower than
        the prior year quarter primarily due to reduced demand for specialty
        chemical products as a result of the impact of the global economic
        recession. In response to the reduced demand for sodium chlorate, the
        Valdosta facility has been temporarily idled reducing capacity by
        8,000 MT per month while cell line upgrades are completed to improve
        the efficiency and cost structure. The facility is expected to
        restart as demand for sodium chlorate improves in the future.
    -   The Port Edwards Wisconsin chloralkali facility expansion project
        remains on budget and is expected to be placed into service during
        the third quarter of 2009. The conversion project will require a
        temporary closure of the facility for approximately 4-6 weeks
        resulting in reduced sales and production which has been reflected in
        the revised financial outlook. When production restarts, it is
        expected to provide an annual incremental US$20 - $30 million of
        positive EBITDA contribution at full capacity.
    -   EBITDA from operations is expected to be $100 - $110 million for
        2009, a decrease of $5 million from the previous outlook provided in
        the fourth quarter 2008 Financial Discussion reflecting the impact of
        the down time at Port Edwards for the plant expansion and lower
        chloralkali pricing.

    Construction Products Distribution

    -   EBITDA from operations was $1.5 million in the first quarter of 2009,
        a $3.3 million decrease from the prior year quarter.
    -   Gross profit in the first quarter of 2009 was $24.4 million, a
        $4.2 million decrease from the prior year quarter primarily due to a
        21% decline in drywall sales volumes marginally offset by improved
        sales volumes relating to the Ontario GSD acquisition completed on
        May 9, 2008. Sales volumes declined as a result of the residential
        housing slowdown in Canada and the US and were exacerbated by more
        severe than normal weather conditions compared to the prior year.
    -   Sales margins were consistent or modestly higher in most operating
        areas in the first quarter of 2009 compared to the prior year quarter
        due to a continued focus on margin management initiatives and the
        impact of purchasing programs.
    -   Significant restructuring and cost reduction initiatives have and
        continue to be made to adjust to the changes in the market. These
        include closure or consolidation of locations, fleet and
        personnel reductions. The 2009 outlook includes $0.7 million to
        implement identified changes and will have a positive impact on
        reducing cost structure in the future.
    -   The fragmented nature of the specialty buildings products industry,
        combined with the market downturn, provide for additional
        consolidation and product expansion opportunities for Winroc.
    -   EBITDA from operations is expected to be $20 - $27 million for 2009,
        a decrease of $8 million from the previous outlook provided in the
        fourth quarter 2008 Financial Discussion as a result of the severe
        demand reduction which is not expected to improve until the second
        half of 2009.

    Fixed-Price Energy Services

    -   EBITDA from operations was $1.5 million in the first quarter of 2009,
        a $0.5 million decrease over the prior year quarter.
    -   Gross profit was $7.0 million in the first quarter of 2009, a
        $0.2 million increase over the prior year quarter as improvement in
        natural gas margin and increase electricity volumes more than offset
        a decrease in natural gas sales volumes.
    -   SEM continues to focus on developing and implementing alternative
        sales channel models and products to enhance its competitive position
        in energy retail markets. In response to the difficult Ontario
        residential markets, SEM has refocused its sales channels towards
        acquiring and retaining Ontario commercial natural gas and
        electricity customers, Quebec commercial natural gas customers and
        British Columbia natural gas residential and commercial customers.
    -   Currently, SEM's portfolio of customers is approximately 70%
        commercial and 30% residential by volume.
    -   EBITDA from operations is expected to be $9 - $12 million for 2009,
        consistent with the previous outlook provided in the fourth quarter
        2008 Financial Discussion.

    Key Quarterly Corporate Items

    -   Total interest expense of $10.3 million in the first quarter
        increased by $0.5 million compared to the prior year quarter
        primarily due to higher average debt levels and the impact of the
        appreciation of the US dollar on US denominated interests costs
        partially offset by lower average interest rates.
    -   Superior had a $595 million syndicated credit facility with undrawn
        credit capacity of approximately $339 million (excluding its
        securitization program) as at March 31, 2009. As of May 6, 2009,
        Superior had received $570 million of credit commitments relating to
        the extension of its $595 million syndicated credit facility from
        June 28, 2010 to June 28, 2011. Closing of the syndicated credit
        facility is expected to occur in May 2009 and is subject to standard
        review of the documentation
    -   As at March 31, 2009, Superior had utilized $125 million of its
        existing securitization program. Effective April 30, 2009, Superior
        extended its securitization receivable program to June 29, 2010.

    Capital Expenditures

    Consolidated Capital Expenditure Summary
    -------------------------------------------------------------------------
                                                          Three months ended
                                                                March 31
    (millions of dollars)                                  2009         2008
    -------------------------------------------------------------------------
    Efficiency, process improvement and growth related      7.8          3.8
    Other capital                                           1.5          1.6
    Port Edwards expansion project                         26.6          5.2
    -------------------------------------------------------------------------
                                                           35.9         10.6
    Earn-out payment on prior acquisition                   0.6            -
    Proceeds on disposition of capital                     (1.8)        (0.2)
    -------------------------------------------------------------------------
    Total net capital expenditures                         34.7         10.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    In the first quarter of 2009, Superior continued to improve its cost
structure by investing $7.8 million of capital in efficiency projects
primarily in the propane distribution and specialty chemicals divisions. The
Port Edwards conversion project made good progress in the first quarter of
2009 with capital spending of $26.6 million (US$21.2 million). The project is
on budget and scheduled for conversion during the third quarter of 2009.
Superior has incurred $77.6 million (US$66.0 million) of the estimated US$130
million costs to complete the Port Edwards project.

    
    Financial Outlook
    -------------------------------------------------------------------------
                                                         2009(1)      2009(2)
    (millions of dollars, except per share amounts)       Prior      Current
    -------------------------------------------------------------------------
    EBITDA from operations
      Propane Distribution                               95-105       95-105
      Specialty Chemicals                               105-115      100-110
      Construction Products Distribution                  28-35        20-27
      Fixed-Price Energy Services                          9-12         9-12
    -------------------------------------------------------------------------
    Adjusted operating cash flow per share        $2.00-$2.20  $2.00-$2.15(4)
    Dividends paid per share                            $1.62        $1.62

    -------------------------------------------------------------------------
    Senior Debt/EBITDA Ratio(3)                             2.0          1.9
    Total Debt/EBITDA Ratio(3)                              3.0          2.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) As provided in Superior's fourth quarter 2008 Financial Discussion.
    (2) The assumptions, definitions, and risk factors relating to the
        Financial Outlook are discussed in Management's Discussion and
        Analysis of the 2009 First Quarter Results.
    (3) Superior's debt ratios take into account the impact of the
        off-balance sheet receivable sales program amounts, the efficiency
        and growth projects and excludes Port Edwards project debt of
        $150 million (US$130 million) as well as project EBITDA contribution.
        Including the Port Edwards project debt with no corresponding EBITDA
        would result in a year end Senior Debt to EBITDA ratio of 2.4 and
        Total Debt to EBITDA ratio of 3.4.
    (4) The Port Edwards expansion project is now estimated to be placed into
        service during the third quarter of 2009. This will result in
        approximately US$ cash tax savings of $8-$10 million in 2009.
    

    Consolidated Financial Outlook

    Superior's adjusted operating cash flow increased by 10% to $0.69 per
share in the first quarter of 2009 compared to the prior year quarter. The
diversification of the businesses continued to support strong consolidated
performance despite the extremely difficult economic environment and poor
credit conditions experienced in the first quarter of 2009. Superior has
narrowed its annual expectations for adjusted operating cash flow to $2.00-
$2.15 per share from $2.00-$2.20 per share in 2009 based upon first quarter
results and its outlook for the remainder of the year. Superior expects
economic environment to improve in the latter half of 2009 continuing with a
modest recovery in 2010.
    The Port Edwards expansion project continues to remain on time and is
scheduled to be converted in the third quarter of 2009. As such, Superior has
included approximately $8 - 10 million in US cash tax savings in the revised
2009 adjusted operating cash flow outlook of $2.00 - $2.15 per share. The Port
Edwards expansion project will require the closure of the facility for
approximately 4-6 weeks and this reduced production is included in the 2009
financial outlook. Superior's financial outlook for 2010 is unchanged from its
previous outlook of adjusted operating cash flow per share of $2.20 - $2.40.
    The projected Senior Debt to EBITDA and Total Debt to EBITDA ratios of
2.4x and 3.4x for 2009 reflect the $150 million (US$130 million) investment in
the Port Edwards conversion with no incremental cash flow from the project
occurring until 2010. The projected Senior Debt to EBITDA and Total Debt to
EBITDA ratios for 2009 excluding Port Edwards project debt are 1.9x and 2.9x,
respectively. Upon closing of the extension of Superior's syndicated credit
facility, the corporation will not have any significant credit maturities
until June 2011.
    Superior believes its diversified portfolio of stable businesses, strong
balance sheet, and prudent allocation of capital will result in stability of
dividends and long-term growth for its securityholders.

    2009 First Quarter Results

    Superior's 2009 First Quarter Results is attached and available on
Superior's website at: www.superiorplus.com under the investor information
section and at www.sedar.com.

    Conference Call

    Superior Plus will be conducting a conference call and webcast for
investors, analysts, brokers and media representatives to discuss the 2009
First Quarter Results at 7:30 a.m. MST (9:30 a.m. EST) on Thursday, May 7,
2009. To participate in the call, dial: 1-800-732-9303. An archived recording
of the call will be available for replay until midnight, June 8, 2009. To
access the recording, dial: 1-877-289-8525 and enter pass code 21301182
followed by the pound key. Internet users can listen to the call live, or as
an archived call, on Superior's website at: www.superiorplus.com under the
Investor section.

    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 Management's Discussion and Analysis of 2009
First Quarter Results, includes but is not limited to, consolidated and
business segment outlooks, expected EBITDA from operations, expected adjusted
operating cash flow, expected adjusted operating cash flow per share, future
capital expenditures, business strategy and objectives, dividend strategy,
expected senior debt and total debt to EBITDA ratios, future cash flows,
anticipated taxes and statements regarding the future financial position of
Superior and Superior LP. Superior and Superior LP believe 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, currency, exchange and interest rates, trading data, cost
estimates and the other assumptions set forth under the "Outlook" sections
contained in the attached Management's Discussion and Analysis of 2009 First
Quarter Results. 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 Management's Discussion and Analysis of 2009 First
Quarter Results. 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 Management's Discussion
and Analysis of 2009 First Quarter Results, 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, neither Superior nor Superior LP undertakes any obligation to
publicly update or revise such information to reflect new information,
subsequent or otherwise.

    Management's Discussion and Analysis of 2009 First Quarter Results
    May 6, 2009

    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
acquisition 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 Canadian 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 Superior Propane, 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 9.

    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 divisions. 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 businesses may be referred to as EBITDA from operations.
Net earnings (loss) are reconciled to EBITDA from operations on page 24.

    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 10 to the unaudited Interim
Consolidated Financial Statements for a reconciliation of net earnings (loss)
to compliance EBITDA.

    Overview of Superior

    Superior Plus Corp. is a diversified business corporation. Superior holds
100% of 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 four operating
businesses: a propane distribution and related services business operating
under the trade name Superior Propane; a specialty chemicals business
operating under the trade name ERCO Worldwide (ERCO); a construction products
distribution business operating under the trade name Winroc; and a fixed-price
energy services business operating under the trade name Superior Energy
Management (SEM).

    
    First Quarter Results

    Summary of Adjusted Operating Cash Flow
    -------------------------------------------------------------------------
                                                          Three months ended
                                                                March 31
    (millions of dollars except per share amounts)         2009         2008
    -------------------------------------------------------------------------
    EBITDA from operations:
      Propane Distribution                                 44.9         37.9
      Specialty Chemicals                                  32.1         26.0
      Construction Products Distribution                    1.5          4.8
      Fixed-Price Energy Services                           1.5          2.0
    -------------------------------------------------------------------------
                                                           80.0         70.7
    Interest                                              (10.3)        (9.8)
    Cash income taxes                                      (5.0)        (1.7)
    Corporate costs                                        (3.4)        (3.5)
    -------------------------------------------------------------------------
    Adjusted operating cash flow                           61.3         55.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Adjusted operating cash flow per share,
     basic(1) and diluted(2)                           $   0.69     $   0.63
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) The weighted average number of shares outstanding for the quarter
        ended March 31, 2009, is 88.4 million (2008 - 88.1 million).
    (2) For the three months ended March 31, 2009 and 2008, there were no
        dilutive instruments.


    Adjusted Operating Cash Flow Reconciled to Cash Flow from Operating
    Activities(1)
    -------------------------------------------------------------------------
                                                          Three months ended
                                                                March 31
    (millions of dollars)                                  2009         2008
    -------------------------------------------------------------------------
    Cash flows from operating activities                   83.4         63.2

    Add:  Customer contract related costs capitalized       0.9          0.7

    Less: Decrease in non-cash working capital            (18.6)        (6.6)
          Reclassification of unrealized losses
           related to Superior Propane's wholesale
           trading business                                (2.7)           -
        Amortization of customer contract related costs    (1.7)        (1.6)
    -------------------------------------------------------------------------
    Adjusted operating cash flow                           61.3         55.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) See the unaudited Interim Consolidated Financial Statements for cash
        flows from operating activities, customer contract related costs and
        changes in non-cash working capital.
    

    First quarter adjusted operating cash flow was $61.3 million, an increase
of $5.6 million or 10% over the prior year quarter. The increase in adjusted
operating cash flow was due to improved EBITDA from operations at Superior
Propane and ERCO, offset in part, by lower operating results at Winroc and SEM
and the impact of higher cash taxes. Adjusted operating cash flow per share
was $0.69 per share in the first quarter, an increase of 10% from $0.63 per
share in the prior year quarter due to the increase of adjusted operating cash
flow noted above; the weighted average number of shares outstanding was
consistent with the prior year quarter.
    Net loss for the first quarter was $5.5 million, compared to net earnings
of $127.2 million in the prior year quarter. Net earnings were impacted by
$72.9 million in unrealized losses on financial instruments, compared to
unrealized gains of $105.3 million in the prior year quarter. The change in
the unrealized gains and losses on financial instruments was due to losses on
SEM's natural gas financial derivatives as a result of a decrease in the spot
price for natural gas. Total income taxes for the first quarter were a
recovery of $16.8 million compared to an income tax expense of $18.0 million
in the prior year quarter. Income taxes were impacted by Superior's conversion
to a corporation on December 31, 2008 and the change in unrealized losses on
financial instruments in first quarter as discussed above. Additionally, first
quarter net earnings were affected for the same reasons as the analysis of
adjusted operating cash flow for the first quarter.

    Propane Distribution

    Superior Propane generated EBITDA from operations of $44.9 million in the
first quarter, an increase of $7.0 million from the prior year quarter due to
higher gross profit, offset in part, by higher operating costs.

    Condensed operating results for the three months ended March 31, 2009 and
    2008 are provided in the following table.

    
    -------------------------------------------------------------------------
    (millions of dollars                 Three months ended March 31
     except per litre amounts)         2009                      2008
    -------------------------------------------------------------------------
                                       cents/litre               cents/litre
                                       -----------               -----------
    Revenue(1),(2),(3)          303.4         70.4        369.3         78.7
    Cost of sales              (202.7)       (47.0)      (277.7)       (59.2)
    -------------------------------------------------------------------------
    Gross profit                100.7         23.4         91.6         19.5
    Less: cash operating and
     administration costs       (55.8)       (13.0)       (53.7)       (11.4)
    -------------------------------------------------------------------------
    EBITDA from operations       44.9         10.4         37.9          8.1
    Propane retail volumes
     sold (millions of litres)          431                       469
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 8 and 12 to the unaudited Interim Consolidated
        Financial Statements). In order to better reflect the results of its
        operations, Superior has reclassified these amounts for purposes of
        this management's discussion and analysis to present its results as
        if it had accounted for these transactions as accounting hedges. As
        such, included in revenue for the three months ended March 31, 2009
        is $2.6 million in realized foreign currency forward contract losses
        and for the three months ended March 31, 2008 is $1.0 million in
        realized foreign currency forward contract losses.
    (2) For the three months ended March 31, 2009 and 2008, for purposes of
        the management's discussion and analysis, Superior has reclassified
        $0.4 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.
    (3) For the three months ended March 31, 2009, for purposes of this
        management's discussion and analysis, Superior has classified
        $2.7 million of unrealized losses on forward propane purchase
        contracts as a component of revenue, related to Superior Propane's
        wholesale trading business.
    

    Revenues for the first quarter of 2009 were $303.4 million, a decrease of
$65.9 million from revenues of $369.3 million in 2008. The decrease in
revenues was due to lower retail propane sales volumes, combined with a lower
average retail selling price of propane as a result of reductions in the
wholesale cost of propane. Total gross profit for the first quarter of 2009
was $100.7 million, an increase of $9.1 million or 10% over the prior year
quarter. Total gross profit per litre for the first quarter of 2009 was 23.4
cents per litre, an increase of 3.9 cents per litre or 20% compared to the
prior year quarter. A summary and detailed review of gross profit by segment
is provided below.

    
    Gross Profit by Segment
    -------------------------------------------------------------------------
                                                          Three months ended
                                                                March 31
    (millions of dollars)                                  2009         2008
    -------------------------------------------------------------------------
    Retail propane and delivery                            79.6         80.7
    Other services                                          5.7          5.2
    Wholesale and related                                  15.4          5.7
    -------------------------------------------------------------------------
    Total gross profit                                    100.7         91.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Retail propane and delivery gross profit for the first quarter was $79.6
million, a decrease of $1.1 million or 1% from the prior year quarter, as a
1.3 cent per litre or 8% increase in the average retail and delivery sales
margin was fully offset by a 38 million litre or 8% reduction in sales
volumes. Residential and commercial volumes decreased by 7 million litres or
4% and were negatively impacted by a weaker overall economic environment
throughout most of Canada and the ongoing impact of customer conservation.
Superior Propane's 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, as measured by degree days, for
the first quarter was 3% colder than the prior year and 6% colder than the
five year average, the impact of which partially mitigated a reduction in
volumes due to the weaker economic environment. Industrial volumes decreased
by 24 million litres or 10%, 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 the Prairies in addition to the impact
of reduced activity levels in the oil and gas sector. Automotive propane
volumes declined by 5 million litres or 21%, consistent with the structural
decline trends in this end-use market. Superior Propane continued to actively
manage sales margins in the first quarter, resulting in an average retail
propane and delivery sales margin of 18.5 cents per litre, which was 1.3 cents
per litre higher than the prior year quarter average margin of 17.2 cents per
litre. Average margins compared to the prior year quarter were positively
impacted by strong margin management despite the volatility in the wholesale
cost of propane.
    Other services gross profit was $5.7 million for the first quarter, an
increase of $0.5 million over the prior year quarter as an increase in rental
gross profit more than offset the impact of weaker demand for service and
installations. Wholesale and related gross profits were $15.4 million for the
first quarter, an increase of $9.7 million compared to the prior year quarter
due to improved gross profits within the wholesale trading business due in
part to the volatility of wholesale propane costs and the timing of the
recognition of gross profits compared to the prior year quarter. On an
annualized basis, Superior Propane anticipates that wholesale trading gross
profits will be higher than the prior year assuming normal volatility in the
wholesale cost of propane for the remainder of 2009.

    
    Superior Propane Annual Sales Volumes:

    Volumes by End-Use Application(1)   Volumes by Region(1),(2)
    -------------------------------------------------------------------------
                  Three months ended                      Three months ended
                            March 31,                               March 31,
                      2009      2008                          2009      2008
    ---------------------------------   -------------------------------------
    Residential         63        66    Western Canada         245       264
    Commercial         114       118    Eastern Canada         154       173
    Agricultural        23        25    Atlantic Canada         32        32
    Industrial         212       236
    Automotive          19        24
    ---------------------------------   -------------------------------------
                       431       469                           431       469
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Volume: Volume of retail 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.
    

    Cash operating and administrative costs of $55.8 million increased by
$2.1 million or 4% from the prior year quarter due to higher wages and
benefits, provisions for bad debts and rental costs, offset by lower truck and
telecommunication expenses. Superior Propane continues to actively manage
expenses, particularly wages and benefits in response to fluctuations in
volumes.

    Outlook

    Superior Propane expects EBITDA from operations for 2009 to be between
$95 million and $105 million, consistent with Superior Propane's previous
outlook as provided in the fourth quarter 2008 Financial Discussion. Superior
Propane's significant assumptions underlying its current outlook are:

    
    -   Superior Propane forecasts average temperatures across Canada to be
        consistent with the most recent five-year average;
    -   Total sales volumes are expected to decline due to a continued
        slowdown in economic activity resulting in reduced demand for propane
        and related services.
    -   Superior Propane expects that wholesale propane prices will not
        significantly impact demand for propane and related propane services;
    -   Total gross profit for Superior Propane is anticipated to decrease
        due to reduced economic activity; and
    -   Wholesale trading gross profits will be higher than in 2008 assuming
        normal volatility in the wholesale cost of propane for the remainder
        of 2009.
    

    In addition to Superior Propane's significant assumptions detailed above,
refer to the section "Risk Factors to Superior" for a detailed review of
Superior Propane's significant business risk.

    Specialty Chemicals

    ERCO Worldwide generated EBITDA from operations in the first quarter of
$32.1 million, an increase of $6.1 million or 23% from the prior year quarter,
as higher gross profits more than offset higher operating expenditures.
    Condensed operating results for the three months ended March 31, 2009 and
2008 are provided in the following table.

    
    -------------------------------------------------------------------------
    (millions of dollars except          Three months ended March 31
     per metric tonne (MT) amounts)    2009                      2008
    -------------------------------------------------------------------------
    Revenue                           $ per MT                  $ per MT
      Chemical(1),(3)           118.4          764        111.6          584
      Technology                  1.8           12          5.5           29
    Cost of Sales
      Chemical(2)               (57.1)        (368)       (59.8)        (313)
      Technology                 (0.4)          (3)        (3.6)         (19)
    -------------------------------------------------------------------------
    Gross Profit                 62.7          405         53.7          281
    Less: Cash operating and
     administrative costs(3)    (30.6)        (198)       (27.7)        (145)
    -------------------------------------------------------------------------
    EBITDA from operations       32.1          207         26.0          136
    Chemical volumes sold
     (thousands of MTs)                  155                       191
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 8 and 12 to the unaudited Interim Consolidated
        Financial Statements). In order to better reflect the results of its
        operations, Superior has reclassified these amounts for purposes of
        this management's discussion analysis to present its results as if it
        had accounted for these transactions as accounting hedges. As such,
        included in revenue for the three months ended March 31, 2009 is
        $4.4 million in realized foreign currency forward contract losses and
        included in chemical cost of sales for the three months ended
        March 31, 2009 is $1.3 million in realized fixed-price electricity
        gains. Included in revenue for the three months ended March 31, 2008
        is $2.5 million in realized foreign currency forward contract gains
        and included in chemical cost of sales for the three months ended
        March 31, 2008 is $3.3 million in realized fixed-price electricity
        gains.
    (2) Effective January 1, 2008, Superior adopted a revised CICA Handbook
        section related to Inventory. This section impacts the calculation of
        the cost of inventory at ERCO Worldwide, 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 months ended March 31, 2009 and 2008, for
        purposes of the management's discussion and analysis, Superior has
        excluded $9.1 million and $10.6 million in non-cash amortization from
        cost of sales in the calculation of ERCO Worldwide's EBITDA from
        operations.
    (3) For the three months ended March 31, 2009 and 2008, for purposes of
        the management's discussion and analysis, Superior has reclassified
        $0.7 million and $1.2 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.
    

    Chemical and technology revenues for the first quarter of $120.2 million
were $3.1 million higher than the prior year quarter due to higher chemical
revenue as improved chemical pricing more than offset reduced chemical sales
volumes. Technology revenues were lower than the prior year quarter due to
reduced project activity. First quarter gross profit was $62.7 million,
comprised of $61.3 million from chemical sales and $1.4 million from
technology projects. Chemical gross profit was $9.5 million higher than the
prior year quarter due to higher chloralkali/potassium gross profit which more
than offset reduced sodium chlorate gross profit. Chloralkali/potassium gross
profit was higher than the prior year quarter as an increase in the average
aggregate selling price more than offset a 1,000 tonne or 2% reduction in
sales volumes. Sales prices for potassium based products for the first quarter
of 2009 were at historically high levels in response to the increase in the
cost of potash, the primary input cost in the production of potassium
products. Sales volumes of chloralkali/potassium products in the first quarter
were impacted by inventory management and production adjustments at its Port
Edward's, Wisconsin chloralkali facility, as ERCO prepares for the
expansion/conversion of the facility from a mercury based technology to a
membrane technology. The conversion is anticipated to be completed in the
third quarter of 2009. Sodium chlorate gross profits were lower than the prior
year as reduced sales volumes more than offset a 9% increase in average
selling prices. Sodium chlorate sales volumes decreased by 35,000 tonnes or
27% due principally to reduced sales volumes in North America as a result of
reduced demand for pulp. Weaker demand for pulp, and therefore sodium chlorate
in North America was due principally to the global economic slow down.
Technology gross profit was $0.5 million lower than the prior year quarter due
to reduced project activity and the normal course expiration of royalty
revenues.
    Cash operating and administrative costs of $30.6 million were $2.9
million or 10% higher than the prior year quarter, due principally to the
impact of the appreciation of the US dollar on US-denominated expenses and
higher provisions for potential bad debts.
    During 2007, ERCO determined that it will convert its Port Edwards,
Wisconsin chloralkali facility from mercury based technology to membrane
technology. The project maintains the facility's ability to produce both
sodium and potassium products, provides increased production capacity of
approximately 30%, provides a significant extension of the plant life and
enhances the efficiency of ERCO's use of electrical energy. The cost of the
conversion is estimated to be US $130 million. See "Consolidated Capital
Expenditure Summary" for additional details on costs incurred related to Port
Edwards.

    Outlook

    ERCO expects EBITDA from operations for 2009 to be between $100 million
and $110 million. ERCO's previous outlook as provided in the fourth quarter
2008 Financial Discussion was $105 million to $115 million. The reduction in
ERCO's guidance reflects reduced chloralkali production at the Port Edwards,
Wisconsin facility due to the conversion and the ongoing impact of reduced
sales volume for sodium chlorate due to the current economic environment.
ERCO's significant assumptions underlying its current outlook are:

    
    -   Current supply and demand fundamentals for sodium chlorate will
        remain weak, resulting in reduced sales volumes for 2009;
    -   Chloralkali/potassium gross profits will be impacted by lower sales
        prices compared to historically high levels in the first quarter of
        2009 and the second half of 2008.
    -   ERCO's average plant utilization is expected to be approximately
        80-90%;
    -   The foreign currency exchange rate between the Canadian and United
        States dollar is expected to be 1.25 on all unhedged foreign currency
        transactions;
    -   ERCO's conversion of its Port Edwards, Wisconsin chloralkali facility
        from mercury based technology to membrane technology for
        US $130 million is expected to be completed on-budget in the third
        quarter of 2009; and
    -   No incremental cash flow is anticipated as a result of the Port
        Edward's project in 2009, except for the impact of reduced US cash
        income taxes which does not form part of ERCO's EBITDA from
        operations.
    

    In addition to ERCO's significant assumptions detailed above, refer to
the section "Risk Factors to Superior" for a detailed review of ERCO's
significant business risk.

    Construction Products Distribution

    Winroc generated EBITDA from operations of $1.5 million in the first
quarter, a decrease of $3.3 million or 69% from the prior year quarter, as
reduced gross profit more than offset lower operating expenses.
    Condensed operating results for the three months ended March 31, 2009 and
2008 are provided in the following table.

    
    -------------------------------------------------------------------------
                                                          Three months ended
                                                                March 31
    (millions of dollars)                                  2009         2008
    -------------------------------------------------------------------------
    Distribution and direct sales revenue                  94.1        115.4
    Distribution and direct sales cost of sales           (69.7)       (86.8)
    -------------------------------------------------------------------------
    Distribution and direct sales gross profit             24.4         28.6
    Less: Cash operating and administrative costs         (22.9)       (23.8)
    -------------------------------------------------------------------------
    EBITDA from operations                                  1.5          4.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Distribution and direct sales revenues of $94.1 million for the first
quarter of 2009 was $21.3 million or 18% lower than the prior year quarter due
to reduced sales volumes and lower selling prices. Distribution and direct
sales gross profit of $24.4 million in the first quarter was $4.2 million or
15% lower than the prior year quarter, as the impact of reduced sales volumes
was offset in part by higher volumes due to the acquisition of Fackoury's
Building Supplies Ltd. (Fackoury's) on May 9, 2008 and the impact of improved
sales margins. Distribution drywall sales volumes, an indicator of overall
distribution sales volumes, decreased 21% compared to the prior year quarter.
The decrease in distribution sales volumes was largely due to the ongoing
slowdown in new home residential housing starts, particularly in the Southwest
and Midwest U.S., and more generally due to the ongoing economic slowdown
through North America. Additionally, volumes in Canada were negatively
impacted by adverse weather conditions during the first quarter of 2009, which
was compounded by the fact that the first quarter is historically Winroc's
weakest quarter in terms of sales volumes. Sales volumes in Ontario were
higher than the prior year quarter due principally to the acquisition of
Fackoury's. Percentage sales margins were consistent to modestly higher
compared to the prior year quarter, due in part to the continued focus on
margin management and improved geographic and product sales mix. Cash
operating and administrative costs of $22.9 million were $0.9 million or 4%
lower than the prior year quarter as reduced warehouse wages and fleet costs
due to reduced sales volumes, were partially offset by increased costs due to
the acquisition of Fackoury's and the impact of the appreciation of the US
dollar on US-denominated expenses.

    Outlook

    Winroc expects EBITDA from operations for 2009 to be between $20 million
and $27 million. Winroc's previous outlook as provided in the 2008 fourth
quarter Financial Discussion was $28 million to $35 million. The reduction in
Winroc's 2009 outlook reflects the ongoing impact of reduced sales volumes due
to the current economic environment within North America, which is anticipated
to continue to negatively impact Winroc's operations. Winroc's significant
assumption underlying its current outlook is:

    
    -   Sales volumes are expected to continue to be negatively impacted by
        the ongoing decline in new home residential and commercial activity
        in both Canada and the United States.
    -   Current economic conditions in Canada and the United States will
        improve in the last half of 2009 with continued improvement
        throughout 2010.
    

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

    Fixed-Price Energy Services

    SEM's condensed operating results for the three months ended March 31,
2009 and 2008 are provided below.

    

    -------------------------------------------------------------------------
                                                          Three months ended
                                                                March 31
    (millions of dollars)                                  2009         2008
    -------------------------------------------------------------------------
    Revenue                                                76.4         81.9
    Cost of sales(1),(2)                                  (69.4)       (75.1)
    -------------------------------------------------------------------------
    Gross profit                                            7.0          6.8
    Less: Operating, administrative and
     selling costs(2)                                      (5.5)        (4.8)
    -------------------------------------------------------------------------
    EBITDA from operations                                  1.5          2.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 8 and 12 to the unaudited Interim Consolidated
        Financial Statements.) In order to better reflect the results of its
        operations, Superior has reclassified these amounts for purposes of
        this management's discussion and analysis to present its results as
        if it had accounted for these transactions as accounting hedges. As
        such, included in cost of sales for the three months ended March 31,
        2009, is $0.9 million in realized foreign currency forward contract
        gains and $17.9 million related to natural gas commodity realized
        fixed price losses. Included in cost of sales for the three months
        ended March 31, 2008, is $6.3 million in realized foreign currency
        forward contract losses and $1.7 million related to natural gas
        commodity realized fixed price gains.
    (2) For the three months ended March 31, 2009 and 2008, for purposes of
        this management's discussion and analysis, Superior has reclassified
        $0.2 million and $0.6 million of foreign currency translation losses
        related to US-denominated working capital from operating and
        administrative expense to cost of sales. 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.

    Gross Profit by Segment
    -------------------------------------------------------------------------
    (millions
     of dollars
     except
     volume            Three months ended             Three months ended
     and per             March 31, 2009                 March 31, 2008
     unit      Gross                           Gross
     amounts) Profit    Volume       Per Unit Profit   Volume        Per Unit
    -------------------------------------------------------------------------

    Natural
     Gas(1)     6.78    8.1 GJ  83.7 cents/GJ   6.64   8.7 GJ   76.3 cents/GJ
    Electri-
     city(2)    0.22  30.9 KWh 0.71 cents/KWh   0.16  10.4KWh  1.54 cents/KWh
    -------------------------------------------------------------------------
    Total       7.00                            6.80
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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).
    

    SEM generated EBITDA from operations of $1.5 million in the first
quarter, a decrease of $0.5 million compared to the prior year quarter. SEM's
revenues were $76.4 million in the first quarter, compared to $81.9 million in
the prior year quarter. Revenues were impacted by reduced natural gas sales
volumes, offset in part, by an increase in electricity revenues due to higher
sales volumes. Gross profit from natural gas was $6.8 million in the first
quarter, an increase of $0.2 million or 3% compared to the prior year quarter
as gross profit per gigajoule (GJ) was 83.7 cents per GJ, a 10% increase over
the prior year quarter, offsetting a 7% decrease in natural gas volume sold.
The increase in gross profit compared to the prior year quarter is due
principally to the impact of the revaluation of US-denominated working capital
which resulted in a net increase of gross profit of $0.4 million compared to
the prior year quarter. Natural gas sales volumes were lower than the prior
year quarter due to challenges in the Ontario residential market with the
acquisition of new customers and the retention of SEM's existing customers in
the Ontario market. The acquisition and retention of customers was challenged
due in part to the low system price of natural gas compared to the fixed-rate
alternative SEM is able to currently offer, as the perceived benefit of
entering into a long-term contract is reduced at the current system price of
natural gas. Similar to the sign-up of natural gas customers, SEM's sign-up
for residential fixed-price electricity customers has been lower than expected
due to a low regulated price for electricity. Operating, administration and
selling costs of $5.5 million was $0.7 million higher than the prior year
quarter due to higher selling and marketing costs. Electricity gross profit in
the first quarter of 2009 was $0.2 million, modestly higher than the prior
year quarter due to the aggregation of additional commercial customers over
the past twelve months.
    As a result of the challenges in the acquisition and retention of SEM's
Ontario residential natural gas and electricity customers as noted above, SEM
has determined that it will refocus its efforts away from direct residential
natural gas and electricity marketing in Ontario. Instead, SEM will focus its
efforts on the acquisition and retention of commercial natural gas and
electricity customers in Ontario and Quebec and on its successful residential
natural gas operations in BC. The change in SEM's strategy is expected to have
a positive impact on its current cost structure, while maintaining the
scalability and infrastructure of its existing business model which would
allow SEM to re-enter the Ontario residential market when direct residential
market conditions improve. SEM will continue to extend or renew its existing
Ontario based residential customers. Additionally, SEM will continue to pursue
residential and commercial natural gas customers in British Columbia and
commercial customers in Quebec.
    SEM invested $0.9 million in customer acquisition costs during the
quarter, resulting in a customer base of 91,300 residential natural gas
customers, 6,400 commercial natural gas customers and 4,400 electricity
customers. As at March 31, 2009, the average remaining term of SEM's contracts
was 25 months (March 31, 2008 - 31 months), reflecting the slowdown in the
sign-up of new customers, and the retention of existing customers. Residential
and small commercial customer volumes comprised approximately 29% of sales
volumes in the first quarter (2008 first quarter - 30%).

    Outlook

    SEM expects EBITDA from operations for 2009 to be between $9 million and
$12 million, consistent with SEM's previous outlook as provided in fourth
quarter 2008 Financial Discussion. SEM's significant assumptions underlying
its current outlook are:

    
    -   SEM is able to access sales channel distributors on acceptable
        contract terms;
    -   Natural gas markets in Ontario, Quebec and British Columbia will
        provide growth opportunities for SEM; and
    -   The commercial electricity market in Ontario is expected to provide
        additional growth opportunities for SEM.

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

    Consolidated Capital Expenditure Summary
    -------------------------------------------------------------------------
                                                          Three months ended
                                                                March 31
    (millions of dollars)                                  2009         2008
    -------------------------------------------------------------------------
    Efficiency, process improvement and growth related      7.8          3.8
    Other capital                                           1.5          1.6
    Port Edwards expansion project                         26.6          5.2
    -------------------------------------------------------------------------
                                                           35.9         10.6
    Earn-out payment on prior acquisition                   0.6            -
    Proceeds on disposition of capital                     (1.8)        (0.2)
    -------------------------------------------------------------------------
    Total net capital expenditures                         34.7         10.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Efficiency, process improvement and growth related expenditures were $7.8
million in the first quarter compared to $3.8 million in the prior year
quarter. Efficiency, process improvement and growth related expenditures were
incurred in relation to ERCO's electrical cell replacement program and
Superior Propane's business transformation project. Other capital expenditures
were $1.5 million in the first quarter compared to $1.6 million in the prior
year quarter, consisting primarily of required maintenance and general capital
at Superior Propane and ERCO. Proceeds on the disposal of capital were $1.8
million in the first quarter and consisted of Superior Propane's disposition
of an excess property and surplus tanks and cylinders. ERCO incurred $26.6
million (US$21.2 million) in the first quarter of 2009 related to its Port
Edward's expansion project, and has incurred US$66.0 million cumulatively on
the project which is anticipated to cost US$130.0 million in aggregate. An
earn-out payment of $0.6 million was paid in the first quarter of 2009 related
to Winroc's acquisition of Leon's (acquired in the second quarter of 2005)
based upon the business achieving post-acquisition profitability targets.

    Corporate and Interest Costs

    Corporate costs for the first quarter were $3.4 million, compared to $3.5
million in the prior year quarter. Corporate costs were impacted by higher
professional and consulting related costs in the current year quarter, offset
by lower long-term incentive plan costs due to fluctuations in the market
value of Superior's share price.
    Interest expense on revolving term bank credits and term loans was $6.5
million for the first quarter, an increase of $0.4 million from the prior year
quarter. The increase in interest expense was due to the impact of the
appreciation of the US dollar on US-denominated interest costs and higher
average debt levels, offset in part by lower interest rates on floating rate
debt. See "Liquidity and Capital Resources" discussion for further details on
the change in average debt levels.
    Interest on Superior's unsecured subordinated convertible debentures (the
debentures) was $3.8 million for the first quarter of 2009, consistent with
the prior year quarter interest of $3.7 million.

    Taxation

    On December 31, 2008, Superior converted from a publicly traded income
trust to a publicly traded corporation by way of a plan of arrangement with
Ballard Power for cash consideration of $46.3 million. The transaction
resulted in Superior increasing its tax basis by approximately $1,013.0
million. Additional consideration may be payable/receivable to/from Ballard in
future periods based on the finalization of tax basis available to Superior.
Superior's calculation of current and future income taxes for the period ended
March 31, 2009 is based on the conversion to a corporate structure effective
December 31, 2008, whereas Superior's calculation of current and future income
taxes for the period ended March 31, 2008 is based on Superior being a
publicly traded income trust. 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 recovery for the first quarter was $16.8 million, and
consists of $5.0 million in cash income taxes and a $21.8 million future
income tax recovery, compared to a total income tax expense of $18.0 million
in the prior year quarter, which consisted of $1.7 million in cash income
taxes and a $16.3 million future income tax expense.
    Cash income and withholding taxes for the first quarter was $5.0 million
and consisted of cash taxes in the US of $4.7 million and Canadian capital and
withholding taxes of $0.3 million (2008 Q1 - $1.7 million of US cash taxes).
The increase in US cash income taxes was due to higher US-denominated taxable
earnings as a result of improved operating results at ERCO's US facilities.
Future income tax recovery for the first quarter of 2009 was $16.5 million
(2008 Q1 - $16.3 million future income tax expense), resulting in a
corresponding net future income tax asset of $259.9 million as at March 31,
2009 and a net deferred credit of $293.7 million. Future income taxes were
impacted by Superior's conversion to a corporation on December 31, 2008 and
the impact of unrealized gains and losses on financial instruments.

    Consolidated Outlook

    Superior expects adjusted cash flow from operations for 2009 to be
between $2.00 and $2.15 per share and for 2010 to be between $2.20 and $2.40
per share. Superior's previous outlook for 2009 was $2.00 and $2.20 per share
and for 2010 to be between $2.20 and $2.40 per share, as provided in the
fourth quarter 2008 Financial Discussion. Superior has narrowed the range of
its outlook for 2009 as a result of the 2009 first quarter financial results.
Superior's outlook for 2010 is unchanged from its previous outlook. Superior's
consolidated adjusted operating cash flow outlook is predominantly dependent
on the operating results of its four divisions. See the discussion of
operating results by division for additional details on Superior's 2009
guidance. In addition to the operating results of Superior's four divisions,
significant assumptions underlying Superior's current 2009 and 2010 outlook
are:

    
    -   Current economic conditions in Canada and the United States will
        improve in the last half of 2009 with continued improvement
        throughout 2010;
    -   Superior continues to attract capital and obtain financing on
        acceptable terms;
    -   The foreign currency exchange rate between the Canadian and US dollar
        averages 1.25 in 2009 and 1.15 in 2010 on all unhedged foreign
        currency transactions;
    -   Superior's average interest rate on floating rate debt remains stable
        to marginally lower throughout 2009, increasing modestly in 2010;
    -   Financial and physical counterparties continue to fulfill their
        obligations to Superior;
    -   Regulatory authorities do not impose any new regulations impacting
        Superior;
    -   EBITDA from operations of the divisions in 2010 is consistent, to
        modestly improved, compared to 2009;
    -   Incremental EBITDA is generated in 2010 from the Port Edward's
        expansion project, which is due to be completed in the third quarter
        of 2009; and
    -   US cash income taxes will be reduced due the completion of the Port
        Edward's expansion project in the third quarter of 2009.
    

    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 and term loans before deferred
financing fees, including $125.0 million related to Superior's accounts
receivable securitization program totaled $552.2 million as at March 31, 2009,
a decrease of $25.5 million from December 31, 2008. The decrease in revolving
term bank credits and terms loans is predominately due to the repayment of
debt with cash flow in excess of dividends for the quarter ended March 31,
2009, offset by the impact of capital expenditures and the non-cash impact of
the appreciation of the US dollar on US-denominated debt (approximately a $8.5
million impact). Superior's existing revolving term credit facility has
borrowing capacity of $595.0 million and matures on June 28, 2010. As at May
6, 2009, Superior had credit commitments of $570.0 million related to the
extension of its revolving term credit facility from a maturity of June 28,
2010 until June 28, 2011. See "Summary of Cash Flows" for a complete summary
of Superior's sources and uses of cash.
    As at March 31, 2009, debentures before deferred issue costs issued by
Superior totaled $247.9 million, which is $0.2 million higher than the balance
at December 31, 2008. The change in the stated cost of the debentures is due
to the accretion of the original discount to interest expense during the
quarter ended March 31, 2009.
    As at March 31, 2009, approximately $339.2 million was available under
Superior's credit facilities 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 $83.7 million as at March 31, 2009,
a decrease of $63.0 million from $146.7 million as at December 31, 2008. The
reduction in net working capital is due to lower working capital levels at
Superior Propane due to the reduction in the retail cost of propane and a
$25.0 million increase in Superior's accounts receivable securitization
program. Corporate related working capital was impacted by the requirement to
fund the December 31, 2008 distribution to Superior's trust agent in advance
of the payment on January 15, 2008 and reduced cash on-hand. 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.
    Proceeds received from Superior's distribution reinvestment plan (DRIP)
were $nil for the three months ended March 31, 2009, and $8.9 million for the
three months ended March 31, 2008. The reduction in proceeds related to the
DRIP is the result of Superior announcing on February 28, 2008, that it would
suspend the DRIP after the February 2008 distribution. In February of 2009,
Superior adopted a dividend reinvestment plan in relation to its conversion to
a corporation. The current DRIP can be implemented at Superior's request.
    As at March 31, 2009, Superior's senior debt and total debt to compliance
EBITDA are 2.2 and 3.1 times, respectively, (December 31, 2008, 2.3 and 3.4
times), 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, a consolidated senior debt to compliance
EBITDA of not more than 3.0 to 1.0 and 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, 2008, the senior debt ratio when calculated in
accordance with Superior's senior banking agreements was 2.2 times to 1.0
(December 31, 2008 - 2.4 to 1.0) and the total debt ratio when calculated in
accordance with Superior's senior bank agreements was 2.2 times to 1.0
(December 31, 2008 - 2.4 times to 1.0). Total debt to compliance EBITDA for
purposes of senior credit agreements does not include the debentures.
    Superior has entered into an agreement to sell, with limited recourse,
certain accounts receivables 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 March 31, 2009, proceeds of $125.0 million (December 31,
2008 - $100.0 million) had been raised from this program and were used to
repay revolving term bank credits. (See Note 4 to the unaudited Interim
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 30, 2008, Superior announced its intention to convert from a
trust to a corporation, completing this transaction on December 31, 2008. On
October 30, 2008, DBRS confirmed Superior's senior secured notes rating at BBB
(low) with a stable outlook. On October 31, 2008, Standard and Poor's
confirmed Superior's BBB- (negative outlook) secured long-term debt credit
rating. On November 14, 2008, Standard and Poor's removed Superior's negative
outlook and confirmed its credit ratings BBB- secured and BB+ unsecured.
    At March 31, 2009, Superior had an estimated defined benefit pension
solvency deficiency of approximately $36 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 first
quarter was 88.4 million shares, an increase of 0.3 million shares compared to
the prior year quarter, due to shares issued under the DRIP in the prior year
quarter.
    As at May 6, 2009, March 31, 2009 and December 31, 2008, the following
shares and securities convertible into shares were outstanding:

    

    -------------------------------------------------------------------------
                                   May 6,         March 31,      December 31,
                                    2009              2009              2008
                          Convert-          Convert-          Convert-
                            ible              ible              ible
                           Secur-            Secur-            Secur-
    (millions)             ities  Shares     ities  Shares     ities  Shares
    -------------------------------------------------------------------------
    Shares outstanding              88.4              88.4              88.4
    Series 1, 5.75%
     Debentures
     (convertible at
     $36.00 per share)    $174.9     4.9    $174.9     4.9    $174.9     4.9
    Series 1, 5.85%
     Debentures
     (convertible at
     $31.25 per share)     $75.0     2.4     $75.0     2.4     $75.0     2.4
    -------------------------------------------------------------------------
    Shares outstanding,
     and issuable upon
     conversion of
     Debenture and
     Warrant securities             95.7              95.7              95.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Dividends Paid to Shareholders

    Superior's dividends to its shareholders are dependent on its cash flow
from operating activities with consideration for changes in working capital
requirements, investing activities and financing activities of Superior. See
"Summary of Adjusted Operating Cash Flow" on page 8 and "Summary of Cash
Flows" on page 20 for additional details on the sources and uses of Superior's
cash flow.
    Dividends paid to shareholders for the quarter ended March 31, 2009
totaled $35.8 million or $0.405 per share, compared to $34.8 million or $0.395
per share in the first quarter of 2008. The increase in dividends paid to
shareholders is the result of Superior increasing its monthly dividend to
$0.135 per share ($1.62 on an annualized basis) from $0.13 per share effective
with the payment of the March 2008 dividend.

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

    

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

    Cash flows from operating activities                   83.4         63.2

    Investing activities:
      Purchase of property, plant and equipment(2)        (35.9)       (10.6)
      Proceeds on disposal of property,
       plant and equipment                                  1.8          0.2
      Earn-out payment on prior acquisition                (0.6)           -
    -------------------------------------------------------------------------
    Cash flows from investing activities                  (34.7)       (10.4)
    -------------------------------------------------------------------------

    Financing activities:
      Dividends to shareholders                           (35.8)       (34.8)
      Revolving term bank credits and term loans          (59.1)        74.0
      Net proceeds of accounts receivable
       securitization program                              25.0       (100.0)
      Other                                                15.5            -
      Proceeds from distribution reinvestment plan            -          8.9
    -------------------------------------------------------------------------
    Cash flows from financing activities                  (54.4)       (51.9)
    -------------------------------------------------------------------------

    Net increase (decrease) in cash                        (5.7)         0.9
    Cash beginning of period                               16.1         14.1
    -------------------------------------------------------------------------
    Cash end of period                                     10.4         15.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) See the unaudited Interim 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, SEM enters into natural gas financial swaps primarily
with 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, SEM continues to
maintain its historical natural gas swap positions with seven additional
counterparties. SEM monitors its fixed-price natural gas positions on a daily
basis to evaluate compliance with established risk management policies. SEM
maintains a substantially balanced fixed-price natural gas position in
relation to its customer supply commitments.
    SEM enters into electricity financial swaps with two counterparties to
manage the economic exposure of providing fixed-price electricity to its
customers. SEM monitors its fixed-price electricity positions on a daily basis
to evaluate compliance with established risk management policies. SEM
maintains a substantially balanced fixed-price electricity position in
relation to its customer supply commitments.
    ERCO 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 Propane 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. Superior Propane monitors
its fixed-price propane positions on a daily basis to monitor compliance with
established risk management policies. Superior Propane 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. SEM and Superior Propane contract a portion of their 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. ERCO 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 March 31, 2009, SEM and Superior Propane had hedged approximately
100% of their US dollar natural gas and propane purchase (sales) obligations
and ERCO Worldwide had hedged 64%(3) and 56%(3) of its estimated US dollar
exposure for the remainder of 2009 and 2010. 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 2009 is $0.4 million, after giving
effect to United States forward contracts for 2009, as shown in the table
below. Superior's sensitivities and guidance are based on an anticipated
Canadian to USD foreign currency exchange rate for 2009 of 1.25.

    
    -------------------------------------------------------------------------
                                                                 2014
                                                                  and
                                                                There-
    (US$ millions)            2009   2010   2011   2012   2013  after  Total
    -------------------------------------------------------------------------
    SEM - US$ forward
     purchases(1)             78.9   61.9    5.4      -      -      -  146.2
    Superior Propane -
     US$ forward
     purchases (sales)        10.9   (3.1)     -      -      -      -    7.8
    Superior Plus LP(2)          -      -      -      -      -   60.0   60.0
    ERCO - US$ forward
     sales(3)                (69.7) (78.4) (36.0)     -      -      - (184.1)
    -------------------------------------------------------------------------
    Net US $ forward
     purchases                20.1  (19.6) (30.6)     -      -   60.0   29.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SEM - Average US$
     forward purchase
     rate(1)                  1.21   1.16   1.11      -      -      -   1.18
    Superior Propane -
     Average US$
     forward rate             1.08   1.21      -      -      -      -   1.11
    Superior Plus LP(2)          -      -      -      -      -   1.00   1.00
    ERCO - Average US$
     forward sales rate(3)    1.06   1.06   1.26      -      -      -   1.10
    -------------------------------------------------------------------------
    Net average external
     US$/Cdn$ exchange rate   1.13   1.10   1.24      -      -   1.00   1.12
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    ERCO - EURO forward
     sales                    (3.1)  (5.1)  (0.3)     -      -      -   (8.5)
    -------------------------------------------------------------------------
    ERCO - Average EURO
     forward sales rate       1.59   1.58   1.58      -      -      -   1.58
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) SEM is now sourcing its fixed-price natural gas requirements in
        Canadian dollars, as such, SEM will no longer be required to use
        United States dollar forward contracts to fix its Canadian dollar
        exposure.
    (2) Superior has entered into US$ forward purchase contracts for
        $60.0 million in relation to the repayment profile of its US dollar
        senior secured notes. (See Note 6 of the unaudited Interim
        Consolidated Financial Statements).
    (3) Does not include the impact of the US$ conversion of ERCO's Port
        Edwards, Wisconsin chloralkali facility which is anticipated to cost
        US$130.0 million in aggregate, of which $26.6 million
        (US$21.2 million) was incurred in the first quarter of 2009,
        (US$66.0 million cumulatively) with the remaining costs expected
        throughout 2009.
    

    Superior has 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. Superior Propane and Winroc
deal with a large number of small customers, thereby reducing this risk. ERCO,
due to the nature of its operations, sells its products to a relatively small
number of customers. ERCO mitigates its customer credit risk by actively
monitoring the overall credit worthiness of its customers. SEM has minimal
exposure to customer credit risk as local natural gas and electricity
distribution utilities have been mandated, for a nominal fee, to provide SEM
with invoicing, collection and the assumption of bad debts risk for
residential and small commercial customers. SEM actively monitors the credit
worthiness of its industrial customers.
    For additional details on Superior's financial instruments, including the
amount and classification of gains and losses recorded in Superior's first
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 8
to the Interim Consolidated Financial Statements.

    Changes in Internal Control over Financial Reporting

    During the first quarter of 2009, Superior made changes in the processes
and procedures at SEM in response to the two material weaknesses referenced in
the 2008 annual certification. During the first quarter, management has
overseen changes to ensure the specific internal controls are effective.
Management has confirmed through ongoing monitoring and independent review
that the key reconciliation at SEM and controls over the mark-to-market
calculation at SEM operated effectively throughout the first quarter.
Management will continue to monitor and test these controls throughout 2009.

    Critical Accounting Policies and Estimates

    Superior's unaudited Interim Consolidated Financial Statements have been
prepared in accordance with Canadian 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 Interim 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 Canadian 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 Canadian GAAP with International Financial
Reporting Standards (IFRS) for publicly accountable enterprises, including
Superior Plus Corp. The changeover date from Canadian 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
Canadian 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. Upon completion of a comprehensive
diagnostic, Superior will focus its efforts 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, disclose 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 Canadian GAAP;
    -   Asset impairments recorded in prior years, under certain
        circumstances, are eligible to be reversed under IFRS;
    -   The classification of financial statement items may differ under
        IFRS; and
    -   Financial statement disclosures under IFRS tend to be more robust
        than those under Canadian GAAP.

    Superior will continue to assess the impact of IFRS throughout 2009,
including the impact on its consolidated financial statements, financial
reporting systems and internal control systems.

    Quarterly Financial and Operating Information
    -------------------------------------------------------------------------
                                    2009                 2008
                                Quarters               Quarters
    -------------------------------------------------------------------------
    (millions of dollars except
     per share amounts)            First   Fourth    Third   Second    First
    -------------------------------------------------------------------------
    Propane sales volumes
     (millions of litres)            431      390      244      274      469
    Chemical sales volumes
     (thousands of metric tonnes)    155      160      188      188      191
    Natural gas sales volumes
     (millions of GJs)                 8        8        8        8        9
    Electricity sales volumes
     (millions of KWh)                31       28       18       14       10
    Gross profit                   188.3    193.1    152.8    153.3    169.9
    Net earnings (loss)             (5.5)   (19.9)  (203.9)   164.3    127.2
    Per share, basic              $(0.06)  $(0.23)  $(2.31)   $1.86    $1.44
    Per share, diluted            $(0.06)  $(0.23)  $(2.31)   $1.86    $1.44
    Adjusted operating cash flow    61.3     65.0     33.5     38.1     55.7
    Per share, basic               $0.69    $0.74    $0.38    $0.43    $0.63
    Per share, diluted             $0.69    $0.74    $0.38    $0.43    $0.63
    Net working capital(1)          83.7    152.2    227.4    217.6    256.3
    -------------------------------------------------------------------------


    ----------------------------------------------------------------
                                                2007
                                              Quarters
    ----------------------------------------------------------------
    (millions of dollars except
     per share amounts)           Fourth    Third   Second    First
    ----------------------------------------------------------------
    Propane sales volumes
     (millions of litres)            416      256      280      477
    Chemical sales volumes
     (thousands of metric tonnes)    194      187      193      194
    Natural gas sales volumes
     (millions of GJs)                 9        9        9       10
    Electricity sales volumes
     (millions of KWh)                 2        -        -        -
    Gross profit                   185.8    145.9    144.4    185.7
    Net earnings (loss)             64.5    (26.9)   (25.5)   107.7
    Per share, basic               $0.74   $(0.31)  $(0.30)   $1.26
    Per share, diluted             $0.74   $(0.31)  $(0.30)   $1.26
    Adjusted operating cash flow    64.9     30.3     21.7     62.6
    Per share, basic               $0.74    $0.35    $0.25    $0.73
    Per share, diluted             $0.74    $0.35    $0.25    $0.73
    Net working capital(1)         157.0     62.3    105.2    134.3
    ----------------------------------------------------------------
    (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 (Loss) to EBITDA from
    Operations(1),(2),(3)
    -------------------------------------------------------------------------
    For the three months ended           Superior
     March 31, 2009                       Propane     ERCO   Winroc      SEM
    -------------------------------------------------------------------------
    Net earnings (loss)                      37.1      6.8      0.4    (53.5)
    Add: Amortization of property,
          plant and equipment,
          intangible assets and accretion
          of convertible debenture
          issue costs                         6.2      1.1      1.1      0.2
         Amortization included in cost
          of sales                              -      9.1        -        -
         Superior Propane non-cash
          pension expense                     0.4        -        -        -
         Unrealized (gains) losses on
          financial instruments               1.2     15.1        -     54.8
    -------------------------------------------------------------------------
    EBITDA from operations                   44.9     32.1      1.5      1.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    For the three months ended           Superior
     March 31, 2008                       Propane     ERCO   Winroc      SEM
    -------------------------------------------------------------------------
    Net earnings (loss)                      30.5     30.8      3.8     87.1
    Add: Amortization of property,
          plant and equipment,
          intangible assets and accretion
          of convertible debenture
          issue costs                         3.8      1.0      1.0        -
         Amortization included in cost
          of sales                              -     10.6        -        -
         Superior Propane non-cash
          pension expense                     0.6        -        -        -
         Unrealized (gains) losses on
          financial instruments               3.0    (16.4)       -    (85.1)
    -------------------------------------------------------------------------
    EBITDA from operations                   37.9     26.0      4.8      2.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) See the unaudited Interim Consolidated Financial Statements for net
        earnings (loss), amortization of property, plant and equipment,
        intangible assets and accretion of convertible debenture issue costs,
        tax expense (recovery), management internalization costs, non-cash
        pension expense and unrealized (gains) losses on financial
        instruments.
    (2) See "Non-GAAP Financial Measures" for additional details.
    (3) For the three months ended March 31, 2009, Superior has reclassified
        $2.7 million of unrealized losses as a component of EBITDA from
        operations, related to Superior Propane's wholesale trading business.
    

    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., the General Partner
of Superior LP, 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 Superior Propane's sales
and substantially all of ERCO and Winroc'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.
    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 is or may be exposed to third-party credit risk relating to any
obligations of Ballard that are not transferred, or if transferred, from which
obligations Superior has not been released. Superior has, through the
contractual provisions in the agreement entered into with Ballard in
connection with Superior's corporate conversion (the Arrangement Agreement),
the indemnity agreement and the divestiture agreement contemplated thereby,
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 and to the extent any applicable insurance
coverage is not available, Superior may be liable for such obligations which
could have a material adverse effect on the business, financial condition and
results of operations of Superior.
    Although Superior has conducted investigations of, and engaged legal
counsel to review, the corporate, legal, financial and business records of
Ballard and attempted to ensure, through the contractual provisions in the
Arrangement Agreement, the indemnity agreement and the divestiture agreement,
and through securing certain insurance coverage, that the liabilities and
obligations relating to the business of Ballard are transferred to and assumed
by the new corporation which continued to carry on Ballard's business (New
Ballard), there may be liabilities or risks that Superior may not have
uncovered in its due diligence investigations, or that may have an
unanticipated material adverse effect on Superior. These liabilities and risks
could have, individually or in the aggregate, a material adverse effect on the
business, financial condition and results of operations of Superior.
    The steps under the plan of arrangement pursuant to which the corporate
conversion was completed (the Plan of Arrangement) were structured to be
tax-deferred to the Fund and Fund Unitholders based on proposals to facilitate
tax deferred conversions of certain mutual fund trusts into taxable Canadian
corporations (the SIFT Reorganization Amendments) proposed by the Department
of Finance on July 14, 2008. On March 5, 2009 the Budget Implementation Act,
2009 (Bill C-10 (2009)), which includes the SIFT Reorganization Amendments,
received second reading in the Senate and has been referred to the Senate
Standing Committee on National Finance. If the SIFT Reorganization Amendments
are not passed in their current form or other legislation or amendments to
existing legislation are proposed or announced, there is a risk that the tax
consequences contemplated by the Fund or the tax consequences of the Plan of
Arrangement to the Fund and the Unitholders may be materially different from
the tax consequences described in the Plan of Arrangement. While Superior is
confident in its position, there is a possibility that the Canada Revenue
Agency could successfully challenge the tax consequences of the Plan of
Arrangement or prior transactions of Ballard, or that legislation could be
enacted or amended resulting in different tax consequences from those
contemplated in the Plan of Arrangement for Superior. Such a challenge or
legislation could potentially affect the availability or amount of the tax
basis or other tax accounts of Superior.

    Risks to the Businesses

    Superior Propane
    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 Propane competes with other retail marketers. Superior
Propane's ability to remain an industry leader depends on its ability to
provide reliable service at competitive selling prices.
    Weather and general economic conditions affect propane market volumes.
Weather influences the demand for propane 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 Propane'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
Propane purchases the propane and when the customer purchases the propane) may
result in positive or negative gross margin fluctuations.
    Superior Propane offers its customers various fixed-price propane
programs. In order to mitigate the price risk from offering these services,
Superior Propane 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 Propane'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 Propane 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.
    Approximately 22% of Superior Propane's employees are unionized.
Collective bargaining agreements are renegotiated in the normal course of
business.

    ERCO
    ERCO 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 ERCO's products are correlated to the general economic
environment and the competitiveness of its customers, all of which are outside
of its control.
    ERCO 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 ERCO 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 ERCO's Port Edwards, Wisconsin facility.
Substantially all of ERCO's KCl is received from Potash Corporation of
Saskatchewan (Potash). ERCO currently has a limited ability to source KCl from
additional suppliers.
    ERCO is exposed to fluctuations in the US dollar and the euro to the
Canadian dollar.
    ERCO's 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.
    ERCO's 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 ERCO.
    Approximately 25% of ERCO employees are unionized. Collective bargaining
agreements are renegotiated in the normal course of business.

    Winroc
    Winroc competes with other specialty construction distributors servicing
the builder/contractor market, in addition to big-box home centres and
independent lumber yards. Winroc's 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 Winroc's products and services.
    Approximately 8% of Winroc's employees are unionized. Collective
bargaining agreements are renegotiated in the normal course of business.

    SEM
    New entrants in the energy retailing business may enter the market and
compete directly for the customer base that SEM targets, slowing or reducing
its market share.
    SEM 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 SEM 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, SEM closely monitors its
balancing position and takes measures such as adjusting gas deliveries and
transferring gas between pools of customers, so that imbalances are minimized.
In addition, SEM 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.
    SEM matches its customers' estimated electricity requirements by entering
into electricity swaps in advance of acquiring customers. Depending on several
factors, including weather, customers' energy consumption may vary from the
volumes purchased by SEM. SEM is able to invoice existing commercial
electricity customers for balancing charges when the amount of energy used is
greater than or less than 10% of the amount of energy that SEM estimated. In
certain circumstances, there can be balancing issues for which SEM is
responsible when customer aggregation forecasts are not realized.
    SEM 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. SEM 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 SEM.
However, the financial condition of each counterparty is evaluated and credit
limits are established to minimize SEM'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 SEM's risk
management policy.
    SEM must retain qualified sales agents in order to properly execute its
business strategy. The continued growth of SEM 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 SEM would limit future growth of the
cash flow.
    SEM 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 SEM,
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 of 2008, Ontario MPP David Ramsay's private members Bill 131
was introduced and passed second reading. If this bill were to pass through
committee and pass third reading, it could receive Royal Assent. The bill
contains several consumer protection measures, such as the requirement for a
written re-affirmation with the customer. The bill, if passed, could
negatively impact the acquisition of residential natural gas and power
customers in Ontario.


    

    SUPERIOR PLUS CORP.
    Consolidated Balance Sheets

    -------------------------------------------------------------------------
                                                       March 31, December 31,
    (unaudited, millions of dollars)                       2009         2008
    -------------------------------------------------------------------------
    Assets
    Current Assets
      Cash and cash equivalents                            10.4         16.1
      Accounts receivable and other (Note 4 and 8)        179.7        246.8
      Inventories                                         106.0        128.0
      Future income tax asset (Note 9)                     78.1         65.9
      Current portion of unrealized gains on
       financial instruments (Note 8)                      41.3         42.0
    -------------------------------------------------------------------------
                                                          415.5        498.8

    Property, plant and equipment                         584.0        562.3
    Customer contract related costs                        16.9         17.7
    Intangible assets                                      28.0         28.8
    Goodwill                                              474.3        472.7
    Accrued pension asset                                  19.2         19.5
    Future income tax asset (Note 9)                      181.8        185.9
    Investment tax credits                                133.1        133.1
    Long-term portion of unrealized gains on
     financial instruments (Note 8)                        99.0        108.1
    -------------------------------------------------------------------------

                                                        1,951.8      2,026.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
    Current Liabilities
      Accounts payable and accrued liabilities            183.6        230.5
      Current portion of term loans (Note 6)               12.6         13.0
      Dividends and interest payable to
       shareholders and debentureholders                   16.2          0.7
      Current portion of deferred credit (Note 9)          39.6         37.9
      Current portion of unrealized losses on
       financial instruments (Note 8)                     127.9         87.8
    -------------------------------------------------------------------------
                                                          379.9        369.9

    Revolving term bank credits and term
     loans (Note 6)                                       412.9        462.8
    Convertible unsecured subordinated
     debentures (Note 7)                                  242.3        241.7
    Future employee benefits                               18.2         18.0
    Deferred credit (Note 9)                              254.1        269.8
    Long-term portion of unrealized losses on
     financial instruments (Note 8)                       114.0         90.5
    -------------------------------------------------------------------------
    Total Liabilities                                   1,421.4      1,452.7

    Shareholders' Equity
      Shareholders' capital (Note 10)                   1,370.9      1,370.9
      Contributed surplus (Note 10)                         4.8          4.8

      Accumulated deficit                                (844.7)      (803.1)
      Accumulated other comprehensive income
       (loss) (Note 10)                                    (0.6)         1.6
    -------------------------------------------------------------------------
                                                         (845.3)      (801.5)
    -------------------------------------------------------------------------
    Total Shareholders' Equity                            530.4        574.2
    -------------------------------------------------------------------------

                                                        1,951.8      2,026.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See Notes to the Unaudited Interim Consolidated Financial Statements)



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

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

    Revenues                                              603.5        681.4
    Cost of products sold                                (392.5)      (511.7)
    Realized gains (losses) on financial
     instruments (Note 8)                                 (22.7)         0.2
    -------------------------------------------------------------------------
    Gross profit                                          188.3        169.9
    -------------------------------------------------------------------------

    Expenses
      Operating and administrative                        118.5        113.9
      Amortization of property, plant and equipment         7.2          4.7
      Amortization of intangible assets                     1.4          1.1
      Interest on revolving term bank credits
       and term loans                                       6.5          6.1
      Interest on convertible unsecured
       subordinated debentures                              3.8          3.7
      Accretion of convertible debenture issue costs        0.3          0.5
      Unrealized losses (gains) on financial
       instruments (Note 8)                                72.9       (105.3)
    -------------------------------------------------------------------------
                                                          210.6         24.7
    -------------------------------------------------------------------------

    Net earnings (loss) before income taxes               (22.3)       145.2
    Income tax recovery (expense) (Note 9)                 16.8        (18.0)
    -------------------------------------------------------------------------
    Net Earnings (Loss)                                    (5.5)       127.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings (loss)                                    (5.5)       127.2
    Other comprehensive income (loss):
      Unrealized foreign currency gains (losses)
       on translation of self-sustaining foreign
       operations                                           4.1         (3.6)
      Reclassification of derivative gains and
       losses previously deferred                          (6.3)         8.1
    -------------------------------------------------------------------------
    Comprehensive Income (Loss)                            (7.7)       131.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Deficit, Beginning of Period                         (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)                                    (5.5)       127.2
    Dividends to Shareholders                             (35.8)       (34.8)
    -------------------------------------------------------------------------
    Deficit, End of Period                               (844.7)      (636.2)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings (loss) per share, basic and
     diluted (Note 11)                                   ($0.06)       $1.44
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See Notes to the Unaudited Interim Consolidated Financial Statements)



    SUPERIOR PLUS CORP.
    Consolidated Statements of Cash Flows

    -------------------------------------------------------------------------
                                                          Three months ended
                                                                March 31,
    (unaudited, millions of dollars)                       2009         2008
    -------------------------------------------------------------------------
    Operating Activities
    Net earnings (loss)                                    (5.5)       127.2
    Items not affecting cash:
      Amortization of property, plant and equipment,
       intangible assets and accretion of convertible
       debenture issue costs                                8.9          6.3
      Amortization of customer contract related costs       1.7          1.6
      Amortization included in cost of sales                9.1         10.6
      Pension expense                                       0.4          0.6
      Unrealized losses (gains) on financial
       instruments                                         72.9       (105.3)
      Future income tax expense (recovery)                (21.8)        16.3
    Customer contract related costs                        (0.9)        (0.7)
    Decrease in non-cash operating working capital
     items                                                 18.6          6.6
    -------------------------------------------------------------------------
    Cash flows from operating activities                   83.4         63.2
    -------------------------------------------------------------------------

    Investing Activities
      Purchase of property, plant and equipment           (35.9)       (10.6)
      Proceeds on disposal of property, plant
       and equipment                                        1.8          0.2
      Earn-out payment on prior acquisition                (0.6)           -
    -------------------------------------------------------------------------
    Cash flows from investing activities                  (34.7)       (10.4)
    -------------------------------------------------------------------------

    Financing Activities
      Revolving term bank credits and term loans          (59.1)        74.0
      Net proceeds of accounts receivable sales program    25.0       (100.0)
      Proceeds from distribution reinvestment program         -          8.9
      Dividends to Shareholders                           (35.8)       (34.8)
      Increase in non-cash working capital                 15.5            -
    -------------------------------------------------------------------------
    Cash flows from financing activities                  (54.4)       (51.9)
    -------------------------------------------------------------------------

    Net increase (decrease) in cash                        (5.7)         0.9
    Cash and cash equivalents, beginning of period         16.1         14.1
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of period               10.4         15.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See Notes to the Unaudited Interim Consolidated Financial Statements)



    Notes to Interim 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 Interim 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 Interim Consolidated
    Financial Statements. For the period ended March 31, 2009, payments to
    Shareholders were in the form of dividends, whereas for the period ended
    March 31, 2008, payments to Unitholders were in the form of trust unit
    distributions. These unaudited Interim 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 Interim 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.

    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
    Canadian 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 Canadian GAAP with International
    Financial Reporting Standards (IFRS) for publicly accountable
    enterprises, including Superior. The changeover date from Canadian 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.

    (d) Business Segments

    Superior operates four distinct business segments: a propane distribution
    and related services business operating under the Superior Propane trade
    name; a specialty chemicals manufacturer operating under the ERCO
    Worldwide trade name (ERCO); a construction products distribution
    business operating under the Winroc trade name; and a fixed-price energy
    services business operating under the Superior Energy Management trade
    name (SEM). (See Note 12.)

    3.  Seasonality of Operations

    Superior Propane

    Propane sales typically peak in the first quarter when approximately one-
    third of annual propane 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.

    Winroc

    Winroc's 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.  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 March 31, 2009, proceeds of $125.0 million
    (December 31, 2008 - $100.0 million) had been received. The existing
    accounts receivable securitization program matures on December 29, 2009.

    A summary of accounts receivable and other is as follows:

                                                       March 31, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Accounts receivable trade                             162.9        225.5
    Accounts receivable other                               7.3          5.9
    Prepaid expenses                                        9.5         15.4
    -------------------------------------------------------------------------
    Accounts receivable and other                         179.7        246.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    5.  Inventories

    For the three months ended March 31, 2009 and 2008, inventories of
    $338.9 million and $437.6 million were expensed through cost of products
    sold. No write-downs of inventory or reversals of write-downs were
    recorded during the three months ended March 31, 2009 and 2008.

    6.  Revolving Term Bank Credits and Term Loans

                            Year of    Effective Interest    March  December
                           Maturity    Rate               31, 2009  31, 2008
    -------------------------------------------------------------------------
    Revolving term
     bank credits(1)                   Floating BA rate
      Bankers                           plus applicable
       Acceptances (BA)        2010     credit spread        124.5     168.9
      LIBOR Loans                      Floating LIBOR rate
       (US$59.0 million; 2008           plus applicable
       - US$71.6 million)      2010     credit spread         74.4      90.1
    -------------------------------------------------------------------------
                                                             198.9     259.0
    -------------------------------------------------------------------------
    Other Debt
      Notes payable       2009-2010    Prime                   6.2       6.2
      Deferred
       consideration      2009-2010    Non-interest bearing    2.4       4.8
      Loan payable        2009-2014    6.3%                   18.1      11.8
    -------------------------------------------------------------------------
                                                              26.7      22.8
    -------------------------------------------------------------------------
    Senior Secured Notes
      Senior secured notes
       subject to floating
       interest rates
       (US$60.0 million;
       2008 - US$60.0                  Floating LIBOR
       million)(2)        2009-2015     rate plus 1.7%        75.6      73.5
      Senior secured
       notes subject to
       fixed interest
       rates
       (US$100.0 million;
       2008 - US$100.0
       million)(2)        2009-2015    6.65%                 126.0     122.4
    -------------------------------------------------------------------------
                                                             201.6     195.9
    -------------------------------------------------------------------------
    Total revolving term
     bank credits and
     term loans before
     deferred financing
     fees                                                    427.2     477.7
    Deferred financing fees                                   (1.7)     (1.9)
    -------------------------------------------------------------------------
    Revolving term bank
     credits and term loans                                  425.5     475.8
    Current maturities                                       (12.6)    (13.0)
    -------------------------------------------------------------------------
    Revolving term bank
     credits and term loans                                  412.9     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 $595.0 million. These
        facilities are secured by a general charge over the assets of
        Superior and certain of its subsidiaries. As at March 31, 2009,
        Superior had $56.9 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$160.0 million
        (CDN$201.6 million at March 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 begin
        in 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 March 31, 2009 was CDN$190.6 million (December 31, 2008 -
        CDN$183.8 million). In conjunction with the issue of the Notes,
        Superior swapped US$60.0 million (CDN $75.6 million) (December 31,
        2008 - US$60.0 million (CDN $73.5 million)) of the fixed rate
        obligation into a US dollar floating rate obligation. Additionally,
        at March 31, 2009, Superior has outstanding US$60.0 million
        (December 31, 2008 - US$60.0 million) of foreign currency forward
        contracts in relation to future principal repayments at a rate of
        1.00 US to CDN dollar.

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

    -------------------------------------------------------------------------
    Current portion                                                     12.6
    Due in 2010                                                        204.3
    Due in 2011                                                         42.8
    Due in 2012                                                         42.9
    Due in 2013                                                         42.4
    Subsequent to 2013                                                  82.2
    -------------------------------------------------------------------------
    Total                                                              427.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    7.  Convertible Unsecured Subordinated Debentures

    Superior has issued two series of debentures denoted as 5.75% Series 1
    and 5.85% Series 1 as follows:
                                                                       Total
                                                    Unamortized     Carrying
                             Series 1     Series 1     Discount        Value
    -------------------------------------------------------------------------
                          December 31,  October 31,
    Maturity date                2012         2015
    Interest rate               5.75%        5.85%
    Conversion price
     per share                 $36.00       $31.25
    -------------------------------------------------------------------------
    Debentures outstanding
     as at December 31, 2008    174.9         75.0         (2.3)       247.6
    Conversion and
     repayment/redemption
     of debentures and
     accretion of discount
     during 2009                    -            -          0.3          0.3
    Deferred issue costs         (3.6)        (2.0)                     (5.6)
    -------------------------------------------------------------------------
    Debentures outstanding
     as at March 31, 2009       171.3         73.0         (2.0)       242.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Quoted market value
     as at March 31, 2009       155.5         63.0
    Quoted market value
     as at December 31, 2008    141.7         52.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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.

    8.  Financial Instruments

    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 ERCO'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 $1.4 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
                                                       (Liability)(Liability)
                                                            as at      as at
                                              Effective  March 31,  December
    Description     Notional(1)       Term         Rate      2009   31, 2008
    -------------------------------------------------------------------------
    Natural gas
     financial
     swaps-NYMEX     20.6 GJ(2)  2009-2011   US$7.66/GJ     (67.7)     (33.5)
    Natural gas
     financial
     swaps-AECO      35.5 GJ(2)  2009-2014  CDN$7.89/GJ     (60.6)     (34.8)
    Foreign
     currency
     forward
     contracts,
     net             US$29.9(4)  2009-2015         1.12      (2.1)     (11.5)
    Foreign
     currency
     forward
     contracts    (euro) 8.5(4)  2009-2011         1.58      (0.7)         -

                                               Floating
    Interest rate                            LIBOR rate
     swaps-USD       US$60.0(4)  2013-2015    plus 1.7%      12.6       11.7
    Propane
     wholesale
     purchase
     and sale
     contracts,
     net          (1.91) USG(5)  2009-2010    $1.31/USG      (5.2)      (1.3)
    ERCO fixed-
     price electri-
     city purchase
     agreement         45 MW(3)  2009-2017  $45-$52/MWh      25.9       42.1
    SEM electricity
     swaps           0.5 MWh(6)  2009-2014    $66.1/MWh      (3.8)      (0.9)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Notional values as at March 31, 2009
    (2) Millions of gigajoules purchased
    (3) Mega watts (MW) on a 24/7 continual basis per year purchased
    (4) Millions of dollars/euros purchased
    (5) Millions of United States gallons purchased
    (6) Millions of mega watt hours (MWh)


    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      18.5          6.2         97.4         55.6
    SEM electricity swaps           -          0.5          2.4          1.9
    Foreign currency forward
     contracts, net              10.2         57.5         14.0         56.5
    Interest rate swaps             -         12.6            -            -
    Propane wholesale purchase
     and sale contracts           8.9            -         14.1            -
    ERCO fixed-price power
     purchase agreements          3.7         22.2            -            -
    -------------------------------------------------------------------------
    As at March 31, 2009         41.3         99.0        127.9        114.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    As at December 31, 2008      42.0        108.1         87.8         90.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                     For the three             For the three
                                      months ended              months ended
                                    March 31, 2009            March 31, 2008
                             Realized   Unrealized     Realized   Unrealized
                                 gain         gain         gain         gain
    Description                 (loss)       (loss)       (loss)       (loss)
    -------------------------------------------------------------------------
    Natural gas financial
     swaps - NYMEX and AECO     (17.4)       (51.8)         1.7         84.6
    SEM electricity swaps        (0.5)        (3.0)           -          0.5
    Foreign currency forward
     contracts, net              (6.1)         6.6         (4.8)        10.7
    Interest rate swaps             -            -            -          2.5
    Propane wholesale purchase
     and sale contracts             -         (3.9)           -         (3.0)
    ERCO fixed-price power
     purchase agreements          1.3        (15.1)         3.3         17.2
    -------------------------------------------------------------------------
    Total realized and
     unrealized gains
     (losses) on financial
     and non-financial
     derivatives                (22.7)       (67.2)         0.2        112.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Foreign currency
     translation of senior
     secured notes                  -         (5.7)           -         (6.4)
    Foreign currency
     translation of ERCO
     royalty assets                 -            -            -         (0.8)
    -------------------------------------------------------------------------
    Total realized and
     unrealized gains (losses)  (22.7)       (72.9)         0.2        105.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Non-Derivative Financial Instruments

    Superior's accounts receivables 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 debenture holders, 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 6
    and 7.

    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, SEM enters into natural gas financial swaps primarily
    with 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, SEM
    continues to maintain its historical natural gas swap positions with
    seven additional counterparties. SEM monitors its fixed-price natural gas
    positions on a daily basis to monitor compliance with established risk
    management policies. SEM maintains a substantially balanced fixed-price
    natural gas position in relation to its customer supply commitments.

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

    ERCO 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.

    Superior Propane 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. Superior Propane
    monitors its fixed-price propane positions on a daily basis to monitor
    compliance with established risk management policies. Superior Propane
    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. SEM and Superior Propane contract a portion of their
    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. ERCO Worldwide
    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 has 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. Superior
    Propane and Winroc deal with a large number of small customers, thereby
    reducing this risk. ERCO, due to the nature of its operations, sells its
    products to a relatively small number of customers. ERCO mitigates its
    customer credit risk by actively monitoring the overall credit worthiness
    of its customers. SEM has minimal exposure to customer credit risk as
    local natural gas and electricity distribution utilities have been
    mandated, for a nominal fee, to provide SEM with invoicing, collection
    and the assumption of bad debts risk for residential customers. SEM
    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.

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

                                                       March 31, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Current                                               132.9        150.5
    Past due less than 90 days                             31.5         67.6
    Past due over 90 days                                   6.5         16.7
    -------------------------------------------------------------------------
    Trade accounts receivable, total                      170.9        234.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Superior's trade accounts receivable are stated after deducting a
    provision of $8.0 million as at March 31, 2009 (December 31, 2008 -
    $9.3 million). The movement in the provision for doubtful accounts was as
    follows:
                                                          Three       Twelve
                                                         months       months
                                                          ended        ended
                                                       March 31, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Allowance for doubtful accounts, opening               (9.3)        (5.1)
    Bad debt expense, net of recoveries                    (2.3)        (8.1)
    Written-off                                             3.6          3.9
    -------------------------------------------------------------------------
    Allowance for doubtful accounts, ending                (8.0)        (9.3)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Superior's contractual obligations associated with its financial
    liabilities are as follows:
                                                                 2014
                                                                  and
                                                                There-
                              2009   2010   2011   2012   2013  after  Total
    -------------------------------------------------------------------------
    Revolving term bank
     credits and term loans   12.6  204.3   42.8   42.9   42.4   82.2  427.2
    Convertible unsecured
     subordinated debentures     -      -      -      -  174.9   75.0  249.9
    CDN$ equivalent of US$
     foreign currency forward
     purchase contracts      107.2   67.9    6.0      -      -   60.0  241.1
    US$ foreign currency
     forward sales
     contracts (US$)          69.7   78.4   36.0      -      -      -  184.1
    EURO (euro) foreign
     currency forward sales
     contracts (EURO)          3.1    5.1    0.3      -      -      -    8.5
    Fixed-price electricity
     purchase commitments     13.3   17.7   17.7   17.7   17.7   70.8  154.9
    CDN$ natural gas
     purchases                32.6   38.5    9.4    7.7    7.1      -   95.3
    US$ natural gas
     purchases (US$)          45.0   35.6    2.2      -      -      -   82.8
    US$ propane
     purchases (US$)          24.7    0.5      -      -      -      -   25.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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 ended
                                                              March 31, 2009
    -------------------------------------------------------------------------
    Increase (decrease) to net earnings of a
     $0.01 increase in the CDN$ to the US$                               1.6
    Increase (decrease) to net earnings of a
     0.5% increase in interest rates                                    (0.4)
    Increase (decrease) to net earnings of a
     $0.40/GJ increase in the spot price of natural gas                 22.6
    Increase (decrease) to net earnings of a
     $0.04/litre increase in the spot price of propane                   0.8
    Increase (decrease) to net earnings of a
     $1.00/KwH increase in the spot price of electricity                 2.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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 (loss) on financial
    instruments and would not have a material impact on Superior's cash flow
    from operations.

    9.  Income Taxes

    On December 31, 2008, Superior converted from a publicly traded income
    trust to a publicly traded corporation. As such, Superior's calculation
    of current and future income taxes for the period ended March 31, 2009 is
    based on the conversion to a corporate structure effective December 31,
    2008, whereas Superior's calculation of current and future income taxes
    for the period ended March 31, 2008 is based on Superior being a publicly
    traded income trust. 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 recovery, comprised of current and future taxes for the
    three months ended March 31, 2009 was a $16.8 million, compared to a
    $18.0 million expense in the comparative period. Income taxes were
    impacted by Superior's conversion to a corporation on December 31, 2008
    and unrealized gains and losses on financial instruments. For the three
    months ended March 31, 2009, future income tax recoveries from operations
    in Canada, the United States and Chile were $21.8 million, resulting in a
    corresponding total future income tax asset of $259.9 million and a total
    deferred credit of $293.7 million. Future income tax expense for the
    three months ended March 31, 2008 was $16.3 million.

    10. 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 Shares Shareholders'
                                                  (Millions)(1)     Equity(1)
    -------------------------------------------------------------------------
    Shareholders' equity, December 31, 2008                88.4        574.2
    Net loss                                                  -         (5.5)
    Other comprehensive loss                                  -         (2.2)
    Cumulative impact of adopting new guidance
     on the valuation of financial instrument
     asset and liabilities (Note 2(b))                        -         (0.3)
    Dividends to Shareholders(2)                              -        (35.8)
    -------------------------------------------------------------------------
    Shareholders' equity, March 31, 2009                   88.4        530.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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) Dividends to Shareholders are declared at the discretion of Superior.

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

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

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

    Accumulated deficit
      Retained earnings from operations                   527.3        532.8
      Cumulative impact of adopting new guidance
       on the valuation of financial instrument
       asset and liabilities (Note 2(b))                   (0.3)           -
      Accumulated distributions                        (1,371.7)    (1,335.9)
    -------------------------------------------------------------------------
                                                         (844.7)      (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                                           4.1         30.1
      Reclassification of derivative gains and
       losses previously deferred                          (6.3)        (8.2)
    -------------------------------------------------------------------------
                                                           (0.6)         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 March 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:
                                                       March 31, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Total shareholders' equity                            530.4        574.2
    Exclude accumulated other comprehensive
     loss (income)                                          0.6         (1.6)
    -------------------------------------------------------------------------
    Shareholders' equity (excluding AOCI)                 531.0        572.6

    Current portion of term loans                          12.6         13.0
    Revolving term bank credits and term loans(1)         414.6        464.7
    Accounts receivable securitization program            125.0        100.0
    -------------------------------------------------------------------------
    Total senior debt                                     552.2        577.7
    Convertible unsecured subordinated debentures(1)      247.9        247.6
    -------------------------------------------------------------------------
    Total debt                                            800.1        825.3

    Cash                                                  (10.4)       (16.1)

    -------------------------------------------------------------------------
    Total capital                                       1,320.7      1,381.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                         Twelve       Twelve
                                                         months       months
                                                          ended        ended
                                                       March 31, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Net earnings (loss)                                   (65.0)        67.7
    Adjusted for:
      Interest on revolving term bank credits
       and term loans                                      24.1         23.7
      Interest on convertible unsecured
       subordinated debentures                             14.9         14.8
      Accretion of convertible debenture issue costs        1.2          1.4
      Amortization of property, plant and equipment        20.8         18.3
      Amortization included in cost of sales               37.4         38.9
      Amortization of intangible assets                     5.6          5.3
      Income tax expense (recovery)                       (24.9)         9.9
      Unrealized (gains) losses on financial
       instruments                                        239.4         61.2
      Gain on sale of facility                             (4.0)        (4.0)
      Superior Propane non-cash pension expense             2.2          2.4
      Proforma impact of acquisitions                       0.2          2.5
    -------------------------------------------------------------------------
    EBITDA(2),(3)                                         251.9        242.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                       March 31, December 31,
                                            Target         2009         2008
    -------------------------------------------------------------------------
    Senior debt to EBITDA(2)         1.5:1 - 2.0:1        2.2:1        2.4:1
    Total debt to EBITDA(2)          2.5:1 - 3.0:1        3.2:1        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.

    11. Net Earnings (Loss) per Share

                                                          Three months ended
                                                               March 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Net earnings per share computation,
     basic and diluted(1)
      Net earnings (loss)                                  (5.5)       127.2
      Weighted average shares outstanding                  88.4         88.1
    -------------------------------------------------------------------------
    Net earnings (loss) per share, basic and diluted     $(0.06)       $1.44
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) All outstanding debentures have been excluded from this calculation
        as they were anti-dilutive.

    12. Business Segments

    Superior operates four distinct business segments: a propane distribution
    and related services business operating under the Superior Propane trade
    name; a specialty chemicals manufacturer operating under the ERCO
    Worldwide trade name (ERCO); a construction products distribution
    business operating under the Winroc trade name; and a fixed-price energy
    services business operating under the Superior Energy Management trade
    name (SEM). 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.

    For the three
     months ended                                                      Total
     March 31,    Superior                                    Corp-  Consoli-
     2009          Propane      ERCO    Winroc       SEM     orate     dated
    -------------------------------------------------------------------------
    Revenues         309.1     123.9      94.1      76.4         -     603.5
    Cost of
     products sold  (202.7)    (67.9)    (69.7)    (52.2)        -    (392.5)
    Realized gains
     (losses) on
     financial
     instruments      (2.6)     (3.1)        -     (17.0)        -     (22.7)
    -------------------------------------------------------------------------
    Gross profit     103.8      52.9      24.4       7.2         -     188.3
    Expenses
      Operating and
       administrative 56.6      29.9      22.9       5.7       3.4     118.5
      Amortization
       of property,
       plant and
       equipment       6.2         -       1.0         -         -       7.2
      Amortization
       of intangible
       assets            -       1.1       0.1       0.2         -       1.4
      Interest on
       revolving
       term bank
       credits and
       term loans        -         -         -         -       6.5       6.5
      Interest on
       convertible
       unsecured
       subordinated
       debentures        -         -         -         -       3.8       3.8
      Accretion of
       convertible
       debenture
       issue costs       -         -         -         -       0.3       0.3
      Unrealized
       losses (gains)
       on financial
       instruments     3.9      15.1         -      54.8      (0.9)     72.9
    -------------------------------------------------------------------------
                      66.7      46.1      24.0      60.7      13.1     210.6
    -------------------------------------------------------------------------
    Net earnings
     (loss) before
     income taxes     37.1       6.8       0.4     (53.5)    (13.1)    (22.3)
    Income tax
     recovery            -         -         -         -      16.8      16.8
    -------------------------------------------------------------------------
    Net Earnings
     (Loss)           37.1       6.8       0.4     (53.5)      3.7      (5.5)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    For the three
     months ended                                                      Total
     March 31,    Superior                                    Corp-  Consoli-
     2008          Propane      ERCO    Winroc       SEM     orate     dated
    -------------------------------------------------------------------------
    Revenues         370.7     113.4     115.4      81.9         -     681.4
    Cost of
     products sold  (277.7)    (77.3)    (86.8)    (69.9)        -    (511.7)
    Realized gains
     (losses) on
     financial
     instruments      (1.0)      5.8         -      (4.6)        -       0.2
    -------------------------------------------------------------------------
    Gross profit      92.0      41.9      28.6       7.4         -     169.9
    Expenses
      Operating and
       administrative 54.7      26.5      23.8       5.4       3.5     113.9
      Amortization
       of property,
       plant and
       equipment       3.8         -       0.9         -         -       4.7
      Amortization
       of intangible
       assets            -       1.0       0.1         -         -       1.1
      Interest on
       revolving
       term bank
       credits and
       term loans        -         -         -         -       6.1       6.1
      Interest on
       convertible
       unsecured
       subordinated
       debentures        -         -         -         -       3.7       3.7
      Accretion of
       convertible
       debenture
       issue costs       -         -         -         -       0.5       0.5
      Unrealized
       losses (gains)
       on financial
       instruments     3.0     (16.4)        -     (85.1)     (6.8)   (105.3)
    -------------------------------------------------------------------------
                      61.5      11.1      24.8     (79.7)      7.0      24.7
    -------------------------------------------------------------------------
    Net earnings
     (loss)           30.5      30.8       3.8      87.1      (7.0)    145.2
    Income tax
     expense             -         -         -         -     (18.0)    (18.0)
    -------------------------------------------------------------------------
    Net Earnings
     (Loss)           30.5      30.8       3.8      87.1     (25.0)    127.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

                                                                       Total
                  Superior                                    Corp-  Consoli-
                   Propane      ERCO    Winroc       SEM     orate     dated
    -------------------------------------------------------------------------
    As at
     March 31, 2009
      Net working
       capital        16.0      35.2      64.1      10.0     (41.6)     83.7
      Total assets   555.1     640.0     205.7      76.5     474.5   1,951.8
    -------------------------------------------------------------------------
    As at
     December 31,
     2008
      Net working
       capital        60.7      27.6      76.5       4.8     (22.9)    146.7
      Total assets   658.2     618.3     211.3      69.5     469.6   2,026.9
    -------------------------------------------------------------------------
    For the three
     months ended
     March 31, 2009
      Acquisitions       -         -         -         -         -         -
      Purchase of
       property,
       plant and
       equipment       2.7      33.1         -       0.1         -      35.9
    -------------------------------------------------------------------------
    For the three
     months ended
     March 31, 2008
      Acquisitions       -         -         -         -         -         -
      Purchase of
       property,
       plant and
       equipment       1.5       8.3       0.6       0.2         -      10.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Geographic Information

                                            United                     Total
                               Canada       States        Other Consolidated
    -------------------------------------------------------------------------
    Revenues for the
     three months ended
     March 31, 2009             488.9         95.8         18.8        603.5
    Property, plant and
     equipment as at
     March 31, 2009             390.1        122.6         71.3        584.0
    Goodwill as at
     March 31, 2009             455.7         18.6            -        474.3
    Total assets as at
     March 31, 2009           1,635.9        234.7         81.2      1,951.8
    -------------------------------------------------------------------------
    Revenues for the
     three months ended
     March 31, 2008             583.5         77.4         20.5        681.4
    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
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    13. 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 Superior Propane's rental assets.
    Additionally, $25.4 million has been reclassified from current portion of
    deferred credit to long-term portion of the deferred credit.

    





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); Scott Daniel,
Vice-President, Treasurer and Investor Relations, E-mail:
sdaniel@superiorplus.com, Phone: (403) 218-2953, Fax: (403) 218-2973, Toll
Free: 1-866-490-PLUS (7587)

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SUPERIOR PLUS CORP.

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