Superior Plus Announces Second Quarter Results and Construction Products Distribution Acquisition



    TSX: SPB

    CALGARY, Aug. 6 /CNW/ -

    
    HIGHLIGHTS

    -   The rapid decline in economic activity in the first half of 2009 was
        the most significant factor which contributed to reduced sales in all
        business segments. Superior's customers continued to conserve and
        reduce inventories due to the prolonged and deep impact of the global
        economic downturn. Superior continues to see positive signs that the
        economy has bottomed and is expected to improve in the last half of
        2009.
    -   Superior's revised forecast for adjusted operating cash flow per
        share is $1.95 - $2.10 in 2009 compared to $2.18 per share in 2008, a
        decrease of approximately 7% based upon the mid-point of the 2009
        financial outlook range.
    -   Strong first quarter adjusted operating cash flow of $0.70 per share
        combined with a seasonal weak second quarter adjusted operating cash
        flow of $0.21 per share resulted in year-to-date adjusted operating
        cash flow of $0.91 per share, which was 14% lower than the 2008
        year-to-date period.
    -   Gross profits were $134.9 million and $323.2 million for the second
        quarter and year-to-date, a decrease of 12% and 0%, respectively,
        compared to prior year periods. Gross profits in the current year
        were impacted by the recession resulting in reduced sales volumes.
    -   Second quarter and year-to-date EBITDA from operations decreased by
        41% and 10% to $31 million and $111 million, respectively, compared
        to prior year periods reflecting reduced sales volumes.
    -   Four quarter trailing EBITDA was $232.4 million resulting in a Senior
        Debt to EBITDA ratio of 2.3x and a Total Debt to EBITDA ratio of 3.4x
        as at June 30, 2009.
    -   The Port Edwards expansion project is on schedule and is being
        commissioned during the third quarter of 2009. The project is
        expected to start to provide a positive contribution in the fourth
        quarter with annualized incremental EBITDA of US$20 - $30 million at
        full capacity.
    -   On August 6, 2009, Superior entered into a definitive agreement to
        acquire Specialty Products and Insulation Co. ("SPI") for the total
        aggregate purchase price of approximately US$135 million anticipated
        to close in September 2009. For details on the acquisition, please
        refer to press release entitled "Superior Plus Announces Expansion of
        its Construction Products Distribution Business with a US$135 Million
        Acquisition" dated August 6, 2009.


    FINANCIAL SUMMARY
    -------------------------------------------------------------------------
                                Three months ended          Six months ended
    (millions of dollars except            June 30,                  June 30,
     per share amounts)          2009         2008         2009         2008
    -------------------------------------------------------------------------
    Revenue                     454.4        567.2      1,057.9      1,248.6
    -------------------------------------------------------------------------
    Gross profit                134.9        153.3        323.2        323.2
    -------------------------------------------------------------------------

    EBITDA from operations(1)    31.0         52.7        111.0        123.4
    Interest                     (7.7)        (8.4)       (18.0)       (18.2)
    Cash taxes                   (1.2)        (4.2)        (6.2)        (5.9)
    Corporate costs              (3.2)        (2.0)        (6.6)        (5.5)
    -------------------------------------------------------------------------
    Adjusted operating cash
     flow(1)                     18.9         38.1         80.2         93.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Adjusted operating cash
     flow per share, basic(1)(2)
     and diluted(1)(3)          $0.21        $0.43        $0.91        $1.06
    -------------------------------------------------------------------------
    Dividends/Distributions
     paid per share/unit       $0.405       $0.405        $0.81        $0.80
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) EBITDA from operations and adjusted operating cash flow are key
        performance measures used by management to evaluate the performance
        of Superior. These measures are defined under Non-GAAP Financial
        Measures in Management's Discussion and Analysis of the 2009 Second
        Quarter Results.
    (2) The weighted average number of shares outstanding for the three
        months ended June 30, 2009 is 88.4 million (2008 - 88.4 million)
    (3) For the three and six months ended June 30, 2009 and 2008, there were
        no dilutive instruments.
    


    FINANCIAL OUTLOOK

    "The length and depth of the global recession has made forecasting the
recovery of the businesses difficult, but Superior has responded swiftly to
minimize the short-term impact of the recession. Superior is well-positioned
and diversified to capitalize on the recovery and future opportunities given
its strong balance sheet and operational expertise. We have navigated through
one of the most severe economic downturns in the past century and remain
committed to stability of dividends and creating value growth for our
shareholders," said Chairman and Chief Executive Officer Grant Billing.

    
    -------------------------------------------------------------------------
                                                         2009(1)   2009(2)(4)
    (millions of dollars, except per share amounts)       Prior      Current
    -------------------------------------------------------------------------
    EBITDA from operations
      Propane Distribution                               95-105       95-105
      Specialty Chemicals                               100-110       95-105
      Construction Products Distribution                  20-27        20-25
      Fixed-Price Energy Services                          9-12         9-12
    -------------------------------------------------------------------------
    Adjusted operating cash flow per share          $2.00-$2.15  $1.95-$2.10
    Dividends paid per share                              $1.62        $1.62
    -------------------------------------------------------------------------
    Senior Debt/EBITDA Ratio(3)                             1.9          1.9
    Total Debt/EBITDA Ratio(3)                              2.9          3.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) As provided in Superior's First Quarter 2009 Financial Results.
    (2) The assumptions, definitions, and risk factors relating to the
        Financial Outlook are discussed in Management's Discussion and
        Analysis of the 2009 Second 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 2.6x and
        Total Debt to EBITDA ratio of 3.7x.
    (4) The current 2009 financial outlook does not include any benefit or
        cost associated with the proposed acquisition of SPI anticipated to
        close in September 2009.
    

    Superior has revised its annual expectations for adjusted operating cash
flow by $0.05 to be $1.95 - $2.10 per share in 2009 based upon year-to-date
results and its current outlook for the remainder of 2009. The forecast
decrease in EBITDA from operations has been partially offset by reduced
interest costs and lower income taxes as compared to the previous outlook
provided in the 2009 First Quarter Results. Superior's financial outlook for
2010 adjusted operating cash flow has been decreased to $2.05 - $2.25 from its
previous first quarter outlook of $2.20 - $2.40 to reflect a deeper more
prolonged slowdown in economic activity. The current financial outlook for
2009 and 2010 does not include any benefit or cost associated with the
proposed acquisition of SPI anticipated to close in September 2009. Superior
expects to update its financial outlook upon completion of the SPI transaction
at the next quarterly release of its financial statements.
    Although the timing of the recovery remains uncertain, Superior continues
to see positive signs that the economy has bottomed and is expected to improve
in the last half of 2009. Superior's successful marketing programs, focused
cost cutting initiatives, anticipated demand from its customers, and a
successful closing of the SPI acquisition are expected to provide support for
a solid finish to the year and an improved outlook in 2010. The Port Edwards
expansion project continues to remain on time and is scheduled to be
commissioned during the third quarter of 2009. 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 current 2009 financial outlook.

    
    SEGMENTED INFORMATION
    -------------------------------------------------------------------------
                                Three months ended          Six months ended
                                           June 30,                  June 30,
    (millions of dollars)      2009(1)      2008(1)      2009(1)      2008(1)
    -------------------------------------------------------------------------
    EBITDA from operations:
      Propane Distribution        4.7         12.9         49.6         50.8
      Specialty Chemicals        20.2         25.7         52.3         51.7
      Construction Products
       Distribution               3.3         11.0          4.8         15.8
      Fixed-Price Energy
       Services                   2.8          3.1          4.3          5.1
    -------------------------------------------------------------------------
                                 31.0         52.7        111.0        123.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) EBITDA from operations is a key performance measure used by
        management to evaluate the performance of Superior. This measure is
        defined under Non-GAAP Financial Measures in Management's Discussion
        and Analysis of the 2009 Second Quarter Results.


    Propane Distribution

    -   EBITDA from operations were $4.7 million and $49.6 million for the
        second quarter and first half of 2009, a decrease of $8.2 million and
        $1.2 million, respectively, compared to prior year periods, primarily
        as a result of a 9% decline in sales volumes due to the impact of the
        economic recession in Canada.
    -   Total gross profits per litre for the second quarter and first half
        of 2009 were 21.9 cents and 22.8 cents, a decrease of 0.7 cents and
        an increase of 2.1 cents, respectively, compared to the prior year
        periods.
    -   Retail propane and delivery gross profits of $46.8 million and
        $126.4 million decreased by 9% and 4% in the second quarter and first
        half of 2009, respectively, compared to the prior year periods.
        Superior's sales and marketing program has produced positive results
        in the first half of the year with annualized new customer volumes of
        approximately 81 million litres partially offsetting the impact on
        sales volumes due to the economic recession in Canada.
    -   Wholesale and related gross profits were $2.8 million and
        $18.2 million in the second quarter and first half of 2009, a
        decrease of $2.7 million and an increase of $6.6 million,
        respectively, compared to the prior year periods, substantially due
        to the timing of gross profits recognized in the 2008/2009 winter
        heating season.
    -   Superior substantially completed the implementation of its new
        routing and scheduling system in the second quarter and expects to
        consolidate the logistics functions from six Regional Operation
        Centres into one National Operations Centre during the third quarter
        of 2009. Superior anticipates the installation of handheld computers
        on the service fleet will be completed by the end of 2009. These
        productivity improvements are estimated to have annual cost savings
        of $5.8 million upon completion.
    -   EBITDA from operations is expected to be $95 - $105 million for 2009
        consistent with the previous outlook provided in the 2009 First
        Quarter Results. The benefits of sales marketing initiatives,
        projected efficiency improvements in the cost structure and a
        forecast improvement in economic activity provide support for
        maintaining the outlook range.

    Specialty Chemicals

    -   EBITDA from operations were $20.2 million and $52.3 million in the
        second quarter and first half of 2009, a decrease of $5.5 million and
        an increase of $0.6 million, respectively, compared to the prior year
        periods.
    -   Gross profits in the second quarter and first half of 2009 decreased
        by $2.2 million and increased by $6.8 million to $51.0 million and
        $113.7 million, respectively.
    -   Chemical sales volumes of 155,000 (MTs) for the second quarter were
        33,000 (MTs) lower than the prior year quarter primarily due to
        reduced demand for specialty chemical products as a result of reduced
        sales volumes to pulp customers. The Valdosta, Georgia facility was
        temporarily idled in the second quarter reducing capacity by 8,000 MT
        per month with cell line upgrades expected to be completed during the
        third quarter. The Valdosta, Georgia facility is anticipated to be
        restarted by the fourth quarter of 2009 due to stabilization of pulp
        prices along with a forecasted increase in sodium chlorate demand.
    -   The Port Edwards, Wisconsin chloralkali facility expansion project
        remains on budget and is being commissioned during the third quarter
        of 2009. The conversion project has started up many of the systems
        and will require a temporary closure of the facility for
        approximately 4-6 weeks to complete the changes resulting in reduced
        revenue and production volumes which has been reflected in the
        revised financial outlook. 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 $95 - $105 million for 2009,
        a decrease of $5 million from the previous outlook provided in the
        2009 First Quarter Results reflecting reduced chloralkali pricing.

    Construction Products Distribution

    -   EBITDA from operations were $3.3 million and $4.8 million in the
        second quarter and first half of 2009, a decrease of $7.7 million and
        $11.0 million, respectively, compared to the prior year periods.
    -   Gross profits in the second quarter and first half of 2009 were
        $24.3 million and $48.7 million, a decrease of $11.8 million and
        $16.0 million, respectively, compared to the prior year periods
        primarily due to a 21% and 29% decline in drywall sales volumes in
        the first and second quarter, respectively. Sales volumes declined
        due to a rapid deterioration of the residential and commercial
        construction activity as a result of the impact of a recession in
        North America.
    -   Sales margins were consistent in most operating areas in the second
        quarter and first half of 2009, compared to the prior year periods
        due to a continued focus on margin management initiatives and the
        impact of purchasing programs.
    -   Significant restructuring and cost reduction initiatives have been
        made during the second quarter and first half of 2009 to adjust to
        the changes in the market. These initiatives expect to have an annual
        cost saving in excess of $6 million reflecting significant reductions
        in employees in most locations along with consolidation of branch
        locations.
    -   The fragmented nature of the specialty buildings products industry,
        combined with the market downturn, provide additional consolidation
        and product expansion opportunities for Winroc.
    -   Several leading indicators such as permits and housing starts have
        provided positive signs of both the US and Canadian construction
        markets bottoming with some improvement expected in the last half of
        2009.
    -   EBITDA from operations is expected to be $20 - $25 million for 2009,
        a decrease of $2 million in the upper-end of our previous outlook
        provided in the 2009 First Quarter Results. The residential
        construction activity in Canada and the US is starting to improve and
        is expected to have limited benefit until later in 2009.

    Fixed-Price Energy Services

    -   EBITDA from operations were $2.8 million and $4.3 million in the
        second quarter and first half of 2009, a decrease of $0.3 million and
        $0.8 million, respectively, compared to the prior year periods.
    -   Gross profits were $8.3 million and $15.3 million in the second
        quarter and first half of 2009, a decrease of $0.3 million and
        $0.1 million, respectively, compared to the prior year periods.
    -   SEM continued to focus 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 2009 First
        Quarter Results.


    CAPITAL EXPENDITURE SUMMARY
    -------------------------------------------------------------------------
                                Three months ended          Six months ended
                                           June 30                   June 30
    (millions of dollars)        2009         2008         2009         2008
    -------------------------------------------------------------------------
    Efficiency, process
     improvement and growth
     related                      5.1          7.1         12.9         10.9
    Other capital                 1.8          2.8          3.3          4.4
    Port Edwards expansion
     project                     29.6          3.3         56.2          8.5
    -------------------------------------------------------------------------
    Earn-out payment on prior
     acquisition                    -            -          0.6            -
    Acquisitions                    -         24.6            -         24.6
    -------------------------------------------------------------------------
    Proceeds on disposition
     of capital                  (1.1)        (1.3)        (2.9)        (1.5)
    -------------------------------------------------------------------------
    Total net capital
     expenditures                35.4         36.5         70.1         46.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    In the second quarter of 2009, Superior continued to improve its cost
structure by investing $5.1 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 second quarter of
2009 with capital spending of $29.6 million (US$25.6 million). The project is
on budget and scheduled to be commissioned during the third quarter of 2009.
As at June 30, 2009, Superior has incurred US$91.6 million of the estimated
US$130 million costs to complete the Port Edwards project.

    
    KEY CORPORATE ITEMS

    -   Total interest expense of $7.7 million in the second quarter
        decreased by $0.7 million compared to the prior year quarter
        primarily due to lower average interest rates and the impact of the
        appreciation of the Canadian dollar on US denominated interest costs,
        partially offset by higher average debt levels.
    -   Superior had a $570 million syndicated credit facility with undrawn
        credit capacity of approximately $293.5 million (excluding its
        securitization program) as at June 30, 2009.
    -   As at June 30, 2009, Superior had utilized $85.9 million of its
        existing securitization program.
    -   With the commissioning of the Port Edwards project, there will be
        sufficient tax basis available to reduce 2009 US cash income taxes to
        zero. Superior anticipates a US cash income tax reversal of
        approximately $5.5 million to occur in the third quarter which will
        result in an increase to adjusted operating cash flow per share of
        approximately $0.06.
    -   Given Superior's current tax basis of approximately $1.7 billion as
        at December 31, 2008, the corporation does not anticipate any
        material Canadian cash taxes payable until 2014 based upon the
        current level of Canadian taxable income projected from 2009-2014.
        Beyond 2014, Superior anticipates incurring Canadian cash taxes at an
        approximate rate of 12-13% for a period of 3-4 years.
    

    2009 Second Quarter Results

    Superior's 2009 Second Quarter Results are 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
Second Quarter Results at 3:00 p.m. MST on Thursday, August 6, 2009. To
participate in the call, dial: 1-800-732-6179. A recording of the call will be
available for replay until midnight, September 6, 2009. To access the
recording, dial: 1-877-289-8525 and enter pass code: 21309903, 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 events calendar
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
Second 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, expected timing of restarting the Valdosta, Georgia
facility, timing and expected impact of proposed productivity improvement
initiatives, expected timing of the closing of the SPI acquisition, expected
timing with respect to commissioning the Port Edwards, Wisconsin project 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 Second
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 Second
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 Second 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 Second Quarter Results
    August 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).

    
    Second Quarter Results
    ----------------------

    Summary of Adjusted Operating Cash Flow

    -------------------------------------------------------------------------
    (millions of dollars        Three months ended          Six months ended
     except per share                      June 30,                  June 30,
     amounts)                    2009         2008         2009         2008
    -------------------------------------------------------------------------
    EBITDA from operations:
      Propane Distribution        4.7         12.9         49.6         50.8
      Specialty Chemicals        20.2         25.7         52.3         51.7
      Construction Products
       Distribution               3.3         11.0          4.8         15.8
      Fixed-Price Energy
       Services                   2.8          3.1          4.3          5.1
    -------------------------------------------------------------------------
                                 31.0         52.7        111.0        123.4
    Interest                     (7.7)        (8.4)       (18.0)       (18.2)
    Cash income taxes            (1.2)        (4.2)        (6.2)        (5.9)
    Corporate costs              (3.2)        (2.0)        (6.6)        (5.5)
    -------------------------------------------------------------------------
    Adjusted operating
     cash flow                   18.9         38.1         80.2         93.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Adjusted operating cash
     flow per share,
     basic(1) and diluted(2)    $0.21        $0.43        $0.91        $1.06
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) The weighted average number of shares outstanding for the three
        months ended June 30, 2009, is 88.4 million (2008 - 88.4 million) and
        for the six months ended June 30, 2009, is 88.4 million (2008 - 88.3
        million)
    (2) For the three and six months ended June 30, 2009 and 2008, there were
        no dilutive instruments.


    Adjusted Operating Cash Flow Reconciled to Cash Flow from Operating
    Activities(1)
    -------------------------------------------------------------------------
                                Three months ended          Six months ended
                                           June 30,                  June 30,
    (millions of dollars)        2009         2008         2009         2008
    -------------------------------------------------------------------------
    Cash flows from operating
     activities                  75.0         82.2        158.4        145.4

    Add:  Customer contract
           related costs
           capitalized            1.2          1.7          2.1          2.4

    Less: Decrease in non-cash
           working capital      (58.3)       (44.1)       (76.9)       (50.7)
          Amortization of
           customer contract
           related costs         (1.7)        (1.7)        (3.4)        (3.3)
          Reversal of unrealized
           losses on financial
           instruments previously
           treated as realized.   2.7            -            -            -
    -------------------------------------------------------------------------
    Adjusted operating
     cash flow                   18.9         38.1         80.2         93.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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.
    

    Second quarter adjusted operating cash flow was $18.9 million, a decrease
of $19.2 million or 50% over the prior year quarter. The decrease in adjusted
operating cash flow was due to reduced EBITDA from operations at all of
Superior's businesses and higher corporate costs, offset in part by lower cash
income taxes and interest costs. Adjusted operating cash flow per share was
$0.21 per share in the second quarter, a decrease of 50% from $0.43 per share
in the prior year quarter due to the decrease in adjusted operating cash flow
noted above; the weighted average number of shares outstanding was consistent
with the prior year quarter. A comprehensive review of EBTIDA from operations
for all of Superior's businesses follows.
    Adjusted operating cash flow for the six months ended June 30, 2009 was
$80.2 million, a decrease of $13.6 million or 14% compared to the prior year
period. The decrease in adjusted operating cash flow was due to reduced EBITDA
from operations at Winroc, Superior Propane and SEM, combined with modestly
higher cash income taxes and higher corporate costs, offset by higher EBITDA
from operations at ERCO and lower interest costs. Adjusted operating cash flow
per share was $0.91 per share for the six months ended June 30, 2009, a
decrease of $0.15 per share or 14% due to the decrease in adjusted operating
cash flow as noted above. The weighted average number of shares outstanding
was consistent with the prior year period.
    Net earnings for the second quarter were $23.4 million, compared to net
earnings of $164.3 million in the prior year quarter. Net earnings were
impacted by $18.6 million in unrealized gains on financial instruments in the
current quarter, compared to unrealized gains of $149.8 million in the prior
year quarter. The change in the unrealized gains and losses on financial
instruments was due principally to reduced gains on SEM's natural gas
financial derivatives compared to the prior year as a result of fluctuations
in the spot price for natural gas. Revenues of $454.4 million were $112.8
million lower than the prior year quarter due principally to a decrease in the
retail selling prices of propane as a result of a reduction in the wholesale
cost of propane. Gross profit of $134.9 million was $18.4 million lower than
the prior year quarter due principally to reduced sales volumes at all of
Superior's operating businesses. Total income taxes for the second quarter was
an expense of $3.5 million compared to an income tax expense of $11.0 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 gains on
financial instruments in the second quarter as discussed above. Additionally,
second quarter net earnings were affected for the same reasons as the analysis
of adjusted operating cash flow for the second quarter.
    Net earnings for the six months ended June 30, 2009 were $17.9 million,
compared to net earnings of $291.5 million in the prior year period. Net
earnings were impacted by $54.3 million in unrealized losses on financial
instruments in the current period, compared to unrealized gains of $255.1
million in the prior year period. The change in the unrealized gains and
losses on financial instruments was due principally to reduced gains on SEM's
natural gas financial derivatives compared to the prior year as a result of
fluctuations in the spot price for natural gas. Revenues of $1,057.9 million
were $190.7 million lower than the prior year period due principally to a
decrease in the retail selling prices of propane as a result of a reduction in
the wholesale cost of propane. Gross profit of $323.2 million was consistent
with the prior year quarter as improved gross profit at ERCO offset lower
gross profit at Winroc. Total income tax recovery in the current period was
$13.3 million compared to an income tax expense of $29.0 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 gains on
financial instruments as discussed above.

    Propane Distribution

    Superior Propane generated EBITDA from operations of $4.7 million in the
second quarter, a decrease of $8.2 million from the prior year quarter due to
lower gross profit and modestly higher operating costs.
    Condensed operating results for the three and six months ended June 30,
2009 and 2008 are provided in the following table.

    
    -------------------------------------------------------------------------
    (millions of dollars                  Three months ended June 30,
     except per litre amounts)         2009                      2008
    -------------------------------------------------------------------------
                                       cents/litre               cents/litre
                                       -----------               -----------
    Revenue(1)(2)(3)            163.4         65.6        228.3         83.3
    Cost of sales              (108.9)       (43.7)      (166.2)       (60.7)
    -------------------------------------------------------------------------
    Gross profit                 54.5         21.9         62.1         22.6
    Less: Cash operating and
     administration costs       (49.8)       (20.0)       (49.2)       (17.9)
    -------------------------------------------------------------------------
    EBITDA from operations        4.7          1.9         12.9          4.7
    Propane retail volumes sold
     (millions of litres)               249                       274
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    (millions of dollars                  Six months ended June 30,
    except per litre amounts)          2009                      2008
    -------------------------------------------------------------------------
                                       cents/litre               cents/litre
                                       -----------               -----------
    Revenue(1)(2)(3)            466.8         68.6        597.6         80.4
    Cost of sales              (311.6)       (45.8)      (443.9)       (59.7)
    -------------------------------------------------------------------------
    Gross profit                155.2         22.8        153.7         20.7
    Less: Cash operating and
     administration costs      (105.6)       (15.5)      (102.9)       (13.8)
    -------------------------------------------------------------------------
    EBITDA from operations       49.6          7.3         50.8          6.9
    Propane retail volumes sold
     (millions of litres)               680                       743
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 and six months ended June 30,
        2009 is $1.7 million and ($0.9) million in realized foreign currency
        forward contract gains (losses) and included in revenue for the three
        and six months ended June 30, 2008 is $0.4 million and ($0.6) million
        in realized foreign currency forward contract gains (losses).
    (2) For the three and six months ended June 30, 2009 for purposes of the
        management's discussion and analysis, Superior has reclassified
        ($0.3) million and $0.1 million, of foreign currency translation
        losses (gains) related to US-denominated working capital from
        operating and administrative expense to revenue and for the three and
        six months ended June 30, 2008 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 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 June 30, 2009, for purposes of this
        management's discussion and analysis, Superior has reversed the
        impact of $2.7 million of unrealized losses on forward propane
        purchase contracts as a component of revenue for the three months
        ended March 31, 2009, related to Superior Propane's wholesale trading
        business. There is no impact on Superior Propane's EBITDA from
        operations for the six months ended June 30, 2009.
    

    Revenues for the second quarter of 2009 were $163.4 million, a decrease
of $64.9 million from revenues of $228.3 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 second quarter of 2009
was $54.5 million, a decrease of $7.6 million or 12% over the prior year
quarter. Total gross profit per litre for the second quarter of 2009 was 21.9
cents per litre, a decrease of 0.7 cents per litre or 3% 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         Six months ended
                                           June 30,                  June 30,
    (millions of dollars)        2009         2008         2009         2008
    -------------------------------------------------------------------------
    Retail propane and delivery  46.8         51.4        126.4        131.7
    Other services                4.9          5.2         10.6         10.4
    Wholesale and related         2.8          5.5         18.2         11.6
    -------------------------------------------------------------------------
    Total gross profit           54.5         62.1        155.2        153.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Retail propane and delivery gross profit for the second quarter was $46.8
million, a decrease of $4.6 million or 9% from the prior year quarter, due
principally to a 25 million litre or 9% reduction in sales volumes. The
average retail and delivery sales margin in the second quarter was consistent
with the prior year quarter. Residential and commercial volumes decreased by 6
million litres or 8% and were negatively impacted by a weaker overall economic
environment throughout most of Canada and the ongoing impact of the customer
conservation trend which began in 2008. 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 second quarter was 3% colder than
the prior year and 8% colder than the five year average, the impact of which
partially mitigated a reduction in volumes due to the weaker economic
environment. However, heating related volumes in the second and third quarters
are generally not materially impacted by average weather due to the
seasonality of Superior Propane's operations. Industrial volumes decreased by
15 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 3 million litres or 9%, which was modestly below the historical
decline trend in this end-use market due to a favourable pricing differential
between propane and retail gas. Superior Propane continued to actively manage
sales margins in the second quarter, resulting in an average retail propane
and delivery sales margin of 18.8 cents per litre, which was consistent with
the prior year quarter average margin of 18.8 cents per litre. Average margins
compared to the prior year quarter were positively impacted by margin
management initiatives, offset by the impact of competitive pressures.
    Other services gross profit was $4.9 million in the second quarter, a
decrease of $0.3 million over the prior year quarter as weaker demand for
service and installations was partially offset by an increase in rental gross
profit. Wholesale and related gross profits were $2.8 million in the second
quarter, a decrease of $2.7 million compared to the prior year quarter due to
lower gross profits within the wholesale trading business as a result of
weaker trading conditions during the quarter in addition to 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
                             June 30,                                June 30,
                      2009      2008                          2009      2008
    ---------------------------------   -------------------------------------
    Residential         22        24    Western Canada         134       152
    Commercial          49        53    Eastern Canada          94       101
    Agricultural         8         9    Atlantic Canada         21        21
    Industrial         140       155
    Automotive          30        33
    ---------------------------------   -------------------------------------
                       249       274                           249       274
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Volumes by End-Use Application(1)   Volumes by Region(1)(2)
    -------------------------------------------------------------------------
                    Six months ended                        Six months ended
                             June 30,                                June 30,
                      2009      2008                          2009      2008
    ---------------------------------   -------------------------------------
    Residential         85        90    Western Canada         379       416
    Commercial         163       171    Eastern Canada         248       274
    Agricultural        31        35    Atlantic Canada         53        53
    Industrial         351       390
    Automotive          50        57
    ---------------------------------   -------------------------------------
                       680       743                           680       743
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 $49.8 million increased by
$0.6 million or 1% from the prior year quarter due to higher provisions for
bad debts and truck expenses, offset by lower wages and benefits and fuel
costs. 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 first quarter 2009 Management's Discussion and
Analysis. 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 compared to the prior year are expected to
        decline due to a continued slowdown in economic activity resulting in
        reduced demand for propane and related services.
    -   Commercial and industrial volumes are anticipated to improve in the
        second half of 2009 relative to the first half of 2009 due to
        customer sales initiatives and a modestly improved outlook for the
        general economy.
    -   Superior Propane expects that wholesale propane prices will not
        significantly impact demand for propane and related propane services;
    -   Total gross profit for Superior Propane compared to the prior year is
        anticipated to decrease due to reduced economic activity and
        resulting demand; 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 second quarter of
$20.2 million, a decrease of $5.5 million or 21% from the prior year quarter
due to lower gross profits and higher operating expenditures.
    Condensed operating results for the three and six months ended June 30,
2009 and 2008 are provided in the following table.

    
    -------------------------------------------------------------------------
    (millions of dollars
     except per metric tonne             Three months ended June 30,
     (MT) amounts)                     2009                      2008
    -------------------------------------------------------------------------
    Revenue                               $ per MT                  $ per MT
      Chemical(1)(3)            112.0          722        110.9          590
      Technology                  3.5           23          2.8           15
    Cost of Sales
      Chemical(1)(2)            (62.8)        (405)       (59.2)        (315)
      Technology                 (1.7)         (11)        (1.3)          (7)
    -------------------------------------------------------------------------
    Gross Profit                 51.0          329         53.2          283
    Less: Cash operating and
     administrative costs(3)    (30.8)        (199)       (27.5)        (146)
    -------------------------------------------------------------------------
    EBITDA from operations       20.2          130         25.7          137
     Chemical volumes sold
      (thousands of MTs)                155                       188
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    (millions of dollars
     except per metric tonne             Six months ended June 30,
     (MT) amounts)                     2009                      2008
    -------------------------------------------------------------------------
    Revenue                               $ per MT                  $ per MT
      Chemical(1)(3)            230.6          744        222.5          587
      Technology                  5.2           18          8.3           22
    Cost of Sales
      Chemical(1)(2)           (119.9)        (387)      (119.0)        (314)
      Technology                 (2.2)          (7)        (4.9)         (13)
    -------------------------------------------------------------------------
    Gross Profit                113.7          368        106.9          282
    Less: Cash operating and
     administrative costs(3)    (61.4)        (198)       (55.2)        (146)
    -------------------------------------------------------------------------
    EBITDA from operations       52.3          170         51.7          136
     Chemical volumes sold
      (thousands of MTs)                310                       379
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 and six months ended June 30, 2009
        is $2.5 million and $6.8 million in realized foreign currency forward
        contract losses and included in chemical cost of sales for the three
        and six months ended June 30, 2009 is ($1.1) million and $0.1 million
        in realized fixed-price electricity gains (losses). Included in
        revenue for the three and six months ended June 30, 2008 is $2.3
        million and $4.8 million in realized foreign currency forward
        contract gains and included in chemical cost of sales for the three
        and six months ended June 30, 2008 is $8.5 million and $11.8 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 and six months ended June 30, 2009, for purposes
        of the management's discussion and analysis, Superior has excluded
        $9.1 million and $18.2 million in non-cash amortization from cost of
        sales in the calculation of ERCO Worldwide's EBITDA from operations
        and for the three and six months ended June 30, 2008, Superior has
        excluded $9.1 million and $19.7 million.
    (3) For the three and six months ended June 30, 2009 for purposes of the
        management's discussion and analysis, Superior has reclassified $2.1
        million and $1.4 million, of foreign currency translation losses
        related to US-denominated working capital from operating and
        administrative expense to revenue and for the three and six months
        ended June 30, 2008 has reclassified $0.6 million and ($0.6) million
        of foreign currency translation losses (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 second quarter of $115.5 million
were $1.8 million or 2% 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 modestly higher than the
prior year quarter due to the timing of the recognition of revenue on various
projects. Second quarter gross profit was $51.0 million, comprised of $49.2
million from chemical sales and $1.8 million from technology projects.
Chemical gross profit was $2.5 million lower than the prior year quarter as
higher chloralkali/potassium gross profit was more than offset by 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 lower sales volumes. Sales prices for potassium based
products continue to be at historically high levels in response to the
increase in the cost of potash, the primary input cost in the production of
potassium products. The reduction in chloralkali/potassium sale volumes
compared to the prior year quarter was due principally to the general economic
slow down and the high selling price of potassium based products as noted
above, both of which resulted in reduced customer demand. Sodium chlorate
gross profits were lower than the prior year as reduced sales volumes and
higher average electricity costs more than offset an increase in average
selling prices. Sodium chlorate sales volumes decreased by 25,000 tonnes or
19% due principally to reduced sales volumes in North America as a result of
weaker demand for pulp. Weak demand for pulp, and therefore sodium chlorate in
North America was due principally to the global economic slow down. Sodium
chlorate average selling prices were 7% higher than the prior year quarter due
to the appreciation of the US dollar relative to the Canadian dollar on US
denominated sales. Technology gross profit was $0.3 million higher than the
prior year quarter due to the time of the recognition of profits on various
projects, offset by the impact of the normal course expiration of royalty
revenues.
    Cash operating and administrative costs of $30.8 million were $3.3
million or 12% 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, offset in part by reduced operating
costs at ERCO's Valdosta, Georgia facility due to production curtailments.
    During 2007, ERCO determined that it will convert its Port Edwards,
Wisconsin chloralkali facility from mercury based technology to membrane
technology. The conversion is anticipated to be completed as planned during
the third quarter of 2009. 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 $95 million
and $105 million. ERCO's previous outlook as provided in the first quarter
2009 Management's Discussion and Analysis was $100 million to $110 million.
The reduction in ERCO's guidance reflects weaker pricing for caustic products,
offset by improved pricing on chlorine products and modestly higher sodium
chlorate volumes compared to the first half of 2009. ERCO's significant
assumptions underlying its current outlook are:

    
    -   Current supply and demand fundamentals for sodium chlorate will be
        weaker than the prior year, 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 half of 2009
        and the second half of 2008;
    -   ERCO's average plant utilization is expected to be approximately 80-
        85%, excluding the impact of production curtailments at the Valdosta,
        Georgia facility and the conversion of the Port Edwards, Wisconsin
        facility;
    -   The foreign currency exchange rate between the Canadian and United
        States dollar is expected to be 1.11 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 and on schedule 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 compared to the prior year 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 $3.3 million in the second
quarter, a decrease of $7.7 million or 70% from the prior year quarter, as
reduced gross profit more than offset lower operating expenses.
    Condensed operating results for the three and six months ended June 30,
2009 and 2008 are provided in the following table.

    
    -------------------------------------------------------------------------
                                Three months ended          Six months ended
                                           June 30,                  June 30,
    (millions of dollars)        2009         2008         2009         2008
    -------------------------------------------------------------------------
    Distribution and direct
     sales revenue               98.2        141.5        192.3        256.9
    Distribution and direct
     sales cost of sales        (73.9)      (105.4)      (143.6)      (192.2)
    -------------------------------------------------------------------------
    Distribution and direct
     sales gross profit          24.3         36.1         48.7         64.7
    Less: Cash operating and
     administrative costs       (21.0)       (25.1)       (43.9)       (48.9)
    -------------------------------------------------------------------------
    EBITDA from operations        3.3         11.0          4.8         15.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Distribution and direct sales revenues of $98.2 million for the second
quarter of 2009 were $43.3 million or 31% lower than the prior year quarter
due to reduced sales volumes and lower selling prices. Distribution and direct
sales gross profit of $24.3 million in the second quarter was $11.8 million or
33% lower than the prior year quarter, as the impact of reduced sales volumes,
offset in part by sales volumes due to the acquisition of Fackoury's Building
Supplies Ltd. (Fackoury's) on May 9, 2008, combined with lower average sales
margins. Distribution drywall sales volumes, an indicator of overall
distribution sales volumes, decreased 29% 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 which negatively impacted
volumes in all of Winroc's operating regions, particularly in Western Canada
and the U.S. Sales volumes were also negatively impacted by the general
economic slowdown throughout North America. Percentage sales margins were
lower than the prior year quarter, as competitive pressures on sales prices
more than offset the impact of margin management initiatives. Cash operating
and administrative costs of $21.0 million were $4.1 million or 16% lower than
the prior year quarter as reduced warehouse wages and fleet costs due to cost
management initiatives and 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 $25 million. Winroc's previous outlook as provided in the 2009 first
quarter Management's Discussion and Analysis was $20 million to $27 million.
The reduction in the top end of 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 assumptions underlying its current outlook
are:

    
    -   Sales volumes compared to the prior year 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.
    -   Residential sales volumes in the second half of 2009 are anticipated
        to modestly improve compared to the first half of 2009, while
        commercial volumes will continue to be weaker than the prior year.
    -   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 and six months ended June
30, 2009 and 2008 are provided below.

    
    -------------------------------------------------------------------------
                                Three months ended          Six months ended
                                           June 30,                  June 30,
    (millions of dollars)        2009         2008         2009         2008
    -------------------------------------------------------------------------

    Revenue                      77.4         85.6        153.8        167.5
    Cost of sales(1)(2)         (69.1)       (77.0)      (138.5)      (152.1)
    -------------------------------------------------------------------------
    Gross profit                  8.3          8.6         15.3         15.4
    Less: Operating,
     administrative and
     selling costs(2)            (5.5)        (5.5)       (11.0)       (10.3)
    -------------------------------------------------------------------------
    EBITDA from operations        2.8          3.1          4.3          5.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (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 and six months ended
        June 30, 2009, is ($0.6) million and $0.3 million in realized foreign
        currency forward contract gains (losses) and $29.5 million and
        $47.4 million related to natural gas commodity realized fixed price
        losses. Included in cost of sales for the three and six months ended
        June 30, 2008, is $6.3 million and $12.6 million in realized foreign
        currency forward contract losses and $19.7 million and $21.4 million
        in related to natural gas commodity realized fixed price gains.

    (2) For the three and six months ended June 30, 2009 for purposes of the
        management's discussion and analysis, Superior has reclassified
        $0.9 million and $0.7 million, of foreign currency translation gains
        related to US-denominated working capital from operating and
        administrative expense to cost of sales, and for the three and six
        months ended June 30, 2008 has reclassified $0.2 million and
        $0.8 million of foreign currency translation losses related to
        US-denominated working capital from operating and administrative
        expense to 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     Three months ended            Three months ended
     volume and           June 30, 2009                 June 30, 2008
     per unit      Gross                         Gross
     amounts)     Profit     Volume   Per Unit  Profit     Volume   Per Unit
    -------------------------------------------------------------------------
    Natural Gas(1)  8.00     8.3 GJ       96.4    8.35     8.0 GJ      104.4
                                      cents/GJ                      cents/GJ
    Electricity(2)  0.30   38.1 KWh       0.79    0.25    13.9KWh       1.79
                                     cents/KWh                     cents/KWh
    -------------------------------------------------------------------------
    Total           8.30                          8.60
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    (millions of
     dollars except     Six months ended               Six months ended
     volume and           June 30, 2009                  June 30, 2008
     per unit      Gross                         Gross
     amounts)     Profit     Volume   Per Unit  Profit      Volume  Per Unit
    -------------------------------------------------------------------------
    Natural Gas(1) 14.78    16.4 GJ       90.1   14.99     16.7 GJ      89.8
                                      cents/GJ                      cents/GJ
    Electricity(2)  0.52   69.0 KWh       0.75    0.41     24.3KWh      1.70
                                     cents/KWh                     cents/KWh
    -------------------------------------------------------------------------
    Total          15.30                         15.40
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (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 $2.8 million in the second
quarter, a decrease of $0.3 million compared to the prior year quarter. SEM's
revenues were $77.4 million in the second quarter, compared to $85.6 million
in the prior year quarter. Revenues were impacted by a reduction in the
average selling price of natural gas, offset in part, by an increase in
electricity revenues due to higher sales volumes. Gross profit from natural
gas was $8.0 million in the second quarter, a decrease of $0.3 million or 4%
compared to the prior year quarter, as gross profit per gigajoule (GJ) of 96.4
cents was 8% lower than over the prior year quarter, more than offsetting a 4%
increase in natural gas volume sold. Gross profit per GJ was impacted by the
revaluation of US-denominated working capital which resulted in a net increase
of gross profit of $0.9 million compared to the prior year quarter, offset in
part by reduced gross profit due to a lower proportion of higher margin
natural gas residential volumes. Natural gas sales volumes were modestly
higher than the prior year quarter as an increase in commercial volumes more
than offset the impact of reduced residential customer volumes. The mix
between commercial and residential volumes was impacted by reduced residential
customer sign-up and SEM's determination during the first quarter of 2009 that
it would refocus its efforts away from direct residential natural gas and
electricity marketing in Ontario to commercial natural gas and electricity
marketing. SEM made this determination based on the challenges in the Ontario
residential market in the acquisition of new customers and the retention of
existing customers. Electricity gross profit in the second quarter of 2009 was
$0.3 million, modestly higher than the prior year quarter due to the
aggregation of additional commercial customers over the past twelve months.
Similar to natural gas, electricity gross profit, electricity unit margins and
electricity volumes were impacted by the increased focus on commercial
customers. Operating, administration and selling costs of $5.5 million were
consistent with the prior year quarter, as reduced selling costs due to
exiting the Ontario residential market were offset by higher professional
costs associated with the restructuring.
    SEM invested $1.2 million in customer acquisition costs during the
quarter, resulting in a customer base of 89,900 residential natural gas
customers, 6,400 commercial natural gas customers and 4,700 electricity
customers. As at June 30, 2009, the average remaining term of SEM's contracts
was 23 months (June 30, 2008 - 30 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 28% of sales
volumes in the second quarter (2008 second quarter - 29%).

    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 the first
quarter 2009 Management's Discussion and Analysis. 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          Six months ended
                                           June 30,                  June 30,
    (millions of dollars)        2009         2008         2009         2008
    -------------------------------------------------------------------------
    Efficiency, process
     improvement and growth
     related                      5.1          7.1         12.9         10.9
    Other capital                 1.8          2.8          3.3          4.4
    Port Edwards expansion
     project                     29.6          3.3         56.2          8.5
    -------------------------------------------------------------------------
                                 36.5         13.2         72.4         23.8
    Earn-out payment on
     prior acquisition              -            -          0.6            -
    Acquisitions                    -         24.6            -         24.6
    Proceeds on disposition
     of capital                  (1.1)        (1.3)        (2.9)        (1.5)
    -------------------------------------------------------------------------
    Total net capital
     expenditures                35.4         36.5         70.1         46.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Efficiency, process improvement and growth related expenditures were $5.1
million in the second quarter compared to $7.1 million in the prior year
quarter. Efficiency, process improvement and growth related expenditures were
incurred in relation to ERCO's electrical cell replacement program, other
efficiency projects and Superior Propane's business transformation project.
Other capital expenditures were $1.8 million in the second quarter compared to
$2.8 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 $1.1 million in the second quarter and consisted of
Superior Propane's disposition of an excess property and surplus tanks and
cylinders. ERCO incurred $29.6 million (US$25.6 million) in the second quarter
of 2009 related to its Port Edward's expansion project, and has incurred
US$91.6 million cumulatively on the project which is anticipated to cost
US$130.0 million in aggregate.

    Corporate and Interest Costs

    Corporate costs for the second quarter were $3.2 million, compared to
$2.0 million in the prior year quarter. Corporate costs were impacted by the
timing of the recognition of long-term incentive plan costs due to
quarter-over-quarter fluctuations in the market value of Superior's share
price and higher professional and consulting costs, offset by reduced
short-term incentive plan costs.
    Interest expense on revolving term bank credits and term loans was $4.0
million (net of $1.4 million of realized gains on interest rate swaps) for the
second quarter, a decrease of $0.7 million from the prior year quarter. The
decrease in interest expense was due to lower average interest rates on
floating rate debt, offset by the impact of higher average debt levels and the
appreciation of the US dollar on US-denominated interest costs. 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 $3.7 million for the second 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 $1,002.3
million. Additional consideration may be payable to/receivable 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
June 30, 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 June 30, 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 expense for the second quarter was $3.5 million, and
consists of $1.2 million in cash income taxes and $2.3 million in future
income taxes, compared to a total income tax expense of $11.0 million in the
prior year quarter, which consisted of $4.2 million in cash income taxes and a
$6.8 million future income tax expense.
    Cash income and withholding taxes for the second quarter were $1.2
million and consisted of cash taxes in the US of $0.9 million and Canadian
capital and withholding taxes of $0.3 million (2008 Q2 - $2.8 million of US
cash taxes and $1.4 million of withholding taxes). The decrease in US cash
income taxes was due to reduced US-denominated taxable earnings as a result of
weaker operating results at ERCO and Winroc's US operations. The decrease in
withholding taxes is due to the establishment of certain intercompany
financing structures in the prior year quarter. Future income tax expense for
the second quarter of 2009 was $2.3 million (2008 Q2 - $6.8 million future
income tax expense), resulting in a corresponding net future income tax asset
of $253.7 million as at June 30, 2009 and a net deferred credit of $281.2
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 $1.95 and $2.10 per share and for 2010 to be between $2.05 and $2.25
per share. Superior's previous outlook for 2009 was $2.00 and $2.15 per share
and for 2010 to be between $2.20 and $2.40 per share, as provided in the first
quarter 2009 Management's Discussion and Analysis. Superior has reduced its
2009 outlook to reflect a reduction in divisional operating guidance at ERCO
and Winroc. Superior has reduced its 2010 outlook to reflect Superior's view
that general economic growth in 2010 will be slower than previously forecast.
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 second half of 2009 with continued modest 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 1.11 in 2009 and 1.11 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 for 2009 and 2010 will be reduced due to 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 $85.9 million related to Superior's accounts
receivable securitization program totaled $530.3 million as at June 30, 2009,
a decrease of $47.4 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 six months ended June 30,
2009 and the non-cash impact of the appreciation of the US dollar on
US-denominated debt (approximately $15.0 million), offset by the impact of
capital expenditures. On May 21, 2009, Superior extended $570.0 million of its
revolving term credit facility; the facility matures on June 28, 2011. See
"Summary of Cash Flows" for a complete summary of Superior's sources and uses
of cash.
    As at June 30, 2009, debentures before deferred issue costs issued by
Superior totaled $248.0 million, which is $0.4 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 six
months ended June 30, 2009.
    As at June 30, 2009, approximately $293.5 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 $72.0 million as at June 30, 2009, a
decrease of $74.7 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 seasonal reduction in working capital levels
combined with a reduction in the retail cost of propane. Lower working capital
levels at Winroc were due to reduced sales activity and inventory management
initiatives, while working capital at ERCO was impacted by the 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. Net
working capital at Propane and ERCO was impacted in part by a $14.9 million
decrease in Superior's accounts receivable securitization program. Superior's
net working capital requirements are financed from revolving term bank credit
facilities and by proceeds raised from a trade accounts receivable sales
program.
    As at June 30, 2009, Superior's senior debt and total debt to compliance
EBITDA are 2.2 and 3.3 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 ratio 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 June 30, 2008, the senior debt ratio when calculated
in accordance with Superior's senior banking agreements was 2.3 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 2.3 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 June 30, 2009, proceeds of $85.9 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 June 10, 2009, DBRS confirmed Superior's senior secured notes rating
at BBB(low) with a stable outlook. On June 12, 2009, Standard and Poor's
confirmed Superior's BBB- secured long-term debt credit rating, but altered
their outlook from stable to negative. Additionally, on June 12, 2009,
Standard and Poor's confirmed Superior's BB+ unsecured credit rating.
    At June 30, 2009, Superior had an estimated defined benefit pension
solvency deficiency of approximately $24 million. Funding requirements
required by applicable pension legislation are based upon solvency actuarial
assumptions. These assumptions differ from the going concern actuarial
assumptions used in Superior's financial statements. Superior has sufficient
liquidity through existing revolving term bank credits and anticipated future
operating cash flow to fund this deficiency over the prescribed funding
period.
    In the normal course of business, Superior is subject to lawsuits and
claims. Superior believes the resolution of these matters will not have a
material adverse effect, individually or in the aggregate, on Superior's
liquidity, consolidated financial position or results of operations. Superior
records costs as they are incurred or when they become determinable.

    Shareholders' Capital

    The weighted average number of shares outstanding during the second
quarter was 88.4 million shares, consistent with the prior year quarter.
    As at August 6, 2009, June 30, 2009, and December 31, 2008, the following
shares and securities convertible into shares were outstanding:

    
    -------------------------------------------------------------------------
                      August 6, 2009       June 30, 2009   December 31, 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 June 30, 2009
totaled $35.8 million or $0.405 per share, consistent with the second quarter
of 2008. Superior's current monthly dividend is $0.135 per share ($1.62 on an
annualized basis). Dividends to shareholders are declared at the discretion of
Superior.

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

    Summary of Cash Flows(1)
    -------------------------------------------------------------------------
                                Three months ended          Six months ended
                                           June 30,                  June 30,
    (millions of dollars)        2009         2008         2009         2008
    -------------------------------------------------------------------------

    Cash flows from operating
     activities                  75.0         82.2        158.4        145.4

    Investing activities:
      Purchase of property,
       plant and equipment(2)   (36.5)       (13.2)       (72.4)       (23.8)
      Proceeds on disposal of
       property, plant and
       equipment                  1.1          1.3          2.9          1.5
      Earn-out payment on
       prior acquisition            -            -         (0.6)           -
      Acquisitions                  -        (24.6)           -        (24.6)
    -------------------------------------------------------------------------
    Cash flows from investing
     activities                 (35.4)       (36.5)       (70.1)       (46.9)
    -------------------------------------------------------------------------

    Financing activities:
      Dividends to
       shareholders             (35.8)       (35.8)       (71.6)       (70.6)
      Revolving term bank
       credits and term loans    36.1         (9.2)       (23.0)        64.8
      Net proceeds of accounts
       receivable
       securitization program   (39.1)           -        (14.1)      (100.0)
      Realized gain on
       financial instruments      6.3            -          6.3            -
      Other                      (3.5)           -         12.0            -
      Proceeds from
       distribution
       reinvestment plan            -            -            -          8.9
    -------------------------------------------------------------------------
    Cash flows from financing
     activities                 (36.0)       (45.0)       (90.4)       (96.9)
    -------------------------------------------------------------------------

    Net increase (decrease)
     in cash                      3.6          0.7         (2.1)         1.6
    Cash beginning of period     10.4         15.0         16.1         14.1
    -------------------------------------------------------------------------
    Cash end of period           14.0         15.7         14.0         15.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (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 three 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 June 30, 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 89%(2) and 75%(2) 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 $0.1 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 1.11.

    
    -------------------------------------------------------------------------
                                                                 2014
                                                                  and
                                                                There-
    (US$ millions)            2009   2010   2011   2012   2013  after  Total
    -------------------------------------------------------------------------
    SEM - US$ forward
     purchases(1)            (49.4) (61.9)  (5.4)     -      -      - (116.7)
    Superior Propane -
     US$ forward sales         6.6    3.1      -      -      -      -    9.7
    ERCO - US$ forward
     sales(2)                 64.7  111.4   64.5   32.5    9.0      -  282.1
    SPLP - US$ forward
     purchases                (5.3)     -      -      -      -      -   (5.3)
    -------------------------------------------------------------------------
    Net US $ forward
     purchases                16.6   52.6   59.1   32.5    9.0      -  169.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SEM - Average US$
     forward purchase
     rate(1)                  1.21   1.16   1.11      -      -      -   1.18
    Superior Propane -
     Average US$ forward
     rate                     1.22   1.21      -      -      -      -   1.22
    ERCO - Average US$
     forward sales rate(2)    1.08   1.08   1.20   1.13   1.11      -   1.12
    SPLP - Average US$
     forward sales purchase
     rate                     1.09      -      -      -      -      -   1.09
    -------------------------------------------------------------------------
    Net average external
     US$/Cdn$ exchange rate   1.14   1.11   1.19   1.13   1.11      -   1.14
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    ERCO - EURO forward
     sales                     2.8    5.1    0.3      -      -      -    8.2
    -------------------------------------------------------------------------
    ERCO - Average EURO
     forward sales rate       1.58   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) 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 $29.6 million
        (US$25.6 million) was incurred in the second quarter of 2009,
        (US$91.6 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 second
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.

    Subsequent Event

    On August 6, 2009, Superior entered into a definitive agreement to
acquire the shares of Specialty Products & Insulation Co. (SPI), a privately
held US national distributor of insulation and architectural products in the
commercial and industrial markets for consideration of approximately US$135
million (not including acquisition costs and normal course closing
adjustments). The acquisition is anticipated to close in the third quarter of
2009.

    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 and second quarters,
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 and second
quarters. 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 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 a lease arrangement as either an operating
        lease or a finance/capital lease may differ under IFRS;
    -   The assessment and accounting treatment of off-balance sheet
        arrangements such as Superior's accounts receivable securitization
        program may differ under IFRS ;
    -   The classification of financial statement items may differ under
        IFRS; and
    -   Financial statement disclosures under IFRS tend to be more
        comprehensive 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.

    Financial Instruments - Disclosure

    The CICA has amended Handbook Section 3862 Financial Instruments -
Disclosure. These amendments require enhanced disclosure on the fair value of
certain financial instruments. The amendments are effective for annual
financial statements on or after September 30, 2009. Superior does not
anticipate that these amendments will have a significant impact on its
consolidated financial statements.

    Quarterly Financial and Operating Information

    
    -------------------------------------------------------------------------
                           2009                          2008
                         Quarters                      Quarters
    -------------------------------------------------------------------------
    (millions of
     dollars except
     per share
     amounts)       Second     First    Fourth     Third    Second     First
    -------------------------------------------------------------------------
    Propane sales
     volumes
     (millions of
     litres)           249       431       390       244       274       469
    Chemical sales
     volumes
     (thousands of
     metric tonnes)    155       155       160       188       188       191
    Natural gas
     sales volumes
     (millions of
     GJs)                8         8         8         8         8         9
    Electricity
     sales volumes
     (millions of
     KWh)               38        31        28        18        14        10

    Gross profit     134.9     188.3     193.1     152.8     153.3     169.9
    Net earnings
     (loss)           23.4      (5.5)    (19.9)   (203.9)    164.3     127.2
    Per share,
     basic           $0.26    $(0.06)   $(0.23)   $(2.31)    $1.86     $1.44
    Per share,
     diluted         $0.26    $(0.06)   $(0.23)   $(2.31)    $1.86     $1.44
    Adjusted
     operating cash
     flow             18.9      61.3      65.0      33.5      38.1      55.7
    Per share,
     basic           $0.21     $0.69     $0.74     $0.38     $0.43     $0.63
    Per share,
     diluted         $0.21     $0.69     $0.74     $0.38     $0.43     $0.63
    Net working
     capital(1)       72.0      83.7     152.2     227.4     217.6     256.3
    -------------------------------------------------------------------------


    -------------------------------------------
                               2007
                             Quarters
    -------------------------------------------
     (millions of
      dollars except
      per share
      amounts)      Fourth     Third    Second
    -------------------------------------------
     Propane sales
      volumes
      (millions of
      litres)          416       256       280
     Chemical sales
      volumes
      (thousands of
      metric tonnes)   194       187       193
     Natural gas
      sales volumes
      (millions of
      GJs)               9         9         9
     Electricity
      sales volumes
      (millions of
      KWh)               2         -         -

     Gross profit    185.8     145.9     144.4
     Net earnings
      (loss)          64.5     (26.9)    (25.5)
     Per share,
      basic          $0.74    $(0.31)   $(0.30)
     Per share,
      diluted        $0.74    $(0.31)   $(0.30)
     Adjusted
      operating cash
      flow            64.9      30.3      21.7
     Per share,
      basic          $0.74     $0.35     $0.25
     Per share,
      diluted        $0.74     $0.35     $0.25
     Net working
      capital(1)     157.0      62.3     105.2
    -------------------------------------------

    (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     Superior
     ended June 30, 2009      Propane         ERCO       Winroc          SEM
    -------------------------------------------------------------------------
    Net earnings (loss)           6.3          8.0          2.2         17.6
    Add: Amortization of
          property, plant and
          equipment, intangible
          assets and accretion
          of convertible
          debenture issue costs   3.2          1.4          1.1            -
         Amortization included
          in cost of sales          -          9.1            -            -
         Superior Propane
          non-cash pension
          expense                 0.3            -            -            -
         Unrealized (gains)
          losses on financial
          instruments            (7.8)         1.7            -        (14.8)
         Reversal of unrealized
          losses financial
          instruments previously
          treated as realized     2.7            -            -            -
    -------------------------------------------------------------------------
    EBITDA from operations        4.7         20.2          3.3          2.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    For the three months     Superior
     ended June 30, 2008      Propane         ERCO       Winroc          SEM
    -------------------------------------------------------------------------
    Net earnings (loss)           8.8         25.1         10.0        145.1
    Add: Amortization of
          property, plant and
          equipment, intangible
          assets and accretion
          of convertible
          debenture issue costs   3.9          1.8          1.0          0.1
         Amortization included
          in cost of sales          -          9.1            -            -
         Superior Propane
          non-cash pension
          expense                 0.6            -            -            -
         Unrealized (gains)
          losses on financial
          instruments            (0.4)       (10.3)           -       (142.1)
    -------------------------------------------------------------------------
    EBITDA from operations       12.9         25.7         11.0          3.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    For the six months       Superior
     ended June 30, 2009      Propane         ERCO       Winroc          SEM
    -------------------------------------------------------------------------
    Net earnings (loss)          43.4         14.8          2.6        (35.9)
    Add: Amortization of
          property, plant and
          equipment, intangible
          assets and accretion
          of convertible
          debenture issue costs   9.4          2.5          2.2          0.2
         Amortization included
          in cost of sales          -         18.2            -            -
         Superior Propane
          non-cash pension
          expense                 0.7            -            -            -
         Unrealized (gains)
          losses on financial
          instruments            (3.9)        16.8            -         40.0
    -------------------------------------------------------------------------
    EBITDA from operations       49.6         52.3          4.8          4.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    For the six months       Superior
     ended June 30, 2008      Propane         ERCO       Winroc          SEM
    -------------------------------------------------------------------------
    Net earnings (loss)          39.3         55.9         13.8        232.2
    Add: Amortization of
          property, plant and
          equipment, intangible
          assets and accretion
          of convertible
          debenture issue costs   7.7          2.8          2.0          0.1
         Amortization included
          in cost of sales          -         19.7            -            -
         Superior Propane
          non-cash pension
          expense                 1.2            -            -            -
         Unrealized (gains)
          losses on financial
          instruments             2.6        (26.7)           -       (227.2)
    -------------------------------------------------------------------------
    EBITDA from operations       50.8         51.7         15.8          5.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (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 June 30, 2009, Superior has reversed the
        impact of $2.7 million of unrealized losses on financial instruments
        which were treated as a component of EBITDA from operations for the
        three months ended March 31, 2009, related to Superior Propane's
        wholesale trading business. There is no impact on Superior Propane's
        EBITDA from operations for the six months ended June 30, 2009.
    

    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 a 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, 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 are 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.

    
    SUPERIOR PLUS CORP.
    Consolidated Balance Sheets

    -------------------------------------------------------------------------
                                                        June 30, December 31,
    (unaudited, millions of dollars)                       2009         2008
    -------------------------------------------------------------------------
    Assets
    Current Assets
      Cash and cash equivalents                            14.0         16.1
      Accounts receivable and other (Note 4 and 8)        166.4        246.8
      Inventories                                         105.7        128.0
      Future income tax asset (Note 9)                     77.5         65.9
      Current portion of unrealized gains on
       financial instruments (Note 8)                      27.5         42.0
    -------------------------------------------------------------------------
                                                          391.1        498.8

    Property, plant and equipment                         591.1        562.3
    Customer contract related costs                        16.4         17.7
    Intangible assets                                      27.6         28.8
    Goodwill                                              472.8        472.7
    Accrued pension asset                                  18.8         19.5
    Future income tax asset (Note 9)                      176.2        185.9
    Investment tax credits                                124.0        133.1
    Long-term portion of unrealized gains on
     financial instruments (Note 8)                        37.2        108.1
    -------------------------------------------------------------------------

                                                        1,855.2      2,026.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
    Current Liabilities
      Accounts payable and accrued liabilities            196.1        230.5
      Current portion of term loans (Note 6)                5.3         13.0
      Dividends and interest payable to
       shareholders and debentureholders                   12.7          0.7
      Current portion of deferred credit (Note 9)          39.8         37.9
      Current portion of unrealized losses on
       financial instruments (Note 8)                     104.4         87.8
    -------------------------------------------------------------------------
                                                          358.3        369.9

    Revolving term bank credits and term
     loans (Note 6)                                       434.3        462.8
    Convertible unsecured subordinated
     debentures (Note 7)                                  242.6        241.7
    Future employee benefits                               15.2         18.0
    Deferred credit (Note 9)                              241.4        269.8
    Long-term portion of unrealized losses on
     financial instruments (Note 8)                        56.6         90.5
    -------------------------------------------------------------------------
    Total Liabilities                                   1,348.4      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                                (857.1)      (803.1)
      Accumulated other comprehensive income
       (loss) (Note 10)                                   (11.8)         1.6
    -------------------------------------------------------------------------
                                                         (868.9)      (801.5)
    -------------------------------------------------------------------------
    Total Shareholders' Equity                            506.8        574.2
    -------------------------------------------------------------------------

                                                        1,855.2      2,026.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See Notes to the Unaudited Interim Consolidated Financial Statements)



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

    -------------------------------------------------------------------------
    (unaudited,
     millions of
     dollars except             Three months ended          Six months ended
     per share                             June 30,                  June 30,
     amounts)                    2009         2008         2009         2008
    -------------------------------------------------------------------------

    Revenues                    454.4        567.2      1,057.9      1,248.6
    Cost of products sold      (295.2)      (439.9)      (687.7)      (951.6)
    Realized gains
     (losses) on
     financial
     instruments (Note 8)       (24.3)        26.0        (47.0)        26.2
    -------------------------------------------------------------------------
    Gross profit                134.9        153.3        323.2        323.2
    -------------------------------------------------------------------------

    Expenses
      Operating and
       administrative           111.5        110.9        230.0        224.8
      Amortization of
       property, plant
       and equipment              4.1          5.5         11.3         10.2
      Amortization of
       intangible assets          1.6          1.3          3.0          2.4
      Interest on
       revolving term
       bank credits and
       term loans                 5.4          6.1         11.9         12.2
      Interest on
       convertible
       unsecured
       subordinated
       debentures                 3.7          3.7          7.5          7.4
      Accretion of
       convertible
       debenture issue
       costs                      0.3          0.3          0.6          0.8
      Unrealized losses
       (gains) on
       financial
       instruments
       (Note 8)                 (18.6)      (149.8)        54.3       (255.1)
    -------------------------------------------------------------------------
                                108.0        (22.0)       318.6          2.7
    -------------------------------------------------------------------------

    Net earnings before
     income taxes                26.9        175.3          4.6        320.5
    Income tax recovery
     (expense) (Note 9)          (3.5)       (11.0)        13.3        (29.0)
    -------------------------------------------------------------------------
    Net Earnings                 23.4        164.3         17.9        291.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings                 23.4        164.3         17.9        291.5
    Other comprehensive
     income:
      Unrealized foreign
       currency gains
       (losses) on
       translation of
       self-sustaining
       foreign operations       (13.1)         6.4         (9.0)         2.8
      Reclassification of
       derivative gains
       and losses
       previously deferred        1.9        (15.1)        (4.4)        (7.0)
    -------------------------------------------------------------------------
    Comprehensive Income         12.2        155.6          4.5        287.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Deficit, Beginning
     of Period                 (844.7)      (636.2)      (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                 23.4        164.3         17.9        291.5
    Dividends to
     Shareholders
     (Note 2(a))                (35.8)       (35.8)       (71.6)       (70.6)
    -------------------------------------------------------------------------
    Deficit, End
     of Period                 (857.1)      (507.7)      (857.1)      (507.7)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings (loss)
     per share, basic
     and diluted
     (Note 11)                  $0.26        $1.86        $0.20        $3.30
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See Notes to the Unaudited Interim Consolidated Financial Statements)



    SUPERIOR PLUS CORP.
    Consolidated Statements of Cash Flows

    -------------------------------------------------------------------------
    (unaudited,                 Three months ended          Six months ended
     millions                              June 30,                  June 30,
     of dollars)                 2009         2008         2009         2008
    -------------------------------------------------------------------------
    Operating Activities
    Net earnings                 23.4        164.3         17.9        291.5
    Items not affecting cash:
      Amortization of property,
       plant and equipment,
       intangible assets and
       accretion of convertible
       debenture issue costs      6.0          7.1         14.9         13.4
      Amortization of customer
       contract related costs     1.7          1.7          3.4          3.3
      Amortization included
       in cost of sales           9.1          9.1         18.2         19.7
      Pension expense             0.3          0.6          0.7          1.2
      Unrealized losses
       (gains) on
       financial instruments    (18.6)      (149.8)        54.3       (255.1)
      Future income tax
       expense (recovery)         2.3          6.8        (19.5)        23.1
    Customer contract
     related costs               (1.2)        (1.7)        (2.1)        (2.4)
    Realized gain on
     financial instruments       (6.3)           -         (6.3)           -
    Decrease in non-cash
     operating working
     capital items               58.3         44.1         76.9         50.7
    -------------------------------------------------------------------------
    Cash flows from
     operating activities        75.0         82.2        158.4        145.4
    -------------------------------------------------------------------------

    Investing Activities
      Purchase of property,
       plant and equipment      (36.5)       (13.2)       (72.4)       (23.8)
      Proceeds on disposal
       of property, plant
       and equipment              1.1          1.3          2.9          1.5
      Earn-out payment on
       prior acquisition            -            -         (0.6)           -
      Acquisitions                  -        (24.6)           -        (24.6)
    -------------------------------------------------------------------------
    Cash flows from
     investing activities       (35.4)       (36.5)       (70.1)       (46.9)
    -------------------------------------------------------------------------

    Financing Activities
      Revolving term bank
       credits and term
       loans                     36.1         (9.2)       (23.0)        64.8
      Net repayment of
       accounts receivable
       sales program            (39.1)           -        (14.1)      (100.0)
      Dividends to
       Shareholders             (35.8)       (35.8)       (71.6)       (70.6)
      Proceeds from
       distribution
       reinvestment
       program                      -            -            -          8.9
      Realized gain on
       financial
       instruments                6.3            -          6.3            -
      Increase in non-cash
       working capital           (3.5)           -         12.0            -
    -------------------------------------------------------------------------
    Cash flows from
     financing activities       (36.0)       (45.0)       (90.4)       (96.9)
    -------------------------------------------------------------------------

    Net increase (decrease)
     in cash                      3.6          0.7         (2.1)         1.6
    Cash and cash
     equivalents, beginning
     of period                   10.4         15.0         16.1         14.1
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end
     of period                   14.0         15.7         14.0         15.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 June 30, 2009, payments to
    Shareholders were in the form of dividends, whereas for the period ended
    June 30, 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 unaudited 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 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.

    Financial Instruments - Disclosure

    The CICA has amended Handbook Section 3862 Financial Instruments -
    Disclosure. These amendments require enhanced disclosure on the fair
    value of certain financial instruments. The amendments are effective for
    annual financial statements on or after September 30, 2009. Superior does
    not anticipate that these amendments will have a significant impact 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 June 30, 2009, proceeds of $85.9 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:

                                                        June 30, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Accounts receivable trade                             153.0        225.5
    Accounts receivable other                               3.6          5.9
    Prepaid expenses                                        9.8         15.4
    -------------------------------------------------------------------------
    Accounts receivable and other                         166.4        246.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    5.  Inventories

    For the three and six months ended June 30, 2009 inventories of $252.9
    million and $591.7 million were expensed through cost of products sold.
    For the three and six months ended June 30, 2008 inventories of $335.4
    million and $773.0 million were expensed through cost of products sold.
    No write-downs of inventory or reversals of write-downs were recorded
    during the three and six months ended June 30, 2009 and 2008.

    6.  Revolving Term Bank Credits and Term Loans



                            Year of    Effective Interest     June  December
                           Maturity    Rate               30, 2009  31, 2008
    -------------------------------------------------------------------------
    Revolving term
     bank credits(1)                   Floating BA rate
      Bankers                           plus applicable
       Acceptances (BA)        2011     credit spread        187.6     168.9
      LIBOR Loans                      Floating LIBOR rate
        (US$58.3 million; 2008          plus applicable
        - US$71.6 million)     2011     credit spread         67.8      90.1
    -------------------------------------------------------------------------
                                                             255.4     259.0
    -------------------------------------------------------------------------
    Other Debt
      Notes payable            2010    Prime                   0.6       6.2
      Deferred
       consideration           2010    Non-interest bearing    2.4       4.8
      Loan payable        2009-2014    6.3%                      -      11.8
    -------------------------------------------------------------------------
                                                               3.0      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%        69.8      73.5
      Senior secured
       notes subject to
       fixed interest
       rates
       (US$100.0 million;
       2008 - US$100.0
       million)(2)        2009-2015    6.65%                 116.2     122.4
    -------------------------------------------------------------------------
                                                             186.0     195.9
    -------------------------------------------------------------------------
    Total revolving term
     bank credits and
     term loans before
     deferred financing
     fees                                                    444.4     477.7
    Deferred financing fees                                   (4.8)     (1.9)
    -------------------------------------------------------------------------
    Revolving term bank credits and term loans               439.6     475.8
    Current maturities                                        (5.3)    (13.0)
    -------------------------------------------------------------------------
    Revolving term bank credits and term loans               434.3     462.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Superior and its wholly-owned subsidiaries, Superior Plus US Holdings
        Inc. and Commercial e Industrial (Chile) Limitada, have revolving
        term bank credit borrowing capacity of $570.0 million. The credit
        facility matures on June 28, 2011 These facilities are secured by a
        general charge over the assets of Superior and certain of its
        subsidiaries. As at June 30, 2009, Superior had $19.4 million of
        outstanding letters of credit (December 31, 2008 - $41.5 million).
        The fair value of Superior's revolving term bank credits and other
        debt approximates its carrying value as a result of the market based
        interest rates and the short-term nature of the underlying debt
        instruments.

    (2) Senior secured notes (the Notes) totaling US$160.0 million (CDN$186.0
        million at June 30, 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 June 30, 2009 was CDN$180.5 million (December 31, 2008 - CDN$183.8
        million). In conjunction with the issue of the Notes, Superior
        swapped US$60.0 million (CDN $69.8 million) (December 31, 2008 - US
        $60.0 million (CDN $73.5 million)) of the fixed rate obligation into
        a US dollar floating rate obligation.

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

    -------------------------------------------------------------------------
    Current portion                                                      5.3
    Due in 2011                                                        294.9
    Due in 2012                                                         37.2
    Due in 2013                                                         37.2
    Due in 2014                                                         34.9
    Subsequent to 2014                                                  34.9
    -------------------------------------------------------------------------
    Total                                                              444.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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                    -            -          0.4          0.4
    Deferred issue costs         (3.4)        (2.0)                     (5.4)
    -------------------------------------------------------------------------
    Debentures outstanding
     as at June 30, 2009        171.5         73.0         (1.9)       242.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Quoted market value
     as at June 30, 2009        173.2         67.5
    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 $1.2 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   June 30,  December
    Description    Notional(1)        Term         Rate      2009   31, 2008
    -------------------------------------------------------------------------
    Natural gas
     financial
     swaps-NYMEX    16.2 GJ(2)   2009-2011   US$7.83/GJ     (47.1)     (33.5)
    Natural gas
     financial
     swaps-AECO     36.7 GJ(2)   2009-2014  CDN$7.81/GJ     (60.2)     (34.8)
    Foreign
     currency
     forward
     contracts,
     net sale      US$169.8(4)   2009-2015         1.14     (12.9)     (11.5)
    Foreign
     currency
     forward       EURO
     contracts    (euro)8.2(4)   2009-2011         1.58      (0.3)         -

                                               Floating
    Interest rate                            LIBOR rate
     swaps          US$60.0(4)   2013-2015    plus 1.7%       6.5       11.7
    Propane
     wholesale
     purchase
     and sale
     contracts,
     net sale      10.0 USG(5)   2009-2010    $1.02/USG       1.7       (1.3)
    Butane
     wholesale
     purchase
     and sale
     contracts,
     net sale       0.7 USG(5)   2009-2010    $1.13/USG       0.8          -
    ERCO fixed-
     price electri-
     city purchase
     agreement        45 MW(3)   2009-2017  $45-$52/MWh      24.7       42.1
    SEM electricity
     swaps          0.5 MWh(6)   2009-2014    $63.5/MWh      (9.5)      (0.9)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Notional values as at June 30, 2009
    (2) Millions of gigajoules purchased
    (3) Mega watts (MW) on a 24/7 continual basis per year purchased
    (4) Millions of dollars/Euros
    (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      16.4          5.0         83.9         44.8
    SEM electricity swaps           -            -          4.1          5.4
    Foreign currency forward
     contracts, net               2.3          4.5         13.6          6.4
    Interest rate swaps             -          6.5            -            -
    Propane wholesale purchase
     and sale contracts           3.5            -          1.8            -
    Butane wholesale purchase
     and sale contracts           1.8            -          1.0            -
    ERCO fixed-price power
     purchase agreements          3.5         21.2            -            -
    -------------------------------------------------------------------------
    As at June 30, 2009          27.5         37.2        104.4         56.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    As at December 31, 2008      42.0        108.1         87.8         90.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                     For the three             For the three
                                      months ended              months ended
                                     June 30, 2009             June 30, 2008
                             Realized   Unrealized     Realized   Unrealized
                                 gain         gain         gain         gain
    Description                 (loss)       (loss)       (loss)       (loss)
    -------------------------------------------------------------------------
    Natural gas financial
     swaps - NYMEX and AECO     (28.2)        20.3         19.7        140.4
    SEM electricity swaps        (1.3)        (5.6)           -          1.7
    Foreign currency forward
     contracts, net              (1.4)       (12.1)        (3.6)        (1.2)
    Interest rate swaps           1.4         (5.8)         1.4         (3.4)
    Foreign currency forward
     contracts - balance
     sheet related                6.3            -            -            -
    Propane wholesale purchase
     and sale contracts             -          7.0            -          0.4
    Butane wholesale purchase
     and sale contracts             -          0.8            -            -
    ERCO fixed-price power
     purchase agreements         (1.1)        (1.6)         8.5          8.3
    -------------------------------------------------------------------------
    Total realized and
     unrealized gains
     (losses) on financial
     and non-financial
     derivatives                (24.3)         3.0         26.0        146.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Foreign currency
     translation of senior
     secured notes                  -         15.6            -          1.6
    Foreign currency
     translation of ERCO
     royalty assets                 -            -            -          2.0
    -------------------------------------------------------------------------
    Total realized and
     unrealized gains (losses)  (24.3)        18.6         26.0        149.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                       For the six               For the six
                                      months ended              months ended
                                     June 30, 2009             June 30, 2008
                             Realized   Unrealized     Realized   Unrealized
                                 gain         gain         gain         gain
    Description                 (loss)       (loss)       (loss)       (loss)
    -------------------------------------------------------------------------
    Natural gas financial
     swaps - NYMEX and AECO     (45.6)       (31.5)        21.4        225.0
    SEM electricity swaps        (1.8)        (8.6)           -          2.2
    Foreign currency forward
     contracts, net              (7.4)        (5.5)        (8.4)         9.5
    Interest rate swaps           1.4         (5.8)         1.4         (0.9)
    Foreign currency forward
     contracts - balance sheet
     related                      6.3            -            -            -
    Propane wholesale purchase
     and sale contracts             -          3.1            -         (2.6)
    Butane wholesale purchase
     and sale contracts             -          0.8            -            -
    ERCO fixed-price power
     purchase agreements          0.1        (16.7)        11.8         25.5
    -------------------------------------------------------------------------
    Total realized and
     unrealized gains (losses)
     on financial and
     non-financial derivatives  (47.0)       (64.2)        26.2        258.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Foreign currency
     translation of senior
     secured notes                  -          9.9            -         (4.8)
    Foreign currency
     translation of ERCO
     royalty assets                 -            -            -          1.2
    -------------------------------------------------------------------------
    Total realized and
     unrealized gains (losses)  (47.0)       (54.3)        26.2        255.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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


                                                        June 30, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Current                                               121.2        150.5
    Past due less than 90 days                             29.1         67.6
    Past due over 90 days                                   9.1         16.7
    -------------------------------------------------------------------------
    Trade accounts receivable, total                      159.4        234.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Superior's trade accounts receivable are stated after deducting a
    provision of $6.4 million as at June 30, 2009 (December 31, 2008 -
    $9.3 million). The movement in the provision for doubtful accounts was as
    follows:

                                                            Six       Twelve
                                                         months       months
                                                          ended        ended
                                                        June 30, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Allowance for doubtful accounts, opening               (9.3)        (5.1)
    Bad debt expense, net of recoveries                    (2.4)        (8.1)
    Written-off                                             5.3          3.9
    -------------------------------------------------------------------------
    Allowance for doubtful accounts, ending                (6.4)        (9.3)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

                                                                 2015
                                                                  and
                                                                There-
                              2010   2011   2012   2013   2014  after  Total
    -------------------------------------------------------------------------
    Revolving term bank
     credits and term loans    5.3  294.9   37.2   37.2   34.9   34.9  444.4
    Convertible unsecured
     subordinated debentures     -      -      -      -  174.9   75.0  249.9
    CDN$ equivalent of US$
     foreign currency forward
     purchase contracts       57.5   68.0    6.0      -      -      -  131.5
    US$ foreign currency
     forward sales contracts
     (US$)                    64.7  111.4   64.5   32.5    9.0      -  282.1
    EURO(euro) foreign
     currency forward sales
     contracts (EURO)          2.8    5.1    0.3      -      -      -    8.2
    Fixed-price electricity
     purchase commitments      8.9   17.7   17.7   17.7   17.7   70.8  150.5
    CDN$ natural gas
     purchases                17.6   28.9    7.5    4.9    3.4      -   62.3
    US$ natural gas
     purchases (US$)          27.7   36.3    2.2      -      -      -   66.2
    US$ propane purchases
     (US$)                    13.0    0.5      -      -      -      -   13.5
    US$ butane purchases
     (US$)                     4.7    1.9      -      -      -      -    6.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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 and six
                                                                months ended
                                                               June 30, 2009
    -------------------------------------------------------------------------
    Increase (decrease) to net earnings of a $0.01 increase
     in the CDN$ to the US$                                              3.4
    Increase (decrease) to net earnings of a 0.5% increase
     in interest rates                                                  (0.8)
    Increase (decrease) to net earnings of a $0.40/GJ increase
     in the price of natural gas                                        20.3
    Increase (decrease) to net earnings of a $0.04/litre increase
     in the price of propane                                             0.6
    Increase (decrease) to net earnings of a $0.04/litre increase
     in the price of butane                                              0.1
    Increase (decrease) to net earnings of a $1.00/KwH increase
     in the price of electricity                                         1.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The calculation of Superior's sensitivity to changes in foreign currency
    exchange rates, interest rates and various commodity prices represent the
    change in fair value of the financial instrument without consideration of
    the value of the underlying variable, for example, the underlying
    customer contracts. The recognition of the sensitivities identified above
    would have impacted Superior's unrealized gain (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 three and six months ended
    June 30, 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 three and six months ended June 30, 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/expense, comprised of current and future taxes
    for the three and six months ended June 30, 2009 was a $3.5 million
    expense and a $13.3 million recovery, respectively, compared to an
    expense of $11.0 million and $29.0 million 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 and six months ended June 30, 2009, future
    income tax recovery/expense from operations in Canada, the United States
    and Chile was a $2.3 million expense and a $19.5 million recovery,
    respectively, resulting in a corresponding total future income tax asset
    of $253.7 million and a total deferred credit of $281.2 million. Future
    income tax expense for the three and six months ended June 30, 2008 was
    $6.8 million and $23.1 million, respectively.

    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 earnings                                              -         17.9
    Other comprehensive loss                                  -        (13.4)
    Cumulative impact of adopting new guidance on the
     valuation of financial instrument asset and
     liabilities (Note 2(b))                                  -         (0.3)
    Dividends to Shareholders(2)                              -        (71.6)
    -------------------------------------------------------------------------
    Shareholders' equity, June 30, 2009                    88.4        506.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (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 June 30, 2009 and December 31, 2008 consists of the
    following components:

                                                        June 30, 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                   550.7        532.8
      Cumulative impact of adopting new guidance on
       the valuation of financial instrument asset
       and liabilities (Note 2(b))                         (0.3)           -
      Accumulated distributions                        (1,407.5)    (1,335.9)
    -------------------------------------------------------------------------
                                                         (857.1)      (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   (9.0)        30.1
      Reclassification of derivative gains and losses
       previously deferred                                 (4.4)        (8.2)
    -------------------------------------------------------------------------
                                                          (11.8)         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 June 30, 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:

                                                        June 30, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Total shareholders' equity                            506.8        574.2
    Exclude accumulated other comprehensive loss (income)  11.8         (1.6)
    -------------------------------------------------------------------------
    Shareholders' equity (excluding AOCI)                 518.6        572.6

    Current portion of term loans                           5.3         13.0
    Revolving term bank credits and term loans(1)         439.1        464.7
    Accounts receivable securitization program             85.9        100.0
    -------------------------------------------------------------------------
    Total senior debt                                     530.3        577.7
    Convertible unsecured subordinated debentures(1)      248.0        247.6
    -------------------------------------------------------------------------
    Total debt                                            778.3        825.3

    Cash                                                  (14.0)       (16.1)

    -------------------------------------------------------------------------
    Total capital                                       1,282.9      1,381.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                         Twelve       Twelve
                                                         months       months
                                                          ended        ended
                                                        June 30, December 31,
                                                           2009         2008
    -------------------------------------------------------------------------
    Net earnings (loss)                                  (205.9)        67.7
    Adjusted for:
      Interest on revolving term bank credits and term
       loans                                               23.4         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        19.4         18.3
      Amortization included in cost of sales               37.4         38.9
      Amortization of intangible assets                     5.9          5.3
      Income tax expense (recovery)                       (32.4)         9.9
      Unrealized (gains) losses on financial instruments  370.6         61.2
      Gain on sale of facility                             (4.0)        (4.0)
      Superior Propane non-cash pension expense             1.9          2.4
    -------------------------------------------------------------------------
    EBITDA(2)                                             232.4        239.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                        June 30, December 31,
                                            Target         2009         2008
    -------------------------------------------------------------------------
    Senior debt to EBITDA(2)         1.5:1 - 2.0:1         2.3:1       2.4:1
    Total debt to EBITDA(2)          2.5:1 - 3.0:1         3.3:1       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 per Share

                                Three months ended          Six months ended
                                           June 30,                  June 30,
                                 2009         2008         2009         2008
    -------------------------------------------------------------------------
    Net earnings per share
     computation, basic and
     diluted(1)
      Net earnings               23.4        164.3         17.9        291.5
      Weighted average shares
       outstanding               88.4         88.4         88.4         88.3
    -------------------------------------------------------------------------
    Net earnings per share,
     basic and diluted          $0.26        $1.86        $0.20        $3.30
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (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
     June 30,     Superior                                           Consoli-
     2009          Propane      ERCO    Winroc       SEM Corporate     dated
    -------------------------------------------------------------------------
    Revenues         158.7     120.1      98.2      77.4         -     454.4
    Cost of
     products sold  (108.9)    (72.5)    (73.9)    (39.9)        -    (295.2)
    Realized gains
     (losses) on
     financial
     instruments       1.7      (3.6)        -     (30.1)      7.7     (24.3)
    -------------------------------------------------------------------------
    Gross profit      51.5      44.0      24.3       7.4       7.7     134.9

    Expenses
      Operating and
       administrative 49.8      32.9      21.0       4.6       3.2     111.5
      Amortization of
       property, plant
       and equipment   3.2         -       0.9         -         -       4.1
      Amortization of
       intangible
       assets            -       1.4       0.2         -         -       1.6
      Interest on
       revolving term
       bank credits
       and term loans    -          -        -         -       5.4       5.4
      Interest on
       convertible
       unsecured
       subordinated
       debentures        -          -        -         -       3.7       3.7
      Accretion of
       convertible
       debenture
       issue costs       -         -         -         -       0.3       0.3
      Unrealized
       losses (gains)
       on financial
       instruments    (7.8)      1.7         -     (14.8)      2.3     (18.6)
    -------------------------------------------------------------------------
                      45.2      36.0      22.1     (10.2)     14.9     108.0
    -------------------------------------------------------------------------
    Net earnings
     (loss) before
     income taxes      6.3       8.0       2.2      17.6      (7.2)     26.9
    Income tax
     expense             -         -         -         -      (3.5)     (3.5)
    -------------------------------------------------------------------------
    Net Earnings
     (Loss)            6.3       8.0       2.2      17.6     (10.7)     23.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    For the three
     months ended                                                      Total
     June 30,     Superior                                           Consoli-
     2008          Propane      ERCO    Winroc       SEM Corporate     dated
    -------------------------------------------------------------------------
    Revenues         228.1     112.0     141.5      85.6         -     567.2
    Cost of
     products sold  (166.2)    (78.1)   (105.4)    (90.2)        -    (439.9)
    Realized gains
     (losses) on
     financial
     instruments       0.4      10.8         -      13.4       1.4      26.0
    -------------------------------------------------------------------------
    Gross profit      62.3      44.7      36.1       8.8       1.4     153.3

    Expenses
      Operating and
       administrative 50.0      28.1      25.1       5.7       2.0     110.9
      Amortization of
       property, plant
       and equipment   3.9       0.7       0.9         -         -       5.5
      Amortization of
       intangible
       assets            -       1.1       0.1       0.1         -       1.3
      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             -         -         -         -       0.3       0.3
      Unrealized losses
       (gains) on
       financial
       instruments    (0.4)    (10.3)        -    (142.1)      3.0    (149.8)
    -------------------------------------------------------------------------
                      53.5      19.6      26.1    (136.3)     15.1     (22.0)
    -------------------------------------------------------------------------
    Net earnings
     (loss) before
     income taxes      8.8      25.1      10.0     145.1     (13.7)    175.3
    Income tax expense   -         -         -         -     (11.0)    (11.0)
    -------------------------------------------------------------------------
    Net Earnings
     (Loss)            8.8      25.1      10.0     145.1     (24.7)    164.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    For the six
     months ended                                                      Total
     June 30,     Superior                                           Consoli-
     2009          Propane      ERCO    Winroc       SEM Corporate     dated
    -------------------------------------------------------------------------
    Revenues         467.8     244.0     192.3     153.8         -   1,057.9
    Cost of
     products sold  (311.6)   (140.4)   (143.6)    (92.1)        -    (687.7)
    Realized gains
     (losses) on
     financial
     instruments      (0.9)     (6.7)        -     (47.1)      7.7     (47.0)
    -------------------------------------------------------------------------
    Gross profit     155.3      96.9      48.7      14.6       7.7     323.2

    Expenses
      Operating and
       admini-
       strative      106.4      62.8      43.9      10.3       6.6     230.0
      Amortization
       of property,
       plant and
       equipment       9.4         -       1.9         -         -      11.3
      Amortization
       of intangible
       assets            -       2.5       0.3       0.2         -       3.0
      Interest on
       revolving term
       bank credits and
       term loans        -         -         -         -      11.9      11.9
      Interest on
       convertible
       unsecured
       subordinated
       debentures        -         -         -         -       7.5       7.5
      Accretion of
       convertible
       debenture issue
       costs             -         -         -         -       0.6       0.6
      Unrealized losses
       (gains) on
       financial
       instruments    (3.9)     16.8         -       40.0      1.4      54.3
    -------------------------------------------------------------------------
                     111.9      82.1      46.1       50.5     28.0     318.6
    -------------------------------------------------------------------------
    Net earnings
     (loss) before
     income taxes     43.4      14.8       2.6      (35.9)   (20.3)      4.6
    Income tax
     recovery            -         -         -          -     13.3      13.3
    -------------------------------------------------------------------------
    Net Earnings
     (Loss)           43.4      14.8       2.6      (35.9)    (7.0)     17.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    For the six
     months ended                                                      Total
     June 30,     Superior                                           Consoli-
     2008          Propane      ERCO    Winroc       SEM Corporate     dated
    -------------------------------------------------------------------------
    Revenues         598.8     225.4     256.9     167.5         -   1,248.6
    Cost of
     products sold  (443.9)   (155.4)   (192.2)   (160.1)        -    (951.6)
    Realized gains
     (losses) on
     financial
     instruments      (0.6)     16.6         -       8.8       1.4      26.2
    -------------------------------------------------------------------------
    Gross profit     154.3      86.6      64.7      16.2       1.4     323.2

    Expenses
      Operating and
       admini-
       strative      104.7      54.6      48.9      11.1       5.5     224.8
      Amortization
       of property,
       plant and
       equipment       7.7       0.7       1.8         -         -      10.2
      Amortization
       of intangible
       assets            -       2.1       0.2       0.1         -       2.4
      Interest on
       revolving term
       bank credits
       and term loans    -         -         -         -      12.2      12.2
      Interest on
       convertible
       unsecured
       subordinated
       debentures        -         -         -         -       7.4       7.4
      Accretion of
       convertible
       debenture issue
       costs             -         -         -         -       0.8       0.8
      Unrealized losses
       (gains) on
       financial
       instruments     2.6     (26.7)        -    (227.2)     (3.8)   (255.1)
    -------------------------------------------------------------------------
                     115.0      30.7      50.9    (216.0)     22.1       2.7
    -------------------------------------------------------------------------
    Net earnings
     (loss) before
     income taxes     39.3      55.9      13.8     232.2     (20.7)    320.5
    Income tax
     expense             -         -         -         -     (29.0)    (29.0)
    -------------------------------------------------------------------------
    Net Earnings
     (Loss)           39.3      55.9      13.8     232.2     (49.7)    291.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


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

                                                                       Total
                  Superior                                           Consoli-
                   Propane      ERCO    Winroc       SEM Corporate     dated
    -------------------------------------------------------------------------
    As at June 30,
     2009
      Net working
       capital(1)     33.7       4.7      56.6       9.4     (32.4)     72.0
      Total assets   578.4     615.5     202.3      70.6     388.4   1,855.2
    -------------------------------------------------------------------------
    As at December 31,
     2008
      Net working
       capital(1)     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
     June 30, 2009
      Acquisitions       -         -         -         -         -         -
      Purchase of
       property,
       plant and
       equipment       2.6      33.7       0.2         -         -      36.5
    -------------------------------------------------------------------------
    For the three
     months ended
     June 30, 2008
      Acquisitions     3.4         -      21.2         -         -      24.6
      Purchase of
       property, plant
       and equipment   1.7      10.2       1.0       0.3         -      13.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    For the six
     months ended
     June 30, 2009
      Acquisitions       -         -         -         -         -         -
      Purchase of
       property, plant
       and equipment   5.3      66.8       0.2       0.1         -      72.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    For the six
     months ended
     June 30, 2008
      Acquisitions     3.4         -      21.2         -         -      24.6
      Purchase of
       property, plant
       and equipment   3.2      18.5       1.6       0.5         -      23.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (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.


    Geographic Information
                                                                       Total
                                            United                   Consoli-
                               Canada       States        Other        dated
    -------------------------------------------------------------------------
    Revenues for the three
     months ended June 30,
     2009                       339.5         90.4         24.5        454.4
    Revenues for the six
     months ended June 30,
     2009                       828.4        186.2         43.3      1,057.9
    Property, plant and
     equipment as at June 30,
     2009                       382.0        143.7         65.4        591.1
    Goodwill as at June 30,
     2009                       455.6         17.2            -        472.8
    Total assets as at
     June 30, 2009            1,539.8        241.3         74.1      1,855.2
    -------------------------------------------------------------------------
    Revenues for the three
     months ended June 30,
     2008                       460.9         87.5         18.8        567.2
    Revenues for the six
     months ended June 30,
     2008                     1,044.5        164.7         39.4      1,248.6
    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.

    14. Subsequent Event

    On August 6, 2009, Superior entered into a definitive agreement to
    acquire the shares of Specialty Products & Insulation Co. (SPI), a
    privately held US national distributor of insulation and architectural
    products in the commercial and industrial markets for consideration of
    approximately US$135 million (not including acquisition costs and normal
    course closing adjustments). The acquisition is anticipated to close in
    the third quarter of 2009.
    





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)

Organization Profile

SUPERIOR PLUS CORP.

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