Superior Plus Announces Strong 2007 Year-End Results and a 4% Distribution Increase



    TSX: SPF.UN

    CALGARY, Feb. 28 /CNW/ -

    
    Highlights

    -   Fourth quarter performance was strong with operating distributable
        cash flow from continuing operations up by 14% and overall
        distributable cash flow per trust unit up by 11% from the fourth
        quarter of 2006.
    -   Distributable cash flow per trust unit for the year-ended
        December 31, 2007 was $1.97, which exceeded the Fund's 2007 annual
        guidance range of $1.80-$1.90 per unit.
    -   Distributions paid per trust unit in 2007 remained stable at
        $0.13 per month ($1.56 annualized) and resulted in an annual payout
        ratio of 79%.
    -   Superior Plus announces a distribution increase of 4% to $0.135 per
        trust unit per month ($1.62 annualized) as a result of solid
        operating and financial results commencing with the April 15, 2008
        payment.
    -   Superior Propane results were at the high-end of the guidance range,
        an increase of 22% over the fourth quarter of 2006 and an annual
        increase of 10% from 2006 driven by increased volumes and value-added
        services revenue.
    -   ERCO Worldwide results exceeded the forecast range, an increase of
        13% over the fourth quarter of 2006 and an increase of 5% from 2006
        primarily due to strong chemical volumes and higher prices.
    -   Winroc results were at the high-end of the guidance range, marginally
        lower than the fourth quarter of 2006 and consistent with the 2006
        record results despite weaker residential housing demand in the
        United States.
    -   Superior Energy Management results were as forecast, consistent with
        the fourth quarter of 2006 and a 17% increase from 2006.
    -   Total debt outstanding decreased by $72.8 million from December 31,
        2006 levels resulting in Senior Debt to EBITDA ratio of 1.9x and
        Total Debt to EBITDA ratio of 3.0x as at December 31, 2007.
    -   Superior's US denominated cash flows are hedged 94% for 2008 and 50%
        for 2009.

    Financial Summary
    -------------------------------------------------------------------------
    (millions of dollars,          Three Months Ended         Years Ended
     except per trust unit              Dec. 31                  Dec. 31
     amounts)                       2007        2006        2007        2006
    -------------------------------------------------------------------------
    Financial
    Operating distributable
     cash flow
      Superior Propane              39.9        32.6        99.6        90.6
      ERCO Worldwide ("ERCO")       22.6        20.0        79.3        75.7
      Winroc                        10.1        10.7        34.6        34.6
      Superior Energy Management
       ("SEM")                       2.8         3.0        12.1        10.3
    -------------------------------------------------------------------------
                                    75.4        66.3       225.6       211.2
      Discontinued operations -
       JW Aluminum ("JWA")             -         8.1           -        38.9
    -------------------------------------------------------------------------
                                    75.4        74.4       225.6       250.1
    Interest                       (10.7)      (16.4)      (44.7)      (63.3)
    Corporate costs                 (1.7)       (2.4)      (10.5)       (6.4)
    -------------------------------------------------------------------------
    Distributable cash flow         63.0        55.6       170.4       180.4
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Distributable cash flow per
     trust unit, basic and
     diluted                       $0.72       $0.65       $1.97       $2.11
    Average number of trust
     units outstanding
     (millions)                     87.3        85.5        86.5        85.5
    Distributions paid per trust
     unit                          $0.39       $0.39       $1.56       $1.82
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    For Superior Plus, 2007 was an excellent year with strong results from
each of the four divisions. The Fund is well diversified and consists of
high-quality, businesses with growth opportunities in each of its core
sectors: Propane Distribution, Specialty Chemicals, Construction Products
Distribution, and Fixed-Price Energy Services. All of Superior's businesses
have an inventory of efficiency improvement projects and growth opportunities,
positioning the Fund to execute on its long-term objective of stability of
distributions with value growth. The strong performance in 2007 and the
positive outlook going forward supported the Board's decision to increase the
monthly cash distribution rate by 4%.
    Over the past year, we increased efficiencies in our core businesses,
strengthened our balance sheet, and proactively managed risk factors. In
addition, we improved our corporate governance processes and enhanced our
Board of Directors with the addition of three new members. The new members
provided valuable expertise and relevant experience to the Board and their
respective business advisory committees on which they sit.

    Execution of the Growth Strategy

    2007 marked the launch of Superior's corporate growth strategy which
included the following major accomplishments:

    
    -   Superior Propane increased sales volumes by 3% as a result of
        customer improvement initiatives and weather conditions consistent
        with the historical five-year average.
    -   Superior Propane's customer service initiative was enhanced with a
        reorganization of the business into six regional markets allowing for
        increased focus on customer retention and growth through improved
        service.
    -   Superior Propane's total gross profit increased to $294.2 million
        from $272.9 million representing an increase of 8% over the prior
        year primarily driven from increases in volumes, margins and value-
        added services.
    -   ERCO achieved a 98% average utilization rate at its facilities
        demonstrating excellent operational management and continued progress
        on its efficiency improvement projects.
    -   ERCO announced the US$95 million Port Edwards modernization and
        expansion project.
    -   SEM expanded into the British Columbia fixed-price natural gas market
        and entered the Ontario fixed-price electricity market penetrating
        two new growth channels.
    -   SEM established long-term supply partnerships with Bruce Power LP and
        Constellation Energy Commodities Group, Inc. providing increased
        financial flexibility and stability of supply for its customers.
    -   Winroc added two new greenfield locations and completed two regional
        tuck-in acquisitions while maintaining a strict focus on
        relationship, margin and expense management.
    

    Stability of Distributions

    The Fund continued to invest in efficiency improvement projects in each
of the four businesses providing a foundation for long-term, stable
distributions in 2007. Total cash distributions in 2007 were $1.56 per trust
unit representing a constant $0.13 per trust unit per month. A targeted payout
ratio of 85-90% was established in 2006 in order to provide increased
financial flexibility for future growth. Distributable cash flow of $1.97 per
trust unit resulted in an actual payout ratio of 79% in 2007, which was well
below our targeted range. The Fund continues to forecast a payout ratio well
below 90%, following the announced distribution increase to $0.135 per trust
unit per month. ($1.62 annualized). Superior will also be suspending its
distribution reinvestment program commencing with the April 15, 2008 payment
due to forecast surplus cash flows and declining debt levels. In addition, we
consider this program to be dilutive for our unitholders at this time.

    Income Funds New Tax Regime

    On October 31, 2006, the Minister of Finance (Canada) announced new tax
proposals concerning the taxation of income trusts and other flow-through
entities (the "SIFT Rules") which received Royal Assent on June 22, 2007.
Following the announcement, Superior Plus completed a five-year business plan
incorporating its tax pools and announced growth projects to assess the impact
of the new tax. The results of the detailed planning model indicated Superior
Plus will have growth opportunities to more than offset the impact of the new
SIFT tax post 2011 resulting in stable distributions for its unitholders over
the long-term.

    Financial Position

    In 2007, Superior Plus continued to improve and maintain a strong balance
sheet. The Fund established a new syndicated credit facility of $595 million
with enhanced debt covenants and increased financial capacity maturing in
2010. Superior Plus has conservative leverage target ranges with its Senior
Debt to EBITDA ratio between 1.5x-2.0x and its Total Debt to EBITDA ratio
between 2.5x-3.0x. In 2008, the Fund has forecast it will be at the mid-point
of the target ranges, which are significantly lower than its lenders'
covenants. As at December 31, 2007, Superior Plus had $670 million of credit
capacity with 11 chartered banks and approximately $330 million of undrawn
credit availability. (Excluding its securitization program).

    
    Financial Outlook
    -------------------------------------------------------------------------
    (millions of dollars,
     except per trust unit
     amounts)                      2007E       2007A     2008P(3)    2009P(3)
    -------------------------------------------------------------------------
    Operating distributable
     cash flow
      Superior Propane            95-100        99.6     100-105     105-110
      ERCO                         70-75        79.3       75-80       78-83
      Winroc                       30-35        34.6       32-37       32-37
      SEM                          12-15        12.1       15-18       18-23
    -------------------------------------------------------------------------
    Distributable cash per
     trust unit                1.80-1.90        1.97   1.90-2.10   2.05-2.25
    Payout ratio                     84%         79%       80%(1)      75%(1)
    -------------------------------------------------------------------------
    Average Senior Debt/
     EBITDA Ratio (target
     of 1.5 to 2.0x)               2.0(2)      1.9(2)      1.7(2)      1.6(2)
    Average Total Debt/
     EBITDA Ratio (target
     of 2.5 to 3.0x)               3.1(2)      3.0(2)      2.8(2)      2.7(2)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Based on mid-point of the distributable cash flow per trust unit
        range and includes distribution increase effective April 15, 2008.
    (2) Superior's debt ratios take into account the impact of the off-
        balance sheet receivable sales program amounts, cash on hand,
        suspension of DRIP program, and the Port Edwards Project.
    (3) The assumptions relating to the Financial Outlook are discussed
        in the Financial Discussion of 2007 Fourth Quarter and 2007 Year-End
        Results.
    


    Consolidated Outlook

    Superior's operating distributable cash flow per trust unit was $1.97 in
2007, exceeding the Fund's expectations due to strong performance from all of
its core businesses. Superior Propane continues to expand its product offering
and increase propane volumes while experiencing average weather conditions.
ERCO Worldwide continues to operate at a high level of utilization due to
increased demand in the sodium chlorate industry with most of its volumes
contracted in 2008 and 2009. Winroc's market and geographic diversification
strategy continues to provide stability to its business during a US housing
downturn. SEM continues to penetrate the fixed-price electricity market in
Ontario while expanding its fixed-price natural gas presence in British
Columbia.
    Given the strong momentum achieved in 2007 and our positive outlook, we
have increased our 2008 expectations of consolidated distributable cash flow
per trust unit to the range of $1.90 to $2.10, increasing in 2009 to the range
of $2.05 to $2.25. The improved operating environments of our core businesses,
reduced payout ratio, increased financial capacity, and inventory of
efficiency and expansion projects provide our unitholders a platform for
distribution stability and growth over the long term.

    Strategic Operational Review

    Propane Distribution

    Superior Propane contributed $99.6 million in operating distributable
cash flow in 2007, an increase of 10% over 2006. The increase in sales volumes
and value-added services revenue contributed to a total gross profit of
$294.2 million or 20.6 cents per litre. These results reflect considerable
improvement in all areas of the business due to the implementation of several
initiatives as described below.
    The reorganization of the business into six regional centres has already
shown early signs of improving customer retention and growth. This new
structure allows for relationships to be managed with direct customer contact
at the local level while receiving benefits of standardized processes and a
technology platform.
    During 2006, Superior completed the installation of on-board bulk truck
computers which reduced driver and office administration in 2007. This
on-board technology improves our ability to reduce out-of-gas occurrences and
is expected to improve distribution efficiencies for routing and scheduling
logistics. The implementation of asset management, real-time communications
and GPS technology are scheduled for 2008 with forecasting of routing and
scheduling improvements to be completed in 2009.
    Superior expanded its master lease program adding 134 new bulk and
service trucks in 2007 with another 113 trucks expected to be brought into
service into 2008. This level of fleet renewel is approximately double the
amount invested compared to prior years. The reduction in maintenance capital
and lower repair costs is expected to offset the increase in lease costs over
the life of the fleet. The dollar value equivalent of trucks brought into
service during 2007 by way of operating lease was $20 million.
    Our wholesale natural gas liquids marketing business continues to provide
transportation, storage, risk management, supply, logistics and fixed-price
offerings for Superior Propane as well as to third parties in Canada and the
United States.
    Superior continues to expand its service offerings such as preventative
maintenance and warranty programs and has separated its service business from
the propane delivery business to gain further efficiencies and implement best
practices across Canada.
    We continue to implement these initiatives and forecast an operating
distributable cash flow for 2008 in the range of $100-$105 million, increasing
in 2009 to $105-$110 million. We are encouraged by the significant
improvements made in the propane distribution business and expect further
growth to be achieved over the long term.

    Specialty Chemicals

    ERCO Worldwide contributed $79.3 million in operating distributable cash
flow in 2007, compared to $75.7 million in 2006. Total gross profit increased
to $207.7 million due to higher chemical volumes and strong pricing received
on sodium chlorate and chloralkali/potassium products. Pulp prices continued
to rise throughout 2007 resulting in increased demand for North American
sodium chlorate. Total chemical sales volumes were 768,000 tonnes,
representing an increase of 12,000 tonnes over the prior year as ERCO's
Chilean facility completed its first full year of operations. ERCO was able to
achieve a 1% increase in average sodium chlorate prices over the prior year
despite an 18% increase in the appreciation of the Canadian dollar against the
United States dollar due to the Fund's proactive hedging program.
    ERCO achieved a 98% average utilization rate at its facilities based upon
total production capacity of approximately 733,000 metric tonnes. ERCO is the
second largest producer of sodium chlorate in North America and has patented
technology utilizing industry leading equipment and processes required by pulp
producers. This proprietary technology allows ERCO to have an early look on
investment opportunities both domestically and internationally.
    ERCO continues to invest growth capital into the business with half of
the expenditures allocated to its on-going electrical cell replacement program
which provides for a reduction in overall electrical consumption. In addition,
ERCO has several projects which capture hydrogen, replace fossil fuels, and
reduce greenhouse gas emissions. With the closure of two high cost facilities
in 2006, ERCO is now well positioned as a low-cost manufacturer with
facilities close to its customers.
    Strategic diversification of our chemical sales volumes towards higher
volume of chloralkali products has reduced our portfolio weighting to sodium
chlorate and our dependency on the North American pulp and paper industry over
the past three years. ERCO's chlorine, hydrochloric acid, potassium hydroxide
and potassium carbonate production, and approximately 94% of its caustic soda
production are sold to end markets not related to the pulp and paper industry.
    In August of 2007, ERCO announced the conversion of its Port Edwards,
Wisconsin potassium/chloralkali facility from a mercury-based process to
membrane technology at a cost of approximately US $95 million and with a
projected completion date in the second half of 2009. This project will allow
ERCO to further enhance its diversification strategy and will improve the
facility's capacity and process efficiency. The project is expected to reduce
plant costs by approximately 25% and increase facility capacity by an
additional 30% generating a forecast after tax rate of return over 15%. This
plant was anticipated to be closed within 4-6 years before the Fund made the
decision to convert the facility.
    Based on the current inventory of efficiency improvement and growth
projects, the stability of sodium chlorate market, and a proactive hedging
program, we expect ERCO's operating distributable cash flow net of maintenance
capital expenditures to be $75-$80 million for 2008, increasing in 2009 to be
$78-$83 million.

    Construction Products Distribution

    Winroc contributed operating distributable cash flow of $34.6 million in
2007, matching the record distributable cash flow in 2006 despite a
significant downturn in United States residential housing demand. Total
revenue and total gross profit were $512.3 million and $129.8 million,
respectively, a decrease of 1% and 2%, respectively, from the prior year.
    Strong Western Canada residential and commercial sales demand continued
to primarily offset weakness in United States residential markets and some
softness in Ontario markets. Winroc's geographical diversification provides
stability of sales volumes as different geographical regions should experience
changes in end-use demand at different rates. Winroc's end-use market split is
approximately 50% residential new construction and renovation and 50%
commercial.
    While Winroc is a distribution business, providing premium service is the
key to its continued success. It is a productivity partner for its installing
contractor customers utilizing a stock and scatter delivery model. Winroc
estimates its gypsum board market position at an average market share between
10%-20% in Canada and 8%-10% in the four states of Utah, Nevada, Arizona and
Minnesota. These significant market positions are important both to suppliers
and customers during changes in the economic cycle. Winroc continues to focus
on improving its core operating areas including: service, contractor and
supplier relationships, margin and operating expense, and working capital
management.
    Winroc continues to invest in the business expanding its master lease
program by adding 19 new trucks in 2007 with an additional 35 trucks expected
to be brought into service in 2008. The reduction in maintenance capital and
lower repair costs are expected to offset the increase in lease costs while
lowering the average age of the fleet. For 2007, Winroc entered into an
equivalent dollar value of $3.6 million worth of leases, replacing previously
owned trucks.
    The fragmented nature of the specialty buildings distribution industry
continues to provide attractive consolidation opportunities. Winroc has
identified a number of acquisition and expansion opportunities which are
expected to add value over the long term. In 2007, Winroc added two new
greenfield locations and completed two regional acquisitions, increasing its
branch network to 42 locations.
    For 2008, we expect continued weakness in the new home construction
market in the United States to be supported by strength in the Western Canada
residential and commercial markets. We are estimating operating distributable
cash flow after maintenance capital expenditures in the range of $32 -
$37 million for both 2008 and 2009, with some improvement in the new home
construction segment in 2009.

    Fixed-Price Energy Services

    Superior Energy Management contributed $12.1 million of operating
distributable cash flow in 2007, representing an increase of 17% over the
prior year. These results reflect SEM's successful strategy of increased focus
on lower volume, higher margin residential customers. The improvement in
margins contributed to a total gross profit of $30.1 million or 81.3 cents per
gigajoule.
    During 2007, SEM made substantial progress in expanding the
infrastructure to support its growth plans beyond the Ontario residential
market and the Ontario and Quebec commercial natural gas markets. SEM expanded
into the newly deregulated natural gas market in British Columbia on May 1,
2007 resulting in the addition of 13,100 customers with the natural gas flow
commencing November 1, 2007. On January 7, 2008, SEM announced it had entered
into a long-term fixed-price natural gas agreement with Constellation Energy
Commodities Group, Inc. This partnership provides SEM with stability of supply
and increased financial capacity to achieve its long-term growth objectives.
    In addition, SEM entered the high-growth fixed-price retail electricity
market by establishing a long-term electricity supply agreement with Bruce
Power LP, one of Ontario's largest independent electricity generators. SEM is
marketing fixed-price electricity contracts to residential and commercial
customers in Ontario, which will result in the electricity flow in 2008. This
market has approximately four million customers and a low penetration rate
relative to the mature Ontario natural gas market and thereby represents a
significant growth opportunity for SEM.
    SEM invested $10.9 million in customer costs exiting 2007 with 94,400
residential and 6,400 commercial natural gas customers and 1,630 electricity
customers. SEM incurred $1.5 million in growth capital expenditures related to
its entrance into the fixed-price electricity market in Ontario during 2007.
    Based on the growth profile in its existing business, SEM is expected to
generate operating distributable cash flow for 2008 of $15-$18 million,
increasing in 2009 to $18-$23 million. SEM continues to assess the potential
of entering certain United States markets in the future to further enhance its
growth platform.

    Key Corporate Items

    Corporate costs for the year were $10.5 million compared to $6.4 million
in the prior year. The prior year included a $5.3 million reversal of
executive stock-based compensation and short-term bonuses as a result of a
decline in the unit price in the prior year.
    Interest expense of $44.7 million for 2007 decreased by $18.6 million
from the prior year due to lower debt levels, the benefit of the appreciation
of the Canadian dollar on US denominated debt, and the sale of JW Aluminum on
December 7, 2006.
    Superior had total credit facilities of $670 million at December 31, 2007
creating an estimated undrawn credit availability of $430 million. (This
includes $100 million average utilization available under the terms of the
securitization program).

    2007 Fourth Quarter and 2007 Year-End Results

    The Fund's Financial Discussion of 2007 Fourth Quarter and 2007 Year-End
Results is available on Superior's website at: www.superiorplus.com under
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 2007
Fourth Quarter and Year-End Results at 5:00 p.m. EST (3:00 p.m. MST) on
Thursday, February 28, 2008. To participate in the call, dial: 1-800-733-7560.
An archived recording of the call will be available for replay until midnight,
April 2, 2008. To access the recording, dial: 1-877-289-8525 and enter pass
code 21259076 followed by the number 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 and Presentations section.

    2007 Annual Financial Statements and Management's Discussion and Analysis

    The Fund intends to file its 2007 Annual Report, including its 2007
Management's Discussion and Analysis, its 2007 Annual Financial Statements and
its 2007 Annual Information Form with securities regulators on March 10, 2008.
Hard copies of the 2007 Annual Report are expected to be available on
March 12, 2008.

    Financial Discussion of 2007 Fourth Quarter and 2007 Year-End Results
    February 28, 2008

    Forward Looking Information

    Certain information included or incorporated by reference herein is
forward-looking, within the meeting of applicable Canadian securities laws.
Forward-looking information includes, without limitation, statements regarding
the future financial position, business strategy, budgets, litigation,
projected costs, capital expenditures, financial results, distributable cash
flow, taxes and plans and objectives of or involving Superior Plus Income Fund
(the "Fund") or Superior Plus LP ("Superior LP" or the "Partnership"). Much of
this 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
Financial Discussion includes but is not limited to, outlooks, capital
expenditures, business strategy and objectives. The Fund 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 not a guarantee of future performance and
involves a number of risks and uncertainties some of which are described
herein. Such forward-looking information necessarily involves known and
unknown risks and uncertainties, which may cause the Fund'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 identified in the Fund's 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 the Fund nor Superior LP undertakes any obligation to publicly update
or revise such information to reflect new information, subsequent or
otherwise.

    Non-GAAP Financial Measures

    Distributable Cash Flow

    Distributable cash flow of the Fund available for distribution to
Unitholders, is equal to cash generated from operations, adjusted for changes
in non-cash working capital and natural gas and electricity customer
acquisition costs, less maintenance capital expenditures. Maintenance capital
expenditures are equal to capital expenditures incurred to maintain the
capacity of Superior's operations and are deducted from the calculation of
distributable cash flow. Acquisitions and other capital expenditures incurred
to expand the capacity of Superior's operations or to increase its
profitability ("growth capital"), are excluded from the calculation of
distributable cash flow. The Fund may deduct or include additional items to
its calculation of distributable cash flow, these items would generally, but
not necessarily, be items of a non-recurring nature. Distributable cash flow
is the main performance measure used by management and investors to evaluate
the performance of the Fund and its businesses. Readers are cautioned that
distributable cash flow is not a defined performance measure under Canadian
generally accepted accounting principles ("GAAP"), and that distributable cash
flow cannot be assured. The Fund's calculation of distributable cash flow,
maintenance capital and growth capital may differ from similar calculations
used by comparable entities. Operating distributable cash flow is
distributable cash flow before corporate and interest expenses. It is also a
non-GAAP measure and is used by management to assess the performance of the
operating divisions.

    Standardized Distributable Cash Flow

    During 2007, the CICA published an interpretive release, Standardized
Distributable Cash in Income Trusts and Other Flow-Through Entities: Guidance
on Preparation and Disclosure, in order to provide its recommendations related
to the measurement and disclosure of cash available for distributions. The
guidance was issued in an effort to improve the consistency, comparability,
and transparency of the reporting of the measure commonly referred to as
distributable cash flow. Superior's calculation of standardized distributable
cash flow is, in all material respects, in accordance with the recommendations
provided by the CICA.
    Superior views the CICA recommendations as a positive step in providing
stakeholders with meaningful information, but consistent with the guidance
provided by the CICA, Superior has determined, that due to the nature of
Superior's businesses, certain adjustments to standardized distributable cash
flow are required to better reflect the cash flow available to be distributed
to Unitholders. Superior's adjusted standardized distributable cash flow is
referred to as distributable cash flow, and is unchanged from Superior's
previous definition or measurement of distributable cash flow. Superior's
distribution policy is based on distributable cash flow on an annualized
basis, accordingly, the seasonality of Superior's individual quarterly results
must be assessed in the context of annualized distributable cash flow.
Adjustments recorded by Superior as part of its calculation of distributable
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 from quarter to quarter differ significantly. Superior's calculation
also distinguishes between capital expenditures that are maintenance related
and those that are growth related, in addition to allowing for the proceeds
received on the sale of certain capital items. Adjustments are also made to
reclassify the cash flows related to natural gas and electricity customer
acquisition costs in a manner consistent with the income statement recognition
of these costs.

    EBITDA

    EBITDA represents earnings before interest, taxes, depreciation and
amortization 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, and is not a defined performance
measure under GAAP. Superior's calculation of EBITDA may differ from similar
calculations used by comparable entities.

    Overview of the Fund

    Superior Plus Income Fund is a diversified business trust. The Fund holds
100% of Superior Plus LP ("Superior"), a limited partnership formed between
Superior Plus Inc., as general partner and the Fund as limited partner. The
distributable cash flow of the Fund is solely dependent on the results of
Superior LP and is derived from the allocation of Superior LP's income to the
Fund by means of partnership allocations. Superior 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"; 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" or "SEM".

    Fourth Quarter and Year-to-Date Results

    Fourth quarter distributable cash flow was $63.0 million, an increase of
$7.4 million (13%) over the prior year quarter. The increase in distributable
cash flow was due to improved operating cash flow at Superior Propane and ERCO
and lower interest and corporate costs, offset in part, by the absence of a
contribution from JW Aluminum as a result of its sale on December 7, 2006, and
marginally lower operating cash flow at Winroc and SEM. Distributable cash
flow per trust unit was $0.72 per trust unit in the fourth quarter, an
increase of $0.07 per trust unit (11%) from the prior year quarter, due to the
increase in distributable cash flow, offset in part, by a 2% increase in the
average number of trust units outstanding.
    Distributable cash flow for the year ended December 31, 2007 was $170.4
million, a decrease of $10.0 million (6%) from the prior year, as improved
operating cash flow at Superior Propane, ERCO and SEM, and lower interest
costs were fully offset by the absence of JW Aluminum as a result of its sale
on December 7, 2006. Distributable cash flow per trust unit was $1.97 per
trust unit, compared to $2.11 per trust unit in the prior year, due to a 6%
decrease in distributable cash flow and a 1% increase in the weighted average
number of trust units outstanding.
    Net earnings for the fourth quarter were $64.5 million, compared to $38.1
million for the prior year quarter. The increase in net earnings is due
principally to improved gross profit at Superior Propane due to higher sales
volumes. Additionally, the current year quarter includes unrealized gains on
financial instruments that were not present in the prior year quarter, due to
the adoption of new accounting standards on January 1, 2007, see "Changes in
Accounting Policies" for a further discussion on these changes. The unrealized
gain is the result of gains on Superior Energy Management's financial natural
gas derivative contracts due to changes in the forward price of natural gas,
partially offset by losses on ERCO Worldwide's fixed-price electricity
purchase agreement due to changes in the forecasted price of electricity in
deregulated markets. Total interest expense of $10.7 million was $5.7 million
lower than the prior year due principally to lower average debt levels. The
change in net earnings from discontinued operations is due to the sale of JW
Aluminum on December 7, 2006. Additionally, fourth quarter net earnings were
affected for the same reasons as the analysis of distributable cash flow for
the fourth quarter.
    The Fund had net earnings for the year ended December 31, 2007 of
$119.8 million, compared to a net loss of $80.8 million for the year ended
December 31, 2006. The change in net earnings (loss) for 2007 compared to 2006
is due principally to non-cash impairment charges of $170.8 million (net of
tax) recorded in the prior year related to the write-down of ERCO Worldwide's
Bruderheim, Alberta and Valdosta, Georgia sodium chlorate facilities and ERCO
Worldwide's goodwill. (See Note 10 to the Interim Consolidated Financial
Statements). Additionally, Superior recorded a $56.3 million impairment on the
carrying value of JWA during 2006. (See Note 10 to the Interim Consolidated
Financial Statements). Consolidated revenues of $2,355.4 million were $91.1
million higher than the prior year due principally to higher revenues at
Superior Propane as a result of higher sales volumes and selling prices. Gross
profits of $661.8 million were $30.9 million higher than the prior year,
reflecting improved operating results at Superior Propane and ERCO Worldwide.
Operating expenses of $439.7 million were $15.8 million higher than the prior
year and were the result of higher sales activity at Superior Propane and
Superior Energy Management. Amortization is lower than the prior year due to
reduced amortization at ERCO, as a result of asset impairments recorded in the
prior year. Total interest expense of $44.7 million was $18.6 million lower
than the prior year due principally to lower average debt levels. Future
income taxes were impacted in 2006 due to the recognition of the asset
impairments that were noted above. (See Note 10 to the Interim Consolidated
Financial Statements). The change in net earnings from discontinued operations
is due to the sale of JW Aluminum on December 7, 2006.

    
    Distributable Cash Flow(1)
    -------------------------------------------------------------------------
                                   Three months ended          Years ended
    (millions of dollars except        December 31             December 31
     per unit amounts)              2007        2006        2007        2006
    -------------------------------------------------------------------------
    Cash flows from operating
     activities of continuing
     operations                      9.2        13.9       134.3       151.7
    Less: Total capital
     expenditures                  (11.8)       (7.9)      (27.0)      (72.3)
    -------------------------------------------------------------------------
    Standardized distributable
     cash flow(2)                   (2.6)        6.0       107.3        79.4

    Add:
      Growth capital
       expenditures                  3.6         1.8         8.8        53.0
      Proceeds on disposal of
       capital items                 3.4         4.3         4.8         5.5
      Natural gas customer
       acquisition costs
       capitalized                   3.6         1.4        10.9         8.4
      Acquisitions                   2.9           -         4.3           -
      Management
       internalization costs           -           -         0.5         1.3
      Strategic plan costs           3.5         5.3         5.7        19.7
      Distributable cash flow
       from discontinued
       operations(3)                   -         8.1           -        38.9
      Increase in non-cash
       working capital              50.2        29.6        34.7           -

    Less:
      Decrease in non-cash
       working capital                 -           -           -       (22.6)
      Amortization of natural
       gas customer acquisition
       costs                        (1.6)       (0.9)       (6.6)       (3.2)
    -------------------------------------------------------------------------
    Distributable cash flow         63.0        55.6       170.4       180.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Distributable cash flow         63.0        55.6       170.4       180.4
    Distributable cash flow
     borrowed (reinvested)(6)      (28.9)      (22.2)      (35.5)      (24.7)
    -------------------------------------------------------------------------
    Distributed cash flow           34.1        33.4       134.9       155.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Distributable cash flow per
     trust unit, basic(4) and
     diluted(5)                    $0.72       $0.65       $1.97       $2.11
    Distribution payout ratio(6)     54%         60%         79%         86%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) See the Interim Consolidated Financial Statements for cash flows from
        operating activities of continuing operations, management
        internalization costs, capital expenditures/proceeds (maintenance,
        growth and acquisitions), natural gas customer acquisition costs, and
        changes in non-cash working capital.
    (2) Standardized distributable cash flow is a measure defined by the
        Canadian Institute of Chartered Accountants (CICA). See Non-GAAP
        Financial Measures.
    (3) See JWA discussion.
    (4) The weighted average number of trust units outstanding for the three
        months ended December 31, 2007 is 87.3 million (2006 - 85.5 million)
        and for the twelve months ended December 31, 2007 is 86.5 million
        (2006 - 85.5 million).
    (5) For the three and twelve months ended December 31, 2007 and 2006,
        there were no dilutive instruments.
    (6) See Distributions Paid to Unitholders.
    

    Superior Propane

    Superior Propane generated operating distributable cash flow of $39.9
million in the fourth quarter, an increase of $7.3 million (22%) from the
prior year quarter due to higher gross profit, offset in part, by higher
operating costs.
    Condensed operating results for the three months and years ended
December 31, 2007 and 2006 are provided in the following table. See "Segmented
Distributable Cash Flow" for detailed comparative business segment results.

    
    -------------------------------------------------------------------------
    (millions
     of dollars
     except per      Three months ended                  Years ended
     litre               December 31                     December 31
     amounts)       2007            2006            2007            2006
    -------------------------------------------------------------------------
                       cents/          cents/          cents/          cents/
                       litre           litre           litre           litre
                      -------         -------         -------         -------
    Revenue    357.3    85.6   279.9    68.8 1,075.7    75.3   985.4    71.1
    Cost of
     sales    (268.0)  (64.1) (201.7)  (49.6) (781.5)  (54.7) (712.5)  (51.4)
    -------------------------------------------------------------------------
    Gross
     profit     89.3    21.5    78.2    19.2   294.2    20.6   272.9    19.7
    Less: cash
     operating,
     admini-
     stration
     and tax
     costs     (50.2)  (12.1)  (47.6)  (11.7) (194.8)  (13.6) (182.6)  (13.2)
    -------------------------------------------------------------------------
    Cash
     generated
     from
     operations
     before
     changes
     in net
     working
     capital    39.1     9.4    30.6     7.5    99.4     7.0    90.3     6.5
    Maintenance
     capital
     proceeds
     (expend-
     itures),
     net         0.8       -     2.0     0.5     0.2       -     0.3       -
    -------------------------------------------------------------------------
    Operating
     distri-
     butable
     cash flow  39.9     9.4    32.6     8.0    99.6     7.0    90.6     6.5
    Propane
     retail
     volumes
     sold
     (millions
     of litres)      416             407            1,429           1,386
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 13 to the Interim Consolidated Financial
        Statements). In order to provide meaningful comparative results,
        these amounts have been reclassified in a manner consistent with the
        accounting treatment in the comparative period. As such, included in
        revenue for the three and twelve months ended December 31, 2007 is
        $0.7 million and $1.2 million in realized foreign currency forward
        contract gains.
    

    Revenues for the fourth quarter of 2007 were $357.3 million, an increase
of $77.4 million from revenues of $279.9 million in 2006. The increase in
revenues was due to higher propane sales volumes in conjunction with higher
retail propane prices. Total gross profit for the fourth quarter of 2007 was
$89.3 million, an increase of $11.1 million (14%) over the prior year. Total
gross profit per litre for the fourth quarter of 2007 was 21.5 cents per
litre, an increase of 2.3 cents per litre (12%) compared to the prior year,
due to Superior Propane's on-going efforts to increase total gross profit per
litre by unbundling the price of propane and the price of value-added services
to its customers. Traditionally, Superior Propane had included a portion of
its service offerings in the base price of its retail propane. As the price of
propane and other services are unbundled, Superior Propane will continue to
benefit from the focus on its service business, ensuring that value added
services are separately billed.

    
    Gross Profit by Segment
    -------------------------------------------------------------------------
                                   Three months ended          Years ended
                                       December 31             December 31
    (millions of dollars)           2007        2006        2007        2006
    -------------------------------------------------------------------------
    Retail propane and delivery     71.3        69.0       246.1       239.0
    Other services                   8.6         6.6        24.7        20.8
    Wholesale and related            9.4         2.6        23.4        13.1
    -------------------------------------------------------------------------
    Total gross profit              89.3        78.2       294.2       272.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Propane sales gross profit for the fourth quarter was $71.3 million, an
increase of $2.3 million (3%) from the prior year quarter, as sales volumes
increased by 9 million litres (2%) and sales margins increased by 0.1 cents
per litre (1%). Residential and commercial volumes increased by 3 million
litres (2%), due principally to colder than average weather, as weather across
Canada was 3% colder than the prior year quarter and 4% colder than the five
year average. In addition to the impact of the colder weather, residential and
commercial volumes, continued to benefit from higher customer growth and
retention levels, as a result of customer service initiatives implemented
throughout 2006 and 2007. Industrial volumes increased by 7 million litres
(4%), due principally to improved heating related volumes as a result of the
colder than average weather. Automotive propane volumes declined by 4 million
litres (12%), consistent with historical decline trends in this end-use
market. Propane continued to actively manage sales margins in the fourth
quarter, resulting in average retail propane and delivery sales margins of
17.1 cents per litre, which was 0.1 cents per litre higher than the prior year
quarter average margin of 17.0 cents per litre. Average margins compared to
the prior year quarter were positively impacted by an increased percentage of
higher margin heating related sales volumes, offset in part, by the continued
competitive pressures on automotive margins.
    Other services gross profit was $8.6 million for the fourth quarter, an
increase of $2.0 million (30%) over the prior year quarter, due to higher
service, rental and hardgood revenues. The improvement in service and rental
gross profits is due in part, to Superior Propane's continued focus on its
service business. Wholesale and related gross profits were $9.4 million for
the fourth quarter, an increase of $6.8 million compared to the prior year
quarter due to the difference in timing with respect to the recognition of
gross profits by Superior Propane's trading business, as a significant amount
of gross profit was recognized in the fourth quarter in 2007, as opposed to
the third quarter in 2006.

    
    Superior Propane Annual Sales Volumes and Gross Profit:
    Volumes by End-Use Application(1)
    -------------------------------------------------------------------------
                         Three months
                    ended December 31                 Years ended December 31
                      2007       2006                       2007        2006
    ----------------------------------    -----------------------------------
    Residential         54         54     Residential        171         163
    Commercial          91         88     Commercial         315         296
    Agricultural        44         41     Agricultural        92          89
    Industrial         198        191     Industrial         716         686
    Automotive          29         33     Automotive         135         152
    ----------------------------------    -----------------------------------
                       416        407                      1,429       1,386
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Volume of retail propane sold (millions of litres)


    Volumes by Region(1)(2)
    -------------------------------------------------------------------------
                         Three months
                    ended December 31                 Years ended December 31
                      2007       2006                       2007        2006
    ----------------------------------    -----------------------------------
    Western Canada     226        230     Western Canada     768         747
    Eastern Canada     162        152     Eastern Canada     556         542
    Atlantic Canada     28         25     Atlantic Canada    105          97
    ----------------------------------    -----------------------------------
                       416        407                      1,429       1,386
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 $50.2 million, increased by
$2.6 million (5%) from the prior year quarter, due to higher wages and
benefits, and higher truck leasing costs as a result of the implementation of
a comprehensive operating lease program in 2007, offset in part, by lower
equipment maintenance costs.
    Net maintenance capital proceeds for the quarter were $0.8 million, which
was $1.2 million lower than the prior year quarter, and was comprised of
expenditures of $1.7 million and proceeds on disposal of $2.5 million.
Proceeds on disposal consisted of the sale of excess land and surplus fleet,
tanks and cylinders. Maintenance capital for 2007 is lower than historical
levels due to the implementation of a comprehensive operating lease program.
Superior Propane had been leasing a portion of its service trucks, crane
trucks and tandem tractors for several years, and has now expanded and
streamlined its leasing programs with a master lease and other lease
arrangements at competitive rates. Superior has expanded the program to
include bulk trucks to accelerate the fleet renewal for 2007 and 2008,
resulting in 134 new trucks being brought into service during 2007, with a
further 113 trucks anticipated to be brought into service throughout 2008.
Increasing lease costs are anticipated to be offset over time by lower
operating costs, resulting from lower repair and maintenance costs and lower
maintenance capital expenditures. Additional benefits are also expected in
relation to fleet reliability, improved productivity, safety and corporate
image. The program is designed to better align the cost structure with
Superior Propane's ongoing operations and result in customer service
improvements.

    Outlook

    Superior Propane expects operating distributable cash flow for 2008 to be
between $100 million and $105 million, increasing in 2009 to between
$105 million and $110 million. Superior Propane's significant assumptions
underlying its outlook are:

    
    -   Superior Propane forecasts average temperatures across Canada to be
        consistent with the most recent five year average.
    -   Superior Propane expects that wholesale propane prices will not
        significantly impact demand for propane and related propane services.
    -   Total gross profit for Superior Propane is projected to increase due
        to the on-going implementation of customer service programs and an
        increase in propane volumes.
    -   Market opportunities for Superior Propane's wholesale trading
        division are expected to be consistent with the prior years.
    

    In addition to Superior Propane's significant assumptions detailed above,
refer to the Fund's Annual Information Form for a detailed review of Superior
Propane's operations and its significant business risks.

    ERCO Worldwide

    ERCO Worldwide generated operating distributable cash flow in the fourth
quarter of $22.6 million, an increase of $2.6 million (13%) from the prior
year quarter, predominantly due to lower operating expenditures.
    Condensed operating results for the three months and years ended December
31, 2007 and 2006 are provided in the following table. See "Segmented
Distributable Cash Flow" for detailed comparative business segment results.

    
    -------------------------------------------------------------------------
    (millions of
    dollars except
    per metric      Three months ended                  Years ended
    tonne (MT)          December 31                     December 31
    amounts)       2007            2006            2007            2006
    -------------------------------------------------------------------------
    Revenue       $ per MT        $ per MT        $ per MT        $ per MT
     Chemi-
      cal(1)   110.7     570   105.9     554   430.3     560   408.6     540
     Techno-
      logy       5.4      28     9.6      50    30.3      40    28.6      38
    Cost of
     Sales
      Chemi-
       cal(1)  (58.6)   (301)  (52.8)   (276) (231.9)   (301) (214.9)   (284)
      Techno-
       logy     (2.8)    (14)   (6.3)    (33)  (21.0)    (27)  (18.2)    (24)
    -------------------------------------------------------------------------
    Gross
     Profit     54.7     283    56.4     295   207.7     272   204.1     270
    Less: Cash
     operating,
     administ-
     rative &
     tax costs (29.5)   (152)  (33.3)   (174) (119.7)   (156) (120.9)   (160)
    -------------------------------------------------------------------------
    Cash
     generated
     from
     operations
     before
     changes in
     net
     working
     capital    25.2     131    23.1     121    88.0     116    83.2     110
    Maintenance
     capital
     expendi-
     tures      (2.6)    (18)   (3.1)    (16)   (8.7)    (11)   (7.5)    (10)
    -------------------------------------------------------------------------
    Operating
     distribu-
     table cash
     flow       22.6     113    20.0      105   79.3     105    75.7     100
    -------------------------------------------------------------------------
    Chemical
     volumes
     sold
     (thousands
     of MTs)         194              191            768             756
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 13 to the Interim Consolidated Financial
        Statements). In order to provide meaningful comparative results,
        these amounts have been reclassified in a manner consistent with the
        accounting treatment in the comparative period. As such, included in
        revenue for the three and twelve months ended December 31, 2007 is
        $5.2 million and $13.6 million in realized foreign currency forward
        contract gains and included in chemical cost of sales for the three
        and twelve months ended December 31, 2007 is $2.0 million and
        $7.6 million in realized fixed-price electricity gains.
    

    Chemical and technology revenues for the fourth quarter of $116.1 million
were $0.6 million higher than the prior year quarter due to higher chemical
revenue as a result of higher sales volumes and pricing, offset in part, by
lower technology revenue. Fourth quarter gross profit was $54.7 million,
comprised of $52.1 million from chemical sales and $2.6 million from
technology projects. Chemical sales gross profit was $1.0 million lower than
the prior year quarter, due to marginally lower sodium chlorate and
chloralkali/potassium gross profits. Sodium chlorate gross profits were lower
than the prior year as a 6% increase in sodium chlorate sales volumes and
product price increases were more than offset by the impact of the
appreciation of the Canadian dollar on US denominated sales and the impact of
reduced hedging gains. Sodium chlorate volumes were higher than prior year
quarter, as the impact of volumes at ERCO's Chilean facility which began
commercial production in the fourth quarter of 2006 and higher other
international volumes, more than offset the impact of reduced North American
sales volumes. Chloralkali/potassium gross profits were lower than the prior
year quarter, as a reduction in sales volumes was partially offset by higher
realized selling prices. Technology gross profit was $0.7 million lower than
the prior year quarter due to reduced project activity and the normal course
expiration of royalty revenues.
    Cash operating, administration and tax costs of $29.5 million were
$3.8 million (11%) lower than the prior year quarter, due principally to a
reduction in US denominated expenses as a result of  the appreciation of the
Canadian dollar and the impact of cost savings due to the closure of ERCO's
Bruderheim, Alberta sodium chlorate facility in the prior year quarter.
Maintenance capital expenditures of $2.6 million were $0.5 million lower than
the prior year quarter due to the timing of projects.
    Growth capital expenditures of $3.3 million were incurred in the fourth
quarter, with $1.9 million incurred in relation to a number of small projects,
including continued work related to anode cell replacement. ERCO incurred
$1.4 million (USD and CDN) related to its Port Edwards, Wisconsin chloralkali
facility.
    During 2007, ERCO determined that it will convert its Port Edwards,
Wisconsin chloralkali facility from mercury based technology to membrane
technology. The project maintains the facility's ability to produce both
sodium and potassium products, provides increased production capacity of
approximately 30%, provides a significant extension of the plant life and
enhances the efficiency of ERCO's use of electrical energy. The cost of the
conversion is estimated to be US $95 million. See the press release, "ERCO
Worldwide Announces US $95 million Expansion of Port Edwards Chloralkali
Facility", dated August 8, 2007, for further details.
    During the fourth quarter, ERCO renegotiated in the normal course, its
union contract at its Saskatoon, Saskatchewan facility. The revised contract
expires on September 30, 2010.

    Outlook

    ERCO Worldwide expects operating distributable cash flow for 2008 to be
between $75 million and $80 million, increasing in 2009 to between $78 million
and $83 million. ERCO Worldwide's significant assumptions underlying its
outlook are:

    
    -   Current supply and demand fundamentals for both sodium chlorate and
        potassium/chloralkali products will remain stable, resulting in no
        significant changes to total chemical sales prices and sales volumes.
    -   ERCO's average plant utilization is expected to be greater than 90%.
    -   The foreign currency exchange rate between the Canadian and United
        States dollar is expected to be par 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 $95
        million is expected to be completed on-budget in the second half of
        2009.
    

    In addition to ERCO Worldwide's significant assumptions detailed above,
refer to the Fund's Annual Information Form for a detailed review of ERCO
Worldwide's operations and its significant business risks.

    Winroc

    Winroc generated operating distributable cash flow of $10.1 million, a
decrease of $0.6 million (6%) from the prior year quarter, as higher operating
expenses were partially offset by higher gross profit and lower maintenance
capital expenditures.
    Condensed operating results for the three months and years ended
December 31, 2007 and 2006 are provided in the following table. See "Segmented
Distributable Cash Flow" for detailed comparative business segment results.

    
    -------------------------------------------------------------------------
                                   Three months ended          Years ended
                                       December 31             December 31
    (millions of dollars)           2007        2006        2007        2006
    -------------------------------------------------------------------------

    Distribution and direct
     sales revenue                 125.4       118.8       512.3       518.7
    Distribution and direct
     sales cost of sales           (91.0)      (85.5)     (382.5)     (386.5)
    -------------------------------------------------------------------------
    Distribution and direct
     sales gross profit             34.4        33.3       129.8       132.2
    Less: Cash operating,
     administrative & cash
     tax costs                     (24.2)      (21.9)      (94.6)      (91.0)
    -------------------------------------------------------------------------
    Cash generated from
     operations before changes
     in net working capital         10.2        11.4        35.2        41.2
    Maintenance capital
     expenditures, net              (0.1)       (0.7)       (0.6)       (6.6)
    -------------------------------------------------------------------------
    Operating distributable
     cash flow                      10.1        10.7        34.6        34.6
    -------------------------------------------------------------------------
    

    Distribution and direct sales revenues of $125.4 million for the fourth
quarter of 2007 were $6.6 million (6%) higher than the prior year quarter as
increased selling prices more than offset the impact of reduced sales volumes.
Distribution and direct sales gross profit of $34.4 million in the fourth
quarter was $1.1 million (3%) higher than the prior year quarter, as increased
sales volumes and gross profit in Western Canada, was offset by reduced sales
volumes and gross profits in the United States due to competitive pressures
and reduced residential construction demand. Gross profits and sales volumes
in Ontario were consistent with the prior year quarter. Drywall sales volumes,
an indicator of overall sales volumes, decreased 4% compared to the prior year
quarter. The decrease in sales volumes was due to weaker sales volumes in the
United States outpacing the increase in sales volumes in Western Canada and a
modest increase in Ontario. Cash operating and administrative costs were
$2.3 million (11%) higher than the prior year quarter due to higher sales
volumes in Western Canada, partially offset by lower costs in Ontario and the
United States. Additionally, operating expenses were impacted by increased
occupancy costs due to additional operating branches and the implementation of
a comprehensive operating lease program in 2007, which results in higher
operating expenses and lower maintenance capital.
    Maintenance capital expenditures were $0.1 million for the fourth
quarter, $0.6 million lower than the prior year quarter due to the timing of
expenditures and the implementation of a master leasing agreement. Both
Superior Propane and Winroc have entered into master lease arrangements for
the ongoing requirements of its delivery fleet, resulting in 19 new Winroc
trucks being brought into service during 2007, with a further 35 trucks
anticipated to be brought into service during 2008.
    During the fourth quarter of 2007, Winroc acquired the assets of a gypsum
supply dealer for consideration of $2.9 million.

    Outlook

    Winroc expects operating distributable cash flow for 2008 and 2009 to
between $32 million and $37 million. Winroc's significant assumptions
underlying its outlook are:

    
    -   The current economic conditions in Canada and the United States are
        expected to prevail in 2008 with slight improvement in 2009.
    -   Gross profit is expected to be stable as, strong demand in Western
        Canada for residential and commercial sales volumes, continues to
        offset weakness in Ontario and United States residential sales
        volumes.
    

    In addition to Winroc's significant assumptions detailed above, refer to
the Fund's Annual Information Form for a detailed review of Winroc's
operations and its significant business risks.

    Superior Energy Management ("SEM")

    SEM's condensed operating results for the three months and years ended
December 31, 2007 and 2006 are provided below. See "Segmented Distributable
Cash Flow" for detailed comparative business segment results.

    
    -------------------------------------------------------------------------
    (millions
    of dollars
    except per
    gigajoule       Three months ended                  Years ended
    ("GJ")              December 31                     December 31
    amounts)       2007            2006            2007            2006
    -------------------------------------------------------------------------
                       cents           cents           cents           cents
                      per GJ          per GJ          per GJ          per GJ
                      ------          ------          ------          ------

    Revenue     76.9   854.4    78.8   788.0   320.4   865.9   325.6   814.0
    Cost of
     sales(1)  (69.5) (772.2)  (72.6) (726.0) (290.3) (784.6) (303.9) (759.7)
    -------------------------------------------------------------------------
    Gross
     profit      7.4    82.2     6.2    62.0    30.1    81.3    21.7    54.3
    Less:
     Operating,
     admin. &
     selling
     costs      (4.6)  (51.1)   (3.2)  (32.0)  (18.0)  (48.6)  (11.4)  (28.5)
    -------------------------------------------------------------------------
    Operating
     distribu-
     table cash
     flow        2.8    31.1     3.0    30.0    12.1    32.7    10.3    25.8
    -------------------------------------------------------------------------
    Natural gas
     sold
     (millions
     of GJs)          9               10              37              40
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 13 to the Interim Consolidated
        Financial Statements). In order to provide meaningful comparative
        results, these amounts have been reclassified in a manner consistent
        with the accounting treatment in the comparative period. As such,
        included in cost of sales for the three and twelve months ended
        December 31, 2007 is $6.8 million and $19.3 million in realized
        foreign currency forward contract losses and $5.1 million and
        $14.9 million related to natural gas commodity realized fixed price
        losses.
    

    SEM generated operating distributable cash flow of $2.8 million in the
fourth quarter, a decrease of $0.2 million compared to the prior year quarter.
SEM's revenues were $76.9 million in the fourth quarter, compared to
$78.8 million in the prior year quarter. Revenues were impacted by higher
overall selling prices, offset by reduced volumes. Gross profit was
$7.4 million in the fourth quarter, an increase of $1.2 million (19%) compared
to the prior year quarter, as gross profit per gigajoule ("GJ") was 82.2 cents
per GJ, a 33% increase from the prior year quarter, more than offsetting the
17% decrease in natural gas volume sold. The increase in gross margin per GJ
and the decrease in natural gas volume sold, reflect SEM's continued strategy
of increasing gross profit through growth in its lower-volume, higher-margin
residential and small commercial customer base. Residential and small
commercial customer volumes comprised approximately 32% of total sales volumes
in the fourth quarter (2006 fourth quarter - 26%). Operating, administration
and selling costs of $4.6 million were $1.4 million higher than the prior year
quarter due to higher amortization of customer acquisition costs which
represented approximately $0.7 million of the increase in costs. The remaining
increase in costs is due to higher customer service and overhead costs,
attributable to the growth in SEM's customer base, and costs associated with
the entrance into the BC natural gas and Ontario electricity markets.
    SEM invested $3.6 million in customer acquisition costs during the
quarter ($10.9 million for the twelve months ended December 31, 2007) to grow
its customer base to 94,400 residential and 6,400 commercial natural gas
customers and 1,630 electricity customers. The acquisition of new customers
and the retention rate of SEM's existing customers has been challenged in all
of SEM's markets due principally to the low system price of natural gas,
compared to the fixed-rate alternative SEM is able to offer on its long-term
contracts. The system price of natural gas has been both constant and low due
to the absence of volatility in the spot price of natural gas over the past
year, resulting in reduced customer demand for long-term, fixed-price natural
gas contracts, as the immediate perceived benefit of entering into a long-term
deal is reduced at the current fixed-price rates. SEM's sign-up for
fixed-price electricity customers has been lower than expected for reasons
similar to the natural gas market. The average remaining term of SEM's sales
contracts at December 31, 2007 was 37 months (December 31, 2006 - 42 months).
    On June 13, 2007, SEM announced it had entered into a long-term
electricity supply agreement with Bruce Power LP, enabling SEM to market
long-term, fixed-price electricity sales contracts. SEM will begin to realize
the benefits of customer electrical contracts in 2008, once electricity has
begun to flow to its customers. On January 7, 2008, SEM announced it had
entered into a long-term natural gas supply agreement with Constellation
Energy Commodities Group, Inc., providing SEM with a dependable long-term,
fixed-price natural gas supply.

    Outlook

    SEM expects operating distributable cash flow for 2008 to be between
$15 million and $18 million, increasing in 2009 to between $18 million to
$23 million. SEM's significant assumptions underlying its outlook are:

    
    -   SEM is able to access sales channel agents on acceptable contract
        terms.
    -   Natural gas markets in Ontario and British Columbia will continue to
        provide significant growth opportunities for SEM.
    -   The electricity market in Ontario is expected to provide an
        additional growth opportunity for SEM.
    

    In addition to SEM's significant assumptions detailed above, refer to the
Fund's Annual Information Form for a detailed review of SEM's operations and
its significant business risks.


    Discontinued Operations - JW Aluminum ("JWA")

    In July 2006, the Fund announced as part of its strategic plan, its
decision to sell JWA in order to focus on its Canadian businesses and to
reduce debt. As a result, JWA was sold on December 7, 2006 for net proceeds of
$356.1 million, resulting in the 2006 comparative period being classified as a
discontinued operation.
    Operating distributable cash flow results for the three months and year
ended December 31, 2006 are provided below:

    
    -------------------------------------------------------------------------
    (millions of dollars except  Three months ended          Years ended
    per pound amounts)           December 31, 2006(1)    December 31, 2006(1)
    -------------------------------------------------------------------------
                                            cents/lb                cents/lb
    Gross profit                    13.1        21.8        58.7        18.5
    Less: Cash operating,
     administration and tax costs   (4.2)       (7.0)      (17.0)       (5.4)
    -------------------------------------------------------------------------
    Cash generated from
     operations before changes
     in net working capital          8.9        14.8        41.7        13.1
    Maintenance capital
     expenditures, net              (0.8)       (1.3)       (2.8)       (0.9)
    -------------------------------------------------------------------------
    Operating distributable
     cash flow                       8.1        13.5        38.9        12.2
    -------------------------------------------------------------------------
    Aluminum sold
     (millions of pounds)                   60                     317
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) JWA was sold on December 7, 2006 (See Note 4 to the Interim
        Consolidated Financial Statements).
    

    Operating distributable cash flow for the three and twelve months ended
December 31, 2006 was $8.1 million and $38.9 million. As a result of the sale
of JWA on December 7, 2006, the 2007 financial results of the Fund have no
contribution from JWA.

    Corporate

    Corporate costs for the fourth quarter were $1.7 million, compared to
$2.4 million in the prior year quarter. Corporate costs were impacted by a
decrease in the Fund's trust unit value during the fourth quarter of 2007,
decreasing the cost of the Fund's long-term incentive plans by $0.7 million
compared to the prior year. Excluding the impact of trust unit based
compensation, corporate costs were consistent with the prior year quarter.
    Interest expense on revolving term bank credits and term loans was
$6.5 million for the fourth quarter, a decrease of $4.9 million from the prior
year quarter. Lower interest costs reflect lower average debt levels and the
impact of the appreciation of the Canadian dollar on United States dollar
denominated interest costs, offset in part, by marginally higher floating
interest rates. See "Liquidity and Capital Resources" discussion for further
details.
    Interest on the Fund's convertible unsecured subordinated debentures (the
"Debentures") was $4.2 million for the fourth quarter of 2007, a decrease of
$0.8 million from the prior year quarter. The reduction in Debenture interest
is due to the maturity of $8.1 million Series I, 8% Debentures on July 31,
2007 and the Fund's early redemption of $59.2 million Series II, 8% Debentures
on November 5, 2007.

    Taxation

    Total income tax expense for the fourth quarter was $9.3 million,
comprised of $1.9 million in cash income taxes and a $7.4 million future
income tax expense, compared to a total income tax recovery of $0.7 million in
the prior year quarter, which was comprised of $2.2 million in cash income
taxes and a $2.9 million future income tax recovery.
    Cash income and withholding taxes for the fourth quarter with respect to
continuing operations were limited to cash taxes in the United States and were
$1.9 million (2006 Q4 - $2.2 million). Cash income taxes have been charged to
the businesses from which the taxable income was derived. Future income tax
expense for the fourth quarter was $7.4 million (2006 Q4 - $0.7 million future
income tax recovery), resulting in a corresponding future income tax asset of
$20.3 million as at December 31, 2007. The change in future income tax expense
compared to the prior year quarter is due principally to a reduction in the
effective tax rate on future income tax timing differences from 31.5 percent
to 29.5 percent in 2011 and 28.0 percent in 2012 and thereafter.
    In June 2007 the Government of Canada enacted new legislation imposing
additional income taxes upon publicly traded income trusts, including the
Superior Plus Income Fund, effective January 1, 2011. Prior to this
legislation, the Fund was only taxable on any taxable income not allocated to
the Unitholders and estimated its future income tax on certain temporary
differences between amounts recorded on its balance sheet for book and tax
purposes at a nil effective tax rate. Under the legislation, the Fund
estimates the effective tax rate on the post 2010 reversal of these temporary
differences to be 29.5 percent in 2011 and 28.0 percent in 2012 and
thereafter. Temporary differences reversing before 2011 will still give rise
to nil future income taxes. Consistent with prior periods, the Fund also
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.
    The Fund believes it will be subject to current and future income taxes
under the new legislation, however, the estimated effective tax rate on
temporary difference reversals after January 1, 2011 may change in future
periods. As the legislation is new, future technical interpretations of the
legislation may occur and could materially affect management's estimate of the
future income tax asset/liability. The amount and timing of reversals of
temporary differences will also depend on the Fund's future operating results,
acquisitions and dispositions of assets and liabilities, and distribution
policy. A significant change in any of the preceding assumptions could
materially affect the Fund's estimate of the future income tax
asset/liability.
    As a result of the Government of Canada's enacted legislation imposing
additional income taxes on the Fund for taxation years commencing January 1,
2011, the Fund is continuing to evaluate the new legislation and the Fund's
organizational alternatives in order to maximize Unitholder value. As the
legislation is not effective until 2011, the Fund's current financial
condition is unaffected from this change. The Fund is continuing to explore
opportunities to grow our businesses to offset the impact of this legislation
on the distributable cash flow of the Fund. Superior currently has
approximately $428 million in tax pools as at December 31, 2007. These tax
pools will be impacted by adjustments to reduce tax at the Fund level due to a
payout ratio below 100% and additional capital outlays.

    Strategic Plan Costs

    Costs associated with the completion of Superior's strategic plan were
$3.5 million in the fourth quarter and were comprised of the following:

    
    -------------------------------------------------------------------------
                                   Three months ended          Years ended
                                       December 31             December 31
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------
    Operating and administrative
     expenses:
      Employee severance and
       retention                       -         3.1         0.8        11.0
      Partnership reorganization
       costs                           -         0.4           -         1.9
      ERCO - Bruderheim closure
       costs                         3.5         2.4         4.9         4.1
      Advisory and other               -        (0.6)          -         0.7
      Write off of deferred financing
       costs                           -           -           -         2.0
    -------------------------------------------------------------------------
    Total strategic plan costs       3.5         5.3         5.7        19.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    On January 31, 2008, ERCO entered into an agreement to sell its
Bruderheim facility, excluding a portion of the land, subject to normal
purchase/sale conditions, which are anticipated to be closed during the second
quarter of 2008. The sale will result in minimum proceeds of approximately
$3.5 million less closing costs, with the potential for additional proceeds
based on a gross overriding royalty. ERCO will continue to explore
opportunities to sell the land not included in the sale of the facility. The
Fund does not anticipate any strategic plan costs for 2008.

    Consolidated Outlook

    The Fund expects consolidated distributable cash flow per trust unit for
2008 to be between $1.90 and $2.10 per trust unit, increasing in 2009 to
between $2.05 and $2.25 per trust unit. The Fund's consolidated distributable
cash flow outlook is dependent on the operating results of its four divisions.
See the discussion of operating results by division for additional details on
the Fund's 2008 and 2009 guidance. In addition to the operating results of the
Fund's four divisions, significant assumptions underlying the Fund's 2008 and
2009 outlook are:

    
    -   The Fund expects current economic conditions in Canada and the United
        States to prevail for 2008 with an improved outlook for 2009.
    -   The Fund continues to attract capital and obtain financing on
        acceptable terms.
    -   The foreign currency exchange rate between the Canadian and United
        States dollar is expected to be par on all unhedged foreign currency
        transactions.
    -   Superior's average interest rate on floating rate debt is expected to
        remain stable to marginally lower throughout 2008, increasing
        modestly in 2009.
    -   Financial and physical counterparties continue to fulfill their
        obligations with Superior.
    -   Regulatory authorities do not impose any new regulations impacting
        the Fund.
    

    In addition to the Fund's significant assumptions detailed above, refer
to the Fund's Annual Information Form for a detailed review of the Fund's
operations and its significant business risks.

    Liquidity and Capital Resources

    As at December 31, 2007, revolving term bank credits and term loan
borrowings before deferred financing fees totaled $340.5 million
($440.5 million including accounts receivable securitization), a decrease of
$6.2 million or 2% ($1.2 million including accounts receivable securitization)
from the prior year due to the repayment of existing debt facilities with
operating cash flow in excess of distributions for the year and the non-cash
impact of the appreciation of the Canadian dollar on United States dollar
denominated debt, offset in part, by the impact of the repayment and
redemption of $8.1 million Series I and $59.2 million Series II, 8%
Debentures.
    As at December 31, 2007, Debentures before deferred issue costs issued by
the Fund totaled $247.3 million, which is $66.6 million lower than the balance
at December 31, 2006, as a result of the maturity of $8.1 million, 8%, Series
I Debentures on July 31, 2007 and the redemption of $59.2 million, 8% Series
II Debentures on November 5, 2007.
    Consolidated net working capital was $173.0 million as at December 31,
2007, a decrease of $5.9 million compared to December 31, 2006
($178.9 million). Net working capital is consistent with the prior year as
lower cash on-hand and reduced working capital requirements at ERCO, were
offset by higher working capital requirements at Superior Propane due to
higher sales volumes and selling prices. See Note 13 to the Interim
Consolidated Financial Statements for segmented net working capital levels by
division, net of the accounts receivable sales 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.
    In January 2007, the Fund commenced a distribution reinvestment plan and
an optional unit purchase plan (the "DRIP"). The DRIP provides Unitholders
with the opportunity to reinvest their cash distributions at a 5% discount to
the market price of the trust units. For the three and nine months ended
December 31, 2007, proceeds of $8.0 million and $25.3 million were received
from the DRIP, and were principally used to fund capital expenditures.
    As at December 31, 2007, Superior's senior debt and total debt to EBITDA
are 1.9 and 3.0 times, respectively, (December 31, 2006, 1.9 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 well within
the requirements contained in Superior's debt covenants which restrict its
ability to pay distributions. In accordance with the Fund's credit facilities,
the Fund must maintain a consolidated debt to EBITDA ratio of not more than
5.0 to 1.0, a consolidated senior debt to EBITDA of not more than 3.0 to 1.0
and distributions (including payment to debenture holders) cannot exceed
EBITDA (plus $25.0 million) on a trailing twelve month rolling basis. At
December 31, 2007, the senior debt ratio when calculated in accordance with
Superior's senior banking agreements was 2.0 to 1.0 (December 31, 2006 - 2.1
to 1.0) and the total debt ratio when calculated in accordance with Superior's
senior bank agreements was 2.0 times to 1.0 (December 31, 2006 - 3.7 times to
1.0). Total debt to 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 receivable on a 30-day revolving basis to an entity sponsored
by a Canadian chartered bank to finance a portion of its working capital
requirements and represents an off-balance sheet obligation. The receivables
are sold at a discount to face value based on prevailing money market rates.
As at December 31, 2007, proceeds of $100.0 million (December 31, 2006 -
$95.0 million) had been raised from this program and were used to repay
revolving term bank credits. (See Note 5 to the Interim Consolidated Financial
Statements). Superior is able to adjust the size of the securitization program
and 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.
    On April 26, 2007, DBRS confirmed Superior's senior secured notes rating
at BBB (low), the Fund's stability rating at STA-3 (low) and changed
Superior's negative outlook to stable. On August 2, 2007, Standard and Poor's
confirmed Superior's BBB- secured long-term debt credit rating and their
negative outlook.

    Unitholders' Capital

    The weighted average number of trust units outstanding during the fourth
quarter was 87.3 million trust units, an increase of 1.8 million trust units
compared to the prior year quarter, due principally to trust units issued
under the DRIP.
    As at December 31, 2007 and December 31, 2006, the following trust units,
and securities convertible into trust units, were outstanding:

    
    -------------------------------------------------------------------------
                                   December 31, 2007       December 31, 2006
                             Convertible       Trust Convertible       Trust
    (millions)                Securities       Units  Securities       Units
    -------------------------------------------------------------------------
    Trust units outstanding                     87.6                    85.5
    Series 1, 8% Debentures
     (convertible at $16 per
     trust unit)(1)                   $-           -        $8.1         0.5
    Series 2, 8% Debentures
     (convertible at $20 per
     trust unit)(2)                   $-           -       $59.2         3.0
    Series 1, 5.75% Debentures
     (convertible at $36 per
     trust unit)                  $174.9         4.9      $174.9         4.9
    Series 1, 5.85% Debentures
     (convertible at $31.25 per
     trust unit)                   $75.0         2.4       $75.0         2.4
    Warrants (exercisable @
     $20 per trust unit until
     May 2008)                       2.3         2.3         2.3         2.3
    -------------------------------------------------------------------------
    Trust units outstanding, and
     issuable upon conversion of
     Debenture and Warrant
     securities                                 97.2                    98.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) On July 31, 2007, $8.1 million Series I, 8% Debentures matured and
        were repaid.
    (2) On November 5, 2007, $59.2 million Series 2, 8% Debentures were
        redeemed.
    

    As at December 31, 2007, there were 500,500 trust unit options
outstanding (December 31, 2006 - 1,086,000 trust units) with a weighted
average exercise price of $23.87 per trust unit (2006 Q4- $22.69 per trust
unit). The number of trust units issued upon exercise of the trust unit
options is equal to the growth in the value of the options at the time the
options are exercised, (represented by the market price less the exercise
price) times the number of options exercised, divided by the current trust
unit market price.

    Distributions Paid to Unitholders

    The Fund distributes to holders of trust units ("Unitholders"), income
earned by Superior LP, after interest payments to holders of the convertible
unsecured subordinated debentures (the "Debentures") of the Fund
("Debentureholders"), and provision for administrative expenses and reserves
of the Fund. The Fund's distributions to Unitholders are sourced entirely from
its equity in Superior LP. See "Summary of Cash Flows" on page 21 for
additional details on the sources and uses of cash. The Fund's investments are
in turn financed by trust unit equity and by the Debentures.
    Distributions paid to Unitholders in the fourth quarter were
$34.1 million or $0.39 per trust unit ($1.56 on an annualized basis), compared
to $33.4 million or $0.39 per trust unit in the fourth quarter of 2006.
Distributable cash flow exceeded distributions paid to Unitholders
$28.9 million in the fourth quarter (2006 Q4 - $22.2 million) resulting in a
payout ratio of 54% (2006 Q4 - 60%). Superior's distributions are based on an
entire fiscal year, and as such, the second and third quarters have payout
ratios that are greater than 100%.
    Distributions paid to Unitholders for the twelve months ended
December 31, 2007 were $134.9 million or $1.56 per trust unit, compared to
$155.7 million or $1.82 per trust unit from the twelve months ended December
31, 2006. Distributable cash flow exceeded distributions by $35.5 million for
the twelve months ended December 31, 2007 (2006 - $24.7 million) resulting in
a payout ratio of 79% (2006 - 86%).

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

    Summary of Cash Flows (1)
    -------------------------------------------------------------------------
                                   Three months ended             Years ended
                                         December 31             December 31
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------

    Cash flows from operating
     activities of continuing
     operations                      9.2        13.9       134.3       151.7

    Investing activities:
      Maintenance capital
       expenditures                 (1.9)       (1.8)       (9.1)      (13.8)
      Other capital expenditures
       - growth                     (3.6)       (1.8)       (8.8)      (53.0)
      Acquisitions                  (2.9)          -        (4.3)          -
      Proceeds on the sale of
       JW Aluminum                     -       354.7         1.4       354.7
    -------------------------------------------------------------------------
    Cash flows from investing
     activities                     (8.4)      351.1       (20.8)      287.9
    -------------------------------------------------------------------------

    Financing activities:
      Distributions to Unitholders (34.1)      (33.4)     (134.9)     (155.7)
      Repayment of 8%, Series 1
       convertible debentures          -           -        (8.1)          -
      Redemption of 8%, Series 2
       convertible debentures      (59.2)          -       (59.2)          -
      Proceeds from DRIP             8.0           -        25.3           -
      Revolving term bank credits
       and term loans               73.9      (342.8)       38.4      (290.5)
      Other                         12.0        15.4         5.5        (2.7)
    -------------------------------------------------------------------------
    Cash flows from financing
     activities                      0.6      (360.8)     (133.0)     (448.9)
    -------------------------------------------------------------------------

    Net increase (decrease) in
     cash from continuing
     operations                      1.4         4.2       (19.5)       (9.3)
    Net increase (decrease) in
     cash from discontinued
     operations                        -         8.0           -        23.0
    Cash beginning of period        12.7        21.4        33.6        19.9
    -------------------------------------------------------------------------
    Cash end of period              14.1        33.6        14.1        33.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) See the Interim Consolidated Statements of Cash Flows 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'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.
    SEM enters into NYMEX and AECO natural gas financial swaps with a variety
of counterparties to manage the economic exposure of providing fixed-price
natural gas to its customers. 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.
Additionally, SEM enters into electricity financial swaps with a single
counterparty 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 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 deregulated markets.
    Superior Propane enters into various propane forward purchase and sale
agreements 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.
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 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
(sales) 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.
    As at December 31, 2007, SEM and Superior Propane had hedged
approximately 100% of their US dollar natural gas and propane purchase (sales)
obligations and ERCO Worldwide had hedged 85%(1) and 40%(1) of its estimated
US dollar exposure for the remainder of 2008 and 2009. The estimated
distributable cash flow sensitivity 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 is: 2008 - $0.1 million and
2009 - $0.6 million, after giving effect to United States forward contracts
for 2008 and 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 2008 of 1.00 CDN dollars to US dollars, and for 2009 1.00 CDN dollars
to US dollars.

    
    -------------------------------------------------------------------------
    (US$ millions)      2008    2009    2010    2011    2012    2013   Total
    -------------------------------------------------------------------------
    SEM - US $
     forward
     purchases(1)      118.3   111.1    61.9     5.4       -       -   296.7
    Superior Propane
     - US $ forward
     purchases
     (sales)             9.8      -       -       -       -       -     9.8
    ERCO - US $
     forward
     sales(2)          (88.3)  (48.0)      -       -       -       -  (136.3)
    -------------------------------------------------------------------------
    Net US $ forward
     purchases          39.8    63.1    61.9     5.4       -       -   170.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SEM - Average
     US $ forward
     purchase
     rate(1)            1.22    1.21    1.16    1.11       -       -    1.20
    Superior Propane
     - Average US $
     forward rate       1.00       -       -       -       -       -    1.00
    ERCO - Average
     US $ forward
     sales rate(2)      1.11    1.06       -       -       -       -    1.09
    -------------------------------------------------------------------------
    Net average
     external US$/Cdn$
     exchange rate      1.17    1.16    1.16    1.11       -       -    1.16
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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 United States dollar conversion of
        ERCO's Port Edwards, Wisconsin chloralkali facility which is
        anticipated to cost US $95.0 million in aggregate, of which
        $1.4 million was incurred in 2007, with the remaining costs expected
        in 2008 - US $37.3 million and 2009 - US $56.3 million.
    

    Superior utilizes interest rate swaps 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. (See Notes 6, 7 and 8 to the Interim Consolidated Financial
Statements).
    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 through out 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 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 the Fund's financial instruments, including the
amount and classification of gains and losses recorded in the Fund's Interim
Consolidated Financial Statements and significant assumptions used in the
calculation of the fair value of the Fund's financial instruments see Note 8
to the Interim Consolidated Financial Statements.
    Superior and Superior's operating divisions are exposed to market risks
and various operational risks. For a detailed discussion of these risks see
our 2006 Annual Information Form filed on the Canadian Securities
Administrator's web site, www.sedar.com and Superior's website,
www.superiorplus.com.

    Critical Accounting Policies and Estimates

    The Fund'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 42
to 46 of the 2006 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.

    Changes in Accounting Policies

    Financial Instruments
    On January 1, 2007, The Fund adopted, on a prospective basis, four new
accounting standards that were issued by the Canadian Institute of Chartered
Accountants ("CICA"); Handbook Section 1530, Comprehensive Income, Handbook
Section 3855, Financial Instruments - Recognition and Measurement, Handbook
Section 3861 Financial Instruments - Disclosure and Presentation, and Handbook
Section 3865, Hedges. These standards, and the impact on our financial
position and results of operations, are discussed in Note 1 to the unaudited
Interim Consolidated Financial Statements.

    Accounting Changes
    On January 1, 2007 the Fund adopted CICA Handbook Section 1506,
Accounting Changes. The amendments to this section were made to harmonize this
section with current International Financial Reporting Standards. Revisions to
section 1506 require that voluntary changes in accounting policy are only
permitted if they result in financial statements that provide more reliable
and relevant information. Accounting policy changes are applied on a
retrospective basis unless impractical to do so. Corrections of prior period
errors are applied retrospectively and changes in accounting estimates are
applied prospectively by including the changes through net income. This
section also outlines additional disclosure requirements when accounting
changes are applied including justification for voluntary changes, a
description of the policy, the primary source of GAAP and a detailed effect on
financial statement line items.

    Recent Accounting Pronouncements

    Financial Instruments - Disclosure and Presentation
    Effective January 1, 2008 for the Fund, The Canadian Institute of
Chartered Accountants ("CICA") has replaced Handbook Section 3861 Financial
Instruments Disclosure and Presentation with Handbook Section 3862 Financial
Instruments - Disclosures and Handbook Section 3863 Financial Instruments -
Presentation. The revised standards provide enhanced disclosure and
presentation requirements, with an increased emphasis on disclosures about the
nature and extent of risks arising from financial instruments and how the
entity manages these risks.

    Capital Disclosures
    Effective January 1, 2008 for the Fund, the CICA has issued Handbook
Section 1535 Capital Disclosures. This section requires the disclosure of (i)
the Fund's objectives, policies and processes for managing capital; (ii)
quantitative data about what the Fund regards as capital; (iii) whether the
Fund has complied with any capital requirements; and (iv) if the Fund has not
complied, the consequences of such non-compliance.

    Inventory
    Effective January 1, 2008 for the Fund, the CICA has issued Handbook
Section 3031 Inventories, replacing Handbook Section 3030 Inventories. This
section provides increased guidance on the determination of the cost and
financial statement presentation of inventory. The Fund anticipates that the
calculation of the cost of inventory of ERCO Worldwide will be impacted by
this revised standard, due to the requirement to inventory the cost of certain
fixed overhead items, principally, the amortization of property, plant and
equipment. The Fund does not anticipate that this will have a material impact
on its net earnings, but rather it will affect the classification of
amortization expense on the financial statements. Previously, all amortization
was expensed and classified on the income statement as amortization. The
revised standard requires that the amortization that is inventoried be
classified as a component of cost of product sold.

    
    Quarterly Financial and Operating Information
    -------------------------------------------------------------------------
                                                  2007
    (millions of dollars except                 Quarter
     per trust unit amounts)      Fourth       Third      Second       First
    -------------------------------------------------------------------------
    Propane sales volumes
     (millions of litres)            416         256         280         477
    Chemical sales volumes
     (thousands of metric tonnes)    194         187         193         194
    Natural gas sales volumes
    (millions of GJs)                  9           9           9          10
    Gross profit                   185.8       145.9       144.4       185.7
    Asset impairments, net of tax      -           -           -           -
    Net earnings (loss) from
     continuing operations          64.5       (25.9)      (25.5)      106.3
    Net earnings (loss)             64.5       (26.9)      (25.5)      107.7
    Per basic trust unit from
     continuing operations         $0.74      ($0.30)     ($0.30)      $1.24
    Per diluted trust unit from
     continuing operations         $0.74      ($0.30)     ($0.30)      $1.24
    Per basic trust unit           $0.74      ($0.31)     ($0.30)      $1.26
    Per diluted trust unit         $0.74      ($0.31)     ($0.30)      $1.26
    Distributable cash flow         63.0        25.7        19.4        62.3
    Per basic trust unit           $0.72       $0.30       $0.23       $0.73
    Per diluted trust unit         $0.72       $0.30       $0.23       $0.73
    Net working capital(1)         173.0       141.9       134.1       162.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                                    2006
                                                  Quarters
                                  Fourth       Third      Second       First
    -------------------------------------------------------------------------
    Propane sales volumes
     (millions of litres)            407         261         270         448
    Chemical sales volumes
     (thousands of metric tonnes)    191         190         183         191
    Natural gas sales volumes
     (millions of GJs)                10          11          10           9
    Gross profit                   174.1       143.5       141.2       172.1
    Asset impairments, net of tax      -        56.3       170.8           -
    Net earnings (loss) from
     continuing operations          25.3        46.3      (157.4)       30.2
    Net earnings (loss)             38.1         1.1      (153.3)       33.3
    Per basic trust unit from
     continuing operations         $0.30       $0.54      ($1.84)      $0.35
    Per diluted trust unit from
     continuing operations         $0.30       $0.54      ($1.84)      $0.35
    Per basic trust unit           $0.45       $0.01      ($1.79)      $0.39
    Per diluted trust unit         $0.45       $0.01      ($1.79)      $0.39
    Distributable cash flow         55.6        33.8        34.6        56.5
    Per basic trust unit           $0.65       $0.40       $0.40       $0.66
    Per diluted trust unit          0.65       $0.40       $0.40       $0.66
    Net working capital(1)         178.9       237.9       294.8       310.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (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.


    Segmented Distributable Cash Flow(1)
    -------------------------------------------------------------------------
    For the three
     months ended                                                      Total
     December 31,      Superior                               Corp-  Consol-
     2007               Propane     ERCO   Winroc      SEM    orate   idated
    -------------------------------------------------------------------------
    Net earnings (loss)
     from continuing
     operations            32.5      2.6      8.8     29.1     (8.5)    64.5
    Add: Amortization of
     property, plant and
     equipment, intangible
     assets and accretion
     of convertible
     debenture issue
     costs                  2.0     11.1      1.0        -      1.1     15.2
      Future income tax
       expense (recovery)   7.0     (3.3)     0.4      3.1      0.2      7.4
      Superior Propane
       non-cash pension
       expense              0.6        -        -        -        -      0.6
      Unrealized (gains)
       losses on financial
       instruments         (3.0)    11.2        -    (29.4)    (5.1)   (26.3)
      Strategic plan costs
       (recovery)             -      3.6        -        -     (0.1)     3.5
    Less: Maintenance
     capital expenditures   0.8     (2.6)    (0.1)       -        -     (1.9)
    -------------------------------------------------------------------------
    Distributable cash
     flow                  39.9     22.6     10.1      2.8    (12.4)    63.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                              Discon
    For the three                                             tinued
     months ended                                             Opera-   Total
     December 31,   Superior                           Corp-  tions- Consol-
     2006            Propane    ERCO  Winroc     SEM   orate   JWA(2) idated
    -------------------------------------------------------------------------
    Net earnings
     (loss) from
     continuing
     operations         23.3    10.6    10.3     2.9   (21.8)           25.3
    Add: Amortization
     of property,
     plant and equip-
     ment, intangible
     assets and
     accretion of
     convertible
     debenture issue
     costs               6.2    13.1     1.1       -     0.6       -    21.0
      Future income
       tax expense
       (recovery)          -    (3.2)      -       -     0.3       -    (2.9)
      Superior Propane
       non-cash pension
       expense           0.6       -       -       -       -       -     0.6
      Distributable
       cash from dis-
       continued
       operations          -       -       -       -       -     8.1     8.1
      Strategic plan
       costs             0.5     2.6       -     0.1     2.1       -     5.3
    Less: Maintenance
     capital proceeds
     (expenditures)      2.0    (3.1)   (0.7)      -       -       -    (1.8)
    -------------------------------------------------------------------------
    Distributable
     cash flow          32.6    20.0    10.7     3.0   (18.8)    8.1    55.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    For the year ended                                                 Total
     December 31,      Superior                               Corp-  Consol-
     2007               Propane     ERCO   Winroc      SEM    orate   idated
    -------------------------------------------------------------------------
    Net earnings from
     continuing
     operations           103.8     22.9     33.3     17.8    (58.4)   119.4
    Add: Amortization
     of property, plant
     and equipment,
     intangible assets
     and accretion of
     convertible
     debenture issue
     costs                 15.7     42.6      4.2        -      2.8     65.3
      Future income tax
       expense (recovery) (19.9)    12.1     (2.3)     0.8     (1.1)   (10.4)
      Management intern-
       alization costs        -        -        -        -      0.5      0.5
      Superior Propane
       non-cash pension
       expense              1.7        -        -        -        -      1.7
      Unrealized (gains)
       losses on financial
       instruments         (2.3)     5.5        -     (6.9)     1.0     (2.7)
      Strategic plan costs  0.4      4.9        -      0.4        -      5.7
    Less: Maintenance
     capital expenditures   0.2     (8.7)    (0.6)       -        -     (9.1)
    -------------------------------------------------------------------------
    Distributable cash
     flow                  99.6     79.3     34.6     12.1    (55.2)   170.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                              Discon
    For the                                                   tinued
     year ended                                               Opera-   Total
     December       Superior                           Corp-  tions- Consol-
     31, 2006        Propane    ERCO  Winroc     SEM   orate   JWA(2) idated
    -------------------------------------------------------------------------
    Net earnings
     (loss) from
     continuing
     operations        115.8   (59.3)   46.0    12.6  (170.7)      -   (55.6)
    Add: Amortization
     of property,
     plant and equip-
     ment, intangible
     assets and
     accretion of
     convertible
     debenture issue
     costs              20.4    52.6     4.1       -     2.3       -    79.4
      Future income
       tax expense
       (recovery)      (49.2) (133.9)   (8.9)   (2.6)   85.4       -  (109.2)
      Trust unit
       incentive plan
       recovery            -       -       -       -    (1.2)      -    (1.2)
      Management intern-
       alization costs     -       -       -       -     1.3       -     1.3
      Impairment of
       property, plant
       and equipment,
       and goodwill        -   218.7       -       -       -       -   218.7
      Superior Propane
       non-cash pension
       expense           2.2       -       -       -       -       -     2.2
      Distributable
       cash from dis-
       continued
       operations          -       -       -       -       -    38.9    38.9
      Strategic plan
       costs             1.1     5.1       -     0.3    13.2       -    19.7
    Less: Maintenance
     capital proceeds
     (expenditures)      0.3    (7.5)   (6.6)      -       -       -   (13.8)
    -------------------------------------------------------------------------
    Distributable
     cash flow          90.6    75.7    34.6    10.3   (69.7)   38.9   180.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) See the Interim Consolidated Financial Statements for net earnings
        (loss), amortization of property, plant and equipment, intangible
        assets and accretion of convertible debenture issue costs, future
        income tax expense (recovery), trust unit incentive plan expense
        (recovery), management internalization costs, impairment of property,
        plant and equipment and goodwill, non-cash pension expense,
        unrealized (gains) losses on financial instruments and maintenance
        capital expenditures.
    (2) See Note 4 to the Interim Consolidated Financial Statements.



    SUPERIOR PLUS INCOME FUND
    Consolidated Balance Sheets
    -------------------------------------------------------------------------
                                                        December    December
    (unaudited, millions of dollars)                     31 2007     31 2006
    -------------------------------------------------------------------------
    Assets
    Current Assets
      Cash and cash equivalents                             14.1        33.6
      Accounts receivable and other (Note 5)               265.8       246.1
      Inventories                                          105.2       142.8
      Current portion of unrealized gains on
       financial instruments (Note 8)                       48.0           -
    -------------------------------------------------------------------------
                                                           433.1       422.5

    Property, plant and equipment                          514.4       571.1
    Customer acquisition and deferred costs                 17.4        25.9
    Intangible assets                                       23.5        31.5
    Goodwill                                               451.8       452.4
    Accrued pension asset                                   21.9        23.7
    Future income tax asset (Note 9)                        20.3         9.8
    Long-term portion of unrealized gains on
     financial instruments (Note 8)                         60.4           -
    -------------------------------------------------------------------------

                                                         1,542.8     1,536.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Unitholders' Equity
    Current Liabilities
      Accounts payable and accrued liabilities             212.1       243.6
      Current portion of term loans and convertible
       debentures (Notes 6 and 7)                            3.9        10.8
      Distributions and interest payable to
       Unitholders and Debentureholders                     12.1        17.9
      Current portion of unrealized losses on
       financial instruments (Note 8)                       51.1           -
    -------------------------------------------------------------------------
                                                           279.2       272.3

    Revolving term bank credits and term loans (Note 6)    334.1       344.0
    Convertible unsecured subordinated debentures
     (Note 7)                                              240.0       305.8
    Future employee benefits                                18.5        19.2
    Long-term portion of unrealized losses on
     financial instruments (Note 8)                         54.3           -
    -------------------------------------------------------------------------
    Total Liabilities                                      926.1       941.3

    Unitholders' Equity
      Unitholders' capital (Note 11)                     1,366.8     1,340.8
      Accumulated deficit                                 (729.8)     (745.3)
      Accumulated other comprehensive income
       (loss) (Note 11)                                    (20.3)        0.1
    -------------------------------------------------------------------------
                                                           616.7       595.6
    -------------------------------------------------------------------------

                                                         1,542.8     1,536.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See Notes to the Interim Consolidated Financial Statements)



    SUPERIOR PLUS INCOME FUND
    Consolidated Statements of Net Earnings (Loss),
     Comprehensive Income (Loss) and Deficit
    -------------------------------------------------------------------------
    (unaudited, millions of        Three months ended          Years ended
     dollars except per                December 31             December 31
     trust unit amounts)            2007        2006        2007        2006
    -------------------------------------------------------------------------

    Revenues                       670.5       592.8     2,355.4     2,264.3
    Cost of products sold         (480.7)     (418.7)   (1,681.8)   (1,633.4)
    Realized gains (losses) on
     financial instruments
     (Note 8)                       (4.0)          -       (11.8)          -
    -------------------------------------------------------------------------
    Gross profit                   185.8       174.1       661.8       630.9
    -------------------------------------------------------------------------

    Expenses
      Operating and
       administrative              112.4       112.1       439.7       423.8
      Amortization of property,
       plant and equipment          13.0        19.1        57.6        72.0
      Amortization of intangible
       assets                        1.1         1.3         4.9         5.1
      Interest on revolving
       term bank credits and
       term loans                    6.5        11.4        25.2        43.1
      Interest on convertible
       unsecured subordinated
       debentures                    4.2         5.0        19.5        20.2
      Accretion of convertible
       debenture issue costs         1.1         0.6         2.8         2.3
      Management internalization
       costs                           -           -         0.5         1.3
      Impairment of property,
       plant and equipment and
       goodwill (Note 10)              -           -           -       218.7
    Unrealized losses (gains)
     on financial instruments
     (Note 8)                      (26.3)          -        (2.7)          -
    -------------------------------------------------------------------------
                                   112.0       149.5       547.5       786.5
    -------------------------------------------------------------------------

    Net earnings (loss) before
     income taxes from
     continuing operations          73.8        24.6       114.3      (156.6)
    Income tax recovery
     (Note 9)                       (9.3)        0.7         5.1       100.0
    -------------------------------------------------------------------------
    Net earnings (loss) from
     continuing operations          64.5        25.3       119.4       (55.6)
    Net earnings (loss) from
     discontinued operations
     (Note 4)                          -        12.8         0.4       (25.2)
    -------------------------------------------------------------------------
    Net Earnings (Loss)             64.5        38.1       119.8       (80.8)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings (loss)             64.5        38.1       119.8       (80.8)
    Other comprehensive income
     (loss), net of tax:
      Unrealized foreign
       currency gains (losses)
       on translation of self-
       sustaining foreign
       operations                   (1.4)          -       (13.6)          -
      Reclassification of
       derivative gains and
       losses previously
       deferred                     (2.8)          -        11.3           -
    -------------------------------------------------------------------------
    Comprehensive Income
     (Loss)                         60.3        38.1       117.5       (80.8)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Deficit, Beginning of
     Period                       (760.2)     (750.0)     (745.3)     (508.8)
    Cumulative impact of
     adopting new accounting
     requirements for
     financial instruments
     (Note 1(b))                       -           -        30.6           -
    Net earnings (loss)             64.5        38.1       119.8       (80.8)
    Distributions to
     Unitholders                  (34.1)       (33.4)     (134.9)     (155.7)
    -------------------------------------------------------------------------
    Deficit, End of Period       (729.8)      (745.3)     (729.8)     (745.3)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings (loss) per
     trust unit from
     continuing operations,
     basic and diluted
     (Note 12)                    $0.74        $0.30       $1.38      ($0.65)
    Net earnings (loss) per
     trust unit from
     discontinued operations,
     basic and diluted
     (Note 12)                        -        $0.15           -      ($0.29)
    Net earnings (loss) per
     trust unit, basic and
     diluted (Note 12)            $0.74        $0.45       $1.38      ($0.94)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (See Notes to the Interim Consolidated Financial Statements)



    SUPERIOR PLUS INCOME FUND
    Consolidated Statements of Cash Flows

    -------------------------------------------------------------------------
                                   Three months ended          Years ended
    (unaudited, millions of            December 31             December 31
     dollars                        2007        2006        2007        2006
    -------------------------------------------------------------------------
    Operating Activities
    Net earnings (loss)             64.5        38.1       119.8       (80.8)
    Net loss (earnings) from
     discontinued operations           -       (12.8)       (0.4)       25.2
    Items not affecting cash:
      Amortization of property,
       plant and equipment,
       intangible assets and
       accretion of convertible
       debenture issue costs        15.2        21.0        65.3        79.4
      Amortization of natural
       gas customer acquisition
       costs                         1.6         0.9         6.6         3.2
      Trust unit incentive plan
       compensation recovery           -           -           -        (1.2)
      Pension expense                0.6         0.6         1.7         2.2
      Impairment of property,
       plant and equipment, and
       goodwill                        -           -           -       218.7
      Unrealized losses (gains)
       on financial instruments    (26.3)          -        (2.7)          -
      Future income tax recovery     7.4        (2.9)      (10.4)     (109.2)
    Natural gas customer
     acquisition costs              (3.6)       (1.4)      (10.9)       (8.4)
    Decrease (increase) in
     non-cash operating working
     capital items                 (50.2)      (29.6)      (34.7)       22.6
    -------------------------------------------------------------------------
    Cash flows from operating
     activities of continuing
     operations                      9.2        13.9       134.3       151.7
    -------------------------------------------------------------------------

    Investing Activities
    Maintenance capital
     expenditures                   (1.9)       (1.8)       (9.1)      (13.8)
    Other capital expenditures      (3.6)       (1.8)       (8.8)      (53.0)
    Acquisitions (Note 3)           (2.9)          -        (4.3)          -
    Proceeds on sale of JW
     Aluminum Company (Note 4)         -       354.7         1.4       354.7
    -------------------------------------------------------------------------
    Cash flows from investing
     activities                     (8.4)      351.1       (20.8)      287.9
    -------------------------------------------------------------------------

    Financing Activities
    Revolving term bank
     credits and term loans         73.9      (342.8)       38.4      (122.7)
    Repayment of 8%, Series 1
     subordinated unsecured
     convertible debentures            -           -        (8.1)          -
    Repayment of 8%, Series 2
     subordinated unsecured
     convertible debentures        (59.2)          -       (59.2)          -
    Issuance of Medium Term
     Notes (Note 6)                    -           -           -       197.2
    Repayment of Medium Term
     Notes (Note 6)                    -           -           -      (197.2)
    Repayment of JW Aluminum
     Company acquisition credit
     facility                          -           -           -      (167.8)
    Net proceeds (repayment)
     of accounts receivable
     sales program                  12.0        15.1         5.0        (5.0)
    Proceeds from exercise of
     trust unit warrants               -           -           -         0.2
    Proceeds from trust unit
     distribution reinvestment
     program                         8.0           -        25.3           -
    Receipt of management
     internalization loans
     receivable                        -         0.3         0.5         2.1
    Distributions to Unitholders   (34.1)      (33.4)     (134.9)     (155.7)
    -------------------------------------------------------------------------
    Cash flows from financing
     activities                      0.6      (360.8)     (133.0)     (448.9)
    -------------------------------------------------------------------------

    Net increase (decrease)
     in cash from continuing
     operations                      1.4         4.2       (19.5)       (9.3)
    Net increase (decrease) in
     cash from discontinued
     operations (Note 4)               -         8.0           -        23.0
    Cash and cash equivalents
     (bank indebtedness),
     beginning of period            12.7        21.4        33.6        19.9
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period                  14.1        33.6        14.1        33.6
    -------------------------------------------------------------------------

    (See Notes to the Interim Consolidated Financial Statements)



    Notes to Interim Consolidated Financial Statements
    (unaudited, tabular amounts in millions of dollars, unless noted
    otherwise, except per trust unit amounts)

    1.  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 with those as set out
    in the Fund's annual financial statements for the year ended December 31,
    2006, except as noted below, and include the accounts of the Superior
    Plus Income Fund (the "Fund"), its wholly owned subsidiaries, Superior
    Plus LP ("Superior"), and Superior's subsidiaries. These financial
    statements do not conform in all respects to the note disclosure
    requirement of GAAP for annual financial statements as certain
    information and disclosures included in the annual financial statements
    notes have been condensed or omitted. These interim financial statements
    and notes thereto should be read in conjunction with the Fund's financial
    statements for the year ended December 31, 2006. All significant
    transactions and balances between the Fund, the Fund's subsidiaries,
    Superior, and Superior's subsidiaries have been eliminated on
    consolidation.

    (b) Changes in Accounting Policies

    Financial Instruments

    On January 1, 2007, the Fund adopted four new accounting standards that
    were issued by the Canadian Institute of Chartered Accountants ("CICA");
    Handbook Section 1530, Comprehensive Income, Handbook Section 3855,
    Financial Instruments - Recognition and Measurement, Handbook Section
    3861 Financial Instruments - Disclosure and Presentation, and Handbook
    Section 3865, Hedges. The fund adopted these standards prospectively,
    accordingly, comparative amounts for prior periods have not been
    restated.

    Comprehensive Income
    Section 1530 introduces comprehensive income, which consists of net
    income and other comprehensive income ("OCI"). OCI represents changes in
    equity during a period arising from transactions and other events with
    non-owner sources and includes unrealized gains and losses on financial
    assets classified as available-for-sale, unrealized foreign currency
    translation gains or losses arising from self-sustaining foreign
    operations, net of hedging activities, and changes in the fair value of
    the effective portion of cash flow hedging instruments. The Fund has
    included in the Interim Consolidated Financial Statements a Statement of
    Comprehensive Income for the changes in these items. The cumulative
    changes in OCI are included in accumulated other comprehensive income
    ("AOCI"), which is presented as a new category of Unitholders' equity on
    the Consolidated Balance Sheets.

    Financial Instruments - Recognition and Measurement
    Section 3855 establishes standards for recognizing and measuring
    financial assets, financial liabilities and non-financial derivatives. It
    requires that financial assets and financial liabilities, including
    derivatives, be recognized on the Consolidated Balance Sheets when the
    Fund becomes a party to the contractual provisions of the financial
    instrument or non-financial derivative contract. Under this standard, all
    financial instruments are required to be measured at fair value on
    initial recognition except for certain related party transactions.
    Measurement in subsequent periods depends on whether the financial
    instrument has been classified as held-for-trading, available-for-sale,
    held-to-maturity, loans and receivables, or other financial liabilities.
    After initial recognition, items classified as held-for-trading or
    available-for-sale are revalued at fair values, items classified as
    held-to-maturity, loans and receivables, and other financial liabilities
    are measured at amortized cost using the effective interest method.
    Transaction costs are expensed as incurred for financial instruments
    classified or designated as held-for-trading. For other financial
    instruments, transaction costs are recorded as part of the underlying
    financial instrument and are amortized or accreted into net income.

    Derivative instruments are recorded on the Consolidated Balance Sheets at
    fair value, including those derivatives that are embedded in financial or
    non-financial contracts that are considered to be derivatives. Changes in
    the fair values of derivative instruments are recognized in net income
    with the exception of derivatives designated as effective cash flow
    hedges or hedges of foreign currency exposure of a net investment in a
    self-sustaining foreign operation.

    Financial Instruments - Presentation and Disclosure
    Section 3861 established standards for the presentation and disclosure of
    financial instruments and non-financial derivatives.

    Hedges
    Section 3865 specifies the criteria that must be satisfied in order for
    hedge accounting to be applied and the accounting for each of the
    permitted hedging strategies: fair value hedges, cash flow hedges and
    hedges of foreign currency exposures of net investments in
    self-sustaining foreign operations. The revised standards require the
    Fund to record all derivatives at fair value. Prior to January 1, 2007,
    the Fund accounted for derivatives as hedges that qualified for hedge
    accounting.

    Impact Upon Adoption of Sections 1530, 3855, 3861 and 3865
    As a result of adopting these standards, on January 1, 2007 the Fund
    recorded previously unrecorded assets and liabilities of $110.1 million
    and $97.6 million, respectively, resulting in a $30.6 million reduction
    to the Fund's opening deficit as at January 1, 2007 and the recognition
    of $18.1 million in accumulated other comprehensive income. The Fund's
    opening adjustment to accumulated other comprehensive income was
    $18.0 million, reflecting the transitional adjustment of $18.1 million
    and the Fund's net cumulative translation adjustment on the translation
    of its self-sustaining foreign operations of $0.1 million.

    Additionally, on January 1, 2007, the Fund reclassified $2.9 million of
    deferred financing fees previously classified as deferred costs to
    revolving term bank credits and term loans, and $10.1 million of deferred
    convertible debenture issue costs previously classified as deferred costs
    to convertible unsecured subordinated debentures.

    Effective January 1, 2007, the Fund ceased formally designating and
    documenting economic hedges in accordance with the requirements of
    Section 3865, accordingly, all derivative instruments are now recorded at
    fair value with changes in the fair value recorded to net income.

    Accounting Changes
    On January 1, 2007 the Fund adopted CICA Handbook Section 1506,
    Accounting Changes. Section 1506 permits voluntary changes in accounting
    policy only if it results in financial statements that provide more
    reliable and relevant information. Accounting policy changes are applied
    retrospectively unless it is impractical to determine the period or
    cumulative impact of the change. Corrections of prior period errors are
    applied retrospectively and changes in accounting estimates are applied
    prospectively by including the changes through net income. This section
    also outlines additional disclosure requirements when accounting changes
    are applied including justification for voluntary changes, a description
    of the policy, the primary source of GAAP and a detailed effect on
    financial statement line items.

    (c) Future Accounting Changes
    Financial Instruments - Disclosure and Presentation
    Effective January 1, 2008 for the Fund, the CICA has replaced Handbook
    Section 3861 Financial Instruments Disclosure and Presentation with
    Handbook Section 3862 Financial Instruments - Disclosures and Handbook
    Section 3863 Financial Instruments - Presentation. The revised standards
    provide enhanced disclosure and presentation requirements, with an
    increased emphasis on disclosures about the nature and extent of risks
    arising from financial instruments and how the entity manages these
    risks.

    Capital Disclosures
    Effective January 1, 2008 for the Fund, the CICA has issued Handbook
    Section 1535 Capital Disclosures. This section requires the disclosure
    of (i) the Fund's objectives, policies and processes for managing
    capital; (ii) quantitative data about what the Fund regards as capital;
    (iii) whether the Fund has complied with any capital requirements; and
    (iv) if the Fund has not complied, the consequences of such
    non-compliance.

    Inventory
    Effective January 1, 2008 for the Fund, the CICA has issued Handbook
    Section 3031 Inventories, replacing Handbook Section 3030 Inventories.
    This section provides increased guidance on the determination of the cost
    and financial statement presentation of inventory. The Fund anticipates
    that the calculation of the cost of inventory of ERCO Worldwide will be
    impacted by this revised standard, due to the requirement to inventory
    the cost of certain fixed overhead items, principally, the amortization
    of property, plant and equipment. The Fund does not anticipate that this
    will have a material impact on its overall financial results, but rather
    it will affect the classification of amortization expense on the
    financial statements. Previously, all amortization was expensed and
    classified on the income statement as amortization. The revised standard
    requires that the amortization that is inventoried be classified as a
    component of cost of product sold.

    (d) Business Segments
    Superior operates four continuing 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 13). JW Aluminum Company ("JWA"
    or "JW Aluminum"), a manufacturer of specialty flat-rolled aluminum
    products, has been sold and classified as a discontinued operation.
    (See Note 4).

    2.  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 fourth and first 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
    fourth and first quarters.

    3.  Acquisitions

    During 2007, Winroc acquired the assets of two gypsum supply dealers, for
    consideration of $4.3 million.

    There were no acquisitions completed by Superior during 2006.

    4.  Disposition - JW Aluminum

    In July of 2006, the Fund announced the results of its strategic review
    designed to maximize Unitholder value which included the decision to sell
    JWA in order to reduce debt levels and refocus its operations on its
    existing Canadian businesses. Accordingly, effective July 1, 2006, JWA's
    balance sheet, results of operations and cash flows have been classified
    as discontinued operations on a retroactive basis. As a result of its
    classification as a discontinued operation, amortization of JWA's
    property, plant and equipment and intangible assets ceased on
    July 1, 2006.

    On December 7, 2006, the Fund completed the sale of all the issued and
    outstanding shares of JWA on a cash and debt free basis to Wellspring
    Capital Management LLC, for total consideration of $356.1 million
    (US $310.1 million), net of $4.9 million (US $4.3 million ) in
    disposition costs.

    The results of discontinued operations presented in the consolidated
    statements of net earnings were as follows:

    -------------------------------------------------------------------------
                                Three months ended               Years ended
                                       December 31               December 31
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
    Revenue                         -        110.2            -        573.3
    Cost of product sold            -        (97.1)           -       (514.6)
    -------------------------------------------------------------------------
    Gross profit                    -         13.1            -         58.7
    -------------------------------------------------------------------------
    Operating and administrative    -          2.4            -          9.5
    Amortization of property,
     plant, equipment,
     and intangibles                -            -            -         19.1
    Impairment of property,
     plant, equipment
     and intangibles                -            -            -         56.3
    Gain (loss) on sale of JWA,
     inclusive of final closing
     adjustments                    -         (4.7)         0.4         (4.7)
    Income tax expense (recovery)   -          2.6            -          3.7
    -------------------------------------------------------------------------
    Net earnings (loss) from
     discontinued operations        -         12.8          0.4        (25.2)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The cash flows from (used in) discontinued operations were as follows:

                                Three months ended               Years ended
                                       December 31               December 31
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
    Cash flows from discontinued
     operations before changes
     in working capital             -          8.9            -         41.7
      Decrease (increase) in
       non-cash operating working
       capital items                -          0.3            -        (12.2)
    -------------------------------------------------------------------------
    Cash flows from discontinued
     operations                     -          9.2            -         29.5
    -------------------------------------------------------------------------
      Maintenance capital
       expenditures                 -         (0.8)           -         (2.8)
      Other capital expenditures    -         (0.4)           -         (3.7)
    -------------------------------------------------------------------------
    Cash flows used in
     investing activities           -         (1.2)           -         (6.5)
    Cash flows from financing
     activities                     -            -            -            -
    -------------------------------------------------------------------------
    Cash flows used in
     discontinued operations        -          8.0            -         23.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    5.  Accounts Receivable and Other

    Superior sells, with limited recourse, certain trade accounts receivable
    on a revolving basis to an entity sponsored by a Canadian chartered bank.
    The accounts receivable are sold at a discount to face value based on
    prevailing money market rates. Superior has retained the servicing
    responsibility for the accounts receivable sold and has therefore
    recognized a servicing liability. The level of accounts receivable sold
    under the program fluctuates seasonally with the level of accounts
    receivable. As at December 31, 2007 proceeds of $100.0 million
    (December 31, 2006 - $95.0 million) had been received.

    Included in accounts receivable and other as at December 31, 2007 is
    $15.1 million (December 31, 2006 - $15.3 million) of prepaid expenses.

    6.  Revolving Term Bank Credits and Term Loans

                            Maturity   Effective Interest December  December
                                Date   Rate                31 2007   31 2006
    -------------------------------------------------------------------------
    Revolving term bank
     credits(1)

      Bankers Acceptances              Floating BA rate plus
      ("BA")                    2010    applicable credit
                                        spread                96.5      35.0
      LIBOR Loans                      Floating LIBOR rate
       (US$66.7 million;                plus applicable
       2006 - US$92.3 million)  2010    credit spread         65.9     107.5
    -------------------------------------------------------------------------
                                                             162.4     142.5
    -------------------------------------------------------------------------
    Other Debt
      Notes payable        2007-2010   Prime                   6.8       7.4
      Deferred
       consideration       2008-2010   Non-interest bearing    7.0       9.2
      Loan payable         2008-2014   6.3%                    5.2         -
      Mortgage payable
       (US$1.0 million;
        2006 - US$1.0 million)  2011   7.53%                   1.0       1.1
    -------------------------------------------------------------------------
                                                              20.0      17.7
    -------------------------------------------------------------------------
    Senior Secured Notes
      Senior secured notes
       subject to floating
       interest rates
       (US$85.0 million;
       2006 - US$85.0                  Floating LIBOR rate
       million)(2)              2015    plus 1.7%             84.0      99.1
      Senior secured notes
       subject to fixed
       interest rates
       (US$75.0 million;
       2006 - US$75.0
       million)(2)        2013, 2015   6.65%                  74.1      87.4
      JWA acquisition                  Floating LIBOR rate
       credit facility                  plus credit
       (US$145.0 million)(3)    2007    applicable spread        -         -
      Medium Term Notes(4)      2016   5.57%                     -         -
    -------------------------------------------------------------------------
                                                             158.1     186.5
    -------------------------------------------------------------------------
    Total revolving term bank credits and term loans
     before deferred financing fees                          340.5     346.7
    Deferred financing fees                                   (2.5)        -
    -------------------------------------------------------------------------
    Revolving term bank credits and term loans               338.0     346.7
    Current maturities                                        (3.9)     (2.7)
    -------------------------------------------------------------------------
    Revolving term bank credits and term loans               334.1     344.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Superior and its wholly-owned subsidiaries, Superior Plus US Holdings
        Inc. and Commercial e Industrial (Chile) Limitada have revolving term
        bank credit borrowing capacity of $595.0 million. These facilities
        are secured by a general charge over the assets of Superior and
        certain of its subsidiaries.
    (2) Senior Secured Notes (the "Notes") totaling US $160.0 million (CDN
        $158.1 million at December 31, 2007 (2006 - CDN $186.5 million) 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 and interest rates. The
        estimated fair value of the Notes at December 31, 2007 was CDN
        $163.8 million (2006 - CDN $181.0 million). In conjunction with the
        issue of the Notes, Superior swapped US $85.0 million (CDN $84.0
        million at December 31, 2007 (2006 - CDN $99.1 million) of the fixed
        rate obligation into a US dollar floating rate obligation.
    (3) On October 19, 2005, Superior Plus US Holdings Inc. entered into a
        secured non-revolving term bank facility for US$145.0 million to
        partially finance the acquisition of JWA. The facility was secured
        by a general charge over the assets of Superior and certain of its
        subsidiaries. This facility was repaid and cancelled in March 2006
        from proceeds raised through the issuance of Medium Term Notes.
    (4) On March 3, 2006, Superior issued $200.0 million, 5.50 percent
        coupon, Medium Term Notes maturing on March 3, 2016 with an effective
        yield to maturity of 5.57 percent. This facility was secured by a
        general charge over the assets of Superior and certain of its
        subsidiaries. On August 8, 2006, Superior repaid the Medium Term
        Notes from borrowings under the revolving term credit facilities
        referred to in footnote 1 above, providing enhanced debt repayment
        and covenant flexibility.

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

    Current portion                                                      3.9
    Due in 2009                                                         10.9
    Due in 2010                                                        168.5
    Due in 2011                                                         33.7
    Due in 2012                                                         32.6
    Subsequent to 2012                                                  90.9
    -------------------------------------------------------------------------
    Total                                                              340.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    7.  Convertible Unsecured Subordinated Debentures

    The Fund has issued four series of Debentures denoted as 8 percent
    Series 1, 8 percent Series 2, 5.75 percent Series 1, and 5.85 percent
    Series 1 as follows:

                                                                        Total
                                                             Unamor-   Carry-
                                                               tized      ing
                 Series 1(1) Series 2(2) Series 1  Series 1  Discount   Value
    -------------------------------------------------------------------------
                   July 31,  November    December   October
    Maturity date     2007    1, 2008    31, 2012  31, 2015
    Interest rate     8.0%       8.0%       5.75%     5.85%
    Conversion price
     per trust unit $16.00     $20.00      $36.00    $31.25
    -------------------------------------------------------------------------
    Debentures
     outstanding
     at December
     31, 2006(3)       8.1       59.2       174.9      75.0     (3.3)  313.9
    Conversion and
     repayment
     /redemption of
     Debentures and
     accretion of
     discount
     during 2007      (8.1)     (59.2)          -         -      0.7   (66.6)
    Deferred issue
     costs               -          -        (4.8)     (2.5)            (7.3)
    -------------------------------------------------------------------------
    Debentures
     outstanding         -          -       170.1      72.5     (2.6)  240.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Quoted market
     value December
     31, 2007            -          -       152.2      67.5
    Quoted market
     value December
     31, 2006          8.2       60.8       157.5      66.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) On July 31, 2007, $8.1 million Series I, 8% Debentures matured and
        were repaid.
    (2) On November 5, 2007, $59.2 million Series 2, 8% Debentures were
        redeemed.
    (3) As at December 31, 2006, the current portion of Series 1, 8%
        Debentures oustanding was $8.1 million.

    The Debentures may be converted into trust units at the option of the
    holder at any time prior to maturity and may be redeemed by the Fund in
    certain circumstances. The Fund may elect to pay interest and principal
    upon maturity or redemption by issuing trust units to a trustee in the
    case of interest payments, and to the Debentureholders in the case of
    payment of principal. The number of any trust units issued will be
    determined based on market prices for the trust units at the time of
    issuance.

    8.  Financial Instruments

    The fair value of a financial instrument is the amount of consideration
    that would 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 the Fund has immediate access. Where bid and ask prices are
    unavailable, the Fund uses the closing price of the most recent
    transaction of the instrument. In the absence of an active market, the
    Fund determined 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 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, the Fund
    looks primarily to external readily observable market inputs including
    factors such as interest rate yield curves, currency rates, and price and
    rate volatilities as applicable. With respect to the valuation of ERCO's
    fixed-price electricity agreements, the valuation of these agreements
    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 price
    of electricity has a material impact on the fair value of these
    agreements. Any changes in the fair values of financial instruments
    classified or designated as held-for-trading measured at fair value are
    recognized in net income.


    Financial and Non-Financial Derivatives
    -------------------------------------------------------------------------
                                                              Fair      Fair
                                                             Value     Value
                                                             as at     as at
                                                          December   January
    Description        Notional   Term   Effective Rate   31, 2007   1, 2007
    -------------------------------------------------------------------------
    Natural gas
     financial                    2008-
     swaps-NYMEX      43.6 GJ(1)  2011     $7.30/GJ USD       33.4      26.9
    Natural gas
     financial                    2008-
     swaps-AECO       36.4 GJ(1)  2012     $7.74/GJ CDN      (18.7)    (29.4)
    SEM electricity               2008-
     swaps            0.2 MW(2)   2013       $72.54/MWh       (0.4)        -
    Foreign currency
     forward con-                 2007-
     tracts, net   $170.2 USD(3)  2011             1.17      (46.0)    (15.0)
    Interest rate                 2013-
     swaps-USD      $85.0 USD(3)  2015             4.95%       2.6      (1.2)
    Interest rate
     swaps-CDN     $100.0 CDN(3)  2007             5.33%         -       0.6
    Propane wholesale
     purchase and sale            2007-
     contracts, net  14.4 USG(4)  2008        $1.25/USG        5.5       3.2
    ERCO fixed-price
     electricity
     purchase                     2008-
     agreement          45 MW(2)  2017      $45-$52/MWh       26.6      27.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Millions of gigajoules purchased
    (2) Mega watts ("MW") on a 24/7 continual basis per year purchased
    (3) Millions of dollars purchased
    (4) Millions of United States gallons purchased


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

                                 Current Long-term      Current    Long-term
    Description                   Assets    Assets  Liabilities  Liabilities
    -------------------------------------------------------------------------
    Natural gas financial swaps
     - NYMEX and AECO               23.8      34.7         21.6         22.2
    SEM electricity swaps              -       0.1          0.3          0.2
    Foreign currency forward
     contracts, net                  7.3       2.6         24.0         31.9
    Interest rate swaps              0.7       1.9            -            -
    Propane wholesale purchase
     and sale contracts             10.7         -          5.2            -
    ERCO fixed-price power
     purchase agreements             5.5      21.1            -            -
    -------------------------------------------------------------------------
    As at December 31, 2007         48.0      60.4         51.1         54.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    As at January 1, 2007 upon
     adoption of new financial
     instruments accounting
     requirements                   33.7      76.4         36.1         61.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                     For the three months ended  For the twelve months ended
                              December 31, 2007            December 31, 2007
                          Realized   Unrealized        Realized   Unrealized
    Description         gain (loss)  gain (loss)     gain (loss)  gain (loss)
    -------------------------------------------------------------------------
    Natural gas financial
     swaps - NYMEX and
     AECO                     (5.1)        29.4           (14.9)         7.3
    SEM electricity swaps        -            -               -         (0.4)
    Foreign currency
     forward contracts, net   (0.9)         0.4            (4.5)       (33.3)
    Interest rate swaps          -          3.2               -          3.8
    Propane wholesale
     purchase and sale
     contracts                   -          3.0               -          2.3
    ERCO fixed-price power
     purchase agreements       2.0        (10.3)            7.6         (0.7)
    -------------------------------------------------------------------------
    Total realized and
     unrealized gains
     (losses) on financial
     and non-financial
     derivatives              (4.0)        25.7           (11.8)       (21.0)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Foreign currency
     translation of
     senior secured
     notes (Note 6)              -          0.7               -         27.7
    Foreign currency
     translation of ERCO
     royalty assets              -         (0.1)              -         (4.0)
    -------------------------------------------------------------------------
    Total realized and
     unrealized gains
     and losses               (4.0)        26.3           (11.8)         2.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Non-Derivative Financial Instruments

    The Fund's accounts receivables have been designated as available for
    sale due to the Fund's accounts receivable securitization program, the
    Fund's accounts payable, distributions and interest payable to
    Unitholders and Debentureholders, revolving term bank credits and term
    loans and Debentures have been designated as other liabilities. The
    carrying value of the Fund's cash, accounts receivable, accounts payable,
    and distributions and interest payable to Unitholders and
    Debentureholders approximates their fair value due to the short-term
    nature of these amounts. The carrying value and the fair value of the
    Fund's revolving term bank credits and term loans, and Debentures, is
    provided in Notes 6 and 7 of the Interim Consolidated Financial
    Statements.

    Financial Instruments - Risk Management

    Derivative and non-financial derivatives are used by the Fund to manage
    its exposure to fluctuations in foreign currency exchange rates, interest
    rates and commodity prices. The Fund's policy is not to use derivative or
    non-financial derivative instruments for speculative purposes. The Fund
    does not formally designate its derivatives as hedges, as a result, the
    Fund does not apply hedge accounting and is required to designate its
    derivatives and non-financial derivatives as held for trading.

    SEM enters into NYMEX and AECO natural gas financial swaps with a variety
    of counterparties to manage the economic exposure of providing
    fixed-price natural gas to its customers. 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 a single counterparty 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 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.

    Superior Propane enters into various propane forward purchase and sale
    agreements 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. 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 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 utilizes interest rate swaps 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 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 through out 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 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.

    9.  Income Taxes

    The Fund is a Mutual Fund Trust for income tax purposes. In June 2007 the
    Government of Canada enacted new legislation imposing additional income
    taxes upon publicly traded income trusts, including Superior Plus Income
    Fund, effective January 1, 2011. Prior to the legislation, the Fund was
    only taxable on any taxable income not allocated to the Unitholders and
    estimated its future income tax on certain temporary differences between
    amounts recorded on its balance sheet for book and tax purposes at a nil
    effective tax rate. Under the legislation, the Fund estimates the
    effective tax rate on the post 2010 reversal of these temporary
    differences to be 31.5%. Temporary differences reversing before 2011 will
    still give rise to nil future income taxes. Accordingly, the Fund began
    recording a Canadian future income tax provision effective June 30, 2007.
    Consistent with prior periods, the Fund 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 tax.

    For the three and twelve months ended December 31, 2007 future income tax
    expense/recovery from operations in Canada, the United States and Chile
    was a $7.4 million expense and a $10.4 million recovery, respectively,
    compared to future income tax recoveries of $2.9 million and
    $109.2 million for the comparative periods, respectively. Future income
    taxes for the twelve months ended December 31, 2006 were impacted by
    $47.9 million in future income tax recoveries related to asset impairment
    charges. Additionally, future income taxes for the twelve months ended
    December 31, 2006 were impacted by $33.2 million in future income tax
    recoveries as a result of the Funds's conversion to a "trust over
    partnership structure". Total income tax expense/recovery, comprised of
    current and future taxes for the three and twelve months ended
    December 31, 2007 was a $9.3 million expense and a $5.1 million recovery,
    compared to income tax recoveries of $100.0 million and $0.7 million for
    the comparative periods, respectively.

    The Fund expects it will be subject to current and future income taxes
    under the new legislation, however, the estimated effective tax rate on
    temporary difference reversals after January 1, 2011 may change in future
    periods. As the legislation is new, future technical interpretations of
    the legislation may occur and could materially affect management's
    estimate of the future income tax asset/liability. The amount and timing
    of reversals of temporary differences will also depend on the Fund's
    future operating results, acquisitions and dispositions of assets and
    liabilities, and distribution policy. A significant change in any of the
    preceding assumptions could materially affect the Fund's estimate of the
    future income tax asset/liability.

    10. Asset Impairments

    Superior determined during the second quarter of 2006 that the net book
    value of ERCO's sodium chlorate facilities located in Bruderheim, Alberta
    and Valdosta, Georgia and ERCO's goodwill were impaired. An aggregate
    impairment charge of $218.7 million was recorded in 2006 ($170.8 million
    net of tax) which was equivalent to the pre-impairment net book value of
    the assets.

    A pre-tax impairment charge of $73.4 million ($47.7 million net of tax)
    was recorded with respect to ERCO's Bruderheim, Alberta sodium chlorate
    facility, based on estimates of the future cash flows from the facility
    which have been negatively impacted by high electrical prices, lower
    sodium chlorate selling prices resulting from the appreciation of the
    Canadian dollar on U.S. dollar denominated sales, and reduced demand for
    sodium chlorate due to various bleached pulp mill closures in
    North America.

    A pre-tax impairment charge of $55.9 million ($33.7 million net of tax)
    was recorded with respect to ERCO's Valdosta, Georgia sodium chlorate
    facility based on estimates of the future cash flows from the facility
    which have been negatively impacted by high electrical prices and reduced
    demand for sodium chlorate due to various bleached pulp mill closures in
    North America.

    As part of Superior's assessment of ERCO's overall operations, the fair
    value of ERCO was estimated using various valuation methods based on
    current market assumptions surrounding the sodium chlorate industry which
    has been negatively impacted by reduced demand for North American sodium
    chlorate due to various pulp mill closures, the impact of the
    appreciation of the Canadian dollar on ERCO's U.S. dollar denominated
    sales and on the competitiveness of its Canadian pulp producer customer
    base, and increased power costs. Based on the estimated fair values, it
    was determined that ERCO's goodwill was impaired and as such an
    impairment charge of $89.4 million was recorded.

    11. Unitholders' Equity

    Authorized

    The Fund may issue an unlimited number of trust units. Each trust unit
    represents an equal undivided beneficial interest in any distributions
    from the Fund and in the net assets in the event of termination or
    wind-up of the Fund. All trust units are of the same class with equal
    rights and privileges.

                                                 Issued Number
                                                of Trust Units   Unitholders'
                                                     (millions)       Equity
    -------------------------------------------------------------------------
    Unitholders' equity, December 31, 2006                85.5         595.6
    Trust unit distribution reinvestment program           2.0          25.3
    Other comprehensive income                               -          (2.3)
    Transitional adjustment to accumulated other
     comprehensive income (loss) upon
     implementation of financial instruments
     (Note 1(b))                                             -         (18.1)
    Cumulative impact to deficit upon
     implementation of financial instruments                 -          30.6
    Conversion of 8%, Series I Debentures
     ($0.7 million converted at $16 per unit)                -           0.7
    Net earnings                                             -         119.8
    Distributions to unitholders                             -        (134.9)
    -------------------------------------------------------------------------
    Unitholders' equity, December 31, 2007                87.5         616.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Unitholders' capital, deficit and accumulated other comprehensive income
    as at December 31, 2007 and December 31, 2006 consists of the following
    components:

                                                   December 31,  December 31,
                                                          2007          2006
    -------------------------------------------------------------------------
    Unitholders' capital
      Trust unit equity                                1,362.0       1,336.0
      Conversion feature on warrants and
       convertible debentures                              4.8           4.8
    -------------------------------------------------------------------------
                                                       1,366.8       1,340.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accumulated deficit
      Retained earnings from operations                  433.3         313.5
      Cumulative impact to deficit upon
       implementation of financial instruments            30.6             -
      Accumulated distributions on trust unit equity  (1,193.7)     (1,058.8)
    -------------------------------------------------------------------------
                                                        (729.8)       (745.3)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accumulated other comprehensive income (loss)
      Balance at beginning of period                         -             -
      Transitional adjustment upon implementation
       of financial instruments (Note 1(b))              (18.0)         (0.7)
      Unrealized foreign currency gains (losses)
       on translation of self-sustaining foreign
       operations                                        (13.5)          0.8
      Reclassification of derivative gains and
       losses previously deferred                         11.2             -
    -------------------------------------------------------------------------
                                                         (20.3)          0.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    As at December 31, 2007, the Fund had 2.3 million trust unit warrants
    outstanding (December 31, 2006 - 2.3 million), exercisable at $20 per
    trust unit warrant. The trust unit warrants expire May 8, 2008.

    12. Net Earnings per Trust Unit

                                        Three months ended       Years ended
                                               December 31       December 31
                                             2007     2006     2007     2006
    -------------------------------------------------------------------------
    Net earnings per trust unit
     computation, basic and diluted(1)
      Net earnings (loss) from
       continuing operations                 64.5     25.3    119.4    (55.6)
      Net earnings (loss) from
       discontinued operations                  -     12.8      0.4    (25.2)
    -------------------------------------------------------------------------
      Net earnings (loss)                    64.5     38.1    119.8    (80.8)
      Weighted average trust units
       outstanding                           87.3     85.5     86.5     85.5
    -------------------------------------------------------------------------
    Net earnings (loss) from continuing
     operations per trust unit, basic
     and diluted                            $0.74    $0.30    $1.38   ($0.65)
    Net earnings from discontinued
     operations per trust unit, basic
     and diluted                                -    $0.15        -   ($0.29)
    Net earnings (loss) per trust unit,
     basic and diluted                      $0.74    $0.45    $1.38   ($0.94)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) All outstanding trust unit options and warrants were excluded from
    this calculation as they were anti-dilutive.

    13. Business Segments

    Superior operates four continuing 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"). JW Aluminum Company ("JWA" or "JW
    Aluminum"), a manufacturer of specialty flat-rolled aluminum products,
    has been sold and classified as a discontinued operation. (See Note
    4). Superior's corporate office arranges intersegment foreign
    exchange contracts from time to time between its business segments.
    Intersegment revenues and cost of sales pertaining to intersegment
    foreign exchange gains and losses are eliminated under the Corporate
    cost column.

    For the three
    months ended       Superior                                        Total
    December 31, 2007   Propane   ERCO  Winroc    SEM Corporate Consolidated
    -------------------------------------------------------------------------
    Revenues              357.3  110.9   125.4   76.9         -        670.5
    Cost of products
     sold                (268.7) (63.4)  (91.0) (57.6)        -       (480.7)
    Realized gains
     (losses) on
     financial
     instruments            0.7    7.2       -  (11.9)        -         (4.0)
    -------------------------------------------------------------------------
    Gross profit           89.3   54.7    34.4    7.4         -        185.8
    Expenses
      Operating and
       administrative      50.8   31.6    23.9    4.6       1.5        112.4
      Amortization of
       property, plant
       and equipment        2.0   10.0     1.0      -         -         13.0
      Amortization of
       intangible assets      -    1.1       -      -         -          1.1
      Interest on revolving
       term bank credits
       and term loans         -      -       -      -       6.5          6.5
      Interest on
       convertible
       unsecured
       subordinated
       debentures             -      -       -      -       4.2          4.2
      Accretion of
       convertible
       debenture issue
       costs                  -      -       -      -       1.1          1.1
      Unrealized (gains)
       losses on financial
       instruments         (3.0)  11.2       -  (29.4)     (5.1)       (26.3)
    -------------------------------------------------------------------------
                           49.8   53.9    24.9  (24.8)      8.2        112.0
    -------------------------------------------------------------------------
    Net earnings (loss)
     before income taxes
     from continuing
     operations            39.5    0.8     9.5   32.2      (8.2)        73.8
    Income tax recovery
     (expense)             (7.0)   1.8    (0.7)  (3.1)     (0.3)        (9.3)
    -------------------------------------------------------------------------
    Net earnings (loss)
     from continuing
     operations            32.5    2.6     8.8   29.1      (8.5)        64.5
    Net earnings (loss)
     from discontinued
     operations (Note 4)                                                   -
    -------------------------------------------------------------------------
    Net Earnings (Loss)                                                 64.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    For the three
    months ended       Superior                                        Total
    December 31, 2006   Propane   ERCO  Winroc    SEM Corporate Consolidated
    -------------------------------------------------------------------------
    Revenues              279.9  115.4   118.8   78.8      (0.1)       592.8
    Cost of products
     sold                (201.7) (59.0)  (85.5) (72.6)      0.1       (418.7)
    -------------------------------------------------------------------------
    Gross profit           78.2   56.4    33.3    6.2         -        174.1
    Expenses
      Operating and
       administrative      48.8   35.0    20.6    3.3       4.4        112.1
      Amortization of
       property, plant
       and equipment        6.2   12.0     0.9      -         -         19.1
      Amortization of
       intangible assets      -    1.1     0.2      -         -          1.3
      Interest on term
       bank credits and
       term loans             -      -       -      -      11.4         11.4
      Interest on
       convertible
       unsecured
       subordinated
       debentures             -      -       -      -       5.0          5.0
      Accretion of
       convertible
       debenture
       issue costs            -      -       -      -       0.6          0.6
    -------------------------------------------------------------------------
                           55.0   48.1    21.7    3.3      21.4        149.5
    -------------------------------------------------------------------------
    Net earnings (loss)
     before income taxes
     from continuing
     operations            23.2    8.3    11.6    2.9     (21.4)        24.6
    Income tax recovery
     (expense)              0.1    2.3    (1.3)     -      (0.4)         0.7
    -------------------------------------------------------------------------
    Net earnings from
     continuing
     operations            23.3   10.6    10.3    2.9     (21.8)        25.3
    Net earnings from
     discontinued
     operations (Note 4)                                                12.8
    -------------------------------------------------------------------------
    Net Earnings                                                        38.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    For the year
    ended December   Superior                                          Total
    31, 2007          Propane    ERCO  Winroc     SEM Corporate Consolidated
    -------------------------------------------------------------------------
    Revenues          1,075.7   447.0   512.3   320.4         -      2,355.4
    Cost of products
     sold              (782.7) (260.5) (382.5) (256.1)        -     (1,681.8)
    Realized gains
     (losses) on
     financial
     instruments          1.2    21.2       -   (34.2)        -        (11.8)
    -------------------------------------------------------------------------
    Gross profit        294.2   207.7   129.8    30.1         -        661.8
    Expenses
      Operating and
       administrative   196.9   120.8    93.1    18.4      10.5        439.7
      Amortization of
       property, plant
       and equipment     15.7    38.0     3.9       -         -         57.6
      Amortization of
       intangible assets    -     4.6     0.3       -         -          4.9
      Interest on
       revolving term
       bank credits
       and term loans       -       -       -       -      25.2         25.2
      Interest on
       convertible
       unsecured
       subordinated
       debentures           -       -       -       -      19.5         19.5
      Accretion of
       convertible
       debenture
       issue costs          -       -       -       -       2.8          2.8
      Management
       internalization
       costs                -       -       -       -       0.5          0.5
      Unrealized (gains)
       losses on financial
       instruments       (2.3)    5.5       -    (6.9)      1.0         (2.7)
    -------------------------------------------------------------------------
                        210.3   168.9    97.3    11.5      59.5        547.5
    -------------------------------------------------------------------------
    Net earnings (loss)
     before income
     taxes from
     continuing
     operations          83.9    38.8    32.5    18.6     (59.5)       114.3
    Income tax recovery
     (expense)           19.9   (15.9)    0.8    (0.8)      1.1          5.1
    -------------------------------------------------------------------------
    Net earnings from
     continuing
     operations         103.8    22.9    33.3    17.8     (58.4)       119.4
    Net earnings from
     discontinued
     operations (Note 4)                                                 0.4
    -------------------------------------------------------------------------
    Net Earnings                                                       119.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    For the year
    ended December   Superior                                          Total
    31, 2006          Propane    ERCO  Winroc     SEM Corporate Consolidated
    -------------------------------------------------------------------------
    Revenues            985.4   437.2   518.7   325.6      (2.6)     2,264.3
    Cost of products
     sold              (712.5) (233.1) (386.5) (303.9)      2.6     (1,633.4)
    -------------------------------------------------------------------------
    Gross profit        272.9   204.1   132.2    21.7         -        630.9
    Expenses
      Operating and
       administrative   185.3   122.1    87.1    11.7      17.6        423.8
      Amortization of
       property, plant
       and equipment     20.4    47.9     3.7       -         -         72.0
      Amortization of
       intangible assets    -     4.7     0.4       -         -          5.1
      Interest on term
       bank credits and
       term loans           -       -       -       -      43.1         43.1
      Interest on
       convertible
       unsecured
       subordinated
       debentures           -       -       -       -      20.2         20.2
      Accretion of
       convertible
       debenture
       issue costs          -       -       -       -       2.3          2.3
      Management
       internalization
       costs                -       -       -       -       1.3          1.3
      Impairment of
       property, plant
       and equipment,
       and goodwill         -   218.7       -       -         -        218.7
    -------------------------------------------------------------------------
                        205.7   393.4    91.2    11.7      84.5        786.5
    -------------------------------------------------------------------------
    Net earnings (loss)
     before income
     taxes from
     continuing
     operations          67.2  (189.3)   41.0    10.0     (84.5)      (155.6)
    Income tax recovery
     (expense)           48.6   130.0     5.0     2.6     (86.2)       100.0
    -------------------------------------------------------------------------
    Net loss from
     continuing
     operations         115.8   (59.3)   46.0    12.6    (170.7)       (55.6)
    Net loss from
     discontinued
     operations (Note 4)                                               (25.2)
    -------------------------------------------------------------------------
    Net Loss                                                           (80.8)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Total Assets, Net Working Capital, Acquisitions and Other Capital
    Expenditures


                                         Superior
                                          Propane     ERCO    Winroc     SEM
    -------------------------------------------------------------------------
    As at December 31, 2007
      Net working capital                    73.9     19.0      65.7     8.8
      Total assets                          663.0    533.1     195.2   115.2
    -------------------------------------------------------------------------
    As at December 31, 2006
      Net working capital                    60.8     32.0      69.7    (2.6)
      Total assets                          679.5    566.4     202.8    46.7
    -------------------------------------------------------------------------
    For the three months ended
     December 31, 2007
      Acquisitions                              -        -       2.9       -
      Other capital expenditures                -      3.3         -     0.3
    -------------------------------------------------------------------------
    For the three months ended
     December 31, 2006
      Acquisitions (dispositions)               -        -         -       -
      Other capital expenditures                -      1.8         -       -
    -------------------------------------------------------------------------
    For the year ended December  31, 2007
      Acquisitions                              -        -       4.3       -
      Other capital expenditures              0.4      6.0       0.9     1.5
    -------------------------------------------------------------------------
    For the year ended December 31, 2006
      Acquisitions (dispositions)               -        -         -       -
      Other capital expenditures                -     51.4       1.6       -
    -------------------------------------------------------------------------

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


                                                 Discontinued
                                                   Operations          Total
                                         Corporate    (Note 4)  Consolidated
    -------------------------------------------------------------------------
    As at December 31, 2007
      Net working capital                      5.6          -          173.0
      Total assets                            36.3          -        1,542.8
    -------------------------------------------------------------------------
    As at December 31, 2006
      Net working capital                     19.0          -          178.9
      Total assets                            41.5          -        1,536.9
    -------------------------------------------------------------------------
    For the three months ended
     December 31, 2007
      Acquisitions                               -          -            2.9
      Other capital expenditures                 -          -            3.6
    -------------------------------------------------------------------------
    For the three months ended
     December 31, 2006
      Acquisitions (dispositions)                -     (354.7)        (354.7)
      Other capital expenditures                 -        0.4            2.2
    -------------------------------------------------------------------------
    For the year ended December 31, 2007
      Acquisitions                               -          -            4.3
      Other capital expenditures               0.4          -            8.8
    -------------------------------------------------------------------------
    For the year ended December 31, 2006
      Acquisitions (dispositions)                -     (354.7)        (354.7)
      Other capital expenditures                 -        3.7           56.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Geographic Information

                                                                Discontinued
                                   United                  Total  Operations
                          Canada   States    Other  Consolidated     (Note 4)
    -------------------------------------------------------------------------
    Revenues for the
     three months ended
     December 31, 2007     572.4     77.5     20.6         670.5           -
    Revenue for the year
     ended December 31,
     2007                1,934.0    346.4     75.0       2,355.4           -
    Property, plant and
     equipment as at
     December 31, 2007     428.1     28.8     57.5         514.4           -
    Total assets as at
     December 31, 2007   1,360.2    117.8     64.8       1,542.8           -
    -------------------------------------------------------------------------
    Revenues for the
     three months ended
     December 31, 2006     482.7     91.5     18.6         592.8       110.2
    Revenues for the
     year ended December
     31, 2006            1,824.0    392.5     47.8       2,264.3       573.3
    Property, plant and
     equipment as at
     December 31, 2006     468.1     33.2     69.8         571.1           -
    Total assets as at
     December 31, 2006   1,305.4    148.5     83.0       1,536.9           -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    





For further information:

For further information: about Superior, visit our website at
www.superiorplus.com or contact: Wayne Bingham, Executive Vice-President and
Chief Financial Officer, E-mail: wbingham@superiorplus.com, Phone: (403)
218-2951, Fax: (403) 218-2973, Toll Free: 1-866-490-PLUS (7587); Scott Daniel,
Vice-President, Treasurer and Investor Relations, E-mail:
sdaniel@superiorplus.com, Phone: (403) 218-2953, Fax: (403) 218-2973, Toll
Free: 1-866-490-PLUS (7587)

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SUPERIOR PLUS CORP.

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