Superior Plus Corp. — Annual Report 2019

Feb 21, 2020

Management’s Responsibility for Financial Statements

The accompanying consolidated financial statements of Superior Plus Corp. (Superior) are the responsibility of management and have been approved by the Board of Directors.

The consolidated financial statements were prepared by management in accordance with International Financial Reporting Standards and include certain estimates that are based on management’s best judgments. Actual results may differ from these estimates and judgments. Management has ensured that the consolidated financial statements are presented fairly in all material respects.

Management has developed and maintains a system of internal controls to provide reasonable assurance that Superior’s assets are safeguarded, transactions are accurately recorded, and the financial statements report Superior’s operating and financial results in a timely manner. Financial information presented elsewhere in this annual report has been prepared on a basis consistent with that in the consolidated financial statements.

The Board of Directors of Superior is responsible for reviewing and approving the consolidated financial statements and, primarily through its Audit Committee, ensures that management fulfills its responsibilities for financial reporting. The Audit Committee meets with management and Superior’s external auditor, to discuss internal controls over the financial reporting process, auditing matters and financial reporting issues, to satisfy itself that each party is properly discharging its responsibilities and to review the consolidated financial statements. The Audit Committee reports its findings to the Board of Directors for approval of the consolidated financial statements for issuance to the shareholders. The Audit Committee also considers, for review by the Board of Directors and approval by the shareholders, the engagement or re-appointment of the external auditor.

The consolidated financial statements have been audited by Ernst & Young LLP, who were appointed at Superior’s last annual meeting.

/s/ Luc Desjardins /s/ Beth Summers Luc Desjardins Beth Summers President and Chief Executive Officer Executive Vice-President and Chief Financial Officer Superior Plus Corp. Superior Plus Corp.

Toronto, Ontario February 20, 2020

Superior Plus Corp.

2019 Annual Financial Results

Independent auditor’s report

To the Shareholders and the Board of Directors of Superior Plus Corp.

Opinion on the consolidated financial statements

We have audited the accompanying consolidated financial statements of Superior Plus Corp. [the “Company”], which comprise the consolidated balance sheets as at December 31, 2019 and 2018, and the consolidated statements of changes in equity, consolidated statements of net earnings (loss) and total comprehensive earnings, and consolidated statements of cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards [“IFRS”].

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other information

Management is responsible for the other information. The other information comprises:

• Management’s Discussion and Analysis

• The information, other than the consolidated financial statements and our auditor’s report thereon, in the Annual Report

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information, and in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

We obtained Management’s Discussion & Analysis prior to the date of this auditor’s report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

The Annual Report is expected to be made available to us after the date of the auditor’s report. If based on the work we will perform on this other information, we conclude there is a material misstatement of other information, we are required to report that fact to those charged with governance.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Superior Plus Corp.

2019 Annual Financial Results

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor’s report is Tracy Brennan.

Toronto, Canada February 20, 2020

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Superior Plus Corp.

2019 Annual Financial Results

Superior Plus Corp. Consolidated Balance Sheets

Superior Plus Corp. Consolidated Balance Sheets
		As at	As at
		December 31	December 31
(millions of Canadian dollars)	Note	2019	2018(i)
Assets
Current Assets
Cash and cash equivalents		26.5	23.9
Trade and other receivables	4	329.2	383.2
Prepaids and deposits	5	57.1	49.3
Inventories	6	116.2	146.8
Other current financial assets	16	5.4	18.2
Total Current Assets		534.4	621.4
Non-Current Assets
Property, plant and equipment	3, 7	1,575.6	1,441.8
Intangible assets	3, 8	388.8	430.2
Goodwill	3, 9	1,080.9	1,094.2
Notes, finance lease receivables and other investments		2.8	8.0
Employee future benefits	15	12.0	8.7
Deferred tax assets	17	41.2	48.7
Other non-current financial assets	16	2.3	1.0
Total Non-Current Assets		3,103.6	3,032.6
Total Assets		3,638.0	3,654.0
Liabilities and Equity
Current Liabilities
Trade and other payables	11	424.0	447.6
Contract liabilities	12	18.1	23.9
Lease liabilities	2	52.4	18.1
Borrowings	14	10.1	10.7
Dividends payable		10.5	10.5
Other current financial liabilities	16	23.7	45.9
Total Current Liabilities		538.8	556.7
Non-Current Liabilities
Lease liabilities	2	182.0	45.7
Borrowings	14	1,684.3	1,779.3
Other liabilities	13	29.7	16.8
Provisions	10	112.9	103.7
Employee future benefits	15	21.2	19.9
Deferred tax liabilities	17	28.5	25.0
Other non-current financial liabilities	16	1.6	18.0
Total Non-Current Liabilities		2,060.2	2,008.4
Total Liabilities		2,599.0	2,565.1
Equity
Capital		2,339.9	2,339.9
Deficit		(1,406.2)	(1,422.9)
Accumulated other comprehensive earnings		105.3	171.9
Total Equity	18	1,039.0	1,088.9
Total Liabilities and Equity		3,638.0	3,654.0

(i) Restated (see Note 2 (b))

See accompanying Notes to the Consolidated Financial Statements.

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Superior Plus Corp. Consolidated Statements of Changes in Equity

					Accumulated
	Share				other
	capital	Contributed	Total		comprehensive
(millions of Canadian dollars)	(Note 18)	surplus	capital	Deficit	earnings	Total
As at January 1, 2019	2,338.7	1.2	2,339.9	(1,422.9)	171.9	1,088.9
Net earnings for the year	–	–	–	142.6	–	142.6
Unrealized foreign currency loss on translation of
foreign operations	–	–	–	–	(74.9)	(74.9)
Transfer of derivative losses from accumulated other
comprehensive earnings	–	–	–	–	7.1	7.1
Actuarial defined-benefit gain	–	–	–	–	1.6	1.6
Income tax expense on other comprehensive earnings
(loss)	–	–	–	–	(0.4)	(0.4)
Total comprehensive earnings (loss)	–	–	–	142.6	(66.6)	76.0
Dividends and dividend equivalent declared to
shareholders	–	–	–	(125.9)	–	(125.9)
As at December 31, 2019	2,338.7	1.2	2,339.9	(1,406.2)	105.3	1,039.0
As at January 1, 2018	1,952.3	1.2	1,953.5	(1,266.9)	89.4	776.0
Net loss for the year	–	–	–	(34.0)	–	(34.0)
Unrealized foreign currency gain on translation of
foreign operations	–	–	–	–	81.6	81.6
Actuarial defined-benefit gain	–	–	–	–	1.2	1.2
Income tax expense on other comprehensive earnings
(loss)	–	–	–	–	(0.3)	(0.3)
Total comprehensive earnings (loss)	–	–	–	(34.0)	82.5	48.5
Change in accounting policy as a result of the
adoption of IFRS 15	–	–	–	(7.6)	–	(7.6)
Issuance of common shares, net of costs	386.4	–	386.4	–	–	386.4
Dividends and dividend equivalent declared to
shareholders	–	–	–	(114.4)	–	(114.4)
As at December 31,2018	2,338.7	1.2	2,339.9	(1,422.9)	171.9	1,088.9

[See accompanying Notes to the Consolidated Financial Statements. ]

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2019 Annual Financial Results

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Superior Plus Corp.

Consolidated Statements of Net Earnings (Loss) and Total Comprehensive Earnings

			Years Ended
			December 31
(millions ofCanadiandollars except pershare amounts)	Note	2019	2018(i)
Revenue	19, 21	2,852.9	2,737.7
Cost of sales(includesproducts and services)	19	(1,639.9)	(1,789.5)
Grossprofit		1,213.0	948.2
Expenses
Selling, distribution and administrative costs	19	(948.3)	(800.3)
Finance expense	19	(114.3)	(90.3)
Other income(loss)	16, 19	17.2	(91.9)
		(1,045.4)	(982.5)
Earnings (loss) before income taxes	19	167.6	(34.3)
Income tax recovery (expense)	17	(25.0)	0.3
Net earnings (loss) for theyear	19	142.6	(34.0)
Other comprehensive earnings (loss)
Items that may be reclassified subsequently to net earnings (loss)
Unrealized foreign currency (loss) gain on translation of foreign operations		(74.9)	81.6
Transfer of derivative losses from accumulated other comprehensive earnings		7.1	–
Items that will not be reclassified to net earnings (loss)
Actuarial defined-benefit gain		1.6	1.2
Income tax expense on other comprehensive earnings(loss)		(0.4)	(0.3)
Othercomprehensive earnings (loss)forthe year		(66.6)	82.5
Total comprehensive earnings for theyear		76.0	48.5
Net earnings (loss) per share, basic and diluted	20	$0.82	$(0.22)

(i) Restated the prior year to be comparable with the current year's presentation (see Note 2 (b)).

See accompanying Notes to the Consolidated Financial Statements.

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Superior Plus Corp. Consolidated Statements of Cash Flows

Superior Plus Corp. Consolidated Statements of Cash Flows
			Years Ended
			December 31
(millions of Canadian dollars)	Note	2019	2018(i)
OPERATING ACTIVITIES
Net earnings (loss) for the year		142.6	(34.0)
Adjustments for:
Depreciation included in selling, distribution and administrative costs	7	108.5	98.3
Depreciation of right-of-use assets	7	35.7	–
Depreciation included in cost of sales	7	44.9	53.6
Amortization of intangible assets	8	63.5	47.2
Losses (gains) on disposal of assets, impairments, and other non-cash items		18.4	(2.2)
Unrealized losses (gains) on derivative financial instruments	16	(58.3)	86.3
Finance expense recognized in net earnings (loss)		114.3	90.3
Income tax expense (recovery) recognized in net earnings (loss)	17	25.0	(0.3)
Changes in non-cash operatingworkingcapital and other	23	43.7	(25.0)
Net cash flows from operating activities before income taxes and interest paid		538.3	314.2
Income taxes paid		(8.4)	(0.1)
Interestpaid		(106.7)	(51.1)
Cash flows from operatingactivities		423.2	263.0
INVESTING ACTIVITIES
Acquisitions, net of cash acquired and assets sold	3	(60.1)	(1,259.6)
Purchase of property, plant and equipment and intangible assets	26	(135.9)	(105.8)
Proceeds on disposal of property, plant and equipment		7.1	22.7
Proceeds on sale of assets	3	–	91.9
Cash flows used in investingactivities		(188.9)	(1,250.8)
FINANCING ACTIVITIES
Proceeds of revolving term bank credits and other debt		2,417.0	2,527.3
Repayment of revolving term bank credits and other debt		(2,480.4)	(2,392.3)
Proceeds from share issuance, net of costs		–	381.4
Proceeds from 7% senior unsecured notes	14	–	458.5
Proceeds from 5.125% senior unsecured notes	14	–	362.5
Redemption of 6.5% senior unsecured notes	14	–	(209.8)
Principal repayment of lease obligations		(41.5)	(17.1)
Debt issue costs		(0.6)	(17.9)
Dividendspaid to shareholders		(125.9)	(112.5)
Cash flows(used in)from financingactivities		(231.4)	980.1
Net increase (decrease) in cash and cash equivalents during the year		2.9	(7.7)
Cash and cash equivalents, beginning of the year		23.9	31.8
Effect of translation of foreign currency-denominated cash and cash equivalents		(0.3)	(0.2)
Cash and cash equivalents, end of theyear		26.5	23.9

(i) Restated the prior year to be comparable with the current year's presentation (see Note 2 (b)).

See accompanying Notes to the Consolidated Financial Statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions of Canadian dollars, except per share amounts. Tables labelled “2019” and “2018” are as at and for the year ended December 31).

1. ORGANIZATION

Superior Plus Corp. (“Superior” or the “Company”) is a diversified business corporation, incorporated under the Canada Business Corporations Act . The registered office is located at Suite 401, 200 Wellington Street West, Toronto, Ontario. Superior’s investment in Superior Plus LP is financed by share capital. Superior is a publicly traded company with its common shares trading on the Toronto Stock Exchange under the exchange symbol SPB.

These consolidated financial statements were authorized for issue by the Board of Directors on February 20, 2020.

Reportable Operating Segments

Effective January 1, 2019, management has changed Superior’s reportable operating segments (Note 26) and now reports three operating segments: Canadian Propane Distribution, United States (“U.S.”) Propane Distribution and Specialty Chemicals. The Canadian Propane Distribution segment includes the Canadian retail business and the wholesale business with offices located in Canada and California. The U.S. Propane Distribution segment distributes propane gas and liquid fuels along the Eastern U.S., and into the Midwest and California. Specialty Chemicals is a leading supplier of sodium chlorate and technology to the pulp and paper industry and a regional supplier of chlor-alkali products in the U.S. Midwest and Western Canada. Reportable segment information has also been restated to comply with the current presentation.

References to Energy Distribution in the notes below refer to both Canadian Propane Distribution and U.S. Propane Distribution because of the inherent similarities of the businesses.

2. BASIS OF PRESENTATION

(a) Preparation of Consolidated Financial Statements

The accompanying consolidated financial statements were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The consolidated financial statements were prepared on a going concern basis.

The consolidated financial statements were prepared on the historical cost basis, except for the revaluation of certain financial instruments and incorporate the accounts of Superior and its subsidiaries. Subsidiaries are all entities over which Superior has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The results of subsidiaries are included in Superior’s consolidated statements of net earnings (loss) and total comprehensive earnings from date of acquisition, or in the case of disposals, up to the effective date of disposal.

All transactions and balances between Superior and Superior’s subsidiaries are eliminated upon consolidation. Superior’s subsidiaries are all wholly owned directly or indirectly by the Company.

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(b) Reclassification of Comparative Figures and Restatement

The purchase price allocations of NGL Propane, LLC (“NGL”) and United Pacific Energy (“UPE”) were finalized in 2019. Superior has restated the comparative figures to record the impact of the final purchase price allocations as if the accounting for these business combinations had been completed at the respective acquisition dates, see Note 3.

In accordance with IFRS 9, Financial Instruments (“IFRS 9”), management has recorded realized gains (losses) on derivatives in other income (loss). In prior periods, realized gains and losses on derivative financial instruments were recognized as a component of revenue, cost of sales or finance expense/income, the classification of which depended on the underlying nature of the economic exposure being managed, while the unrealized gains (losses) on derivatives were recorded in its own line separately. In the current period, realized gains and losses on derivative financial instruments are recorded as a component of other income (loss) together with the unrealized gains (losses) on derivatives. Management has restated the comparative figures to conform with this presentation.

(c) Changes in Accounting Policies and Disclosures

IFRS 16, Leases

The Company adopted IFRS 16, Leases (“IFRS 16”) with a date of initial application of January 1, 2019. IFRS 16 specifies how to recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all major leases. The Company’s accounting policy under IFRS 16 is as follows:

At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date, which is defined as the date at which the right-of-use asset is available for use by the Company.

The lease liability is initially measured at the present value of the following lease payments:

• fixed payments, less any lease incentives receivable;

• variable lease payments that are based on an index or a rate;

• amounts expected to be payable by the lessee under residual value guarantees;

• the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and

• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. The incremental borrowing rate is the rate of interest the lessee would have to pay to borrow over a similar term with similar security.

The right-of-use asset is initially measured at cost comprising the following:

• the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date;

• any initial direct costs incurred;

Superior Plus Corp.

6 2019 Annual Financial Results

• an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located; and

• less any lease incentives received.

The assets are depreciated to the earlier of the end of the useful life of the right-of-use asset or the lease term using the straight-line method as this most closely reflects the expected pattern of consumption of the future economic benefits.

The lease term includes periods covered by an option to extend if the Company is reasonably certain to exercise that option as defined below.

Lease terms range from: Office space and buildings 1 to 70 years Manufacturing equipment 2 to 51 years Railcars 1 to 11 years

The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company’s leases relate to railcars, office space and buildings and manufacturing equipment. Lease contracts are typically made for periods of 5 to 20 years, but may have extension options. Extension and termination options are included in a number of building and equipment leases across the Company. The majority of extension and termination options held are exercisable only by the Company and not by the respective lessor. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Superior’s obligations under some leases are secured by the lessors’ title to the leased assets.

The Company has recorded the right-of-use assets as part of property, plant and equipment.

Impact of Transition to IFRS 16

The Company adopted IFRS 16 using the modified retrospective approach and, accordingly, the information presented for 2018 has not been restated and remains as previously reported under International Accounting Standard (“IAS”) 17, Leases and related interpretations.

In applying IFRS 16 for the first time, the Company has used the following practical expedients permitted by the standard:

• The Company has elected to record right-of-use assets based on the corresponding lease liability. Right-of-use assets and lease obligations of $178.6 million were recorded as of January 1, 2019, with no net impact on deficit. When measuring lease liabilities, the Company discounted lease

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payments using its incremental borrowing rate for similar collateral and term as at January 1, 2019. The incremental borrowing rate applied was 5.4% to 8.3%.

• The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.

• Accounting for leases for which the lease term ends within 12 months of the date of initial application as short-term leases.

• The exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and leases of low-value assets as short-term leases.

• The use of hindsight in determining the lease term where the contract includes extension or termination options.

• The Company has elected to apply the practical expedient to account for each lease component and any non-lease components as a single lease component.

The following table reconciles the Company’s operating lease obligations as at December 31, 2018, as previously disclosed in the Company’s consolidated financial statements, to the lease obligations recognized on initial application of IFRS 16 as at January 1, 2019.

Operating lease commitments as at December 31, 2018	203.3
Discounted using the incremental borrowing rate	(33.1)
Recognition exemption for short-term leases	(2.8)
Arrangements not captured under IFRS 16	(3.5)
Extension options reasonably certain to be exercised	14.7
Initial adoption as at January 1, 2019	178.6

The impact of IFRS 16 and related lease liability by operating segment is as follows:

	Propane	Propane
	Distribution		Specialty
	**Canada **	**U.S. **	Chemicals	Corporate	Total
IFRS 16 initial adoption	34.6	12.5	129.8	1.7	178.6
Reclassification from previously recognized finance lease
liabilities(i)	33.9	29.9	–	–	63.8
Lease liabilities assumed as part of a business combination	0.5	3.1	–	–	3.6
Additions	17.2	10.8	9.2	–	37.2
Finance expense on lease liabilities	3.8	2.5	6.9	0.1	13.3
Lease payments	(16.8)	(11.6)	(26.1)	(0.3)	(54.8)
Impact of changes in foreign exchange rates and other	(0.5)	(0.9)	(5.9)	–	(7.3)
Lease liabilities as at December 31, 2019	72.7	46.3	113.9	1.5	234.4

(i) The finance lease liabilities included in borrowings as at December 31, 2018 have been reclassified to the current period's presentation.

		Total
	Current portion of lease liability	52.4
	Non-current portion of lease liability	182.0
	Lease liabilities as at December 31, 2019	234.4

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Included in the above lease liabilities, as at December 31, 2019, are vehicle and other fleet lease obligations of $73.0 million (December 31, 2018 – $63.8 million).

The present value of lease payments are as follows:

	Minimum	Rental	Present Value of	Present Value of
			Rental Payments
	2019	2018	2019	2018
Not later than one year	60.5	19.4	52.8	18.1
Later than one year and not later than five years	150.4	44.6	120.2	38.2
Later than five years	91.5	8.8	61.4	7.5
Less: future finance charges	(68.0)	(9.0)	–	–
Present value of minimum rentalpayments	234.4	63.8	234.4	63.8

Future minimum lease payments under non-cancellable, low-value, short-term leases and leases with variable lease payments as at December 31, 2019 are summarized below. The December 31, 2018 amounts represent lease commitments before the adoption of IFRS 16.

	2019	2018
Not later than one year	2.1	40.3
Later than one year and not later than five years	0.4	103.0
Laterthan five years	–	60.0
	2.5	203.3

International Financial Reporting Interpretations Committee (“IFRIC”) Interpretation 23, Uncertainty over Income Tax Treatment

The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12, Income Taxes . It does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:

• Whether an entity considers uncertain tax treatments separately;

• The assumptions an entity makes about the examination of tax treatments by taxation authorities;

• How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and

• How an entity considers changes in facts and circumstances.

The Company determines whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty.

The Company applies significant judgement in identifying uncertainties over income tax treatments. Since the Company operates in a complex multinational environment, it assessed whether the Interpretation had an impact on its consolidated financial statements.

Upon adoption of the Interpretation, the Company considered whether it has any uncertain tax positions. The Company’s and the subsidiaries’ tax filings in different jurisdictions include deductions related to transfer pricing and the taxation authorities may challenge those tax treatments. The Company determined,

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based on its tax compliance and transfer pricing study, that it is probable that its tax treatments (including those for the subsidiaries) will be accepted by the taxation authorities. The Interpretation did not have an impact on the consolidated financial statements of the Company.

(d) Significant Accounting Policies

Cash and Cash Equivalents

Cash and cash equivalents include cash and highly liquid short-term investments which, on the date of acquisition, have a term to maturity of three months or less. For the purpose of the consolidated statements of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company’s cash management. As at December 31, 2019, cash equivalents amounted to $4.5 million with a maturity of less than 30 days (December 31, 2018 – nil).

Inventories

Energy Distribution

Inventories are valued at the lower of cost and net realizable value. Costs of inventories are determined either on a weighted average cost or first-in, first-out basis. Materials, supplies, and other inventories are stated at the lower of cost and net realizable value, as appropriate. The net realizable value of inventory is based on estimated selling price in the ordinary course of business less the estimated costs necessary to complete the sale.

Specialty Chemicals

Inventories are valued at the lower of cost and net realizable value. The cost of chemical inventories is determined on a first-in, first-out basis. Stores and supply inventories are costed on a weighted average basis. The net realizable value of inventory is based on estimated selling price in the ordinary course of business less the estimated costs necessary to complete the sale. In the case of manufactured inventories, cost includes an appropriate share of production overhead based on normal operating capacity.

Financial Instruments and Derivative Financial Instruments

Financial assets and financial liabilities, including derivatives, are recognized on the consolidated balance sheets when the Company becomes a party to the financial instrument or derivative contract.

Classification

The Company classifies its financial assets and financial liabilities in the following measurement categories; i) those to be measured subsequently at fair value through profit or loss (“FVTPL”); ii) those to be measured subsequently at fair value through other comprehensive earnings (loss); and iii) those to be measured at amortized cost. The classification of financial assets depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial liabilities are classified as those to be measured at amortized cost unless they are designated as those to be measured subsequently at FVTPL.

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For assets and liabilities measured at fair value, gains and losses are either recorded in profit or loss, or other comprehensive earnings (loss).

The Company reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified.

For classification of the Company’s consolidated financial assets and financial liabilities, refer to Note 16.

Measurement

All financial instruments are required to be measured at fair value on initial recognition, plus, in the case of a financial asset or financial liability not at FVTPL, transaction costs that are directly attributable to the acquisition or issuance of the financial asset or financial liability. Transaction costs of financial assets and financial liabilities carried at FVTPL are expensed in profit or loss. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of the subsequent accounting periods. All other financial assets including equity investments are measured at their fair values at the end of subsequent accounting periods, with any changes taken through the consolidated statements of net earnings (loss) and total comprehensive earnings. For financial liabilities measured subsequently at FVTPL, changes in fair value due to own credit risk are recorded in other comprehensive earnings (loss).

Impairment

The Company recognizes expected credit losses for trade and other receivables based on the simplified approach under IFRS 9. The simplified approach to the recognition of expected losses does not require the Company to track the changes in credit risk; rather, the Company recognizes a loss allowance based on lifetime expected credit losses at each reporting date from the date of the trade receivable.

Evidence of impairment may include indications that a debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Trade receivables are reviewed qualitatively on a case-by-case basis to determine whether they need to be written off.

Expected credit losses are measured as the difference in the present value of the contractual cash flows that are due to the Company under the contract, and the cash flows that the Company expects to receive. The Company assesses all information available, including past due status, credit ratings, the existence of thirdparty insurance, and forward-looking macro-economic factors in the measurement of the expected credit losses associated with its financial assets carried at amortized cost.

The Company measures expected credit loss by considering the risk of default over the contract period and incorporates forward-looking information into its measurement.

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Derivative Financial Instruments

Superior enters into a variety of derivative and non-financial derivative instruments to manage its exposure to certain financial risks. Such instruments arise from contracts comprising natural gas financial swaps, electricity financial swaps, fixed-price electricity purchase, propane forward purchase and sale, foreign currency forwards, interest rate swaps, and equity hedges. For commodity contracts, if physical delivery is effected based on Superior’s expected procurement, sale or usage requirements, the requirements of the socalled “own use exemption” under IFRS 9 are met, which do not represent derivative financial instruments in terms of IFRS 9, but represent pending purchase and sale transactions, which are assessed for possible impending losses in accordance with the requirements of IAS 37, Provisions, Contingent Liabilities and Contingent Assets . If the requirements for the own use exemption are not met (for example, by transactions for short-term optimization), the contracts are recorded as derivatives in accordance with IFRS 9. Further details of derivative and non-financial derivative instruments are disclosed in Note 16.

Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are measured subsequently at FVTPL. The resulting gain or loss is recognized in net earnings (loss). Realized gains and losses on derivatives are recorded as part of other income (loss) which also includes unrealized gains and losses on derivatives. Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at fair value with changes in fair value recognized in net earnings (loss).

Superior does not formally designate and document economic hedges, in accordance with the requirements of applying hedge accounting under IFRS and, therefore, does not apply hedge accounting.

Classification as Debt or Equity

Debt and equity instruments are classified either as financial liabilities or as equity in accordance with the substance of the contractual arrangement.

Equity Instruments

An equity instrument is any contract that has a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by Superior are recorded at the proceeds received, net of direct issuance costs.

Derecognition of Financial Liabilities

Superior derecognizes financial liabilities solely when Superior’s obligations are discharged, cancelled or expire.

Financial Guarantees at FVTPL

Financial guarantees are classified as FVTPL when the financial liability is designated as FVTPL upon initial recognition. Financial guarantees at FVTPL are stated at fair value with any resulting gain or loss recognized in net earnings (loss). Fair value is determined in the manner described in Note 16.

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Property, Plant and Equipment

Cost

Property, plant and equipment are recorded at cost less accumulated depreciation and impairment losses. Major renewals and improvements that provide future economic benefits and can be reliably measured are capitalized, while repair and maintenance expenses are charged to operations as incurred. Property, plant and equipment in the course of construction are carried at cost less any recognized impairment losses. Cost includes directly attributable expenses, professional fees and, for qualifying assets, borrowing costs capitalized in accordance with Superior’s accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are available for their intended use. Disposals are derecognized at carrying costs less accumulated depreciation and impairment losses, with any resulting gain or loss reflected in net earnings (loss).

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take substantial time to ready for their intended use or sale, are included in the cost of those assets, until such time as the assets are available for their intended use. All other borrowing costs are recognized in net earnings (loss) in the period in which they are incurred.

Depreciation

Depreciation is calculated using the straight-line method, based on the estimated useful life. Land is not depreciated. Depreciation of property in the course of construction commences when the assets are available for their intended use. In the majority of cases, residual value is estimated to be insignificant. Depreciation by class of assets is as follows:

Buildings	15 to 40 years
Leasehold improvements	Over the lease term up to 10 years
Energy Distribution tanks and cylinders	30 years
Energy Distribution truck tank bodies, chassis and other	5 to 15 years
Manufacturing equipment	5 to 40 years
Furniture and fixtures	10 years
Computer equipment	3 years

Useful life, residual values and depreciation methods are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Intangible Assets

Intangible assets are reported at cost less accumulated amortization and accumulated impairment losses. For intangible assets with a determinate life, amortization is charged on a straight-line basis over their estimated useful lives.

Intangible assets acquired in a business combination are identified and recognized separately from goodwill when they satisfy the recognition criteria. The initial cost of such intangible assets is their fair value at the acquisition date. Subsequent to initial recognition, intangible assets acquired in a business combination are

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reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets acquired separately. Software costs are capitalized for new systems if there are significant enhancements to existing systems. In addition to the cost of software, the capitalized costs include cost of installation and consulting services related to the system implementation or enhancement.

Intangible assets recorded as part of a business combination generally consist of customer contracts, noncompete agreements, royalty agreements, trade names and other intangible assets. The assets are recorded at fair value, which is generally based on the future expected earnings. Software and technology patents are valued based on the cost to acquire these assets.

Useful life, residual values and amortization methods are reviewed at least annually, with the effect of any changes in estimate being accounted for on a prospective basis.

Superior’s amortization rates related to its intangible assets are summarized as follows:

Non-compete agreements	Term of the agreements (1 to 15 years)
Royalty agreements	1 to 10 years
Software	1 to 5 years
Technology patents	Approximately 10 years
Customer contracts	5 to 10 years

Trade names have an indefinite useful life since they do not expire. These are recorded at cost, are not amortized and are tested for impairment annually or more frequently should events or changes in circumstances indicate that they might be impaired.

As a result of propane distribution activity in Québec, Nova Scotia and California, Superior is required to purchase sufficient Compliance Instruments to offset its carbon footprint. Costs incurred to acquire these Compliance Instruments are recorded as intangible assets and measured at cost. As the Compliance Instruments do not diminish over time, they are deemed intangible assets with an indefinite life and are not amortized. The assets are subject to impairment testing subsequent to initial recognition. The Compliance Instruments are classified as non-current and reclassified as current at the end of the compliance period. The assets are settled against the corresponding cap and trade liabilities at the end of the compliance period to which they relate.

Impairment of Property, Plant and Equipment and Intangible Assets

At each consolidated balance sheet date and when circumstances indicate that the carrying value may be impaired, Superior reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss to confirm whether the assets have indeed suffered an impairment loss. If so, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, Superior estimates the recoverable amount of the cash-generating unit (“CGU”) to which the asset belongs. A CGU is the smallest level of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups.

Recoverable amount is the higher of fair value less costs of disposal (“FVLCOD”) and value-in-use.

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An impairment loss is recognized if the carrying amount of an asset, CGU or group of CGUs exceeds its recoverable amount. Impairment losses are recognized immediately as a separate line item in the consolidated statements of net earnings (loss) and total comprehensive earnings.

A previous impairment, if any, is subsequently assessed for any indication that the impairment has been reduced or no longer exists. An impairment loss is reversed if there has been an increase in the recoverable amount of an asset or CGU over its carrying value. Impairment losses are reversed only to the extent that the asset’s or CGU’s carrying amount would not exceed the carrying amount that would have been reported if no impairment loss had been recognized.

Business Combinations

All business combinations are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value at the acquisition date of the assets given up, the liabilities incurred or assumed and equity instruments issued by Superior in exchange for control of the acquiree. Transaction costs, other than those associated with the issuance of debt or equity securities that Superior incurs in connection with a business combination are expensed as incurred. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3, Business Combinations are recognized at their fair value at the acquisition date, except that:

• Deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognized and measured in accordance with IAS 12, Income Taxes and IAS 19, Employee Benefits , respectively;

• Liabilities or equity instruments related to the replacement by Superior of an acquiree’s sharebased payment awards are measured in accordance with IFRS 2, Share-based Payment ; and

• Assets or disposals that are classified as held for sale in accordance with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that standard.

Contingent liabilities acquired in a business combination are initially measured at fair value at the date of acquisition. At subsequent reporting dates, such contingent liabilities are measured at the amount that would be recognized in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets .

Intangible assets arising on acquisition are recognized at fair value at the date of acquisition. The fair value is based on detailed cash flow models and other metrics depending on the type of intangible asset being recognized.

Goodwill arising on acquisition is recognized as an asset and initially measured at cost, being the excess of the cost of the business combination over Superior’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognized. If the net amounts assigned to the assets acquired and liabilities assumed exceed the cost of the purchase, then Superior is required to reassess the value of both the cost and net assets acquired and any excess remaining after this reassessment is recognized immediately in net earnings (loss). Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, Superior will report provisional amounts for the items for which the accounting is incomplete.

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Those provisional amounts are adjusted during the measurement period (see below), or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances at the acquisition date that, if known, would have affected the amounts recognized at that date.

The measurement period is the period from the date of acquisition to the date Superior obtains complete information about facts and circumstances as of the acquisition date, to a maximum of one year.

Goodwill

Goodwill arising in a business combination is recognized as an asset at the date control commences (the acquisition date). Goodwill is not amortized but is reviewed for impairment at least annually, on December 31. For purposes of impairment testing, goodwill is allocated to each of Superior’s CGUs expected to benefit from the synergies of the combination. CGUs to which goodwill has been allocated are tested for impairment annually or more frequently upon indication of impairment. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.

On disposal of a group of assets, the attributable amount of goodwill is included in the determination of the net gain or loss on disposal.

Revenue Recognition

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Company recognizes revenue when it transfers control over a product or service to a customer, which may occur at a point in time or over a period of time.

The Company generates its revenue through its principal activities, which are separated by reportable segments.

The nature of the goods and services and the timing of satisfaction of performance obligations is as follows:

Energy Distribution

Propane sales contracts include supply of propane along with the loaning of storage tanks, equipment and related servicing and maintenance activities provided by the Company. Revenue from sale of propane is recognized when control of the goods has transferred, being when the goods are delivered to the customer (which occurs when the goods have been shipped to the specific location), the customer has full discretion over the goods, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Payment terms are generally 30 days from the delivery date. Customers may be required to provide a deposit depending on credit quality. These deposits are recorded as part of contract liabilities and recognized into income over the period that it relates to.

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Revenue from loaning of storage tanks and maintenance activities is recognized as the performance obligations are satisfied over time, which is generally in accordance with the terms of the contract. The customer does not control the storage tank during the term of the contract. The customer does not have the right to direct the use of the storage tank, and there is no practical or contractual restriction on the Company’s ability to transfer the storage tank to another customer. The Company is able to redirect the storage tank to another customer at little or no additional cost and therefore it has an alternative use to the Company. In many cases, propane sales and the loaning of storage tanks is included under one sales contract. Propane sales prices are consistent based on the customer geography and type and therefore, the residual amount is related to loaning of storage tanks. Customers typically pay for tank rentals annually, semi-annually or on a month-by-month basis. Rental payments received for periods greater than a month are recorded as part of contract liabilities and recognized into income over the period that the payments relate to.

Included in the U.S. Propane Distribution segment is revenue related to the distribution of heating oil and refined fuels in the northeastern U.S. Its products are generally used in home heating, water heating and motor vehicle fuel. Revenue from sale of refined fuels is also recognized when control of the goods has transferred, being when the goods are delivered to the customer (which occurs when the goods have been shipped to the specific location), the customer has full discretion over the goods, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Payment terms are generally 30 days from the delivery date. Customers may be required to provide a deposit depending on credit quality. These deposits are recorded as part of contract liabilities. Customers typically pay for tank rentals annually, semiannually or on a month-by-month basis. Rental payments received for periods greater than a month are recorded as part of contract liabilities.

Specialty Chemicals

Specialty Chemicals is involved in the distribution of sodium chlorate and environmentally preferred chlorine dioxide technology to the pulp and paper industries as well as a supplier of potassium and chloralkali products. Revenue from sale of specialty chemicals is also recognized when control of the goods has transferred, and customer has full discretion over the goods. Payment terms are generally 30 days from the delivery date. Customers may be required to provide a deposit depending on credit quality. These deposits are recorded as part of contract liabilities.

Sales where the Company arranges and charges for freight is considered a separate performance obligation. Consequently, the portion of revenue related to freight is recognized when the goods are delivered to their destination.

Provisions

Provisions are recognized when there is a present legal or constructive obligation as a result of past events, for which it is probable that payment will be required to settle the obligation, and where the amount can be reliably estimated.

The amount is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

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When some or all of the economic benefit required to settle a provision is expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the receivable can be measured reliably.

Decommissioning Costs

Liabilities for decommissioning costs are recognized when Superior has an obligation to dismantle and remove a facility or an item of plant and to restore the site on which it is located, and when a reliable estimate of that liability can be made. Generally, the costs relate to Specialty Chemicals facilities and Energy Distribution assets. Decommissioning costs are recorded at the present value of expected costs to settle the obligation using estimated cash flows. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is expensed as incurred and recognized in net earnings (loss) as a finance expense. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. A corresponding item of property, plant and equipment of an amount equal to the provision is also created. This is subsequently amortized as part of the asset. Changes in the estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset.

Environmental Expenditures and Liabilities

Environmental expenditures that relate to current or future revenues are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations and do not contribute to current or future earnings are expensed.

Liabilities for environmental costs are recognized when a cleanup is probable and the associated costs can be reliably estimated. Generally, the timing of recognition of these provisions coincides with the commitment to a formal plan of action or, if earlier, on divestment or on closure of inactive sites. The amount recognized is the best estimate of the expenditure required. When the liability will not be settled for a number of years, the amount recognized is the present value of the estimated future expenditure.

Restructuring

A restructuring provision is recognized when Superior has developed a detailed formal restructuring plan and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring.

Employee Future Benefits

Superior has a number of defined-benefit and defined-contribution plans providing pension and other postemployment benefits to most of its employees. Superior accrues its obligations under the plans and the related costs, net of plan assets.

Contributions to defined-contribution plans are recognized as an expense when employees have rendered service entitling them to the contributions.

For defined-benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each consolidated balance sheet date. The net

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obligation for each defined-benefit plan is discounted to determine the present value using the yield at the reporting date on high-quality Canadian corporate bonds. Plan assets are measured at fair value and the difference between the fair value of the plan assets and the present value of the defined-benefit obligation is recognized on the consolidated balance sheets as an asset or liability. Costs charged to the consolidated statements of net earnings (loss) and total comprehensive earnings include current service cost, any past service costs, any gains or losses from curtailments and interest on the net defined-benefit asset or liability. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in other comprehensive earnings (loss) in the period in which they occur.

The defined-benefit obligation recognized in the consolidated balance sheet represents the present value adjusted for unrecognized actuarial gains and losses and unrecognized past service cost, and reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to unrecognized actuarial losses and past service cost, plus the present value of available refunds and reductions in future contributions to the plan.

Income Taxes

Income tax expense represents the sum of current income taxes and deferred income taxes.

Current Income Taxes

The income tax currently payable is based on taxable net earnings for the year. Taxable net earnings differ from net earnings as reported in the consolidated statements of net earnings (loss) and total comprehensive earnings because they exclude items of income or expense that are taxable or deductible in other years as well as items that are never taxable or deductible. Superior’s liability for current income tax is calculated using tax rates that have been enacted or substantively enacted by the consolidated balance sheet date.

Deferred Income Taxes

Deferred income tax is recognized on differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of taxable net earnings. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable net earnings will be available against which those deductible temporary differences can be utilized. Deferred tax liabilities are recognized for all taxable temporary differences, except for the following:

• When the deferred tax liability arises from the initial recognition of goodwill;

• When an asset or liability in a transaction is not a business combination and, at the time of the transaction, affects neither the accounting net earnings or taxable net earnings; or

• In respect of taxable temporary differences associated with investments in subsidiaries and associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled by Superior and it is unlikely that the temporary differences will be reversed in the foreseeable future.

Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that they are expected to be reversed in the foreseeable future and it is probable that there will be sufficient taxable net earnings against which to utilize the benefits of the temporary differences. A deferred tax asset may also be recognized for the benefit expected from unused

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tax losses available for carry-forward, to the extent that it is probable that future taxable earnings will be available against which the tax losses can be applied.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates and laws that have been enacted or substantively enacted by the consolidated balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which Superior expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current liabilities and when they are related to income taxes levied by the same taxation authority and Superior intends to settle its current tax assets and liabilities on a net basis. Also, Superior recognizes any benefit associated with investment tax credits as deferred tax assets to the extent they are expected to be utilized in accordance with IAS 12, Income Taxes .

Uncertain Tax Positions

Superior is subject to taxation in numerous jurisdictions. There are many transactions and calculations during the course of business for which the ultimate tax determination is uncertain. It is possible, however, that at some future date, liabilities in excess of Superior’s provisions could result from audits by or litigation with tax authorities. Where the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made.

Current Tax and Deferred Tax for the Period

Current tax and deferred tax are recognized as an expense in net earnings (loss), except where they relate to amounts recognized outside of net earnings (loss) (whether in other comprehensive earnings (loss) or directly in equity), in which case the current tax and deferred tax are also recognized outside of net earnings (loss), or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is included in the accounting for the business combination.

Foreign Currencies

The financial statements of each subsidiary of Superior are translated into the currency of the subsidiary’s primary economic environment (its functional currency). For the purpose of the consolidated financial statements, the results and balance sheets of each subsidiary are expressed in Canadian dollars, Superior’s presentation currency. Transactions are recognized at the rates of exchange prevailing at the transaction date.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the period-end. Non-monetary items that are measured at fair value in a foreign currency shall be translated using the exchange rates at the date when the fair value is measured. Nonmonetary items that are measured in terms of historical cost in a foreign currency shall be translated using the exchange rate at the date of the transaction and are not retranslated.

For the purposes of presenting Superior’s consolidated financial statements, the assets and liabilities of Superior’s foreign operations, namely of Energy Distribution and Specialty Chemicals in the U.S., and of

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Specialty Chemicals in Chile, are translated using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period.

Goodwill and fair value measurements of identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences are recognized in other comprehensive earnings (loss) for the period.

Share-based Payments

Superior has established share-based compensation plans whereby notional restricted shares and/or notional performance shares may be granted to employees. The fair value of these notional shares is estimated using the period-end quoted market price and recorded as an expense with an offsetting amount to accrued liabilities, remeasured at each consolidated balance sheet date. All share-based payments are settled in cash.

Net Earnings (Loss) per Common Share

Basic net earnings (loss) per share are calculated by dividing the net earnings (loss) by the weighted average number of shares outstanding during the period, which is calculated using the number of shares outstanding at the end of each month in that year. Diluted net earnings (loss) per share are calculated by factoring in the dilutive impact of the dilutive instruments, including the conversion of debentures to shares using the ifconverted method to assess the impact of dilution. Superior uses the treasury stock method to determine the impact of dilutive options, which assumes that the proceeds from in-the-money share options are used to repurchase shares at the average market price during the period.

(e) Significant Accounting Judgments, Estimates and Assumptions

The preparation of Superior’s consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosure. The estimates and associated assumptions are based on historical experience and various other factors deemed reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The areas involving a higher degree of judgment or complexity, or where assumptions and estimates are significant to the consolidated financial statements, are as follows:

Estimates and Assumptions

Fair Value of Derivative and Non-Financial Derivative Instruments

Where the fair values of financial derivatives and non-financial derivatives cannot be derived from active markets, they are determined using valuation techniques including a discounted cash flow model. This requires assumptions concerning the amount and timing of estimated future cash flows and discount rates. Differences between actual values and assumed values will affect net earnings (loss) in the period when the difference is determined.

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Allowance for Doubtful Accounts

Superior recognizes an allowance for doubtful accounts based on historical customer collection history, general economic indicators and other customer-specific information, all of which require Superior to make certain assumptions. Where the actual collectability of accounts receivable differs from these estimates, such differences will have an impact on net earnings (loss) in the period such a determination is made.

Property, Plant and Equipment and Intangible Assets

Capitalized assets, including property, plant and equipment and intangible assets, are amortized over their respective estimated useful lives. All estimates of useful lives are set out in the Significant Accounting Policies above.

Provisions

Provisions have been estimated for decommissioning costs, restructuring and environmental expenditures. The actual costs and timing of future cash flows depend on future events. Any differences between estimates and the actual future liability will be accounted for in the period when such determination is made. Determining decommissioning liabilities requires estimates regarding the useful life of certain operating facilities, the timing and cost of future remediation activities, discount rates and the interpretation and changes to various environmental laws and regulations. Differences between estimates and results will affect Superior’s accrual for decommissioning liabilities, with an effect on net earnings (loss).

Employee Future Benefits

Superior has a number of defined-benefit pension plans and other benefit plans. The cost of defined-benefit pension plans and the present value of the pension obligation are determined using actuarial valuations. These require assumptions including the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the valuation’s complexity, its underlying assumptions and long-term nature, a defined-benefit obligation is highly sensitive to changes in the underlying assumptions.

Income Tax Assets and Liabilities

Superior recognizes expected tax assets and liabilities based on estimates of current and future taxable net earnings, which may require significant judgment regarding the ultimate tax determination of certain items. If taxable net earnings differ from the estimates, there may be an impact on current and future income tax provisions in the period when the difference is determined.

Asset Impairments

Financial and non-financial assets are subject to impairment reviews based on whether current or future events and circumstances suggest that their recoverable amount may be less than their carrying value.

Recoverable amounts are based on a calculation of expected future cash flows, which includes management assumptions and estimates of future performance.

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Judgments

Impairment of Property, Plant and Equipment

An impairment evaluation involves consideration of whether there are indicators of impairment. Indicators include but are not limited to: significant underperformance relative to historical or projected operating results, significant changes in the manner in which an asset is used or in Superior’s overall business strategy, or significant negative industry or economic trends. In some cases, these events are clear. In many cases, however, there is no clearly identifiable event. Instead, a series of individually insignificant events, some of them only later known, leads to an indication that an asset may be impaired. Management continually monitors Superior’s segments, the markets, and the business environment, and makes judgments and assessments about conditions and events in order to conclude whether there may be an impairment.

Income Taxes

Preparation of the consolidated financial statements involves making an estimate of, or provision for, income taxes in each of the jurisdictions in which Superior operates. The process also involves estimating taxes currently payable and taxes expected to be payable or recoverable in future periods, referred to as deferred income taxes. Deferred income taxes result from the effects of temporary differences due to items that are treated differently for tax and accounting purposes. The tax effects of these differences are reflected in the consolidated balance sheet as deferred income tax assets and liabilities. An assessment must also be made to determine the likelihood that Superior’s future taxable income will be sufficient to permit the recovery of deferred income tax assets. To the extent that such recovery is not probable, recognized deferred income tax assets must be reduced. Judgment is required in determining the income tax expense (recovery) and recognition of deferred income tax assets and liabilities. Management must also exercise judgment in its assessment of continually changing tax interpretations, regulations and legislation, to ensure deferred income tax assets and liabilities are complete and fairly presented. The effects of differing assessments and applications could be material.

Purchase Price Allocation

All business combinations are accounted for using the acquisition method. This requires management to recognize all identifiable assets, liabilities and contingent liabilities at the acquisition date fair values with a few exceptions. The allocation of the purchase price to property, plant and equipment and intangible assets requires management to exercise judgment when determining the acquisition fair value of each asset and its respective useful life. Consideration paid in a business combination that exceeds the net fair value of assets and liabilities acquired is allocated to goodwill. Goodwill is reviewed for impairment at least annually. As disclosed in Note 3, a number of acquisitions were completed during 2019. Changes in the purchase price allocation could occur during the 12-month period following acquisition. Changes to the fair value of the assets and liabilities acquired could affect the purchase price allocation and the Energy Distribution’s net income.

Financial Instruments

The fair value of financial instruments is determined and classified in three categories, which are outlined below and discussed in more detail in Note 16.

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Level I

Fair values in Level I are determined using quoted prices in active markets for identical instruments.

Level II

Fair values in Level II are determined using quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and value drivers are observable in active markets.

Level III

Fair values in Level III are determined using valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The fair value measurement of a financial instrument is included in only one of the three levels, the determination of which is based on the lowest-level input that is significant to the derivation of the fair value. Classification of financial instruments requires management to use judgment in respect of both the determination of fair value and the lowest-level input of significance.

Revenue from Sale of Specialty Chemicals

Chemical sales are sometimes sold with discounts and volume rebates. Revenue from these sales is recognized based on the price specified in the contract, net of the estimated discounts and volume rebates. Accumulated experience is used to estimate and provide for the discounts, using the expected value or most likely method, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. A contract liability is recognized for expected discounts payable to customers in relation to sales made until the end of the reporting period. No element of significant financing component exists.

Revenue from Sale of Propane, Including Storage Tanks

Certain propane supply contracts entered into by the Company include sale of propane along with the loaning of storage tanks and equipment by the Company. Because these contracts include multiple performance obligations, the transaction price must be allocated to the performance obligations.

Management estimates the standalone selling price using the residual approach. The price of propane charged is consistent by geography and customer type, whereas fees and discounts associated with loaning storage tank can vary. Management allocates revenue to the sale of propane based on the consistent price by customer geography and region and the residual amount is applied to loaning the storage tank. Revenue from the sale of propane is recognized when delivered and revenue from storage tanks and equipment is recognized over the contract period.

Determining the Lease Term

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option or not to exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be

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extended or not terminated. The initial assessment is reviewed if a significant event or a significant change in circumstances occurs that affects this assessment and that it is within the control of the lessee.

(f) Standards Issued But Not Yet Effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s consolidated financial statements are disclosed below. The Company intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.

The Company has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective.

IFRS 3, Business Combinations

In October 2018, the IASB issued amendments to the definition of a business in IFRS 3, Business Combinations to help entities determine whether an acquired set of activities and assets is a business or not. They clarify the minimum requirements for a business, remove the assessment of whether market participants are capable of replacing any missing elements, add guidance to help entities assess whether an acquired process is substantive, narrow the definitions of a business and of outputs, and introduce an optional fair value concentration test. New illustrative examples were provided along with the amendments.

Since the amendments apply prospectively to transactions or other events that occur on or after the date of first application, the Company will not be affected by these amendments on the date of transition.

IAS 1, Presentation of Financial Statements and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors

In October 2018, the IASB issued amendments to IAS 1, Presentation of Financial Statements and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors to align the definition of “material” across the standards and to clarify certain aspects of the definition. The new definition states that, “Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity”.

The amendments to the definition of material is not expected to have a significant impact on the Company’s consolidated financial statements.

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3. ACQUISITIONS

2019 Purchase Price Allocations	Phelps	Sheldon	Other
Cash 0.8 Accounts receivable 1.9 0.6 1.0
Inventory	0.5	0.3	0.1
Property, plant and equipment	14.4	8.3	9.8
Intangible assets	3.2	6.7	6.4
Accounts payable and accrued liabilities	(0.1)		(0.6)
Contract liabilities	(0.6)
Long-termdebt andleaseliabilities	(1.5)	(0.5)	(2.1)
Net identifiable assets and liabilities	17.9	16.1	14.6
Consideration transferred
Fair value of deferred consideration	3.1	1.9	3.0
Cash paid on acquisition	21.9	19.2	19.8
Total consideration transferred	25.0	21.1	22.8
Acquisition date fair value ofpreviouslyheld equityinterest	4.5 25.0 25.6 22.8
Goodwill arisingon acquisition	7.1	9.5	8.2

The acquisition costs directly attributable to the following acquisitions were expensed and are included in selling, distribution and administrative costs. The goodwill recognized represents the expected synergies from operations and the intangible assets that do not qualify for separate recognition. Goodwill arising on acquisition is deductible for tax purposes unless otherwise noted and forms part of the Energy Distribution segment, unless otherwise noted. The acquisitions were initially funded by drawing on Superior’s credit facility, unless otherwise noted.

Phelps Sungas Inc. and BMK Geneva, Inc. (“Phelps”)

On April 1, 2019, Superior closed the acquisition of the propane distribution assets of Phelps, an independent propane distributor in New York for total consideration of $25.2 million (US$18.7 million). The acquisition was funded by drawing on Superior’s credit facility and deferring $3.3 million (US$2.5 million) in payments over the next five years.

The purchase price allocation is considered preliminary, and as a result, may be adjusted during the 12month period following the acquisition once all the required information pertaining to working capital and customer attrition is obtained and assessed. Superior has allocated the purchase price to the identified assets and liabilities based on their current book value and fair value estimates based on available information. The amounts presented are based on their estimated fair value, management expects that any further changes will relate to finalizing the fair value of property, plant and equipment, intangible assets and goodwill.

Revenue and net earnings for the year ended December 31, 2019, would have been $19.1 million and $2.6 million, respectively, if the acquisition had occurred on January 1, 2019. Subsequent to the acquisition date of April 1, 2019, the acquisition contributed revenue and net earnings of $10.1 million and $0.3 million, respectively, to the U.S. Propane Distribution segment for the year ended December 31, 2019.

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Superior has updated the preliminary purchase price allocation and restated the previously reported estimated fair values as follows:

estimated fair values as follows:
Current assets Property, plant and equipment Intangible assets Goodwill Contract liabilities Non-current liabilities	Previously Reported Adjustments December 31, 2019
	2.4 – 2.4 7.5 6.9 14.4 16.8 (13.6) 3.2 0.3 6.8 7.1 (0.5) (0.1) (0.6) (1.5) – (1.5)

Property, plant and equipment was increased by approximately $6.9 million to $14.4 million, as a result of finalizing the fair value for the tanks and vehicles acquired. The fair value of intangible assets decreased from its provisional amount by $13.6 million to $3.2 million as a result of finalizing assumptions related to customer relationships. Intangible assets are primarily made up of customer relationships and will be amortized over the estimated life of these relationships estimated to be eight years.

As a result of the above adjustments, goodwill was increased by $6.8 million. The final goodwill balance of $7.1 million comprises the value of expected synergies from the acquisition.

Sheldon Gas Company and Sheldon Oil Company (“Sheldon”)

On May 2, 2019, Superior closed the acquisition of the shares of Sheldon, an independent propane distributor in Northern California for total consideration of $21.2 million (US$15.8 million). The acquisition was funded by drawing on Superior’s credit facility and deferring $2.0 million (US$1.5 million) in payments over the next three years. Included in the assets acquired was a 51% interest in an entity that Superior acquired the other 49% previously as part of the acquisition of United Pacific Energy.

Revenue and net earnings for the year ended December 31, 2019, would have been $9.3 million and $2.0 million, respectively, if the acquisition had occurred on January 1, 2019. Subsequent to the acquisition date of May 2, 2019, the acquisition contributed revenue and net earnings of $4.9 million and $0.8 million, respectively, to the U.S. Propane Distribution segment for the year ended December 31, 2019.

Superior has finalized the purchase price allocation and restated the previously reported fair values as follows:

follows:
Current assets Property, plant and equipment Intangible assets Goodwill Accounts payable, accrued and other liabilities	Previously Reported Adjustments December 31, 2019
	1.7 – 1.7 8.1 0.2 8.3 4.8 1.9 6.7 12.2 (2.7) 9.5 (1.2) 0.6 (0.6)

Property, plant and equipment was increased by approximately $0.2 million to $8.3 million, as a result of finalizing the fair value for all the tanks acquired. The fair value of intangible assets increased by $1.9 million to $6.7 million as a result of finalizing assumptions related to customer relationships. Intangible assets are primarily made up of customer relationships and will be amortized over the estimated life of these relationships estimated to be eight years. Accounts payable, accrued and other liabilities decreased by approximately $0.6 million as a result of finalizing the fair value of the Company’s liabilities as at the acquisition date. As a result of the above adjustments, goodwill was decreased by $2.7 million. The final goodwill balance of $9.5 million comprises the value of expected synergies from the acquisition.

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Other Acquisitions

During the year ended December 31, 2019, the Company closed three other business acquisitions for a total consideration of approximately $22.8 million. This consisted of one acquisition in Canada and two acquisitions in the U.S. Goodwill of $8.2 million forms part of the U.S. Propane Distribution segment.

The purchase price allocations with these acquisitions are considered preliminary, and as a result, may be adjusted during the 12-month period following the acquisition once all the required information pertaining to working capital and customer attrition is obtained and assessed. Superior has allocated the purchase price to the identified assets and liabilities based on their current book value and fair value estimates based on available information. The amounts presented are based on their estimated fair value, management expects that any further changes will relate to finalizing the fair value of property, plant and equipment, intangible assets and goodwill.

Revenue and net earnings for the year ended December 31, 2019, would have been $10.4 million and $2.6 million, respectively, if the acquisition had occurred on January 1, 2019. Subsequent to the acquisition dates, the acquisitions contributed revenue and net earnings of $0.6 million and $0.1 million, respectively, to the Canadian Propane Distribution segment and contributed revenue and net earnings of $0.7 million and $0.2 million, respectively, to the U.S. Propane Distribution segment for the year ended December 31, 2019.

2018 Acquisitions

	NGL	United	Musco Fuel	Porco	Blue
	Propane,	Pacific	& Propane	Energy	Flame Gas	Hi-Grade
2018 Purchase Price Allocations	LLC(i)	Energy(i)	LLP	Corp.	Service	Oil
Cash	4.7	0.7
Accounts receivable	29.3	14.5	0.7	0.8	0.8	1.0
Prepaid expenses	4.4	4.7
Inventory and other current assets 14.5 1.5 0.1 0.4 0.1 Property, plant and equipment 303.5 18.5 1.7 5.1 3.9 2.3
Other assets	0.6	4.2
Intangible assets	180.9	11.8	12.6	12.8	10.6	3.7
Assets sold					2.4
Accounts payable and accrued
liabilities	(44.8)	(8.1)	(1.1)	(0.6)	(1.7)	(1.1)
Contract liabilities (3.3) Provisions and other liabilities (6.8) (4.3)
Long-term debt (8.9) Deferred tax liabilities (7.4)
Net identifiable assets and liabilities	474.1	36.1	14.0	18.5	13.7	8.3
Consideration transferred
Fair value of deferred consideration			1.2	5.4	2.1
Cashpaid on acquisition	1,165.6	51.4	17.8	13.1	11.6	8.3
Total consideration transferred	1,165.6	51.4	19.0	18.5	13.7	8.3
Goodwill arisingon acquisition	691.5	15.3	5.0

(i) Restated as a result of finalizing the purchase price allocations.

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NGL Propane, LLC (“NGL”)

On July 10, 2018, Superior completed the acquisition of NGL, NGL Energy Partners LP’s retail propane distribution business for cash consideration of $1,165.6 million (US$889.8 million), net of customary closing adjustments and excluding transaction costs. The purchase price was financed through a combination of debt and equity. The acquisition costs directly attributable to the acquisition of NGL were approximately $10.0 million. These costs were expensed and included in selling, distribution and administrative costs.

Superior has finalized the purchase price allocation and restated the previously reported fair values as follows:

Current assets Property, plant and equipment Other assets Intangible assets Goodwill Accounts payable and accrued liabilities and contract liabilities Non-current liabilities	Previously Reported Adjustments December 31, 2019
	52.9 – 52.9 386.2 (82.7) 303.5 0.6 – 0.6 164.5 16.4 180.9 624.9 66.6 691.5 (47.8) (0.3) (48.1) (15.7) – (15.7)

Property, plant and equipment were decreased by approximately $82.7 million to $303.5 million, as a result of finalizing the fair value for all the tanks and equipment acquired. Intangible assets increased by $16.4 million to $180.9 million and the increase was attributed to customer relationships and will be amortized over the estimated life of these relationships estimated to be eight years. Accounts payable and accrued liabilities were adjusted to account for all liabilities that existed at the acquisition date.

As a result of the above adjustments, goodwill was increased by $66.6 million. The final goodwill balance of $691.5 million comprises the value of expected synergies from the acquisition.

United Pacific Energy (“UPE”)

On October 2, 2018, Superior closed the acquisition of UPE for $42.6 million (US$33 million) plus working capital consideration of $8.8 million (US$6.8 million). Goodwill related to the UPE acquisition is not deductible for tax purposes and forms part of the Canadian Propane Distribution segment.

Superior has finalized the purchase price allocation and restated the previously reported fair values as follows:

Current assets Property, plant and equipment Other assets Intangible assets Goodwill Accounts payable and accrued liabilities Other liabilities Deferred tax liabilities	Previously Reported Adjustments December 31, 2019
	21.4 – 21.4 18.5 – 18.5 4.2 – 4.2 10.7 1.1 11.8 12.2 3.1 15.3 (8.1) – (8.1) (0.4) (3.9) (4.3) (7.1) (0.3) (7.4)

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Intangible assets increased by approximately $1.1 million and the increase was mainly attributed to customer relationships and will be amortized over the estimated life of these relationships estimated to be eight years. Deferred tax liabilities also increased by $0.3 million due to the increase in intangible assets.

Other liabilities increased by approximately $3.9 million as a result of finalizing the fair value of the Company’s other liabilities as at the acquisition date.

As a result of these adjustments, goodwill was increased by $3.1 million. The final goodwill balance of $15.3 million comprises the value of expected synergies from the acquisition.

Upon finalizing the purchase price allocations for NGL and UPE, Superior has restated the comparative period to record the impact of the finalized purchase price allocation as if the accounting for the business combination had been completed at the acquisition date. As a result, the following changes were made as at December 31, 2018 using foreign exchange rates prevailing at December 31, 2018:

Property, plant and equipment Intangible assets Goodwill Other liabilities Deferred tax liabilities	Reported	Adjustments NGL UPE Restatement
	1,527.8 412.1 1,021.9 (12.7) (24.7)	(86.0) – 1,441.8 17.0 1.1 430.2 69.0 3.3 1,094.2 – (4.1) (16.8) – (0.3) (25.0)

Musco Fuel & Propane LLP (“Musco”)

On November 1, 2018, Superior closed the acquisition of substantially all of the propane distribution assets of Musco for total cash consideration of $17.8 million (US$13.5 million) and deferred payments of $1.3 million (US$1.0 million).

Revenue and net earnings for year ended December 31, 2018, would have been $9.4 million and $1.6 million, respectively, if the acquisition had occurred on January 1, 2018. Subsequent to the acquisition date of November 1, 2018, the acquisition contributed revenue and net earnings of $2.3 million and $0.5 million, respectively, to the Energy Distribution segment for the period ended December 31, 2018.

Porco Energy Corp. (“Porco”)

On September 21, 2018, Superior closed the acquisition of the propane distribution assets of Porco, an independent propane and distillate fuel distributor in New York for total cash consideration of $13.1 million (US$10.5 million) and deferred payments of $6.9 million (US$5.5 million).

Revenue and net earnings for the year ended December 31, 2018, would have been $19.3 million and $1.7 million, respectively, if the acquisition had occurred on January 1, 2018. Subsequent to the acquisition date of September 21, 2018, the acquisition contributed revenue and net earnings of $3.5 million and $0.9 million, respectively, to the Energy Distribution segment for the period ended December 31, 2018.

Blue Flame Gas Service (“Blue Flame”)

On May 1, 2018, Superior closed the acquisition of the propane distribution assets of Blue Flame, an independent propane distributor in Pennsylvania for total cash consideration of $11.6 million (US$9.0 million) and deferred payments of $2.6 million (US$2.0 million).

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Revenue and net earnings for the year ended December 31, 2018, would have been $8.1 million and $0.2 million, respectively, if the acquisition had occurred on January 1, 2018. Subsequent to the acquisition date of May 1, 2018, the acquisition contributed revenue and net loss of $3.8 million and $0.7 million, respectively, to the Energy Distribution segment for the period ended December 31, 2018.

Hi-Grade Oil (“Hi-Grade”)

On February 2, 2018, Superior closed the acquisition of the propane distribution assets of Hi-Grade, an independent propane and distillate fuel distributor in Ohio for total cash consideration of $8.3 million (US$6.4 million). Immediately following this purchase, the distillate assets were sold to another party for approximately $2.4 million (US$1.7 million).

Revenue and net earnings for the year ended December 31, 2018, would have been $3.6 million and $1.1 million, respectively, if the acquisition had occurred on January 1, 2018. Subsequent to the acquisition date of February 2, 2018, the acquisition contributed revenue and net earnings of $2.9 million and $0.8 million, respectively, to the Energy Distribution segment for the period ended December 31, 2018.

2018 Divestitures

On April 19, 2018, Superior sold its inventory and fixed assets associated with the Petrofuels business in St. Catharines, Ontario to McDougall Energy Inc. for total consideration of $4.1 million, resulting in a gain of $2.7 million. The gain is recorded as part of selling, distribution and administrative costs.

On April 3, 2018, Superior sold certain retail distillate assets in Pennsylvania to a third party for total cash consideration of $20.7 million (US$16.7 million). This resulted in a gain of $9.9 million (US$8.0 million). The gain is recorded as part of selling, distribution and administration costs.

On April 25, 2018, Superior sold certain wholesale refined fuels business assets located across five states in the northeast U.S., and three pipeline connected terminals located in New York to Sunoco LP for cash consideration of approximately $50.8 million (US$39.5 million), plus net working capital of approximately $20.4 million (US$16.0 million). This resulted in a gain of $5.3 million (US$4.1 million). The gain is recorded as part of selling, distribution and administration costs.

4. TRADE AND OTHER RECEIVABLES

A summary of trade and other receivables is as follows:

A summary of trade and other receivables is as follows:
	2019	2018
Trade receivables, net of allowances	320.7	343.7
Accounts receivable – other	8.5	39.5
Trade and other receivables	329.2	383.2

Pursuant to their respective terms, trade receivables, before the deduction for an allowance for doubtful accounts, are aged as follows:

	2019	2018
Current	235.2	246.7
Past due less than 90 days	84.5	94.4
Past due over 90 days	10.3	13.8
Trade receivables	330.0	354.9

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The current portion of Superior’s trade receivables is neither impaired nor past due and there are no indications as of the reporting date that the debtors will not make payment. Superior’s trade receivables are stated after deducting an allowance of $9.3 million as at December 31, 2019 (December 31, 2018 – $11.2 million). The movement in the allowance for doubtful accounts is as follows:

		2019	2018
	Allowance for doubtful accounts, beginning of the year	(11.2)	(6.9)
	Impact of acquisitions and disposals	–	(2.3)
	Impairment losses recognized on receivables	(2.5)	(6.4)
	Amounts written off during the year as uncollectible	3.5	3.5
	Amounts recovered	0.9	0.9
	Allowance for doubtful accounts, end of theyear	(9.3)	(11.2)
5.	PREPAIDS AND DEPOSITS
		2019	2018
	Prepaid insurance	12.9	14.9
	Tax installments	7.0	5.0
	Deposits	21.1	18.5
	Leases and licenses	3.5	3.1
	Storage and rent	1.4	1.7
	Miscellaneousprepaids and other	11.2	6.1
		57.1	49.3
6.	INVENTORIES
		2019	2018
	Propane, heating oil and other refined fuels	55.5	87.3
	Propane retailing materials, supplies, appliances and other	13.2	10.2
	Chemical finished goods and raw materials	30.2	31.6
	Chemical stores,supplies and other	17.3	17.7
		116.2	146.8
		2019	2018
	Cost of inventories recognized as an expense	1,446.8	1,552.0
	Inventorywrite-downs to(reversals from)cost of sales	(6.0)	7.2

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7. PROPERTY, PLANT AND EQUIPMENT

			Specialty	Energy
			Chemicals	Distribution
			Plant and	Retailing	Leasehold
Cost	Land	**Buildings **	Equipment	Equipment	Improvements	Total
Balance as at December 31, 2017	48.3	257.7	961.3	978.2	8.6	2,254.1
Additions	8.2	2.9	27.0	81.6	0.7	120.4
Acquisitions through business combinations (Note 3)	20.3	29.8	–	284.9	–	335.0
Adjustments related to ARO and provisions	–	6.7	21.9	–	–	28.6
Disposals and other	(3.0)	(8.8)	(6.2)	(168.0)	(2.2)	(188.2)
Net foreign currency exchange differences	2.0	10.8	35.7	36.2	(0.1)	84.6
Reclassification	(1.6)	–	–	–	1.6	–
Balance as at December 31, 2018(i)	74.2	299.1	1,039.7	1,212.9	8.6	2,634.5
Initial adoption of IFRS 16 (Note 2)	–	55.8	112.3	10.5	–	178.6
Additions - right-of-use assets	–	8.6	3.9	24.7	–	37.2
Additions - property, plant and equipment	0.2	7.5	39.5	81.1	0.2	128.5
Acquisitions through business combinations (Note 3)	0.1	2.1	–	30.0	0.3	32.5
Adjustments related to ARO and provisions	–	11.5	0.6	–	–	12.1
Disposals and other	(1.6)	(1.3)	(2.9)	(17.6)	–	(23.4)
Impairment	–	(4.7)	(41.0)	–	–	(45.7)
Net foreign currency exchange
differences and other	0.9	(16.8)	(26.6)	(18.3)	3.6	(57.2)
Balance as at December 31, 2019	73.8	361.8	1,125.5	1,323.3	12.7	2,897.1
Accumulated Depreciation
Balance as at December 31, 2017	–	85.4	571.9	471.7	4.3	1,133.3
Depreciation expense	–	12.4	44.9	93.7	0.9	151.9
Eliminated on disposal of assets	–	(6.1)	(6.1)	(115.3)	(0.6)	(128.1)
Net foreign currency exchange
differences and other	–	3.6	19.6	12.2	0.2	35.6
Balance as at December 31, 2018	–	95.3	630.3	462.3	4.8	1,192.7
Depreciation expense - property, plant and equipment	–	12.8	43.6	95.3	0.9	152.6
Depreciation of right-of-use assets	–	11.4	19.7	5.4	–	36.5
Eliminated on disposal of assets	–	(0.9)	(1.6)	(15.3)	–	(17.8)
Impairment	–	(1.9)	(25.0)	–	–	(26.9)
Net foreign currency exchange differences and other	–	(1.2)	(15.0)	(0.2)	0.8	(15.6)
Balance as at December 31, 2019	–	115.5	652.0	547.5	6.5	1,321.5
Carrying Amount
As at December 31, 2018(i)	74.2	203.8	409.4	750.6	3.8	1,441.8
As at December 31, 2019	73.8	246.3	473.5	775.8	6.2	1,575.6

(i) Restated (see Note 3)

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As at December 31, 2019, the carrying amounts of the right-of-use assets included in the above are as follows:

				Specialty	Energy
				Chemicals	Distribution
				Plant and	Retailing	Leasehold
	Land		Buildings	Equipment	Equipment	Improvements	**Total **
Carrying Amount		–	57.6	93.7	92.6	–	243.9

Upon the adoption of IFRS 16, previously capitalized leased assets of $65.6 million has been reclassified from property, plant and equipment to right-of-use assets included in the above table. Depreciation per cost category:

Depreciation per cost category:
	2019	2018
Selling, distribution and administrative costs
Property, plant and equipment	108.5	98.3
Right-of-use asset	35.7	–
Cost of sales
Property, plant and equipment	44.1	53.6
Right-of-use asset	0.8	–
Total	189.1	151.9

Superior evaluated the property, plant and equipment as at December 31, 2019 and 2018 for indicators of impairment and no impairment was identified. Therefore, the carrying value was not adjusted. See Note 9 for further details on testing of property, plant and equipment impairment in CGUs.

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8. INTANGIBLE ASSETS

		Cap and	Energy Distribution	Specialty
		Trade	Trademarks,	Chemicals
		Emissions	Non-Compete and Royalty	Royalty	Other
	Customer	Units	Agreements, Patents and	Assets and	Intangible
Cost	Relationships	Purchased	Software	Patents	Assets	Total
Balance as at December 31, 2017	156.2	10.2	100.1	7.1	–	273.6
Acquisitions through business combinations (Note 3)	201.1	1.3	30.0	–	–	232.4
Additions from internal development	–	–	1.0	–	–	1.0
Additions acquired separately	2.1	5.5	3.1	–	–	10.7
Disposals	(1.7)	(11.7)	(6.0)	–	–	(19.4)
Net foreign currency exchange differences and other	0.6	–	12.3	0.6	–	13.5
Balance as at December 31, 2018(i)	358.3	5.3	140.5	7.7	–	511.8
Acquisitions through business combinations (Note 3)	15.9	–	0.4	–	–	16.3
Additions acquired separately	–	10.4	7.4	–	–	17.8
Reclassifications	10.0	–	(10.0)	–	–	–
Net foreign currency exchange differences and other	(0.5)	–	(14.5)	(0.4)	–	(15.4)
Balance as at December 31, 2019	383.7	15.7	123.8	7.3	–	530.5
Accumulated Amortization
Balance as at December 31, 2017	0.6	–	34.2	–	–	34.8
Amortization expense	2.0	–	44.1	1.1	–	47.2
Disposals	–	–	(2.0)	–	–	(2.0)
Net foreign currency exchange differences and other	–	–	1.6	–	–	1.6
Balance as at December 31, 2018	2.6	–	77.9	1.1	–	81.6
Amortization expense	52.1	–	10.3	1.1	–	63.5
Net foreign currency exchange differences and other	2.1	–	(5.4)	(0.1)	–	(3.4)
Balance as at December 31, 2019	56.8	–	82.8	2.1	–	141.7
Carrying value
As at December 31, 2018(i)	355.7	5.3	62.6	6.6	–	430.2
As at December 31, 2019	326.9	15.7	41.0	5.2	–	388.8

(i) Restated the prior year to be comparable with the current year's presentation and as a result of finalizing the NGL and UPE purchase price allocations, see Note 3.

Superior evaluated intangible assets as at December 31, 2019 and 2018 for indicators of impairment and the Company did not identify any impairment. Therefore, the carrying value was not adjusted for the current year.

During the year, the Company invested $7.4 million (2018 – $3.1 million) in new software systems and enhancements to existing systems. These additions include the cost of the software, the installation and consulting services relating to the enhancements and implementation of these systems.

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9. GOODWILL

	2019	2018(i)
Balance, beginning of the year	1,094.2	352.3
Additional amounts recognized from business combinations during the year	24.8	711.8
Effect of foreigncurrency differences	(38.1)	30.1
Balance, end of theyear	1,080.9	1,094.2

(i) Restated (see Note 3)

Goodwill is a result of a number of previous business combinations and is generally attributable to anticipated synergies expected and other intangible assets that are not required to be separately identified. Goodwill by definition has an indefinite life and, therefore, is not amortized.

Impairment of Property, Plant and Equipment, Goodwill and Intangible Assets

Goodwill is subject to impairment tests at least annually. For purposes of impairment testing, Superior assesses goodwill at the CGU level.

The carrying amount of goodwill as at December 31 was allocated to the segments as follows:

	2019	2018(i)
Canadian Propane Distribution	325.8	325.8
U.S. Propane Distribution	754.1	767.4
Specialty Chemicals	1.0	1.0
	1,080.9	1,094.2

(i) Restated (see Note 3)

Superior conducts assessments for indicators of impairment on a quarterly basis and performs a detailed impairment assessment at least annually. As at December 31, 2019 and 2018, an impairment test was performed for all CGUs with allocated goodwill and no impairment was identified.

The recoverable amount of each CGU for Energy Distribution, which includes property, plant and equipment and intangible assets, was based on its value in use and was determined by estimating the future cash flows that would be generated from the continuing use of the CGU, incorporating the following assumptions:

Basis on which recoverable amount was determined

The recoverable amount for each CGU is determined using a detailed cash flow model which is based on evidence from an internal budget approved by the Board of Directors. Management’s internal budgets are based on past experience and are adjusted to reflect market trends and economic conditions. Key rates used in calculation of recoverable amount

Growth rate to perpetuity

The first five years of cash flow projections used in the model are based on management’s internal budgets and projections after five years are extrapolated using growth rates in line with historical long-term growth rates. The long-term growth rate used in determining the recoverable amount for each CGU is 2.0% (2018 – 2.0%). Cash flow projections exclude any costs related to expansions through acquisitions and other related initiatives.

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Discount rates

Cash flows in the model are discounted using a discount rate specific to each CGU which is adjusted based on risk assessments for each CGU. Discount rates reflect the current market assessments of the time value of money and are derived from the CGU’s weighted average cost of capital and are adjusted for tax. The after-tax discount rates used in determining the recoverable amount for the CGUs range from 9.4% to 10.0% (2018 – 10% to 11.6%).

Inflation rates

Inflation rates used in the cash flow model are based on a blend of a number of publicly available inflation forecasts. The inflation rate used in determining the recoverable amount for each CGU in 2019 is 2.0% (2018 – 2.0%).

Key assumptions

In determining the recoverable amount of each CGU, business, market and industry factors were considered.

The recoverable amount for Specialty Chemicals was based on its FVLCOD. This was a change in approach from prior years. Management was able to estimate the FVLCOD due to the strategic review that was underway during 2019. The FVLCOD was based on the best information available to reflect the amount that could be obtained from the disposal of the CGU in an arm’s-length transaction with a third party, net of estimated costs of disposal. The fair value of calculations is categorized as Level 3 fair value based on the unobservable inputs.

10. PROVISIONS

	**Restructuring **	Decommissioning	Other	Total
Balance as at December 31, 2017	13.4	64.0	7.8	85.2
Additions	—	25.9	—	25.9
Utilization	(7.1)	(0.1)	—	(7.2)
Amounts reversed during the year	(0.1)	(2.1)	(1.9)	(4.1)
Unwinding of discount	—	2.2	—	2.2
Impact of change in discount rate	—	2.7	—	2.7
Acquisitions	—	7.2	—	7.2
Net foreign currencyexchange	—	(0.4)	—	(0.4)
Balance as at December 31, 2018	6.2	99.4	5.9	111.5
Additions	**4.2 **	**3.3 **	—	7.5
Utilization	(4.5)	(1.1)	—	(5.6)
Amounts reversed during the year	(1.1)	(0.2)	(1.6)	(2.9)
Unwinding of discount	**0.1 **	**1.5 **	—	1.6
Impact of change in discount rate	—	**8.8 **	—	8.8
Netforeigncurrency exchange	—	(0.4)	—	(0.4)
Balance as at December 31, 2019	**4.9 **	**111.3 **	4.3	120.5
			2019	2018
Current (Note 11)			7.6	7.8
Non-current			112.9	103.7
			120.5	111.5

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Restructuring

Provisions for restructuring are recorded in provisions, except for the current portion, which is recorded in trade and other payables. As at December 31, 2019, the current portion of restructuring costs was $4.9 million (December 31, 2018 – $6.2 million).

On May 31, 2019, Specialty Chemicals segment announced to employees and other key stakeholders that it will close its sodium chlorate manufacturing facility in Saskatoon, Saskatchewan, before the end of 2019. As a result of the announcement, a $4.2 million restructuring provision related primarily to severance costs was recorded, of which, $1.1 million has been reversed during the year. In addition, management reviewed the recoverability of the related assets and recorded a $17.5 million asset impairment charge. There was another group of assets that were written off as impaired unrelated to this plant during the year for approximately $2.4 million. The restructuring and impairment expense are recorded in selling, distribution and administrative costs.

Decommissioning

The provisions are on a discounted basis and are based on existing technologies at current prices or longterm price assumptions, depending on the expected timing of the activity.

Specialty Chemicals

Superior makes full provision for the future cost of decommissioning Specialty Chemicals’ chemical facilities. As at December 31, 2019, the discount rate used in Superior’s calculation was 1.8% (December 31, 2018 – 2.2%). Superior estimates the total undiscounted expenditures required to settle its decommissioning liabilities to be approximately $154.3 million (December 31, 2018 – $149.8 million), which will be paid over the next 40 years. While Superior’s provision for decommissioning costs is based on the best estimate of future costs and the economic lives of the chemical facilities, the amount and timing of these costs is uncertain.

U.S. Propane Distribution

Superior records a provision for the future costs of decommissioning certain assets associated with the Energy Distribution segment. Superior estimates the total undiscounted expenditures required to settle its decommissioning liabilities to be approximately $4.7 million as at December 31, 2019 (December 31, 2018 – $4.6 million) which will be paid over the next 15 years. The discount rate of 1.8% as at December 31, 2019 (December 31, 2018 – 2.2%) was used to calculate the present value of the estimated cash flows.

Other

Environmental

Provisions for environmental remediation are made when a cleanup is probable and the amount of the obligation can be reliably estimated. Generally, this coincides with the commitment to a formal plan or, if earlier, on divestment or closure of inactive sites. Superior estimates the total undiscounted expenditures required to settle its environmental expenditures to be approximately $2.9 million as at December 31, 2019, (December 31, 2018 – $3.0 million) which will be paid over the next year. The provision for environmental expenditures has been estimated using existing technology at current prices. No discount rate has been applied as the liability is to be settled within 12 months. The extent and cost of future remediation programs

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are inherently difficult to estimate. They depend on the scale of any possible contamination, the timing and extent of corrective actions, and Superior’s share of the liability.

Supply contract

As part of a prior acquisition, Superior was required to enter into a five-year supply agreement with the seller. The supply agreement was for terms that were unfavourable to Superior based on current supply arrangements under contract. As a result, Superior has recorded a provision with a balance of $4.3 million as at December 31, 2019, (December 31, 2018 – $5.9 million) related to this contract. The supply agreement ends March 31, 2022.

Other claims

Superior is subject to various claims and potential claims in the normal course of business, but the Company does not expect the ultimate settlement of any of these to have a material effect on its financial results. The outcomes of all the proceedings and claims against Superior are subject to future resolution that includes the uncertainties of litigation. It is not possible for Superior to predict the result or magnitude of the claims due to the various factors and uncertainties involved in the legal process. Based on information currently known to Superior, it is not probable that the ultimate resolution of any proceedings and claims, individually or in total, will have a material effect on the consolidated statements of net earnings (loss) and total comprehensive earnings or consolidated balance sheets. If it becomes probable that Superior is liable, Superior will record a provision in the period the change in probability occurs, and the resulting impact could be material to the consolidated statements of net earnings (loss) and total comprehensive earnings or consolidated balance sheets.

11. TRADE AND OTHER PAYABLES

A summary of trade and other payables is as follows:

A summary of trade and other payables is as follows:
	2019	2018(i)
Trade payables	307.1	286.1
Provisions (Note 10)	7.6	7.8
Other payables	92.5	140.5
Current taxes payable	11.1	5.3
Share-basedpayments, currentportion	5.7	7.9
	424.0	447.6

(i) Restated the prior period to be comparable with the current year's presentation.

The average credit period on purchases by Superior is 38 days (2018 – 37 days). No interest is charged on the trade payables up to 10 days (2018 – 10 days) from the date of the invoice. Thereafter, interest is charged at a rate of up to 18.0% (2018 – 18.0%) per annum on the balance. Superior’s financial risk management policies ensure that payables are normally paid within the pre-agreed credit terms.

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12. CONTRACT LIABILITIES

12. CONTRACTLIABILITIES
	2019	2018
Customer prepayments	18.1	23.1
Other	–	0.8
	18.1	23.9
	2019	2018
Balance, beginning of the year	23.9	9.9
Change in accounting policies	–	10.4
Acquisitions	0.5	3.3
Additions during the year	34.7	35.3
Recognized in net earnings	(39.7)	(37.7)
Foreignexchangeimpact	(1.3)	2.7
Balance, end of theyear	18.1	23.9

The Company does not generally receive deposits for periods longer than 12 months in advance of performing the related service.

13. OTHER LIABILITIES

13. OTHERLIABILITIES
	2019	2018(i)
Québec cap and trade payable	7.8	3.6
California cap and trade payable	7.2	5.4
Nova Scotia cap and trade payable	0.4	–
Share-basedpayments and others	14.3	7.8
	29.7	16.8

(i) Restated as a result of finalizing the UPE purchase price allocation (see Note 3).

Superior operates in California, Nova Scotia, and Quebec, and is required to participate in the respective government cap and trade programs, which requires Superior to settle any liability with compliance instruments at the end of each compliance period. Intangible assets are recorded when compliance instruments are purchased, and cap and trade liabilities are recorded upon the import of propane. These are included in the consolidated statements of cash flows net of the liability that has been accrued related to cap and trade.

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14. BORROWINGS

14. BORROWINGS
	Maturity	Rate	2019	2018(i)
Revolving Term Bank Credit Facilities(1)
Bankers’ Acceptances ("BA")	2024	Floating BA rate plus 1.70%	5.0	10.0
Canadian Prime Rate Loan (Prime and Swing line)	2024	Prime rate plus 0.70%	14.9	15.5
LIBOR Loans (US$332.0 million; 2018 –
US$450.1		Floating LIBOR
million)	2024	rate plus 1.70%	431.3	508.7
US Base Rate Loans (Prime and Swing line)		U.S. Prime rate
(US$14 million;2018 – US$11.0 million)	2024	plus 0.70%	18.1	15.1
			469.3	549.3
Other Debt
Accounts receivable factoring program(2)		Floating BA plus 1.625%	3.9	1.9
Deferred consideration and other	2019 - 2023	Non-interest bearing	23.8	24.0
			27.7	25.9
Senior Unsecured Notes
Senior unsecured notes(3)	2024	5.25%	400.0	400.0
Senior unsecured notes(4)	2025	5.125%	370.0	370.0
Senior unsecured notes(5)	2026	7.000%	454.7	477.3
			1,224.7	1,247.3
Total borrowings before deferred financing fees			1,721.7	1,822.5
Deferred financingfees and discounts			(27.3)	(32.5)
Total borrowings before current maturities			1,694.4	1,790.0
Current maturities			(10.1)	(10.7)
**Total non-current borrowings **			1,684.3	1,779.3

(i) Restated the prior period to be comparable with the current year's presentation; lease liabilities are now presented separately on the adoption of IFRS 16.

(1) As at December 31, 2019, Superior had $31.3 million of outstanding letters of credit (December 31, 2018 – $41.9 million) and $241.0 million of outstanding financial guarantees on behalf of its businesses (December 31, 2018 – $202.8 million). The fair value of Superior’s revolving term bank credit facilities, other debt, letters of credit, and financial guarantees approximates their carrying value as a result of the market-based interest rates and the short-term nature of the underlying debt instruments. On May 8, 2019, Superior extended and restated its syndicated credit facility with 10 lenders, with no material changes to the financial covenants and extended its maturity to May 8, 2024. The credit facilities are secured by substantially all of the assets of Superior. The lender commitments remain the same at $750 million and can be expanded further to $1,050 million on condition that no event of default has occurred and lender consent is provided.

• (2) Superior has entered into a Master Receivables Purchase Agreement with a financial institution by which it may purchase from time to time, on an uncommitted revolving basis, 100% interest in receivables from Superior. The maximum aggregate amount of purchased receivables purchased by the financial institution under this agreement and outstanding at any time is limited to $15 million. As at December 31, 2019, the accounts receivable factoring program is $3.9 million (December 31, 2018 – $1.9 million).

• (3) These senior unsecured notes were issued at par value and mature on February 27, 2024. The senior unsecured notes contain certain early redemption options under which Superior has the option to redeem all or a portion of the senior unsecured notes at various redemption prices, which include the principal plus accrued and unpaid interest, if any, to the application redemption date. Interest is payable semi-annually on February 27 and August 27, and commenced August 27, 2017. The fair value of the senior unsecured notes is $410.0 million (December 31, 2018 – $377.0 million), based on prevailing market prices.

• (4) These senior unsecured notes contain certain early redemption options under which Superior has the option to redeem all or a portion of the senior unsecured notes at various redemption prices, which include the principal plus accrued and unpaid interest, if any, to the application redemption date. The fair value of the senior unsecured notes is $374.9 million (December 31, 2018 – $339.5 million), based on prevailing market prices.

• (5) These US$350 million senior unsecured notes contain certain early redemption options under which Superior has the option to redeem all or a portion of the senior unsecured notes at various redemption prices, which include the principal plus accrued and unpaid interest, if any, to the application redemption date. The fair value of the senior unsecured notes is $489.0 million (December 31, 2018 – $469.5 million), based on prevailing market prices.

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Repayment requirements of borrowings before deferred financing fees are as follows:

Current maturities	10.1
Due in 2021	5.8
Due in 2022	5.8
Due in 2023	4.3
Due in 2024	871.0
Due in 2025	370.0
Subsequent to 2025	454.7
Total	1,721.7

15. EMPLOYEE FUTURE BENEFITS

The most recent actuarial valuations of plan assets and the present value of the defined-benefit obligation were carried out on December 31, 2019. The present value of the defined-benefit obligation, and the related current and past service costs, were measured using the projected unit credit method, which is the same as that applied in calculating the accrued defined-benefit obligation recognized in the consolidated balance sheets.

The principal assumptions used for the purpose of the actuarial valuation were as follows:

	Defined-benefit	Plans	Other Benefit	Plans
	2019	2018	2019	2018
Average discount rate	3.0%	3.8%	2.8%	3.6%
Expected rate of compensation increase	3.0%	3.0%	3.0%	3.0%
Mortality rate(i)	95%–112%	97%–112%	97%–109%	97%–109%

(i) 2014 Canadian Private Sector Pensioners' Mortality Table combined with mortality improvement scale MI-2017.

Canadian Propane Distribution and Specialty Chemicals have defined-benefit and defined-contribution pension plans (the “Plans”) covering most employees. The benefits provided under the plans are based on the individual employee’s years of service and the highest average earnings for a specified number of consecutive years. The objective of the Plans when managing their net assets available for benefits, which represent the capital of the Plans, is to provide members with the retirement benefits prescribed in the Plans. Aside from a minor move of the Plan assets into real estate during the last quarter of 2019, the rest of the management objectives, policies and procedures are unchanged since 2018. The Plan assets are managed by the Human Resources and Compensation Committee of the Board of Directors on behalf of beneficiaries. The Human Resources and Compensation Committee of the Board of Directors retains independent managers and advisors.

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Information about Superior’s defined-benefit and other post-retirement benefit plans as at December 31, 2019 and 2018 in aggregate is as follows:

Recognized net (asset) liability arising from defined-benefit obligation

	Canadian Propane	Specialty
	Distribution	Chemicals
	Pension	Pension Benefit	Other
	Benefit Plans	Plans	Benefit Plans
Balance as at December 31, 2019
Present value of defined-benefit obligations	35.3	142.5	21.2
Fair value ofplan assets	(41.1)	**(148.7) **	(0.0)
Net(asset)liabilityarisingfrom defined-benefit	(5.8)	**(6.2) **	21.2
Balance as at December 31, 2018
Present value of defined-benefit obligations	35.3	128.6	19.9
Fair value ofplan assets	(40.2)	(132.4)	–
Net(asset)liabilityarisingfrom defined-benefit	(4.9)	(3.8)	19.9

Movements in defined-benefit obligations and plan assets

	Canadian	Propane
	Distribution
		Pension	Specialty Chemicals
	Benefit Plans		Pension Benefit Plans		Other Benefit	Plans
	2019	2018	2019	2018	2019	2018
Movement in the present value of the defined-benefit obligation during			the year:
Benefit obligation as at January 1	35.3	38.8	128.6	134.4	19.9	21.0
Current service cost	–	–	1.7	1.9	0.3	0.3
Interest cost	1.3	1.2	4.9	4.4	0.7	0.7
Contributions by the plan participants	–	–	0.1	–	–	–
Past service cost	–	–	0.2	–	–	–
Actuarial gains (losses)	2.0	(1.2)	13.0	(6.9)	1.6	(1.2)
Benefits paid	(3.3)	(3.5)	(6.0)	(5.2)	(1.3)	(0.9)
Benefit obligationas atDecember31	35.3	35.3	142.5	128.6	21.2	19.9
Movement in the fair value of the plan assets during the year:
Fair value of plan assets as at January 1	40.2	43.1	132.4	138.2	–	–
Expected return on plan assets	1.4	1.3	5.0	4.6	–	–
Excess return (shortfall) on plan assets	2.3	(1.2)	15.9	(6.7)	–	–
Contributions by the employer	0.5	0.6	1.6	1.9	1.3	1.0
Contributions by plan participants	–	–	0.1	–	–	–
Benefits paid	(3.3)	(3.5)	(6.0)	(5.2)	(1.3)	(1.0)
Administrationexpenses	**– **	(0.1)	(0.3)	(0.4)	**– **	–
Fair value ofplan assets as at December 31	41.1	40.2	148.7	132.4	–	–
Funded status– plan surplus (deficit)
Net asset (obligation) arising from defined-benefit
obligation	5.8	4.9	6.2	3.8	(21.2)	(19.9)
Non-current net benefit asset(obligation)	5.8	4.9	6.2	3.8	(21.2)	(19.9)

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43 2019 Annual Financial Results

The accrued net pension asset related to the Canadian Propane Distribution pension benefit plan on December 31, 2019 was $5.8 million (December 31, 2018 – $4.9 million), and the expense for 2019 was nil (2018 – nil). The accrued net pension asset related to the Specialty Chemicals pension benefit plan on December 31, 2019 was $6.2 million (2018 – $3.8 million), and the expense for 2019 was $2.0 million (2018 – $2.2 million).

The accrued net benefit obligation related to the total other benefit plans of Canadian Propane Distribution and Specialty Chemicals on December 31, 2019 was $21.2 million (2018 – $19.9 million), and the expense for 2019 was $1.0 million (2018 – $1.0 million). Amounts recognized in net earnings (loss) in respect of these defined-benefit plans are as follows for the years ended December 31:

	2019	2018
Service cost
Current service cost	2.0	2.2
Administrative expense	0.3	0.5
Past service cost	0.2	–
Net interest expense	0.5	0.4
Components of defined-benefit costs recognized in net earnings (loss)	3.0	3.1

The service cost, administrative expense and net interest expense related to Canadian Propane Distribution and Specialty Chemicals on December 31, 2019 was $3.0 million (December 31, 2018 – $3.1 million) and is included in selling, distribution and administrative costs.

The remeasurement of the net defined-benefit liability is included in other comprehensive earnings (loss). The amounts recognized in accumulated other comprehensive earnings in respect of these benefit plans are as follows:

	2019	2018
Actuarial defined-benefit losses (before income taxes)	1.6	1.1
Cumulative actuarial losses (before income taxes)	(0.3)	(1.9)
Remeasurement on the net benefit obligation:	2019	2018
Cumulative actuarial gains (before income taxes), beginning of the year	(1.9)	(3.1)
Actuarial asset experience gain	18.2	(8.0)
Actuarial loss arising from changes in financial assumptions	(16.6)	10.0
Actuarial gain arising from changes in experience adjustments	–	(0.8)
Cumulative actuarial losses(before income taxes), end of theyear	(0.3)	(1.9)

Significant actuarial assumptions for the determination of the accrued defined-benefit obligation are discount rate, compensation increase, mortality scale and trend rate. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring as at December 31, 2019, while holding all other assumptions constant.

Discount Rate

A 1% change in the discount rate would result in a change to the accrued defined-benefit obligation related to Canadian Propane Distribution of $3.5 million as at December 31, 2019 (December 31, 2018 – $3.4 million) and a change to the current service expense of $0.1 million as at December 31, 2019 (December 31, 2018 – $0.1 million). A 1% change in the discount rate would result in a change to the accrued definedbenefit obligation related to Specialty Chemicals of $23.0 million as at December 31, 2019 (December 31,

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2018 – $19.7 million) and a change to the current service expense of $0.9 million at December 31, 2019 (December 31, 2018 – $1.0 million).

Compensation Increase

A 1% change in the salary would result in a change to the accrued defined-benefit obligation related to Canadian Propane Distribution of nil as at December 31, 2019 (December 31, 2018 – nil) and a change to the current service expense of nil as at December 31, 2019 (December 31, 2018 – nil). A 1% change in salary would result in a change to the accrued defined-benefit obligation related to Specialty Chemicals of $2.5 million as at December 31, 2019 (December 31, 2018 – $1.6 million) and a change to the current service expense of $0.2 million as at December 31, 2019 (December 31, 2018 – $0.2 million).

Mortality Scale

A 10% change in the mortality scale would result in a change to the accrued defined-benefit obligation related to Canadian Propane Distribution of $1.9 million as at December 31, 2019 (2018 – $1.8 million) and a change to the current service expense of $0.1 million as at December 31, 2019 (2018 – $0.1 million). A 10% change in the mortality scale would result in a change to the accrued defined-benefit obligation related to Specialty Chemicals of $4.3 million as at December 31, 2019 (December 31, 2018 – $3.4 million) and a change to the current service expense of $0.2 million as at December 31, 2019 (December 31, 2018 – $0.2 million).

Trend Rate

A 1% change in the trend rate would result in a change to the accrued defined-benefit obligation related to Canadian Propane Distribution of $0.4 million as at December 31, 2019 (December 31, 2018 – $0.4 million) and a change to the current service expense of nil as at December 31, 2019 (December 31, 2018 – nil). A 1% change in the trend rate would result in a change to the accrued defined-benefit obligation liability related to Specialty Chemicals of $1.1 million as at December 31, 2019 (December 31, 2018 – $0.9 million) and a change to the current service expense of $0.1 million as at December 31, 2019 (December 31, 2018 – $0.1 million).

The sensitivity presented above may not be representative of the actual change in the accrued definedbenefit obligation as it is unlikely that the change in assumptions would occur in isolation, as some of the assumptions may be correlated.

There were no changes in the methods or assumptions used in preparing the sensitivity analysis from prior years.

The average duration of the net benefit obligation related to Canadian Propane Distribution is 7.9 years as at December 31, 2019 (December 31, 2018 – 7.6 years) and related to Specialty Chemicals is 13.9 years as at December 31, 2019 (December 31, 2018 – 13.2 years).

As at December 31, 2019, Superior expects to make a contribution to the Canadian Propane Distribution Pension Benefit Plans of $1.4 million and to the Specialty Chemicals Pension Benefit Plans of $2.3 million during 2020.

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The fair values of plan assets as at December 31, 2019, by major asset category, are as follows:

	Canadian Propane Distribution	Canadian Propane Distribution	Specialty Chemicals Pension	Specialty Chemicals Pension
	Pension Benefit Plans			Benefit Plans
	Level 2	Percentage	Level 2	Percentage
Canadian equities	4.0	9.7%	38.7	26.0%
Foreign equities	–	–	38.4	25.8%
Fixed income	37.1	90.3%	66.2	44.5%
Realestate	**– **	**– **	5.5	3.7%
Total	41.1	100%	148.8	100%

The fair values of plan assets as at December 31, 2018, by major asset category, are as follows:

	Canadian Propane Distribution	Canadian Propane Distribution	Specialty Chemicals Pension	Specialty Chemicals Pension
	Pension Benefit Plans			Benefit Plans
	Level 2	Percentage	Level 2	Percentage
Canadian equities	3.9	9.7%	36.0	27.2%
Foreign equities	–	–	36.2	27.4%
Fixedincome	36.3	90.3%	60.2	45.4%
Total	40.2	100.0%	132.4	100.0%

The actual returns on Canadian Propane Distribution and Specialty Chemicals plan assets during the year ended December 31, 2019 were 9.4% (2018 – 0.1%) and 15.9% (2018 – -1.8%), respectively.

As part of the risk management process, Superior has established a diversification policy, set rate of return objectives, and developed specific investment guidelines.

As at December 31, 2019, the asset-matching strategic choices that are formulated in the actuarial and Superior’s Statement of Investment Policies and Procedures (“SIPP”) of the total defined-benefit plan assets are:

	Canadian Propane
	Distribution Pension Benefit	Specialty Chemicals Pension
	Plans	Benefit Plans
	Range(i)(ii)	Range(i)(ii)
Canadian equities	2.0%-7.0%	5.0%-11.0%
Global equities	2.0%-7.0%	25.0%-38.0%
Fixed income	89.0%-92.0%	40.0%-58.0%
Real estate	**– **	10.0%-23.0%

(i) Based on Superior’s SIPP.

(ii) Canadian Propane Distribution and Specialty Chemicals’ SIPPs do not provide ranges for U.S. and foreign equities; instead, they provide in aggregate ranges classified as global equities.

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As at December 31, 2018, the asset-matching strategic choices that are formulated in the actuarial and SIPP of the total defined-benefit plan assets are:

	Canadian Propane
	Distribution Pension Benefit	Specialty Chemicals Pension
	Plans	Benefit Plans
	Range(i)(ii)	Range(i)(ii)
Canadian equities	–	25.0%-35.0%
Global equities	–	25.0%-35.0%
Fixed income	100%	35.0%-45.0%

(i) Based on Superior’s SIPP.

(ii) Canadian Propane Distribution and Specialty Chemicals’ SIPPs do not provide ranges for U.S. and foreign equities; instead, they provide in aggregate ranges classified as global equities.

16. FINANCIAL INSTRUMENTS

IFRS requires disclosure around fair value and specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect Superior’s market assumptions. These two types of input create the following fair value hierarchy:

• Level 1 – Quoted prices in active markets for identical instruments.

• Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

• Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair values are determined by reference to quoted bid or ask prices, as appropriate, in the most advantageous active market for that instrument to which Superior has immediate access (Level 1). Where bid and ask prices are unavailable, Superior uses the closing price of the instrument’s most recent transaction. In the absence of an active market, Superior estimates fair values based on prevailing market rates (bid and ask prices, as appropriate) for instruments with similar characteristics and risk profiles or internal or external valuation models, such as discounted cash flow analysis using, to the extent possible, observable market-based inputs (Level 2). Superior uses internally developed methodologies and unobservable inputs to determine the fair value of some financial instruments when required (Level 3).

Fair values determined using valuation models require assumptions concerning the amount and timing of estimated future cash flows and discount rates. In determining those assumptions, Superior looks primarily to available readily observable external market inputs including forecast commodity price curves, interest rate yield curves, currency rates and price and rate volatilities as applicable.

All financial and non-financial derivatives are designated as FVTPL upon their initial recognition.

For items that are recognized at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing their classification at the end of each reporting

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period. During the year ended December 31, 2019, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into or out of Level 3 fair value measurements.

		As at December	As at December	31, 2019
	Level 1	Level 2	Level 3	Total
Assets
Foreign currency forward contracts, net sale	3.5	–	–	3.5
Equity derivative contract	–	0.9	–	0.9
Propane, diesel, butane and heating oil wholesale purchase and sale
contracts,net sale– EnergyDistribution	**– **	3.3	**– **	3.3
Totalassets	3.5	4.2	–	7.7
Liabilities
Foreign currency forward contracts, net sale	3.2	–	–	3.2
Cross-currency interest rate exchange agreements	5.8	–	–	5.8
Propane, diesel, butane and heating oil wholesale purchase and sale
contracts,net sale– EnergyDistribution	**– **	16.3	**– **	16.3
Total liabilities	9.0	16.3	**– **	25.3
Total net liabilities	(5.5)	**(12.1) **	–	(17.6)
Current portion of assets	2.1	3.3	–	5.4
Currentportion of liabilities	7.8	15.9	–	23.7
			As atDecember	31,2018
	Level 1	Level 2	Level3	Total
Assets
Foreign currency forward contracts	1.7	–	–	1.7
Natural gas financial swaps – AECO	–	1.5	–	1.5
Cross-currency interest rate exchange agreements	7.1	–	–	7.1
Propane, diesel, butane and heating oil wholesale purchase and sale
contracts– EnergyDistribution	–	8.9	–	8.9
Totalassets	8.8	10.4	–	19.2
Liabilities
Natural gas financial swaps – AECO	–	1.5	–	1.5
Foreign currency forward contracts	35.8	–	–	35.8
Equity derivative contract	–	4.3		4.3
Propane and butane wholesale purchase and sale contracts –
Energy Distribution	–	22.0	–	22.0
WTI wholesale purchase and sale contracts –
EnergyDistribution	–	0.3	–	0.3
Total liabilities	35.8	28.1	–	63.9
Total net liabilities	(27.0)	(17.7)	–	(44.7)
Current portion of assets	8.5	9.7	–	18.2
Currentportion of liabilities	20.8	25.1	–	45.9

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The following table outlines quantitative information about how the fair values of these financial and nonfinancial assets and liabilities are determined, including valuation techniques and inputs used:

			Effective	Valuation Technique(s) and Key
Description	Notional	Term	Rates	Input(s)
Level 1 fair value hierarchy:
Foreign currency forward
contracts,net sale	US$287.1	2020–2023	$1.30	Quoted bidprices in the active market.
Cross-currency interest
rate exchange agreements	US$170.0	2020	$1.30	Quoted bid prices in the active market.
Level 2 fair value hierarchy:
Equity derivative contracts	C$21.8	2020–2022	$12.06	Discounted cash flows – Future cash
				flows are estimated based on the
				share price.
Propane, WTI, butane, heating oil				Quoted bid prices for similar products in
and diesel wholesale purchase	135.47 USG (1)	2020–2022	$0.42 -	an active market.
and sale contracts – Energy			$2.03
Distribution

(1) Millions of United States gallons (“USG”) purchased.

Superior’s realized and unrealized financial instrument gains (losses) for the years ended December 31, 2019 and 2018 are as follows:

		2019			2018
		Unrealized			Unrealized
	Realized	Gain		Realized	Gain
Description	Loss	(Loss)	Total	Loss	(Loss)	Total
Foreign currency forward contracts – net sale	(11.2)	34.3	23.1	(9.2)	(37.7)	(46.9)
Transfer of derivative losses from accumulated other
comprehensive earnings	–	(7.1)	(7.1)	–	–	–
Foreign currency forward contracts related to
the NGL financing	–	–	–	4.5	–	4.5
Cross-currency interest rate swaps	–	(12.8)	(12.8)	–	9.8	9.8
Equity derivative contracts	–	5.1	5.1	–	(3.4)	(3.4)
Propane, WTI, butane, heating oil and diesel wholesale
purchase and sale contracts– EnergyDistribution	(29.9)	0.4	(29.5)	(0.9)	(27.8)	(28.7)
Total gains (losses) on financial and non-financial
derivatives	(41.1)	19.9	(21.2)	(5.6)	(59.1)	(64.7)
Foreigncurrency translationofborrowings	**– **	38.4	38.4	–	(27.2)	(27.2)
Totalgains(losses)	(41.1)	58.3	17.2	(5.6)	(86.3)	(91.9)

Realized and unrealized gains or losses on financial and non-financial derivatives and foreign currency translation gains or losses on the revaluation of Canadian domiciled U.S.-denominated working capital have been classified on the consolidated statements of net earnings (loss) and total comprehensive earnings as a component of other income (loss).

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The following summarizes Superior’s classification and measurement of financial assets and liabilities:

	Classification	Measurement
Financial Assets
Cash and cash equivalents	Loans and receivables	Amortized cost
Trade and other receivables	Loans and receivables	Amortized cost
Derivative assets	FVTPL	Fair Value
Notes and finance lease receivable	Loans and receivables	Amortized cost
Financial liabilities
Trade and other payables	Other liabilities	Amortized cost
Dividends payable	Other liabilities	Amortized cost
Borrowings	Other liabilities	Amortized cost
Derivative liabilities	FVTPL	Fair Value

The fair value of cash and cash equivalents, trade and other receivables, notes and finance lease receivable, trade and other payables, dividends payable and revolving term bank credit facilities correspond to the respective carrying amounts due to their short-term nature and/or the interest rate on the asset is commensurate with market interest rates for the type of asset with similar duration and credit risk. The fair value of senior unsecured notes disclosed in Note 14 are determined by quoted market prices (Level 1 fair value hierarchy).

Offsetting of financial instruments

Financial assets and liabilities are offset and the net amount reported on the consolidated balance sheets when Superior currently has a legally enforceable right to set off the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. In the normal course of business, Superior enters into various master netting agreements or other similar arrangements that do not meet the criteria for offsetting, but do, however, still allow for the related amount to be set off in certain circumstances, such as bankruptcy or the termination of contracts. As at December 31, 2019 and 2018, Superior has not recorded any amount against other current and non-current financial liabilities.

Financial Instruments – Risk Management

Market Risk

Financial derivatives and non-financial derivatives are used by Superior to manage its exposure to fluctuations in foreign currency exchange rates, interest rates and commodity prices. Superior assesses the inherent risks of these instruments by grouping financial and non-financial derivatives according to the exposures these instruments mitigate. Superior’s policy is not to use financial derivative or non-financial derivative instruments for speculative purposes. Superior does not formally designate its derivatives as hedges and, as a result, Superior does not apply hedge accounting and is required to designate its financial derivatives and non-financial derivatives as held for trading.

At the time Superior Energy Management was divested, the Company entered into financial swaps to offset any financial swaps that could not be transferred to the buyer. As a result, the Canadian Propane Distribution segment has nominal exposure to any losses or gains related to the remaining natural gas financial swaps, which expire in 2020.

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Energy Distribution enters into various propane forward purchase and sale agreements to manage the economic exposure of its wholesale customer supply contracts. Energy Distribution monitors its fixed-price propane positions on a daily basis to monitor compliance with established risk management policies. Energy Distribution maintains a substantially balanced fixed-price propane 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 its operations to movements in foreign currency exchange rates. Energy Distribution contracts a portion of its fixed-price natural gas, and propane purchases and sales in U.S. dollars and enters into forward U.S.-dollar purchase contracts to create an effective Canadian-dollar fixed-price purchase cost. Superior enters into U.S.-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 U.S. dollars. Interest expense on Superior’s U.S.-dollar debt is also used to mitigate the impact of foreign exchange fluctuations.

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

Credit Risk

Superior utilizes a variety of counterparties in relation to its financial derivative and non-financial derivative instruments in order to mitigate its counterparty risk. Superior assesses the creditworthiness of its significant counterparties at the inception and throughout the term of a contract. Superior is also exposed to customer credit risk. Energy Distribution deals with a large number of small customers, thereby reducing this risk. Energy Distribution actively monitors the creditworthiness of its commercial customers. Specialty Chemicals, due to the nature of its operations, sells its products to a relatively small number of customers. Specialty Chemicals mitigates its customer credit risk by actively monitoring the overall creditworthiness of its customers. Overall, Superior’s credit quality is enhanced by its portfolio of customers, which is diversified across geographical (primarily Canada and the U.S.) and end-use (primarily commercial, residential and industrial) markets.

Allowances for doubtful accounts and past due receivables are reviewed by Superior as at each consolidated balance sheet date. Superior updates its estimate of the allowance for doubtful accounts based on the evaluation of the recoverability of trade and other receivables with each customer, taking into account historical collection trends of past due accounts and current economic conditions. Trade and other receivables are written off once it is determined they are uncollectible.

Liquidity Risk

Liquidity risk is the risk that Superior cannot meet a demand for cash or fund an obligation as it comes due. Liquidity risk also includes the risk of not being able to liquidate assets in a timely manner at a reasonable price.

To ensure it is able to react to contingencies and investment opportunities quickly, Superior maintains sources of liquidity at the corporate and subsidiary levels. The main sources of liquidity are cash and other financial assets, the undrawn committed revolving term bank credit facility, equity markets and debenture markets.

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Superior is subject to the risks associated with debt financing, including the ability to refinance indebtedness at maturity. Superior believes these risks are mitigated through the use of long-term debt secured by high quality assets, maintaining debt levels that in management’s opinion are appropriate, and by diversifying maturities over an extended period. Superior also seeks to include in its agreements terms that protect it from liquidity issues of counterparties that might otherwise affect liquidity.

Equity Price Risk

Equity price risk is the risk of volatility in earnings as a result of volatility in Superior’s share price. Superior has equity price risk exposure to shares that it issues under various forms of share-based compensation programs, which affect earnings when outstanding units are revalued at the end of each reporting period. Superior uses equity derivatives to manage volatility derived from its share-based compensation program.

As at December 31, 2019, Superior estimates that a 10% increase in its share price would have resulted in a $2.3 million increase in earnings due to the revaluation of equity derivative contracts.

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

							2026 and
	2020	2021	2022	2023	2024	2025	thereafter	Total
Borrowings	10.1	5.8	5.8	4.3	871.0	370.0	454.7	1,721.
Lease liabilities	52.8	38.7	35.5	26.9	19.1	–	61.4	234.4
Non-cancellable, low-value, short-term
leases and leases with variable lease
payments	2.1	0.2	0.2	–	–	–	–	2.5
US$-foreign currency forward sales
contracts	125.8	86.8	51.5	23.0	–	–	–	287.1
Propane, WTI, butane, heating oil
and diesel wholesale purchase and
sale contracts - Energy Distribution	112.3	6.8	1.3	–	–	–	–	120.4

Superior’s contractual obligations are considered normal-course operating commitments and do not include the impact of mark-to-market fair values on financial and non-financial derivatives. Superior expects to fund these obligations through a combination of cash flows from operations, proceeds on revolving term bank credit facilities and proceeds on the issuance of share capital. Superior’s financial instruments’ sensitivities are consistent as at December 31, 2019 and 2018.

Superior’s financial instruments’ sensitivities to changes in foreign currency exchange rates, interest rates and various commodity prices and the resulting impact to net earnings are detailed below:

		2019
Impact to net earnings of a	$0.01 change in the CDN$ dollar compared to the US$ dollar	+/- 0.3
Impact to net earnings of a	0.5% change in interest rates	+/- 2.3
Impact to net earnings of a	$0.04/litre change in the price of heating oil	+/- 0.7
Impact to net earnings of a	$0.04/litre change in theprice ofpropane	+/- 6.9

The calculation of Superior’s sensitivity to changes in foreign currency exchange rates, interest rates and various commodity prices represent the change in fair value of the financial instrument without consideration of the value of the underlying variable, such as the underlying customer contracts.

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The recognition of the sensitivities identified above would have affected Superior’s unrealized gain or loss on financial instruments and would not have had a material impact on Superior’s cash flow from operations.

17. INCOME TAXES

Consistent with prior periods, Superior recognizes a provision for income taxes for its subsidiaries that are subject to current and deferred income taxes, including Canadian, U.S. income taxes, Chilean and Luxembourg income taxes.

The income taxes differ from the amount computed by applying the corporate Canadian federal-provincial enacted statutory rate for 2019 of 26.78% (2018 – 26.98%). The statutory rates reflect previously enacted provincial tax rate increases. The reasons for these differences are as follows:

	2019	2018
Net earnings (loss) for the year	142.6	(34.0)
Income taxexpense (recovery)	25.0	(0.3)
Earnings (loss) before income taxes	167.6	(34.3)
Computed income tax expense	44.9	(9.9)
Changes in effective foreign tax rates	(0.2)	(0.1)
Changes in future income tax rates	(0.7)	0.1
Non-deductible costs and other	(30.6)	7.1
Adjustments in respect of prior years	4.5	1.9
Change in amount of unrecognized asset	9.6	(1.7)
Other	(2.5)	2.3
Income tax expense(recovery)	25.0	(0.3)

Income tax expense (recovery) for the years ended December 31, 2019 and 2018 is comprised of the following:

	2019	2018
Current income tax expense
Current income tax charge	9.9	4.8
Adjustmentsin respect ofprioryears	3.2	(2.9)
Total current income tax expense	13.1	1.9
Deferred income tax expense (recovery)
Relating to origination and reversal of temporary differences	1.3	(3.2)
Relating to changes in tax rates or the imposition of new taxes	(0.7)	0.1
Adjustments in respect of prior years	1.3	4.8
Change in amount of unrecognized asset	9.6	(1.7)
Other	0.4	(2.2)
Total deferred income tax expense (recovery)	11.9	(2.2)
Income tax expense(recovery)	25.0	(0.3)

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Deferred tax for the years ended December 31, 2019 and 2018 is comprised of the following:

		(Credited)
		Charged to	(Credited)
		Net	Charged to
		Earnings	Other
	Opening	(Loss)	Comprehensive		Exchange	Closing
December 31, 2019	Balance(i)	(Continuing)	Earnings (Loss)	Acquisitions	Differences	Balance
Provisions	26.2	4.1	–	–	(0.7)	29.6
Lease liabilities	17.2	45.5	–	–	(1.3)	61.4
Borrowing	(7.3)	–	–	–	–	(7.3)
Financing fees	11.5	(4.7)	–	–	–	6.8
Investment tax credits, net of tax	64.2	(2.6)	–	–	–	61.6
Non-capital losses	141.3	(75.0)	–	–	(3.4)	62.9
Property, plant and equipment	(319.0)	31.9	–	–	7.1	(280.0)
Reserves and employee benefits	16.1	3.4	(0.4)	–	(0.4)	18.7
Scientific research and development	61.3	(6.5)	–	–	–	54.8
Unrealized foreign exchange
(losses)	12.2	(7.6)	–	–	–	4.6
Other	**– **	(0.4)	**– **	**– **	**– **	(0.4)
Total	23.7	(11.9)	(0.4)	–	1.3	12.7

(i) Restated (see Note 2 (b))

		(Credited)	(Credited)
		Charged to	Charged to
		Net Earnings	Other
	Opening	(Loss)	Comprehensive		Exchange	Closing
December31,2018	Balance	(Continuing)	Earnings (Loss)	Acquisitions	Differences	Balance(i)
Provisions	18.0	7.0	–	–	1.2	26.2
Lease liabilities	17.7	(1.0)	–	–	0.5	17.2
Borrowing	0.6	(8.0)	–	–	0.1	(7.3)
Financing fees	2.1	4.4	5.0	–	–	11.5
Investment tax credits, net of tax	64.4	(0.2)	–	–	–	64.2
Non-capital losses	38.6	85.2	–	–	17.5	141.3
Property, plant and equipment	(208.0)	(81.7)	–	(7.1)	(22.2)	(319.0)
Reserves and employee benefits	17.4	(4.3)	2.4	–	0.6	16.1
Scientific research and development	76.1	(14.8)	–	–	–	61.3
Unrealized foreign exchange
(losses)	(3.5)	15.3	–	–	0.4	12.2
Other	(0.4)	0.2	–	–	0.2	–
Total	23.0	2.1	7.4	(7.1)	(1.7)	23.7

(i) Restated (see Note 2 (b))

Deferred taxes reported in the two preceding tables are presented on a functional basis while deferred taxes reported on the consolidated balance sheets are on a legal-entity basis.

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The net deferred income tax asset relates to the following tax jurisdictions as at December 31, 2019 and 2018:

2018:
	2019	2018(i)
Canada	39.5	47.9
U.S.	(20.1)	(16.9)
Chile	(6.7)	(7.3)
Total net deferred income tax asset	12.7	23.7

(i) Restated (see Note 2 (b))

Superior has available to carry forward the following as at December 31, 2019 and 2018:

	2019	2018
Canadian non-capital losses	24.4	8.0
Canadian scientific research expenditures	214.0	227.5
Canadian capital losses	–	2.5
U.S. non-capital losses	212.0	515.3
Canadian federal andprovincial investment tax credits	84.2	88.2

The Canadian scientific research expenditures and the Canadian capital losses may be carried forward indefinitely.

Non-capital loss carry forwards available for future years

As at December 31, 2019, Superior had non-capital loss carry-forwards available to reduce future years’ taxable income for Canada of $24.4 million and U.S. of $212.0 million, all due to expire beyond 2022.

Management believes there will be sufficient taxable profits in the future to offset these losses.

Canadian federal and provincial investment tax credits available for future years

As at December 31, 2019, Superior had Canadian federal and provincial investment tax credits available to reduce future years’ taxable income, which expire as follows:

	Canada
	2020 – 2021 15.2 2022 8.7 2023 14.8 Thereafter 45.5
	Total 84.2

As at December 31, 2019 and 2018, Superior had the following balances in respect of which no deferred tax asset was recognized:

	2019	2018
U.S. interest deduction - 163(j)	35.8	8.2
Canadiancapital losses	–	2.5
Total unrecognized deferred tax assets	35.8	10.7

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Deferred tax assets have not been recognized for the above temporary differences as it is not probable that the respective entities to which they relate will generate sufficient future taxable income against which to utilize the temporary differences.

In Chile, the local tax laws provide that any profits distributed outside of Chile be subject to a 35% tax.

18. TOTAL EQUITY

Superior is authorized to issue an unlimited number of common shares and an unlimited number of preferred shares. The holders of common shares are entitled to dividends if, as and when, declared by the Board of Directors; to one vote per share at shareholders’ meetings; and upon liquidation, dissolution or winding up of Superior to receive pro rata the remaining property and assets of Superior, subject to the rights of any shares having priority over the common shares, of which none is outstanding.

	Issued Number of
	Common Shares	Share	Total
	(Millions)	Capital	Equity
As at January 1, 2018	142.8	1,953.5	776.0
Issuance of common shares	32.1	386.4	386.4
Net loss for the year	–	–	(34.0)
Other comprehensive earnings	–	–	82.5
Dividends and dividend equivalent declared to shareholders	–	–	(114.4)
Changeinaccounting policy as aresult ofthe adoptionof IFRS15	–	–	(7.6)
As at December 31, 2018	174.9	2,339.9	1,088.9
Net earnings for the year	–	–	142.6
Other comprehensive loss	–	–	(66.6)
Dividends and dividend equivalent declared to shareholders	–	–	(125.9)
As at December 31, 2019	174.9	2,339.9	1,039.0

Issuance of common shares

On June 8, 2018, Superior completed a public offering of 32 million subscription receipts at a price of $12.50 per subscription receipt, raising gross proceeds of $400 million. On July 13, 2018, after completion of the NGL acquisition, the Company exchanged the issued and outstanding subscription receipts into 32 million Common Shares of the Company along with a cash payment of $0.06 per subscription receipt less withholding tax which is equal to the aggregate amount of dividends per share paid since the issuance of the subscription receipts.

On September 27, 2018, Superior entered into an at-the-market equity distribution agreement to enable the sale of common shares from treasury having aggregate gross proceeds of up to $100 million at prevailing trading prices. Superior intended to use the net proceeds to fund tuck-in acquisitions and repay indebtedness under Superior’s credit facilities. During the fourth quarter of 2018, Superior issued 29,300 common shares at an average price of $12.76 per share for net proceeds of $0.4 million through this program. Superior incurred a 2% commission issuing shares through this program. This agreement expired on December 9, 2018 and was not subsequently renewed. Total gross proceeds during the year was $400 million less share issue costs of $19.0 million and net of a future tax recovery of $5.0 million.

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Accumulated Other Comprehensive Earnings

Accumulated Other Comprehensive Earnings
	2019	2018
Accumulated other comprehensive earnings
Currency translation adjustment
Balance, beginning of the year	180.5	98.9
Unrealizedforeigncurrency gains (losses) ontranslationof foreignoperations	(74.9)	81.6
Balance, end ofthe year	105.6	180.5
Actuarial defined benefits
Balance, beginning of the year	(1.5)	(2.4)
Actuarial defined-benefit gains	1.6	1.2
Income taxexpense onothercomprehensive earnings (loss)	(0.4)	(0.3)
Balance, end ofthe year	(0.3)	(1.5)
Accumulated derivative losses
Balance, beginning of the year	(7.1)	(7.1)
Transferofderivativelossesfromaccumulated othercomprehensive earnings	7.1	–
Balance, end ofthe year	–	(7.1)
Accumulated other comprehensive earnings, end of theyear	105.3	171.9

Other Capital Disclosure

Additional Capital Disclosure

Superior’s objectives when managing capital are: (i) to maintain a flexible capital structure to preserve its ability to meet its financial obligations, including potential obligations from acquisitions; and (ii) to safeguard its assets while maximizing the growth of its businesses and returns to its shareholders.

In the management of capital, Superior includes shareholders’ equity (excluding accumulated other comprehensive earnings, current and long-term borrowing, and convertible unsecured subordinated debentures). Superior manages its capital structure and makes adjustments in light of changes in economic conditions and the nature of the underlying assets. In order to maintain or adjust the capital structure, Superior may adjust the amount of dividends to shareholders, issue additional share capital, conduct additional borrowing or issue convertible unsecured subordinated debentures, or conduct new borrowing or issue convertible unsecured subordinated debentures with different characteristics.

Superior monitors its capital based on the ratio of senior debt outstanding to net earnings before interest, taxes, depreciation, amortization and other non-cash expenses (“EBITDA”), as defined by its revolving term credit facility, and the ratio of total debt outstanding to EBITDA. Superior’s reference to EBITDA as defined by its revolving term credit facility may be referred to as compliance EBITDA in its other public reports.

Superior is subject to various financial covenants in its credit facility agreements, including senior debt, total debt to EBITDA ratio and restricted payments tests, which are measured on a quarterly basis. As at December 31, 2019, Superior was in compliance with all of its financial covenants.

Superior’s financial objectives and strategy related to managing its capital as described above remained unchanged from the prior year. Superior believes that its debt to EBITDA ratios are within reasonable limits, in light of Superior’s size, the nature of its businesses and its capital management objectives.

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19. SUPPLEMENTAL DISCLOSURE OF CONSOLIDATED STATEMENTS OF NET EARNINGS (LOSS) AND TOTAL COMPREHENSIVE EARNINGS

19. SUPPLEMENTALDISCLOSURE OFCONSOLIDATEDSTATEMENTS OFNETE TOTALCOMPREHENSIVEEARNINGS	ARNINGS(LO	SS) AND
		Years Ended
		December 31
	2019	2018(i)
Revenue
Revenue from products	2,704.2	2,614.1
Revenue from the rendering of services	101.4	81.8
Tankand equipmentrental	47.3	41.8
	2,852.9	2,737.7
Cost of sales (includes products and services)
Cost of products and services	(1,595.0)	(1,735.9)
Depreciation includedincost ofsales	(44.9)	(53.6)
	(1,639.9)	(1,789.5)
Selling, distribution and administrative costs
Other selling, distribution and administrative costs	(246.9)	(253.5)
Restructuring, transaction and other costs	(29.9)	(39.5)
Employee future benefit expense	(2.1)	(2.5)
Employee costs	(364.2)	(296.4)
Vehicle operating costs	(68.1)	(60.8)
Facilities maintenance expense	(6.3)	(6.2)
Depreciation of right-of-use assets	(35.7)	–
Depreciation included in selling, distribution and administrative costs	(108.5)	(98.3)
Amortization of intangible assets	(63.5)	(47.2)
Low value, short-term and variable lease payments	(2.5)	–
Gain on disposal of assets	1.5	2.2
Impairment of Specialty Chemicals equipment	(19.9)	–
Realized loss on long-term incentive program (LTIP)	–	(0.1)
Realized gain(loss) onthe translationofU.S.-denominatednet working capital	(2.2)	2.0
	(948.3)	(800.3)
Finance expense
Interest on borrowings	(91.9)	(67.4)
Interest on lease liability	(13.3)	(2.7)
Premium paid on redemption of 6.5% debenture	–	(9.8)
Unwinding ofdiscount ondecommissioningliabilities andnon-cash financing expenses	(9.1)	(10.4)
	(114.3)	(90.3)
Other income (loss)
Realized loss on financial and non-financial derivatives and foreign currency translation	(41.1)	(5.6)
Unrealizedgain(loss)on financial and non-financial derivatives and foreign currency	58.3	(86.3)
	17.2	(91.9)
Earnings (loss) before income taxes	167.6	(34.3)
Income tax recovery (expense)
Current income tax expense	(13.1)	(1.9)
Deferredincome tax recovery (expense)	(11.9)	2.2
	(25.0)	0.3
Net earnings (loss) for theyear	142.6	(34.0)

(i) Restated the prior period to be comparable with the current year's presentation.

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20. NET EARNINGS (LOSS) PER SHARE, BASIC AND DILUTED

	2019	2018
Net earnings (loss) for the year	$142.6	$(34.0)
Weighted average shares outstanding (millions)	174.9	158.1
Net earnings (loss) per share, basic and diluted	$0.82	$(0.22)

21. DISAGGREGATION OF REVENUE

Revenue is disaggregated by primary geographical market, type of customer and major product and services lines.

For the Year Ended December 31, 2019			Propane Distribution	Propane Distribution
	Canada	U.S.	Other	Total
Revenue from sale of products	777.8	1,249.9	–	2,027.7
Revenue from services	46.3	50.3	–	96.6
Tankand equipmentrental	31.9	15.4	–	47.3
Total revenue	856.0	1,315.6	–	2,171.6
			Specialty Chemicals
	Canada	U.S.	Other	Total
Revenue from sale of chemicals	158.6	411.6	106.3	676.5
Revenuefromservices	2.5	2.2	0.1	4.8
Total revenue	161.1	413.8	106.4	681.3
For the Year Ended December 31,2018			Propane Distribution
	Canada	U.S.	Other	Total
Revenue from sale of products	893.1	1,047.1	–	1,940.2
Revenue from services	46.9	32.3	–	79.2
Tankand equipmentrental	35.3	6.5	–	41.8
Total revenue	975.3	1,085.9	–	2,061.2
			SpecialtyChemicals
	Canada	U.S.	Other	Total
Revenue from sale of chemicals	156.1	419.4	98.4	673.9
Revenuefromservices	0.7	1.8	0.1	2.6
Total revenue	156.8	421.2	98.5	676.5

22. SHARE-BASED COMPENSATION

Restricted and Performance Shares

Under Superior’s long-term incentive program, restricted shares (“RSs”), performance shares (“PSs”) and/or director shares (“DSs”) can be granted to directors, senior officers and employees of Superior. All three types of shares entitle the holder to receive cash compensation in relation to the value of a specified number of underlying notional shares. RSs vest evenly over three years from the grant date, except for RSs issued to directors which vest three years from the grant date. Payments are made on the anniversaries of the RSs to the holders entitled to receive them on the basis of a cash payment equal to the value of the underlying notional shares. PSs vest three years from the grant date and their notional value depends on Superior’s performance as compared to established benchmarks. DSs vest immediately on the grant date

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and payments are made to directors once they resign or retire based on the number of notional shares outstanding and the value of the shares on that date. Employee compensation expense for these plans is charged against net earnings or loss over the vesting period of the RSs, PSs, and DSs. The amount payable by Superior in respect of RSs, PSs and DSs changes as a result of dividends and share price movements. The fair value of all the RSs, PSs and DSs is equal to Superior’s common share market price and the divisional notional share price if related to a divisional plan. In the event of an employee termination, any unvested shares are forfeited on that date.

For the year ended December 31, 2019, total compensation expense related to RSs, PSs and DSs was $11.8 million (2018 – $5.6 million). Exercises during the year ended December 31, 2019 under the long-term incentive plan were completed at a weighted average price of $11.69 per share (2018 – $11.97 per share) for RSs, and $10.26 per share (2018 – $13.06 per share) for PSs. For the year ended December 31, 2019, the total carrying amount of the liability related to RSs, PSs and DSs was $19.1 million (2018 – $16.0 million).

The movement in the number of shares under the long-term incentive program was as follows:

				2019				2018
	RSs	PSs	DSs	Total	RSs	PSs	DSs	Total
Opening number
of shares	623,352	917,625	487,254	2,028,231	577,826	980,935	444,646	2,003,407
Granted	362,783	362,783	14,253	739,819	311,878	311,878	68,983	692,739
Performance factor
adjustment and
other	–	184,707	–	184,707	–	31,262	–	31,262
Dividends reinvested	43,724	66,499	27,521	137,744	41,108	67,768	27,024	135,900
Forfeited	(860)	(12,361)	(58,718)	(71,939)	(39,992)	(296,123)	(53,399)	(389,514)
Exercised	(304,785)	(452,344)	**– **	(757,129)	(267,468)	(178,095)	–	(445,563)
Ending number of
shares	724,214	1,066,909	470,310	2,261,433	623,352	917,625	487,254	2,028,231

Superior entered into equity derivative contracts in order to manage the volatility and costs associated with its share-based compensation plans. As at December 31, 2019, Superior had outstanding notional values of $21.8 million (2018 – $20.4 million) of equity derivative contracts at an average share price of $12.06 (2018 – $12.65). See Note 16 for further details.

23. SUPPLEMENTAL DISCLOSURE OF NON-CASH OPERATING WORKING CAPITAL CHANGES

	2019	2018
Changes in non-cash operating working capital and other
Trade and other receivables, prepaids and deposits	26.0	(24.7)
Inventories	49.3	(9.5)
Trade and other payables and other liabilities	(31.6)	9.2
	43.7	(25.0)

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	2019	2018
Changes in liabilities arising from financing activities
Balance as at January 1	1,853.8	1,052.8
Net proceeds (repayment) of revolving term bank
credits and other debt	(63.4)	738.9
Non-cash finance expense	5.8	6.7
Deferred acquisition payments	(0.2)	12.9
Lease additions including adoption of IFRS 16, net of repayments	178.0	16.0
Debt issue costs	(0.6)	(17.9)
Other, including foreign exchange	(44.6)	44.4
Balance as at December 31	1,928.8	1,853.8

24. RELATED-PARTY TRANSACTIONS AND AGREEMENTS

Transactions between Superior and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

Remuneration of directors and other key management personnel

The key management personnel of Superior are comprised of executives of Superior and presidents of Superior’s business segments.

The remuneration paid to directors and other members of key management personnel over the past two years is as follows:

	2019	2018
Short-term employee benefits(i)	7.9	7.2
Other long-term employee benefits	0.1	0.2
Share-based payments	4.6	4.2
	12.6	11.6

(i) Short-term employee benefits paid to directors and other members of key management personnel include salaries and bonuses.

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25. GROUP ENTITIES

		Ownership
		Interest
	Country of	(Direct and
Significant Subsidiaries	Organization	Indirect)
SP Reinsurance Company Limited	Bermuda	100%
Superior Plus LP	Canada	100%
Superior Gas Liquids Partnership	Canada	100%
Superior International Inc.	Canada	100%
Superior General Partner Inc.	Canada	100%
Superior Plus Canada Financing Inc.	Canada	100%
Stittco Utilities NWT Ltd.	Canada	100%
Stittco Utilities Man Ltd.	Canada	100%
Cal-Gas Inc.	Canada	100%
Commercial E Industrial ERCO (Chile) Limitada	Chile	100%
Superior Luxembourg Sàrl	Luxembourg	100%
Superior Plus US Holdings Inc.	U.S.	100%
Superior Plus US Financing Inc.	U.S.	100%
ERCO Worldwide Inc.	U.S.	100%
ERCO Worldwide (USA) Inc.	U.S.	100%
International Dioxcide Inc.	U.S.	100%
Superior Plus Energy Services Inc.	U.S.	100%
Superior Plus US Capital Corp.	U.S.	100%
NGL Propane, LLC	U.S.	100%
Osterman Propane, LLC	U.S.	100%
Sheldon Gas Company	U.S.	100%
Sheldon Oil Company	U.S.	100%
Sheldon United Terminals, LLC	U.S.	100%
United Liquid Gas Company, Inc.	U.S.	100%

26. REPORTABLE SEGMENT INFORMATION

Superior operates three operating segments: Canadian Propane Distribution, U.S. Propane Distribution and Specialty Chemicals. The Canadian Propane Distribution segment includes the Canadian retail business and wholesale business with offices located in Canada and California. The U.S. Propane Distribution segment distributes propane gas and liquid fuels along the Eastern U.S., and into the Midwest and California.

Specialty Chemicals is a leading supplier of sodium chlorate and technology to the pulp and paper industry and a regional supplier of chlor-alkali products in the U.S. Midwest and Western Canada.

Superior’s Chief Operating Decision Maker, the President, reviews the operating results, assesses performance, and makes capital allocation decisions with respect to the Canadian Propane Distribution, U.S. Propane Distribution and Specialty Chemicals businesses and the corporate office. Therefore, Superior has presented these as operating segments for financial reporting purposes in accordance with IFRS 8, Operating Segments .

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	Canadian
	Propane	U.S. Propane		Specialty
2019	Distribution	Distribution		Chemicals	Corporate	Total
Revenue	1,147.5		1,024.1	681.3	–	2,852.9
Cost ofsales (includes products and services)	(680.4)		(514.7)	(444.8)	–	(1,639.9)
Gross profit	467.1		509.4	236.5	–	1,213.0
Expenses
Depreciation included in selling, distribution and
administrative costs	(40.0)		(60.5)	(7.9)	(0.1)	(108.5)
Depreciation of right-of-use assets	(9.1)		(4.9)	(21.4)	(0.3)	(35.7)
Amortization of intangible assets included in
selling, distribution and administrative costs	(22.8)		(39.6)	(1.1)	–	(63.5)
Selling, distribution and administrative costs	(243.9)		(308.9)	(153.0)	(34.8)	(740.6)
Finance expense	(4.4)		(4.4)	(8.1)	(97.4)	(114.3)
Other income (loss)	(16.7)		(11.7)	2.9	42.7	17.2
	(336.9)		(430.0)	(188.6)	(89.9)	(1,045.4)
Earnings (loss) before income taxes	130.2		79.4	47.9	(89.9)	167.6
Income taxexpense	–		–	–	(25.0)	(25.0)
Net earnings (loss) for theyear	130.2		79.4	47.9	(114.9)	142.6
	Canadian		U.S.
	Propane		Propane	Specialty
2018(i)	Distribution		Distribution	Chemicals	Corporate	Total
Revenue	1,135.9		925.3	676.5	–	2,737.7
Cost ofsales (includes products and services)	(729.5)		(615.5)	(444.5)	–	(1,789.5)
Gross profit	406.4		309.8	232.0	–	948.2
Expenses
Depreciation included in selling, distribution and
administrative costs	(59.0)		(39.1)	–	(0.2)	(98.3)
Amortization of intangible assets included in selling,
distribution and administrative costs	(27.1)		(19.0)	(1.1)	–	(47.2)
Selling, distribution and administrative costs	(255.8)		(208.7)	(148.2)	(42.1)	(654.8)
Finance expense	(2.2)		(2.5)	(2.3)	(83.3)	(90.3)
Other income (loss)	(16.6)		(12.8)	–	(62.5)	(91.9)
	(360.7)		(282.1)	(151.6)	(188.1)	(982.5)
Earnings (loss) before income taxes	45.7		27.7	80.4	(188.1)	(34.3)
Income tax recovery		–	–	–	0.3	0.3
Net earnings(loss)for theyear	45.7		27.7	80.4	(187.8)	(34.0)

(i) Restated the prior year to be comparable with the current year's presentation (see Note 2 (b)).

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

Canadian Propane Distribution	U.S. Propane Distribution Specialty Chemicals Corporate Total
As at December 31, 2019 Net working capital(i) 42.0 Total assets 1,167.7 Total liabilities 295.1	(0.4) 56.9 (48.6) 49.9 1,600.2 797.8 72.3 3,638.0 268.8 338.8 1,696.3 2,599.0
As at December 31, 2018 Net working capital(i) 76.9 Total assets(ii) 1,227.2 Total liabilities(ii) 254.7	16.3 49.4 (45.3) 97.3 1,690.4 710.5 25.9 3,654.0 356.5 223.1 1,730.8 2,565.1
For the year ended December 31, 2019 Purchase of property, plant and equipment and intangible assets 50.3	44.4 41.2 – 135.9
For the year ended December 31, 2018 Purchase of property, plant and equipment and intangible assets 52.1	25.5 28.2 – 105.8
(i) Net working capital is composed of trade and other receivables, prepaids and deposits and inventories, less trade and other payables, contract liabilities and dividends and interest payable.

(ii) Restated as a result of finalizing the NGL and UPE purchase price allocations, see Note 3.

27. GEOGRAPHICAL INFORMATION

27. GEOGRAPHICALINFORMATION
				Total
	Canada	U.S.	Other	Consolidated
Revenue for the year ended December 31, 2019	1,017.1	1,729.4	106.4	2,852.9
Property, plant and equipment as at December 31, 2019	596.9	696.0	38.8	1,331.7
Right-of-use assets as at December 31, 2019	146.0	97.1	0.8	243.9
Intangible assets as at December 31, 2019	152.3	236.5	–	388.8
Goodwill as at December 31, 2019	325.8	755.1	–	1,080.9
Total assets as at December 31, 2019	1,562.3	2,021.5	54.2	3,638.0
Revenue for the year ended December 31, 2018(i)	1,132.1	1,507.0	98.6	2,737.7
Property, plant and equipment as at December 31, 2018(ii)	636.9	755.2	49.7	1,441.8
Intangible assets as at December 31, 2018(ii)	156.6	273.6	–	430.2
Goodwill as at December 31, 2018(ii)	325.8	768.4	–	1,094.2
Totalassets as atDecember31,2018(ii)	1,494.5	2,108.7	50.8	3,654.0

(i) Restated the prior year to be comparable with the current year's presentation.

(ii) Restated as a result of finalizing the NGL and UPE purchase price allocations, see Note 3.

28. SUBSEQUENT EVENTS

On January 9, 2020, Superior acquired a Southern California retail propane distribution company, operating under the tradename, Western Propane Service (“Western”) for total consideration of US$21.8 million (C$28.5 million). The acquisition was funded by drawing on Superior’s credit facility and deferring US$4.0 million (C$5.2 million) in payments over the next five years. Founded in 1988, Western is an established independent retail propane distributor serving approximately 6,000 retail and commercial customers in Southern California.

On January 28, 2020, Superior announced that it will restart the Dividend Reinvestment and Optional Share Purchase Plan (“DRIP”) commencing with the anticipated February dividend, which would be payable on or about March 13, 2020.

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