Superior Plus Corp. - Management Reports 2024

MANAGEMENT’S DISCUSSION AND ANALYSIS

THREE MONTHS ENDED JUNE 30, 2024 AND 2023

This Management’s Discussion and Analysis (“MD&A”) contains information about the performance and financial position of Superior Plus Corp. (“Superior”) as at and for the three and six months ended June 30, 2024 and 2023, as well as forward-looking information about future periods. The information in this MD&A is current to August 13, 2024, and should be read in conjunction with Superior’s unaudited condensed consolidated financial statements and notes thereto as at and for the three and six months ended June 30, 2024 and 2023.

The accompanying unaudited condensed consolidated financial statements of Superior were prepared by and are the responsibility of Superior’s management. Superior’s unaudited condensed consolidated financial statements as at and for the three and six months ended June 30, 2024 and 2023 were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

All financial amounts in this MD&A are expressed in millions of United States dollars except where otherwise noted. All tables are for the three and six months ended June 30 of the period indicated, unless otherwise stated. This MD&A includes forward-looking statements and assumptions. See “Forward-Looking Information” for more details.

Non-GAAP Financial Measures

Throughout the MD&A, Superior has used the following terms that are not defined under IFRS, which are used by management to evaluate the performance of Superior and its businesses: Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) from operations, Adjusted EBITDA, Operating Costs, Net Debt, Leverage Ratio, Pro Forma Adjusted EBITDA, 2023 Pro Forma Adjusted EBITDA and Adjusted Gross Profit. These measures may also be used by investors, financial institutions and credit rating agencies to assess Superior’s performance and ability to service debt. Non-GAAP financial measures do not have standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Securities regulations require that Non-GAAP and other financial measures are clearly defined, explained and reconciled to their most directly comparable measure presented in the (primary) financial statements. Except as otherwise indicated, these Non-GAAP financial measures are calculated and disclosed on a consistent basis from period to period. Specific items may only be relevant in certain periods.

The intent of using Non-GAAP financial measures is to provide additional useful information to investors and analysts; the measures do not have standardized meaning under IFRS. The measures should not, therefore, be considered in isolation or used as a substitute for measures of performance prepared in accordance with IFRS. Other issuers may calculate Non-GAAP financial measures differently. See “Non-GAAP Financial Measures and Reconciliations” for more information about these measures.

Forward-Looking Information

Certain information included herein is forward-looking information within the meaning of applicable Canadian securities laws. Forwardlooking information may include statements regarding the objectives, business strategies to achieve those objectives, expected financial results (including those in the area of risk management), economic or market conditions, and the outlook of or involving Superior and its businesses. Such information is typically identified by words such as “anticipate”, “believe”, “continue”, “estimate”, “expect”, “plan”, “forecast”, “future”, “outlook”, “guidance”, “may”, “project”, “should”, “strategy”, “target”, “will” or similar expressions suggesting future outcomes.

Forward-looking information in this document includes: future financial position, consolidated and business segment outlooks, 2024 expected Adjusted EBITDA guidance, the markets for our products and our financial results, expected Leverage ratio, business strategy and objectives, development plans and programs, organic growth, weather, commercial demand in Canada and the U.S., product pricing and sourcing, volumes and pricing, wholesale propane market fundamentals, exchange rates, expected synergies from acquisitions, expected seasonality of demand, long-term incentive plan accrual estimates and future economic conditions.

Forward-looking information is provided for the purpose of providing information about management’s expectations and plans about the future and may not be appropriate for other purposes. Forward-looking information herein is based on various assumptions and expectations that Superior believes are reasonable in the circumstances. No assurance can be given that these assumptions and expectations will prove to be correct. Those assumptions and expectations are based on information currently available to Superior, including information obtained from third-party industry analysts and other third-party sources, and the historic performance of Superior’s businesses. Such assumptions include no material divestitures, anticipated financial performance, current business and economic trends, the amount of future dividends paid by Superior, business prospects, utilization of tax basis, regulatory developments, average Mobile Storage Unit “MSU” base, impacts of costsaving initiatives, currency exchange, inflation and interest rates, future commodity prices relating to the oil and gas industry, future oil rig activity levels in the U.S. and Western Canada, trading data, cost estimates, our ability to obtain financing on acceptable terms and statements regarding net working capital and capital expenditure requirements of Superior, the assumptions set forth under the “Financial Outlook” sections in this MD&A. Superior cautions that such assumptions could prove to be incorrect or inaccurate. The forward-looking information is also subject to the risks and uncertainties set forth below.

The forward-looking information is also subject to the risks and uncertainties set forth below. By its very nature, forward-looking information involves numerous assumptions, risks and uncertainties, both general and specific. Should one or more of these risks and uncertainties

Superior Plus Corp.

2024 Second Quarter Results

materialize or should underlying assumptions prove incorrect, as many important factors are beyond our control, Superior’s actual performance and financial results may vary materially from those estimates and expectations contemplated, expressed or implied in the forward-looking information. These risks and uncertainties include risks relating to incorrect assessments of value when making acquisitions, failure to realize expected cost-savings and synergies from acquisitions, increases in debt service charges, colder average weather than anticipated, the loss of key personnel, fluctuations in foreign currency and exchange rates, fluctuations in commodity prices, increasing rates of inflation, inadequate insurance coverage, liability for cash taxes, counterparty risk, compliance with environmental laws and regulations, reduced customer demand, operational risks involving our facilities, force majeure, labour relations matters, our ability to access external sources of debt and equity capital, and the risks identified in (i) this MD&A under “Risk Factors to Superior” and (ii) Superior’s most recent Annual Information Form. The preceding list of assumptions, risks and uncertainties is not exhaustive.

When relying on Superior’s forward-looking information to make decisions with respect to Superior, investors and others should carefully consider the preceding factors, other uncertainties and potential events. Any forward-looking information is provided as of the date of this document and, except as required by law, Superior does not undertake to update or revise such information to reflect new information, subsequent or otherwise. For the reasons set forth above, investors should not place undue reliance on forward-looking information.

Overview of Superior and Basis of Presentation

Superior consists of the following four reportable segments: U.S. Retail Propane Distribution (“U.S. Propane”), Canadian Retail Propane Distribution (“Canadian Propane”), North American Wholesale Propane Distribution (“Wholesale Propane”) and Certarus Ltd. (“Certarus”). The U.S. Propane segment distributes propane gas and liquid fuels primarily in the Eastern United States and California; and, to a lesser extent, the Midwest to residential and commercial customers. The Canadian Propane segment distributes propane gas and liquid fuels across Canada to residential and commercial customers. The Wholesale Propane segment distributes propane gas and other natural gas liquids across Canada and the U.S. to wholesale customers and supplies the majority of propane gas required by the Canadian Propane segment and a portion of the propane gas required by the U.S. Propane segment. Certarus is a comprehensive low carbon energy solution provider engaged in the business of transporting and selling compressed natural gas (“CNG”), renewable natural gas (“RNG”) and hydrogen. Certarus’ principal business is supplying fuel for large-scale industrial and commercial customers in the United States and Canada. Superior acquired all the issued and outstanding shares of Certarus on May 31, 2023.

Effective January 1, 2024, Superior elected to change its presentation currency from Canadian dollars to U.S. dollars. The Company applied the change to a U.S. dollar presentation currency retrospectively and restated the comparative 2023 financial information as if the U.S. dollar had been used as the reporting currency. Amounts denominated in Canadian dollars are denoted with "C$" immediately prior to the stated amount. In addition, Superior now reports sales volumes for the Propane distribution segments in millions of U.S. gallons instead of litres using the conversion rate of 3.785 litres to a gallon.

HIGHLIGHTS

Second quarter 2024 Adjusted EBITDA[(1)] of $43.3 million represents a 47% increase from the prior year quarter, primarily due to the full quarter contribution from Certarus
Adjusted EBITDA per share of $0.16 for Q2 2024 QTD and $1.00 YTD represents accretion of 33% and 2%, respectively
Canadian Propane achieved growth of 4% in Q2 2024 compared to the prior year despite the contribution from the divested Northern Ontario assets being included in the prior year
Net loss of $45.3 million in Q2 2024 compared to a net loss of $29.2 million in the prior year primarily due to an unrealized gain on financial and non-financial derivatives in the prior year compared to an unrealized loss in the current year, partially offset by the full quarter impact of Certarus and a lower deferred tax recovery compared to the prior year
Confirming 2024 Adjusted EBITDA[(1)] growth expectation of ~5% compared to 2023 Pro Forma Adjusted EBITDA[(1)]
Effective January 1, 2024, Superior began reporting results in U.S. dollars to improve year over year comparability given foreign exchange fluctuations, as the majority of its business activities are denominated in U.S. dollars.
(1) These amounts are Non-GAAP financial measures and/or Non-GAAP ratios, see “Non-GAAP financial measures and Reconciliations” on page 26 for more information.

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2024 Second Quarter Results

FINANCIAL RESULTS

The following summary contains certain Non-GAAP financial information. See “Non-GAAP Financial Measures and Reconciliations” on page 26 for more information about these measures.

Summary of Adjusted EBITDA

Summary of Adjusted EBITDA
	Three Months Ended		Six	Months Ended
		June 30		June 30
(millions of dollars, except per share amounts)	2024	2023	2024	2023
U.S. Propane Adjusted EBITDA(1)	9.8	13.7	141.2	143.8
Canadian Propane Adjusted EBITDA(1)	10.5	10.1	51.6	58.8
Wholesale Propane Adjusted EBITDA(1)	2.8	4.0	19.9	33.7
Certarus Adjusted EBITDA(1,4)	27.2	9.5	78.7	9.5
Adjusted EBITDA from operations(1)	50.3	37.3	291.4	245.8
Corporate operating costs(1)	(7.0)	(7.8)	(12.5)	(12.0)
Adjusted EBITDA(1)	43.3	29.5	278.9	233.8
Adjusted EBITDA per share(1)(2)	$0.16	$0.12	$1.00	$0.98
Adjusted EBTDAper share(1)(2)	$0.07	$0.04	$0.82	$0.82
Dividends declaredper common share	C$0.18	C$0.18	C$0.36	C$0.36
Volumes
U.S. Propane_(millions of gallons)_	54	64	194	218
Canadian Propane_(millions of gallons)_	54	56	145	165
Wholesale Propane_(millions of gallons)_(3)	63	79	185	211
Certarus_(thousands of million British thermal units "MMBtu")_(3)	7,012	2,035	15,063	2,035
Leverage ratio(1)			3.8x	3.6x
Capital expenditures	30.4	22.1	68.4	44.3
Proceeds on dispositions	(0.9)	(2.7)	(4.0)	(3.6)
Investment in leased assets	6.9	8.7	11.1	15.2
Net (loss) earnings for the period	(45.3)	(29.2)	39.9	80.1
Net (loss) earnings per share attributable to Superior - basic and
diluted	($0.20)	($0.16)	$0.12	$0.33

(1) These amounts are Non-GAAP financial measures and/or Non-GAAP ratios, see “Non-GAAP financial measures and Reconciliations” on page 26 for more information.

(2) The weighted average number of shares outstanding for the three and six months ended June 30, 2024 was 278.6 million (three and six months ended June 30, 2023 was 247.3 million and 239.0 million respectively). The weighted average number of shares assumes the exchange of the issued and outstanding preferred shares into common shares. There were no other dilutive instruments for the three and six months ended June 30, 2024 and 2023.

(3) Represents sales to third-parties and excludes sales volumes to the Canadian and U.S. Propane segments.

(4) Certarus 2023 Adjusted EBITDA and volumes are from the date of acquisition to June 30, 2023.

Results for the three months ended June 30, 2024

Adjusted EBITDA for the three months ended June 30, 2024 was $43.3 million, an increase of $13.8 million or 47% compared to the prior year quarter Adjusted EBITDA of $29.5 million. The increase is primarily due to higher Adjusted EBITDA from operations and to a lesser extent lower corporate costs. Adjusted EBITDA from operations increased by $13.0 million compared to the prior year quarter primarily due to the full quarter impact of the

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2024 Second Quarter Results

Certarus acquisition, partially offset by lower Adjusted EBITDA from operations in the propane distribution segments. Certarus contributed $27.2 million in Adjusted EBITDA for the three months ended June 30, 2024.

U.S. Propane Adjusted EBITDA was $9.8 million, a decrease of $3.9 million or 28% primarily due to the impact of the divestiture in the prior year and lower sales volumes due to warmer weather.

Canadian Propane Adjusted EBITDA was $10.5 million, an increase of $0.4 million or 4% primarily due to the impact of higher average unit margins, partially offset by the impact of divesting the Northern Ontario assets.

Wholesale Propane Adjusted EBITDA was $2.8 million, a decrease of $1.2 million or 30% primarily due to decreased sales demand.

Certarus Adjusted EBITDA was $27.2 million, an increase of $17.7 million primarily due to the impact of the acquisition closing on May 31, 2023 and the comparative figures not representing a full quarter of results. On a proforma basis Certarus Adjusted EBITDA decreased $2.6 million, from $29.8 million, despite growing delivered volumes by over 15% as a result of pricing pressure from increased competition in the oil and gas segment.

Corporate operating costs were $7.0 million compared to $7.8 million in the prior year quarter. The decrease is due to onboarding costs related to the change in management in the prior year partially offset by higher incentive plan costs in the current period.

Results for the six months ended June 30, 2024

Adjusted EBITDA for the six months ended June 30, 2024 was $278.9 million, an increase of $45.1 million or 19% compared to the prior comparable period Adjusted EBITDA of $233.8 million. The increase is primarily due to higher Adjusted EBITDA from operations and to a lesser extent lower corporate costs. Adjusted EBITDA from operations increased by $45.6 million compared to the comparable period primarily due to Certarus, partially offset by lower Adjusted EBITDA from operations in the propane distribution segments. Certarus contributed $78.7 million in Adjusted EBITDA for the six months ended June 30, 2024.

U.S. Propane Adjusted EBITDA was $141.2 million, a decrease of $2.6 million or 2% primarily due to the impact of warmer weather on sales volumes and the divestiture in the prior year partially offset by higher average unit margins.

Canadian Propane Adjusted EBITDA was $51.6 million, a decrease of $7.2 million or 12% primarily due to the impact of divesting the Northern Ontario assets, and warm weather in the first quarter partially offset by higher average unit margins and the timing of selling carbon credits.

Wholesale Propane Adjusted EBITDA was $19.9 million, a decrease of $13.8 million or 41% primarily due to weaker market differentials compared to the prior comparable period and decreased sales demand due to the warmer weather.

Certarus Adjusted EBITDA was $78.7 million, an increase of $69.2 million primarily due to the impact of the acquisition closing on May 31, 2023 and the comparative figures only representing one month of earnings.

Corporate operating costs were $12.5 million compared to $12.0 million in the prior year to date. The increase is due to higher incentive plan costs in the current period as a result of changes in Superior’s share price partially offset by the impact of management onboarding costs incurred in the prior comparable period related to the change in management in the prior year quarter.

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2024 Second Quarter Results

RESULTS OF SUPERIOR’S OPERATING SEGMENTS

Superior’s operating segments consists of U.S. Propane, Canadian Propane, Wholesale Propane, Certarus and Corporate.

U.S. PROPANE

U.S. Propane’s operating results:

U.S. PROPANE U.S. Propane’s operating results:
	Three Months Ended		Six Months Ended
		June 30		June 30
(millions of dollars)	2024	2023	2024	2023
Revenue	160.4	196.3	591.3	700.4
Cost of Sales	(71.0)	(94.6)	(269.8)	(346.1)
Gross profit	89.4	101.7	321.5	354.3
Realized (loss) gain on derivatives related to commodity risk
management(1)	–	(4.0)	3.2	(18.0)
Adjusted gross profit(2)	89.4	97.7	324.7	336.3
SD&A	(111.1)	(119.7)	(248.5)	(266.8)
Add back (deduct):
Amortization and depreciation included in SD&A(3)	29.6	32.6	60.3	67.2
Transaction, restructuring and other costs(3)	2.1	2.8	4.8	6.9
(Gain) loss on disposal of assets(3)	(0.2)	0.3	(0.1)	0.2
Operating costs(2)	(79.6)	(84.0)	(183.5)	(192.5)
Adjusted EBITDA(2)	9.8	13.7	141.2	143.8
Add back (deduct):
Loss (gain) on disposal of assets(3)	0.2	(0.3)	0.1	(0.2)
Transaction, restructuring and other costs(3)	(2.1)	(2.8)	(4.8)	(6.9)
Amortization and depreciation included in SD&A(3)	(29.6)	(32.6)	(60.3)	(67.2)
Unrealized gain (loss) on derivative financial instruments	1.7	(8.5)	10.3	7.9
Finance expense	(1.5)	(1.5)	(3.2)	(3.2)
(Loss) earnings before income tax	(21.5)	(32.0)	83.3	74.2

(1) Realized gain (loss) on derivatives related to commodity risk management are reconciled to gains (losses) on derivatives and foreign currency translation of borrowings, see “Non-GAAP financial measures and Reconciliations” on page 26 for more information.

(2) Adjusted Gross Profit, Adjusted EBITDA and Operating Costs are Non-GAAP financial measures. See “Non-GAAP financial measures and Reconciliations” on page 26 for more information.

(3) The sum of the above amounts and the balances included in the Canadian Propane, Wholesale Propane, Certarus and the Corporate segments are included in SD&A and are disclosed in Note 14 or Note 18 of the unaudited condensed consolidated financial statements as at and for the three and six months ended June 30, 2024 and 2023.

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2024 Second Quarter Results

U.S. Propane Adjusted Gross Profit

U.S. Propane Adjusted Gross Profit
	Three Months Ended		Six Months Ended
		June 30		June 30
(millions of dollars)	2024	2023	2024	2023
Propane distribution(1)	85.5	97.0	312.7	344.0
Realized (loss) gain on derivatives related to commodity risk
management(1)	–	(4.0)	3.2	(18.0)
Adjusted gross profit related to propane distribution	85.5	93.0	315.9	326.0
Other services(1)	3.9	4.7	8.8	10.3
Adjustedgrossprofit(2)	89.4	97.7	324.7	336.3

(1) The sum of propane distribution and other services agrees to segment disclosure in the unaudited condensed consolidated financial statements. Realized gain (loss) on derivatives related to commodity risk management are reconciled to gains (losses) on derivatives and foreign currency translation of borrowings, see “Non-GAAP financial measures and Reconciliations” on page 26 for more information.

(2) Adjusted gross profit from operations is a Non-GAAP financial measure. See “Non-GAAP financial measures and Reconciliations” on page 26 for more information.

U.S. Propane Sales Volumes

End-Use Application

U.S. Propane Sales Volumes *End-Use Application*
	Three Months Ended		Six Months Ended
		June 30		June 30
(millions of gallons)	2024	2023	2024	2023
Residential	24	28	106	119
Commercial	30	36	88	99
Total	54	64	194	218

Volumes by Region[ (1)]

*Volumes by Region (1)*
	Three Months Ended		Six Months Ended
		June 30		June 30
(millions of gallons)	2024	2023	2024	2023
Northeast	35	43	128	148
Southeast	7	8	30	29
Midwest	4	4	15	15
West	8	9	21	26
Total	54	64	194	218

(1) Includes propane and other liquid fuels sold in over twenty-four states in the following regions: Northeast region consists of Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, Pennsylvania, New Jersey, Delaware, Maryland, Virginia; Southeast region consists of North Carolina, South Carolina, Georgia, Tennessee, Florida, Alabama; Midwest region consists of Ohio, Michigan, Minnesota; West region consists primarily of California, Arizona and Nevada.

Revenue for the three months ended June 30, 2024 was $160.4 million, a decrease of $35.9 million or 18% from the prior year quarter primarily due to the impact of divesting specific, less profitable, distillate assets in the prior year, the impact of exiting a warmer first and second quarter on timing of deliveries and lower wholesale commodity prices compared to the prior year quarter, partially offset by price increases to offset the impact of inflation.

Total sales volumes were 54 million gallons, a decrease of 10 million gallons or 16% due primarily to divesting specific, less profitable, distillate assets in the prior year and timing of deliveries. Average weather, as measured by degree days, across markets where U.S. propane operates for the quarter was 15% warmer than the prior year and the five-year average. Weather variances are much less impactful in the second and third quarters because there is much less demand from heating end-use customers. Weather variances in the second quarter do not have a significant impact on total annual sales volumes.

Superior Plus Corp.

2024 Second Quarter Results

Adjusted gross profit related to propane distribution for the three months ended June 30, 2024 was $85.5 million, a decrease of $7.5 million or 8% from the prior year quarter primarily due the impact of divesting specific, less profitable, distillate assets in the prior year partially offset by higher average sales margins.

U.S. Propane average sales margins were $1.58 per gallon, an increase of 0.13 cents or 9% from $1.45 per gallon in the prior year quarter primarily due to a higher proportion of propane customers in the customer base and the impact of increased fees to offset the impact of inflation.

Other services gross profit primarily includes equipment rental, installation, repair and maintenance charges. Other services gross profit was $3.9 million, a decrease of $0.8 million or 17% over the prior year quarter primarily due to the impact of the heating oil divestiture in the prior year.

Operating costs were $79.6 million, a decrease of $4.4 million or 5% over the prior year quarter primarily due to the impact of the divestiture in the prior year, cost saving initiatives and lower volume-related expenses partially offset by the impact of inflation on costs.

SD&A includes amortization, depreciation and transaction, restructuring and other costs whereas operating costs exclude these expenses and is used in the determination of Adjusted EBITDA. SD&A was $111.1 million, a decrease of $8.6 million or 7% over the prior year quarter. The decrease is consistent with the decrease in operating costs as well as lower transaction, restructuring and other costs and to a lesser extent lower amortization and depreciation expense due to the divestiture of distillate assets in the prior year.

Loss before income tax was $21.5 million, a decrease of $10.5 million over the prior year quarter loss of $32.0 million due to the reasons described above and the impact of an unrealized gain on derivative financial instruments compared to a loss in the prior year quarter.

Financial Outlook

U.S. Propane Adjusted EBITDA in 2024 is anticipated to be higher than 2023 despite the impact of warmer weather on first quarter result. The expected increase is based primarily on the assumption that average weather will be consistent with the five-year average for the remainder of 2024 in the Eastern U.S., upper Midwest and California, as measured by degree days, and optimizing customer pricing and cost-saving initiatives partially offset by the impact of the divestiture in the prior year and the impact of inflationary pressures on operating costs.

In addition to the significant assumptions referred to above, refer to “Forward-Looking Information” and “Risk Factors to Superior” for a detailed review of significant business risks affecting Superior.

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2024 Second Quarter Results

CANADIAN PROPANE

Canadian Propane’s operating results:

CANADIAN PROPANE Canadian Propane’s operatingresults:
	Three Months Ended		Six Months Ended
		June 30		June 30
(millions of dollars)	2024	2023	2024	2023
Revenue	104.4	113.2	293.8	342.8
Cost of Sales	(53.7)	(60.7)	(155.4)	(193.1)
Gross profit	50.7	52.5	138.4	149.7
SD&A	(54.5)	(54.7)	(117.4)	(116.6)
Add back (deduct):
Amortization and depreciation included in SD&A(1)	13.9	13.5	27.1	26.6
Transaction, restructuring and other costs(1)	0.8	0.2	4.0	0.4
(Gain) on disposal of assets(1)	(0.4)	(1.4)	(0.5)	(1.3)
Operating costs(2)	(40.2)	(42.4)	(86.8)	(90.9)
Adjusted EBITDA(2)	10.5	10.1	51.6	58.8
Add back (deduct):
Gain on disposal of assets(1)	0.4	1.4	0.5	1.3
Transaction, restructuring and other costs(1)	(0.8)	(0.2)	(4.0)	(0.4)
Amortization and depreciation included in SD&A(1)	(13.9)	(13.5)	(27.1)	(26.6)
Finance expense	(0.7)	(0.6)	(1.5)	(1.2)
(Loss) earnings before income tax	(4.5)	(2.8)	19.5	31.9

(1) The sum of the above amounts and the balances included in the U.S. Propane, Wholesale Propane, Certarus and Corporate segments are included in SD&A and are disclosed in Note 14 or Note 18 of the unaudited condensed consolidated financial statements as at and for the three and six months ended June 30, 2024 and 2023.

(2) Adjusted EBITDA and Operating Costs are Non-GAAP financial measures. See “Non-GAAP financial measures and Reconciliations” on page 26 for more information.

Canadian Propane Gross Profit

Three Months Ended Six Months Ended June 30 June 30	Three Months Ended Six Months Ended June 30 June 30
(millions of dollars)	2024 2023 2024 2023
Propane distribution 48.2 49.7 133.1 144.4 Other services 2.5 2.8 5.3 5.3
Grossprofit 50.7 52.5 138.4 149.7

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2024 Second Quarter Results

Canadian Propane Sales Volumes Volumes by End-Use Application

Canadian Propane Sales Volumes *Volumes by End-Use Application*
	Three Months Ended		Six Months Ended
		June 30		June 30
(millions of gallons)	2024	2023	2024	2023
Residential	7	7	23	26
Commercial	47	49	122	139
Total	54	56	145	165

Volumes by Region[ (1)]

*Volumes by Region (1)*
	Three Months Ended		Six Months Ended
		June 30		June 30
(millions of gallons)	2024	2023	2024	2023
Western Canada	25	22	70	70
Eastern Canada	20	24	52	70
Atlantic Canada	9	10	23	25
Total	54	56	145	165

(1) Regions: Western Canada region consists of British Columbia, Alberta, Saskatchewan, Manitoba, Yukon, Alaska and Northwest Territories; Eastern Canada region consists of Ontario and Quebec; Atlantic Canada region consists of New Brunswick, Newfoundland & Labrador, Nova Scotia and Prince Edward Island.

Revenue for the three months ended June 30, 2024 was $104.4 million, a decrease of $8.8 million or 8% from the prior year quarter primarily due to lower sales volumes and to a lesser extent lower wholesale commodity prices and the impact of the stronger U.S. dollar on the translation of Canadian denominated transactions, partially offset by price increases.

Total sales volumes were 54 million gallons, a decrease of 2 million gallons or 4%. Average weather across Canada, as measured by degree days was 5% colder than the prior year and 9% warmer than the five-year average. Western Canada was 21% colder than the prior year while Eastern Canada was 13% warmer than the prior year. Weather variances are much less impactful in the second and third quarters because there is much less demand from heating end-use customers. Weather variances in the second quarter do not have a significant impact on total annual sales volumes. Residential sales volumes were consistent with the prior year quarter. Commercial sales volumes decreased by 2 million gallons or 4% primarily due to the impact of the divestiture in the prior year.

Gross profit related to propane distribution for the three months ended June 30, 2024 was $48.2 million, a decrease of $1.5 million or 3% from the prior year quarter due to lower sales volumes primarily due to the impact of the divestiture in the prior year.

Average propane sales margins were $0.89 per gallon, consistent with the prior year quarter primarily due to price increases to offset inflation being offset by the impact of the weaker Canadian dollar.

Other services gross profit primarily includes equipment rental, installation, repair and maintenance and customer minimum use charges. Other services gross profit was $2.5 million, a decrease of $0.3 million from the prior year quarter of $2.8 million primarily due to the impact of the divestiture in the prior year.

Operating costs were $40.2 million, a decrease of $2.2 million or 5% compared to the prior year quarter. The decrease in operating costs was primarily due to the impact of the divestiture in the prior year, cost-saving initiatives and to a lesser extent the impact of the strong U.S. dollar on the translation of Canadian denominated transactions partially offset by the impact of inflation.

SD&A includes amortization, depreciation and transaction, restructuring and other costs whereas operating costs excludes these expenses and is used in the determination of Adjusted EBITDA. SD&A was $54.5 million, a

Superior Plus Corp.

2024 Second Quarter Results

decrease of $0.2 million over the prior year quarter. The decrease is consistent with the decrease in operating costs and the impact of a larger gain on disposal of assets in the prior year quarter partially offset by increased transaction and restructuring costs.

Loss before income tax was $4.5 million, an increase of $1.7 million over a loss in the prior year quarter of $2.8 million due to the above reasons.

Financial Outlook

Canadian Propane Adjusted EBITDA in 2024 is anticipated to be lower than 2023 primarily due to the divestiture of the Northern Ontario business as a result of the Certarus Acquisition, the impact of warmer weather on first quarter results and the impact of inflation on costs, partially offset by higher average margins. The average weather for the remainder of 2024, as measured by degree days, is expected to be consistent with the five-year average.

WHOLESALE PROPANE

Wholesale Propane’s operating results:

WHOLESALE PROPANE Wholesale Propane’s operating results:
	Three Months Ended		Six Months Ended
		June 30		June 30
(millions of dollars)	2024	2023	2024	2023
Revenue	123.9	157.7	397.2	521.2
Cost of Sales	(113.5)	(140.0)	(355.1)	(453.0)
Gross profit	10.4	17.7	42.1	68.2
Realized gain (loss) on derivatives related to commodity risk
management(1)	1.4	(1.5)	0.1	(6.3)
Adjusted gross profit(2)	11.8	16.2	42.2	61.9
SD&A	(12.2)	(15.2)	(29.9)	(34.5)
Add back (deduct):
Amortization and depreciation included in SD&A(3)	3.3	2.7	7.0	5.9
Transaction, restructuring and other costs(3)	(0.2)	0.3	–	0.4
Loss on disposal of assets(3)	0.1	–	0.6	–
Operating costs(2)	(9.0)	(12.2)	(22.3)	(28.2)
Adjusted EBITDA(2)	2.8	4.0	19.9	33.7
Add back (deduct):
Loss on disposal of assets(3)	(0.1)	–	(0.6)	–
Transaction, restructuring and other costs(3)	0.2	(0.3)	–	(0.4)
Amortization and depreciation included in SD&A(3)	(3.3)	(2.7)	(7.0)	(5.9)
Unrealized (loss) gain on derivative financial instruments	(0.4)	(1.7)	2.2	7.5
Finance expense	(0.3)	(0.1)	(0.7)	(0.2)
(Loss) earnings before income tax	(1.1)	(0.8)	13.8	34.7

(1) Realized gain (loss) on derivatives related to commodity risk management are reconciled to gains (losses) on derivatives and foreign currency translation of borrowings, see “Non-GAAP financial measures and Reconciliations” on page 26 for more information.

(2) Adjusted Gross Profit, Adjusted EBITDA and Operating Costs are Non-GAAP financial measures. See “Non-GAAP financial measures and Reconciliations” on page 26 for more information.

(3) The sum of the above amounts and the balances included in the U.S. Propane, Canadian Propane, Certarus and Corporate segments are included in SD&A and are disclosed in Note 14 or Note 18 of the unaudited condensed consolidated financial statements as at and for the three and six months ended June 30, 2024 and 2023.

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2024 Second Quarter Results

Wholesale Propane Sales Volumes

Wholesale Propane Sales Volumes
	Three Months Ended		Six Months Ended
		June 30		June 30
(millions of gallons)	2024	2023	2024	2023
Third party sales volumes
United States	53	70	151	182
Canada	10	9	34	29
	63	79	185	211
Sales volumes to the Canadian Propane and US Propane segments	60	65	169	193
Total	123	143	354	403

Revenue for the three months ended June 30 2024 was $123.9 million, a decrease of $33.8 million or 21% from the prior year quarter primarily due to lower sales volumes and lower commodity prices.

Total third-party sales volumes were 63 million gallons, a decrease of 16 million gallons or 20% from the prior year quarter, primarily due to less demand as a result of warmer weather.

Adjusted gross profit was $11.8 million, a decrease of $4.4 million or 27% from the prior year quarter primarily due to lower average unit margins associated with weaker wholesale propane market fundamentals compared to the prior year quarter and the impact of lower sales volumes.

Average propane sales margins, including the impact of sales to other divisions, was 9.6 cents per gallon, a decrease of 1.7 cents or 15% from 11.3 cents per gallon in the prior year quarter primarily due to weaker market fundamentals in California and, to a lesser extent, Canada compared to the prior year quarter.

Operating costs were $9.0 million, a decrease of $3.2 million or 26% compared to the prior year quarter primarily due to lower volume related costs and to a lesser extent cost savings associated with the completion of integrating a prior acquisition, partially offset by the impact of inflation.

SD&A includes amortization, depreciation and transaction, restructuring and other costs whereas operating costs exclude these expenses and is used in the determination of Adjusted EBITDA. SD&A for the three months ended June 30, 2024 was $12.2 million, a decrease of $3.0 million or 20% over the prior year quarter. The decreased SD&A was consistent with the decrease in operating costs.

Loss before income tax was $1.1 million, an increase of $0.3 million over the prior year quarter loss of $0.8 million, for the above reasons partially offset by the impact of a smaller unrealized loss on derivatives in the current year quarter compared to the prior year quarter.

Financial Outlook

Wholesale Propane Adjusted EBITDA in 2024 is anticipated to be lower than 2023 due primarily to lower unit margins as a result of the strong market fundamentals realized in 2023. The average weather for the remainder of 2024, as measured by degree days, is anticipated to be consistent with the five-year average.

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2024 Second Quarter Results

CERTARUS

Certarus’ operating results for the three and six months ended June 30, 2024 and from the date of acquisition, May 31, 2023, to June 30, 2023 are as follows:

31, 2023, to June 30, 2023 are as follows:
		June	30,	2024		Date	of
	Three months			Six months		acquisition to
(millions of dollars except per MSU amounts)	ended			ended		June 30,	2023
		$ per			$ per		$ per
		MSU(1)			MSU(1)		MSU(1)
Revenue	93.1	123		225.6	300	33.5	51
Cost of Sales	(8.4)	(11)		(27.2)	(36)	(5.0)	(8)
Gross profit	84.7	112		198.4	264	28.5	43
SD&A	(76.3)	(101)		(157.0)	(209)	(26.6)	(41)
Add back (deduct):
Amortization and depreciation included in SD&A	18.7	25		36.8	49	6.2	9
Transaction, restructuring and other costs	–	–		–	–	0.2	–
Loss on disposal of assets	0.1	–		0.5	1	1.2	2
Operating costs(1)	(57.5)	(76)		(119.7)	(159)	(19.0)	(30)
Adjusted EBITDA(1)	27.2	36		78.7	105	9.5	13
Add back (deduct):
Loss on disposal of assets	(0.1)	–		(0.5)	(1)	(1.2)	(2)
Transaction, restructuring and other costs	–	–		–	–	(0.2)	–
Amortization and depreciation included in SD&A	(18.7)	(25)		(36.8)	(49)	(6.2)	(9)
Unrealized gain on foreign currency translation	(0.2)	–		0.6	1	–	–
Finance expense	(0.4)	(1)		(0.7)	(1)	–	–
Earnings before income tax	7.8	10		41.3	55	1.9	2

(1) Adjusted EBITDA, Operating Costs and per mobile storage unit (“MSU”) amounts are Non-GAAP financial measures. See “Non-GAAP financial measures and Reconciliations” on page 26 for more information.

Certarus Gross Profit	Certarus Gross Profit
		June 30,2024		Date of acquisition
(millions of dollars)		Three months ended	Six months ended	to June 30, 2023
Direct gas distribution		64.8	142.8	22.3
Ancillary services		19.9	55.6	6.2
Grossprofit		84.7	198.4	28.5
Certarus Sales Volumes
*Volumes by Region*
		June 30,2024		Date of acquisition
	(thousands of MMBtu)	Three months ended	Six months ended	to June 30, 2023
	United States	5,850	12,064	1,724
	Canada	1,162	2,999	311
	Total	7,012	15,063	2,035

Revenue for the three months ended June 30, 2024 was $93.1 million an increase of $59.6 million from the prior year quarter primarily due to the impact of the acquisition closing on May 31, 2023 and the comparative figures not representing a full quarter of results. Included in revenue is sales related to natural gas distribution and ancillary services which consists of equipment rentals, standby services and take-or-pay arrangements. Cost of sales

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2024 Second Quarter Results

primarily consists of the cost of the commodity being distributed and excludes distribution costs, vehicle costs, salaries and wages and other costs related to the operations of the various satellite locations. These costs are included in operating costs and SD&A.

Gross profit related to direct natural gas distribution for the three months ended June 30, 2024 was $64.8 million an increase of $43.2 million from the prior year quarter primarily due to the impact of acquisition closing on May 31, 2023 and the comparative figures not representing a full quarter of results. Total sales volumes for the three months ended June 30, 2024 was 7,012 MMBtu resulting in an average direct natural gas distribution sales margin of $9.24 per MMBtu compared to $10.61 per MMBtu in the prior year quarter. The decrease is due to the impact of the acquisition closing on May 31, 2023 and the comparative figures not representing a full quarter of results partially offset by the impact of competition on pricing in the oil and gas sector.

Natural gas is purchased at spot rates, which are the daily rates in effect at the time of purchase and are quoted in relation to a physical location. The change in product costs period-over-period generally trend with the change in natural gas commodity prices for the same period. Certarus has the ability to quickly adjust pricing on short-term contracts and has contractual mechanisms in place to either flow through the excess cost of natural gas once a certain index threshold is exceeded or have the entire index price of natural gas as a flow through to the customer. These arrangements provide significant downside protection to Certarus in a volatile or rapidly rising natural gas price environment.

Certarus delivers to its customers safely and cost effectively through their platform of MSUs. As at June 30, 2024 Certarus had 770 MSUs an increase of 41 MSUs from December 31, 2023.

Operating costs for the three months ended June 30, 2024 was $57.5 million an increase $38.5 million from the prior year quarter primarily due to the impact of the acquisition closing on May 31, 2023 and the comparative figures not representing a full quarter of results. Operating costs include the cost to operate various satellite locations, distribute natural gas from the pipeline to the customer, vehicle costs and all other selling and administrative costs.

SD&A includes amortization, depreciation and transaction, restructuring and other costs whereas operating costs exclude these expenses and is used in the determination of Adjusted EBITDA. SD&A for the three months ended June 30, 2024 was $76.3 million an increase of $49.7 million from the prior year quarter primarily due to the impact of the acquisition closing on May 31, 2023 and the comparative figures not representing a full quarter of results.

Earnings before income tax was $7.8 million for the three months ended June 30, 2024 compared to $1.9 million in the prior year quarter for the aforementioned reasons.

Financial Outlook

Certarus’ Adjusted EBITDA for 2024 is anticipated to be higher than its Pro Forma Adjusted EBITDA in 2023 as a result of the continued investment in the segment. Superior estimates that Certarus’ average MSU count will increase to approximately 780 MSUs in 2024.

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2024 Second Quarter Results

CORPORATE OPERATING COSTS

A reconciliation between corporate SD&A and corporate operating costs is as follows:

	Three	Months Ended	Six	Months Ended
		June 30		June 30
	2024	2023	2024	2023
Corporate SD&A	(5.9)	(20.9)	(13.6)	(26.5)
Add back (deduct):
Amortization and depreciation included in	0.1	0.3	0.2	0.4
Transaction, restructuring and other costs(1)	0.5	12.8	1.4	14.1
Unrealized gain on equity hedges	(1.7)	-	(0.5)	-
Corporate operatingcosts(2)	(7.0)	(7.8)	(12.5)	(12.0)

(1) The sum of the above amounts and the balances included in the U.S. Propane, Canadian Propane, Certarus and the Corporate segments are included in SD&A and are disclosed in Note 14 or Note 18 of the unaudited condensed consolidated financial statements as at and for the three and six months ended June 30, 2024 and 2023.

(2) Operating costs are Non-GAAP financial measures. See “Non-GAAP financial measures and Reconciliations” on page 26 for more information.

Corporate operating costs for the three months ended June 30, 2024 were $7.0 million a decrease of $0.8 million compared to $7.8 million in the prior year quarter. The decrease is primarily due to on boarding costs related to the change in management and an insurance provision in the prior year quarter partially offset by higher long-term incentive plan costs as a result of fluctuations in the share price causing a reduction in the prior year. In the current year management has adopted hedge accounting for a portion of Superior’s long-term incentive plan to minimize these fluctuations on a go-forward basis.

Corporate operating costs included in Adjusted EBITDA exclude depreciation, amortization and transaction, restructuring and other costs and included the unrealized loss (gain) on equity hedges. Corporate SD&A was $5.9 million for the three months ended June 30, 2024, a decrease of $15.0 million from $20.9 million in the prior year primarily due to lower transaction, restructuring and other costs, incurred in the prior year related to on boarding costs associated with the change in management and an insurance provision.

CONSOLIDATED CAPITAL EXPENDITURE SUMMARY

Superior’s capital expenditures are as follows:

Superior’s capital expenditures are as follows:
	Three Months Ended		Six Months Ended
		June 30		June 30
(millions of dollars)	2024	2023	2024	2023
U.S. Propane	3.8	7.2	13.7	21.7
Canadian Propane	7.0	8.5	12.5	14.6
Wholesale Propane	(0.2)	1.3	0.1	2.9
Certarus	19.8	5.1	42.1	5.1
Purchase of property, plant and equipment and intangible assets	30.4	22.1	68.4	44.3
Proceeds on disposition of assets	(0.9)	(2.7)	(4.0)	(3.6)
Total net capital expenditures	29.5	19.6	64.4	40.7
Investment in leased vehicles(1)	4.1	6.8	9.6	9.1
Investment in other leased assets(1)	2.8	1.9	1.5	6.1
Total expenditures including leases	36.4	28.1	75.5	55.9

(1) The sum of the leases is disclosed as additions in Note 10 of the unaudited condensed consolidated financial statements.

Total capital expenditures were $30.4 million for the three months ended June 30, 2024 compared to $22.1 million in the prior year quarter. The increase is primarily due to expenditures made by Certarus related to MSUs and ancillary equipment and is partially offset by reduced spending by Wholesale Propane and U.S. Propane and to a lesser extent Canadian Propane. Capital expenditures related to the Propane segments decreased by $6.4 million Superior Plus Corp. 14 2024 Second Quarter Results

primarily due to timing of investment in tanks made in the prior comparable period and costs related to a system implementation in the Wholesale segment.

Proceeds on disposition of assets were $0.9 million for the three months ended June 30, 2024 compared to $2.7 million in the prior year quarter primarily due to proceeds received from divesting under utilized assets.

Superior entered into $4.1 million of leased vehicles for the three months ended June 30, 2024 compared to $6.8 million in the prior year quarter. The decrease is due to reduced investment in the Propane segments fleet as a result of timing partially offset by the continued growth in Certarus. Other leased assets of $2.8 million for the three months ended June 30, 2024 changed from the prior year quarter primarily due to timing of renewing property leases.

Capital expenditures were funded from a combination of operating cash flow and borrowings under the revolvingterm bank credit facilities and credit provided through lease liabilities.

TRANSACTION, RESTRUCTURING AND OTHER COSTS

Superior’s transaction, restructuring and other costs have been categorized together and excluded from segmented results.

For the three months ended June 30, 2024, Superior incurred $3.2 million in costs related to the continued integration of acquisitions completed in the prior years. The costs incurred in the prior year quarter of $16.3 million relate primarily to the acquisition of Certarus and to a lesser extent the integration of prior acquisitions.

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2024 Second Quarter Results

FINANCIAL OVERVIEW - GAAP FINANCIAL INFORMATION

Condensed Consolidated Statements of Net Earnings

Condensed Consolidated Statements of Net Earnings
	Three Months Ended		Six Months Ended
		June 30		June 30
(millions of USD dollars, except per share amounts)	2024	2023(1)	2024	2023(1)
Revenue	422.9	432.9	1,320.6	1,361.7
Cost of sales(includesproducts and services)	(187.7)	(232.5)	(620.2)	(761.0)
Grossprofit	235.2	200.4	700.4	600.7
Expenses
Selling, distribution and administrative costs ("SD&A")	(260.0)	(237.1)	(566.4)	(471.0)
Finance expense	(25.7)	(21.5)	(52.9)	(41.0)
(Loss) gain on derivatives and foreign currency translation of borrowings	(5.5)	5.0	(13.3)	12.5
	(291.2)	(253.6)	(632.6)	(499.5)
(Loss)Earnings before income taxes	(56.0)	(53.2)	67.8	101.2
Income tax recovery (expense)	10.7	24.0	(27.9)	(21.1)
Net (loss) earnings for the period	(45.3)	(29.2)	39.9	80.1
Net (loss) earnings attributable to:
Superior	(50.0)	(33.9)	30.5	70.7
Non-controlling interest	4.7	4.7	9.4	9.4
Net (loss) earnings per share attributable to Superior
Basic and diluted	(0.20)	(0.16)	0.12	0.33
Cash flows from operating activities	98.9	79.9	245.4	338.7
Cash flows from operating activities, per share(2)	0.35	0.32	0.88	1.42

(1) Restated, see Note 2(a) of the unaudited Condensed Consolidated Financial Statements as at and for the three and six months ended June 30, 2024.

(2) The weighted average number of shares outstanding for the three and six months ended June 30, 2024 was 278.6 million (three and six months ended June 30, 2023 was 247.3 million 239.0 million respectively). The weighted average number of shares assumes the exchange of the issued and outstanding preferred shares into common shares. There were no other dilutive instruments for the three and six months ended June 30, 2024 and 2023.

Below is GAAP financial information not disclosed in Superior’s operating segments for three months ended June 30, 2024.

Net loss for the three months ended June 30 2024 was $45.3 million, compared to a net loss of $29.1 million in the prior year quarter. The decrease in net earnings is primarily due to an unrealized gain on financial and non-financial derivatives in the prior year compared to an unrealized loss in the current year and lower gross profit in the propane distribution segment partially offset by the impact of the Certarus acquisition and to a lesser extent lower income tax expense. Basic and diluted loss per share attributable to Superior was $0.20 per share, an increase of $0.04 from a $0.16 loss per share in the prior year quarter. The increased loss per share is due to a higher net loss and is partially offset by the impact from the increase in the weighted average shares outstanding.

Finance expense was $25.7 million, an increase of $4.2 million or 20% from $21.5 million in the prior year quarter. The increase is primarily due to higher average debt balances and, to a lesser extent, higher average interest rates in the quarter. Average debt balances were higher as a result of closing the Certarus acquisition on May 31, 2023.

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2024 Second Quarter Results

Gain (loss) on derivative and foreign currency translation of borrowings consists of unrealized gains (losses) on derivative financial instruments and foreign currency translation of borrowings, net of realized gains (losses) on derivative financial instruments and realized gains (losses) on settlement of U.S. denominated borrowings. The loss on derivatives and foreign currency translation of borrowings was $5.5 million for the three months ended June 30, 2024, compared to a gain of $5.0 million in the prior year quarter. The change is primarily due to changes in market prices of commodities, timing of maturities of underlying financial instruments and changes in foreign exchange rates relative to amounts hedged. For additional details, refer to Note 11 in unaudited condensed consolidated financial statements. As a result of the change in reporting currency from Canadian dollars to U.S. dollars Superior has stopped hedging its U.S. denominated based EBITDA and has therefore, excluded the $0.3 million prior year quarter realized gain on foreign currency contracts from the prior year quarter Adjusted EBITDA.

Below is GAAP financial information not disclosed in Superior’s operating segments for the six months ended June 30, 2024.

Net earnings for the six months ended June 30, 2024 was $39.9 million, compared to $80.1 million in the prior comparable period. The decrease is primarily due to an unrealized gain on financial and non-financial derivatives in the prior year compared to an unrealized loss in the current year, lower gross profit in the propane distribution segment and lower income tax recovery partially offset by the impact of the Certarus acquisition. Basic and diluted loss per share attributable to Superior was $0.12 per share, a decrease of $0.21 from $0.33 per share in the prior year quarter. The decrease in earnings per share is due to lower net earnings in the period, and the impact from the increase in the weighted average shares outstanding.

Finance expense for the six months ended June 30, 2024 was $52.9 million, an increase of $11.9 million or 29% from $41.0 million in the prior comparable period. The increase is primarily due to higher average debt balances and, to a lesser extent, higher average interest rates in the quarter. Average debt balances were higher as a result of closing the Certarus acquisition on May 31, 2023.

Gain (loss) on derivative and foreign currency translation of borrowings consists of unrealized gains (losses) on derivative financial instruments and foreign currency translation of borrowings, net of realized gains (losses) on derivative financial instruments and realized gains (losses) on settlement of U.S. denominated borrowings. The loss on derivatives and foreign currency translation of borrowings for the six months ended June 30, 2024 was $13.3 million a decrease of $25.8 million compared to a gain of $12.5 million in the prior comparable period. The change is primarily due to changes in market prices of commodities, timing of maturities of underlying financial instruments and changes in foreign exchange rates relative to amounts hedged. For additional details, refer to Note 11 in unaudited condensed consolidated financial statements. As a result of the change in reporting currency from Canadian dollars to U.S. dollars Superior has stopped hedging its U.S. denominated based EBITDA and has therefore, excluded the $4.1 million realized loss on foreign currency contracts from Adjusted EBITDA for the six months ended June 30, 2024 (2023 – realized loss of $2.7 million).

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., Hungarian and Luxembourg income tax.

Total income tax recovery for the three months ended June 30, 2024 was $10.7 million, comprised of $5.8 million in current income tax expense and $16.5 million in deferred income tax recovery. This compares to a total income tax recovery of $24.0 million in the prior year quarter, which consisted of a current income tax expense of $3.5 million and $27.5 million deferred income tax recovery.

Current income tax expense for the three months ended June 30, 2024 was $5.8 million (2023 – $3.5 million), consisting of income taxes in Canada of $1.7 million (2023 – $1.5 million), in the U.S. of $3.5 million (2023 – $0.4 million) and in Hungary of $0.6 million (2023 – $1.6 million). Deferred income tax recovery for the three months

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2024 Second Quarter Results

ended June 30, 2024 was $16.5 million (2023 – $27.5 million recovery), resulting in a net deferred income tax liability of $157.8 million as at June 30, 2024.

LIQUIDITY AND CAPITAL RESOURCES

Debt Management Update

Superior’s Leverage Ratio as at June 30, 2024 was 3.8x, compared to 3.9x at December 31, 2023. The decrease in the Leverage Ratio was due to lower Net Debt related to the seasonality of the business and the impact of the weaker Canadian dollar on the translation of Canadian denominated debt partially offset by lower Pro forma Adjusted EBITDA.

Net Debt, Pro forma Adjusted EBITDA and Leverage Ratio are Non-GAAP measures, see “Non-GAAP financial measures and Reconciliations” on page 29.

Borrowing

Superior’s revolving syndicated bank facilities (“revolving credit facilities”), senior unsecured notes, lease obligations, deferred consideration and other debt (collectively “borrowing”) before deferred financing fees was $1,594.4 million as at June 30, 2024, a decrease of $116.2 million from $1,710.6 million as at December 31, 2023. The decrease is primarily due to the seasonality of working capital and is partially offset by the impact of the weaker Canadian dollar on the translation of Canadian denominated debt.

Superior’s total and available sources of credit as at June 30, 2024 are detailed below:

	Total		Letters of	Amount
(millions of dollars)	Amount	Borrowing	Credit Issued	Available
Revolving credit facilities(1)	950.4	601.2	11.4	337.8
Senior unsecured notes(1)	965.5	965.5	–	–
Deferred consideration and other	27.7	27.7	–	–
Lease liabilities	169.8	169.8	–	–
Total	2,113.4	1,764.2	11.4	337.8

(1) The revolving credit facilities, including the existing and the new credit facility, and the senior unsecured notes balances are presented before deferred financing fees, see Note 9 of the unaudited condensed consolidated financial statements. The total amount that can be borrowed under the revolving credit facilities is $950.4 million (C$1,300 million) and the available amount as of June 30, 2024 is $337.8 million (C$462.1 million).

Net Working Capital

Consolidated net working capital (deficit) was ($88.3) million as at June 30, 2024, a decrease of $47.8 million from ($40.5) million as at December 31, 2023. The decrease from December 31, 2023 is primarily due to the seasonality of its businesses and the timing of supplier payments and customer receipts. Net working capital is defined in the unaudited condensed consolidated financial statements and notes thereto as at and for the three and six months ended June 30, 2024 and 2023. See Note 18 of the unaudited condensed consolidated financial statements.

Compliance

In accordance with the credit facility, Superior must maintain certain covenants and ratios that represent Non-GAAP financial measures. Superior was in compliance with its lender covenants as at June 30, 2024, and the covenant details are found in the credit facility documents filed in www.sedarplus.ca.

Pension Plans

As at June 30, 2024, Superior’s defined benefit pension plans had an estimated net defined benefit going concern surplus of approximately $3.6 million (December 31, 2023 – surplus $3.7 million) and a net pension solvency surplus of approximately $3.8 million (December 31, 2023 – surplus $4.0 million). Funding requirements by applicable pension legislation are based upon going concern and solvency actuarial assumptions. These assumptions

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2024 Second Quarter Results

differ from the going concern actuarial assumptions found in Superior’s 2023-year end audited consolidated financial statements.

Contractual Obligations and Other Commitments[(1) ]

			July 1 to June 30	July 1 to June 30
	Current	2025	2026	2027	2028	Thereafter	Total
Borrowings before deferred financing fees and
discounts(2)	7.6	5.6	290.5	315.6	366.0	609.1	1,594.4
Lease liabilities(3)	49.2	29.8	25.2	19.9	11.4	34.3	169.8
Interest payments on borrowings and lease liabilities(4)	91.7	93.6	78.5	55.7	36.6	17.5	373.6
Non-cancellable, low-value, short-term
leases and leases with variable lease payments(3)	4.0	0.1	0.1	0.1	–	–	4.3
Certarus capital, transmission and other commitments	51.0	2.0	0.4	0.3	0.3	0.1	54.1
Equity derivative contracts(2)	28.4	6.7	–	–	–	–	35.1
US dollar foreign currency forward sales
contracts(2)	13.2	1.7	–	–	–	–	14.9
Propane, WTI, heating oil, diesel and natural gas
purchase and sale contracts(1) (2)	107.8	10.8	0.1	–	–	–	118.7

(1) Does not include the impact of financial derivatives.

(2) See Notes 9 and 11 of the June 30, 2024 unaudited condensed consolidated financial statements.

(3) See Note 10 of the June 30, 2024 unaudited condensed consolidated financial statements. Operating leases comprise Superior’s offbalance-sheet obligations and are contracts that do not meet the definition of a lease under IFRS 16 or are exempt.

(4) Estimated based on interest rates, foreign exchange rates and outstanding balances as of June 30, 2024 and assumes the settlement of debt will occur on each instrument’s respective maturity date.

In addition to the commitments mentioned above, Superior has entered into purchase orders and contracts during the normal course of business related to commodity purchase obligations transacted at market prices. Furthermore, Superior has entered into purchase agreements that require it to purchase minimum amounts or quantities of propane and other natural gas liquids over certain time periods which vary but are generally for one year. Superior has generally exceeded such minimum requirements in the past and expects to continue doing so for the foreseeable future. Failure to satisfy the minimum purchase requirements could result in the termination of contracts, change in pricing and/or payments to the applicable supplier.

Superior’s contractual obligations are considered normal 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 and proceeds on revolving term bank credit facilities. Superior’s financial instruments’ sensitivities are consistent as at June 30, 2024 and December 31, 2023. In the normal course of business, Superior is subject to lawsuits and claims. Superior believes the resolution of these matters will not have a material adverse effect, individually or in the aggregate, on Superior’s liquidity, consolidated financial position or results of operations. Superior records costs as they are incurred or when they become determinable.

Superior Plus Corp.

2024 Second Quarter Results

SHAREHOLDERS’ CAPITAL

As at June 30, 2024, the following shares were issued and outstanding:

	Common shares	Common shares	Preferred shares	Preferred shares
				Equity
	Issued number	Share	Issued number	attributable
	(Millions)	capital	(Millions)	to NCI
Balance as at December 31, 2023	248.6	$2,712.2	0.3	$260.0
Balance as at June 30, 2024	248.6	$2,712.2	0.3	$260.0

Superior has a normal course issuer bid (the “NCIB”) with respect to its common shares which commenced on November 10, 2023 and will terminate on the earlier of November 9, 2024, the date Superior has purchased the maximum number of common shares permitted under the NCIB or the date on which Superior terminates the NCIB in accordance with its terms. The NCIB permits the purchase of up to 12,427,942 common shares, such amount representing 5% of the 248,558,857 common shares issued and outstanding as at October 27, 2023, by way of normal course purchases effected through the facilities of the TSX and/or alternative trading platforms. The NCIB is subject to additional standard regulatory requirements. Furthermore, subject to certain exemptions for block purchases, the maximum number of common shares that Superior may acquire on anyone trading day is 201,908 common shares, such amount representing 25% of the average daily trading volume of the common shares of 807,635 for the six calendar months prior to the start of the NCIB. All common shares purchased by Superior under the NCIB will be cancelled.

DIVIDENDS

Dividends Declared to Common Shareholders

Dividends declared to Superior’s common shareholders depend on its cash flow from operating activities with consideration for Superior’s changes in working capital requirements, investing activities and financing activities. See “Summary of Adjusted EBITDA” for 2024 above, and “Summary of Cash Flow” for additional details.

Dividends declared to common shareholders for the three and six months ended June 30, 2024 were $32.6 million and $65.7 million respectively or $0.13 per and $0.26 per common share respectively. This compares to $33.4 million and $60.2 million respectively or $0.16 and $0.29 per common share respectively in the prior period. The increase was due primarily to the issuance of common shares issued in accordance with the Certarus Acquisition. Dividends to shareholders are declared at the discretion of Superior’s Board of Directors.

Superior has a Dividend Reinvestment and Optional Share Purchase Plan (“DRIP”) that is currently suspended and will remain in place should Superior elect to reactivate the DRIP, subject to regulatory approval, at a future date.

Dividends Declared to Preferred Shareholders

Dividends declared to preferred shareholders for the three and six months ended June 30, 2024 were $4.7 million and $9.4 million respectively or $18.1 per preferred share (three and six months ended June 30, 2023 - $4.7 million and $9.4 million respectively or $18.1 per preferred share).

Superior Plus Corp.

2024 Second Quarter Results

SUMMARY OF CASH FLOW

Superior’s primary sources and uses of cash are detailed below:

Superior’s primary sources and uses ofcashare detailed below:
	Three Months	Ended	Six Months Ended
		June 30		June 30
(millions of dollars)	2024	2023	2024	2023
Cash flows from operating activities	98.9	79.9	245.4	338.7
Cash flows used in investing activities	(29.5)	(264.9)	(64.4)	(288.8)
Cash flows used in financingactivities	(75.7)	168.0	(181.4)	(50.5)
Net decrease in cash and cash equivalents	(6.3)	(17.0)	(0.4)	(0.6)
Cash and cash equivalents, beginning of the period	37.1	59.7	30.7	43.1
Effect of translation of foreign currency-denominated cash and cash
equivalents	(0.8)	0.4	(0.3)	0.6
Cash and cash equivalents, end of theperiod	30.0	43.1	30.0	43.1

Cash flows used in operating activities for the three months ended June 30, 2024 was $98.9 million, an increase of $19.0 million from the prior year quarter, primarily due to the positive change in non-cash operating working capital, partially offset by higher income taxes and interest paid compared to the prior year quarter.

Cash flows used in investing activities were $29.5 million, a decrease of $235.4 million from the prior year quarter primarily due to the timing of acquisitions, partially offset by the increase in proceeds from disposal of property, plant and equipment.

Cash flows used in financing activities were $75.7 million, a decrease of $243.7 million from the prior year quarter, primarily due to lower advances under the credit facility and payments made to repurchase Superior’s common shares.

FINANCIAL OUTLOOK

Superior is confirming its 5% Adjusted EBITDA growth target compared to 2023 Pro Forma Adjusted EBITDA. The target is primarily due to organic growth, the assumption of normal weather and continued cost-saving initiatives, partially offset by the impact of market and supply differentials regressing to the average.

Achieving Superior’s Adjusted EBITDA depends on the operating results of its segments. In addition to the operating results of Superior’s segments, the significant assumptions underlying the achievement of Superior’s 2024 guidance are consistent with those disclosed in the MD&A for the year ended December 31, 2023.

FINANCIAL INSTRUMENTS – RISK MANAGEMENT

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

Effective January 1, 2024, Superior changed its reporting currency from Canadian dollars to U.S. dollars. As a result, Superior will no longer hedge its U.S dollar EBITDA exposure as the foreign currency exchange risk will be significantly reduced. Subsequent to the 2023 year-end, Superior entered into foreign currency forward contracts and options to offset the below notional amounts. As a result of this change the realized gains (losses) on these instruments are excluded from Adjusted EBITDA.

Superior Plus Corp.

2024 Second Quarter Results

As at June 30, 2024, a summary of the net notional amounts of Superior’s U.S. dollar forward contracts and options and the offsetting amounts for the rolling twelve months is provided in the table below.

			July	1 to June 30	1 to June 30
	Current	2025	2026	2027	2028	Thereafter	Total
USD-foreign currency forward sales
Contracts, net	13.0	1.9	–	–	–	–	14.9
Net average external US$/CDN$ exchange rate	1.33	1.34	1.33	–	–	–	1.33

For additional details on Superior’s financial instruments, including the amount and classification of gains and losses recorded, summary of fair values, notional balances, effective rates and terms, and significant assumptions used in the calculation of the fair value of Superior’s financial instruments, see Note 11 to the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2024.

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING

Disclosure controls and procedures (DC&P) are designed by or under the supervision of Superior’s President and Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) in order to provide reasonable assurance that all material information relating to Superior is communicated to them by others in the organization as it becomes known and is appropriately disclosed as required under the continuous disclosure requirements of securities legislation and regulation. In essence, these types of controls are related to the quality, reliability and transparency of financial and non-financial information that is filed or submitted under securities legislation and regulation. The CEO and CFO are assisted in this responsibility by a Disclosure Committee, which is composed of senior leadership of Superior. The Disclosure Committee has established procedures so that it becomes aware of any material information affecting Superior in order to evaluate and discuss this information and determine the appropriateness and timing of its public release.

Internal Controls over Financial Reporting (ICFR) are also designed by or under the supervision of Superior's CEO and CFO and effected by Superior's Board of Directors, management and other personnel in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that its objectives are met. Due to inherent limitations in all such systems, no evaluation of controls can provide absolute assurance that all control issues within a company have been detected. Accordingly, Superior’s disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of the corporation’s disclosure control system are met.

Changes in Internal Controls over Financial Reporting

No changes were made in Superior’s ICFR that have materially affected, or are reasonably likely to materially affect, Superior’s ICFR in the six months ended June 30, 2024. However, management continues the process of harmonizing and integrating acquired businesses on to Superior’s existing information technology platform.

Effectiveness

An evaluation of the effectiveness of Superior’s DC&P and ICFR was conducted as at June 30, 2024 by and under the supervision of Superior’s management, including the CEO and CFO. Based on this evaluation, the CEO and CFO have concluded that Superior’s DC&P and ICFR were effective as at June 30, 2024.

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2024 Second Quarter Results

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Superior’s audited consolidated financial statements were prepared in accordance with IFRS. The significant accounting policies are described in the audited consolidated financial statements for the year ended December 31, 2023, except for changes disclosed below. Certain of these accounting policies, as well as estimates made by management in applying such policies, are recognized as critical because they require management to make subjective or complex judgments about matters that are inherently uncertain. Superior’s critical accounting estimates relate to the allowance for doubtful accounts, employee future benefits, deferred income tax assets and liabilities, the valuation of financial and non-financial derivatives, asset impairments, estimating liabilities under the cap and trade programs, the translation of the January 1, 2023 opening retained earnings and cumulative translation adjustment on the transition to a US dollar presentation currency and estimating the incremental borrowing rate on leases.

Changes in Accounting Policies and Disclosures

Amendments to IAS 1, Presentation of Financial Statements ("IAS 1")

Adopted January 1, 2024, IAS 1 clarifies the requirements for classifying liabilities as current or non-current and introduces additional disclosures of material information that enables users of financial statements to comprehend the risk that non-current liabilities with covenants may become payable within the next twelve months. The amendment has been applied retrospectively and had no material impact on the condensed consolidated financial statements.

Amendment to IFRS 16, Leases (“IFRS 16”)

Adopted January 1, 2024, IFRS 16 specifies the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains. This amendment has been applied retrospectively and had no material impact on the condensed consolidated financial statements.

Amendments to IAS 7, Statement of Cash Flows and IFRS 7, Financial Instruments: Disclosures

Adopted January 1, 2024, these standards clarify the characteristics of supplier finance arrangements and require certain disclosures on these arrangements, intended to assist users of financial statements in understanding their impacts on the companies' liabilities and cash flows. This amendment has been applied retrospectively and had no material impact on the condensed consolidated financial statements.

Presentation Currency

Effective January 1, 2024, Superior elected to change its presentation currency from Canadian dollars to U.S. dollars. The comparative financial statements were translated as if the U.S. dollar had been used as the reporting currency since the beginning of 2010. Amounts denominated in Canadian dollars within the notes to these unaudited interim consolidated financial statements are denoted with "C$" immediately prior to the stated amount. The Company believes that the change in reporting currency to U.S. dollars will provide more relevant information for the users of the unaudited interim financial statements as over 60% of the Company's consolidated revenues and 75% of the Company’s consolidated assets are derived from operations in the United States. The Company’s Canadian operations are determined to have the Canadian dollar as their functional currency since their operating, financing and investing transactions are predominately denominated in Canadian dollars. The financial statements of these operations are translated into U.S. dollars using the current rate method, whereby assets and liabilities are translated at the rate prevailing at the balance sheet date, and revenue and expenses are translated using average rates for the period. Unrealized gains or losses arising as a result of the translation of the financial statements of these entities are reported as a component of other comprehensive income (loss) ("OCI") and are accumulated in a component of equity on the consolidated balance sheets, and are not recorded in income unless there is a complete or substantially complete sale or liquidation of the investment.

Recent Accounting Pronouncements

The recent accounting pronouncements are consistent with those disclosed in the annual consolidated financial statements as at and for the year ended December 31, 2023, except for the following:

Superior Plus Corp.

2024 Second Quarter Results

Amendments to IAS 21, The Effects of Changes in Foreign Exchange Rates

In August 2023, the IASB issued amendments to IAS 21, The Effects of Changes in Foreign Exchange Rates. The amendments address the lack of exchangeability of illiquid currencies and specify how an entity determines the exchange rate when a currency is not readily exchangeable at the measurement date as well as additional required disclosures. When a currency is not exchangeable, an entity estimates the spot rate as the rate that would have been applied to an orderly transaction between market participants at the measurement date and that would reflect the prevailing economic conditions. An entity must disclose information that would enable users to evaluate how a currency's lack of exchangeability affects financial performance, financial positions, and cash flows of an entity. The amendments to IAS 21 are effective January 1, 2025, with early adoption permitted. Superior is currently assessing the impact of these amendments on its consolidated financial statements.

IFRS 18, Presentation and Disclosure in Financial Statements

In April 2024, the IASB issued a new IFRS 18, Presentation and Disclosure in Financial Statements ("IFRS 18") replacing IAS 1. The new guidance is expected to improve the usefulness of information presented and disclosed in the financial statements of companies. IFRS 18 introduces the following key changes:

Structure of the statement of income (loss) - IFRS 18 introduces a defined structure for the statement of income (loss) composed of operating, investing, financing categories with defined subtotals, such as operating earnings (loss), earnings (loss) before financing and income taxes and net earnings (loss) for the year. The new guidance also requires disclosure of expenses in the operating category by nature, function or a mix of both on the face of the statement of income (loss).
Disclosures on management defined performance measures (MPMs) - IFRS 18 requires companies to disclose definitions of company-specific MPMs that are related to the statement of income (loss) and provide reconciliations between the MPMs and the most similar specified subtotals within the statement of income (loss) in a single note.
Aggregation and disaggregation (impacting all primary financial statements and notes) - IFRS 18 sets out enhanced guidance on the principles of how items should be aggregated based on shared characteristics. The changes are expected to provide more detailed and useful information to investors.

IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, with early adoption permitted. Superior is currently assessing the impact of this new IFRS accounting standard on its consolidated financial statements.

Amendments to IFRS 9, Financial Instruments and IFRS 7, Financial Instruments: Disclosures

In May 2024, the IASB issued amendments to IFRS 9 and IFRS 7 to clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled using an electronic payment system. The amendments also clarify the requirements for assessing whether a financial asset meets the solely payments of principal and interest criterion, and adds disclosure requirements for financial instruments with certain contingent features and for equity investments designated at fair value through other comprehensive income. The amendments are effective January 1, 2026, with early adoption permitted. The amendments are required to be adopted retrospectively by adjusting the opening balance of financial assets, financial liabilities and retained earnings at the date of adoption. The Company is assessing the impact of the amendments on the Company’s consolidated financial statements.

Superior Plus Corp.

2024 Second Quarter Results

QUARTERLY FINANCIAL AND OPERATING INFORMATION

(millions of dollars, except
per share amounts)	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022
Revenue	422.9	897.7	724.3	395.9	432.9	928.8	788.5	390.8
Gross profit	235.2	465.2	377.4	215.5	200.4	400.3	316.2	131.8
Net (loss) earnings	(45.3)	85.2	57.5	(80.1)	(29.2)	109.3	46.4	(158.4)
Per share, basic	($0.20)	$0.30	$0.20	($0.34)	($0.16)	$0.47	$0.20	($0.81)
Per share, diluted	($0.20)	$0.30	$0.20	($0.34)	($0.16)	$0.47	$0.20	($0.81)
Adjusted EBITDA(1)	43.3	229.7	161.3	18.9	29.6	204.3	137.5	(6.4)
Net working (deficit)capital(2)	(88.3)	2.0	(39.5)	(104.2)	(40.5)	42.4	121.3	(0.3)

(1) Adjusted EBITDA is a Non-GAAP financial measure, see “ Non-GAAP financial measures and Reconciliations” on page 26 .

(2) Net working (deficit) capital is comprised of trade and other receivables, prepaid expenses and deposits and inventories, less trade and other payables, contract liabilities, and dividends payable.

Superior commenced reporting its financial results in U.S. dollars effective Q1 2024, below is a summary of historical financial information in 2023 in Canadian and U.S. dollars:

historical financial information in 2023 in Canadian and U.S. dollars:
Canadian dollars	U.S. dollars
Q4 2023 Q3 2023 Q2 2023 Q1 2023	Q4 2023 Q3 2023 Q2 2023 Q1 2023
Adjusted EBITDA
U.S. Propane 113.8 (5.8) 18.6 175.9 Canadian Propane 50.2 4.3 13.6 65.8 Wholesale Propane 16.3 1.5 5.4 40.2 Certarus(1) 47.2 35.5 12.6 – Corporate costs (8.0) (10.1) (10.5) (5.7) Net earnings(loss) 77.5 (107.8) (39.8) 147.1	84.0 (4.5) 13.7 130.1 37.0 3.2 10.1 48.7 12.1 1.0 4.0 29.7 34.8 26.4 9.5 – (5.7) (7.5) (7.8) (4.2) 57.5 (80.1) (29.2) 109.3

(1) Certarus 2023 sales volumes are from the date of acquisition to June 30, 2023.

Fluctuations in Superior’s individual quarterly results is subject to seasonality. Sales typically peak in the first quarter when approximately one-third of annual propane and other refined fuels sales volumes and gross profits are generated due to the demand of heating from end-use customers. They then decline through the second and third quarters, rising seasonally again in the fourth quarter with heating demand. In addition, the timing of acquisitions and divestitures may impact quarterly results. For information on acquisitions see Note 3 Acquisitions in the December 31, 2023 annual audited consolidated financial statements.

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2024 Second Quarter Results

~~V~~olumes
U.S Propane sales by end-use application are as follows:
(millions of gallons)	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022
Residential	24	82	64	18	28	91	72	20
Commercial	30	58	50	31	36	63	58	34
Total	54	140	114	49	64	154	130	54
Canadian Propane sales by end-use application are as follows:
(millions of gallons)	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022
Residential	7	16	14	5	7	20	15	6
Commercial	47	75	67	41	49	90	79	42
Total	54	91	81	46	56	110	94	48
Wholesale Propane sales by	region (1) are as follows:
(millions of gallons)	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022
United States	53	98	89	63	70	112	85	67
Canada	10	24	19	8	9	20	19	7
Total	63	122	108	71	79	132	104	74
(1)Wholesale propane sales volumes exclude inter-segment sales.
Certarus sales by region are as follows:
(thousands of MMBtu)	Q2 2024	Q1 2024	Q4 2023	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022
United States	5,850	6,214	4,850	4,803	1,724	-	-	-
Canada	1,162	1,837	1,290	868	311	-	-	-
Total	7,012	8,051	6,140	5,671	2,035	-	-	-

(2) Certarus 2023 sales volumes are from the date of acquisition to June 30, 2023.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

Throughout the MD&A, Superior has used the following terms that are not defined by IFRS but are used by management to evaluate the performance of Superior and its business. These measures may also be used by investors, financial institutions and credit rating agencies to assess Superior’s performance and ability to service debt. Non-GAAP financial measures do not have standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Securities regulations require that Non-GAAP financial measures be clearly defined, qualified and reconciled to their most comparable IFRS financial measures. Except as otherwise indicated, these Non-GAAP financial measures are calculated and disclosed on a consistent basis from period to period. Specific items may only be relevant in certain periods.

The intent of Non-GAAP financial measures is to provide additional useful information to investors and analysts, and the measures do not have any standardized meaning under IFRS. The measures should not, therefore, be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. Other issuers may calculate Non-GAAP financial measures differently. Investors should be cautioned that Adjusted EBITDA from operations and Adjusted EBITDA should not be construed as alternatives to net earnings, cash flow from operating activities or other measures of financial results determined in accordance with GAAP as an indicator of Superior’s performance.

Non-GAAP financial measures are identified and defined as follows:

Adjusted EBITDA and Adjusted EBITDA per share

Adjusted EBITDA represents earnings before interest, taxes, depreciation, amortization, losses (gains) on disposal of assets, finance expense, restructuring costs, transaction, restructuring and other costs, unrealized gains (losses) on

Superior Plus Corp.

2024 Second Quarter Results

derivative financial instruments, except for unrealized gains (losses) related to equity derivative contracts and realized gains (losses) on foreign currency forward contracts. Adjusted EBITDA is used by Superior and investors to assess its consolidated results and ability to service debt. Adjusted EBITDA is consistent with Superior’s segment profit (loss) as disclosed in Note 18 of the unaudited condensed consolidated financial statements.

Adjusted EBITDA is a significant performance measure used by management and investors to evaluate Superior’s ongoing performance of its businesses. Adjusted EBITDA is also used as one component in determining short-term incentive compensation for certain management employees. Adjusted EBITDA is consistent with Segment Profit as disclosed in Note 18 of the unaudited condensed consolidated financial statements. Adjusted EBITDA per share is calculated by dividing Adjusted EBITDA by the weighted average shares assuming the exchange of the issued and outstanding preferred shares into common shares.

Superior changed the definition of Adjusted EBITDA from its historical definition to exclude the realized gains (losses) on foreign currency forward contracts and include unrealized gains (losses) related to equity derivatives. The foreign currency forward contracts were used to provide a hedge on the translation of U.S. denominated Adjusted EBITDA to Canadian dollars. As a result of the change in presentation currency, management is no longer hedging U.S. denominated Adjusted EBITDA and is excluding these realized gains (losses) from Adjusted EBITDA as there is no longer an offsetting gain (loss) on the translation of U.S. denominated Adjusted EBITDA. Management is currently not entering into similar instruments related to the translation of Canadian denominated Adjusted EBITDA. This change has been made retrospectively. In addition to the change in presentation currency, effective January 1, 2024 Superior implemented hedge accounting for Superior’s long-term incentive plan and related equity derivatives, and now includes these unrealized gains/losses as part of Adjusted EBITDA. The intention of this change in accounting policy is to reduce some of the volatility related to changes in Superior’s share price on the long-term incentive costs.

The seasonality of Superior’s individual quarterly results must be assessed in the context of annualized Adjusted EBITDA.

Adjusted EBTDA and Adjusted EBTDA per share

Adjusted EBTDA is calculated as Adjusted EBTDA less interest on borrowings and interest on lease liability. Adjusted EBTDA per share is calculated by dividing Adjusted EBTDA by the weighted average shares assuming the exchange of the issued and outstanding preferred shares into common shares.

Adjusted EBITDA from operations

Adjusted EBITDA from operations is defined as the sum of U.S. Propane, Canadian Propane, Wholesale Propane and Certarus segment profit (loss). Management uses Adjusted EBITDA from operations to set targets for Superiors’ operating segments (including annual guidance and variable compensation targets). Note 18 of the unaudited condensed consolidated financial statements discloses the segment profit (loss).

Below is a reconciliation of net earnings to EBITDA and Adjusted EBITDA related to Certarus for the period of January 1, 2023 to the date of acquisition. The Adjusted EBITDA number is used as part of 2023 Pro Forma Adjusted EBITDA to include the impact of the Certarus Acquisition from January 1, 2023, as the full economic benefit of Certarus’ 2023 Adjusted EBITDA prior to the close of the Certarus Acquisition was retained in the business. The pro forma Adjusted EBITDA for Certarus for the period of January 1, 2023 to the date of acquisition was approximately $68.4 million.

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2024 Second Quarter Results

For the period January 1, 2023 to the date of acquisition	Certarus
Net earnings before income taxes for the year ended December 31, 2023	55.1
Adjust for:
Amortization and depreciation	64.4
Finance expense	6.1
EBITDA	125.6
Adjust for transaction, restructuring and other costs	13.2
Adjusted EBITDA for the year ended December 31, 2023	138.2
Less Adjusted EBITDA from the date of acquisition to December 31, 2023	(70.7)
Adjusted EBITDA for the period January 1, 2023 to the date of acquisition	67.5

The above Adjusted EBITDA earned from January 1, 2023 to March 31, 2023 was $47.2M and from April 1, 2023 to the date of acquisition was $20.3M.

Adjusted Gross Profit

Adjusted gross profit represents revenue less cost of sales adjusted for realized gains and losses on commodity derivative instruments related to risk management. Management uses Adjusted Gross Profit to set margin targets and measure results. Unrealized gains and losses on commodity derivative instruments are excluded as a result of the customer contract not being included in the determination of the fair value for this risk management activity.

Realized gain (loss) on derivatives related to commodity risk management reconcile to total gain (loss) follows:

	Three months ended	June 30,	Six months ended	June 30,
	2024	2023	2024	2023
Realized gains (losses) related to commodity risk
management
U.S. Propane	–	(4.0)	3.2	(18.0)
Wholesale Propane	1.4	(1.5)	0.1	(6.3)
Realized gains (losses) included in Adjusted
Gross profit	1.4	(5.5)	3.3	(24.3)
Unrealized gain on equity derivative contracts	(1.7)	-	(0.5)	-
Gains (losses) included in Adjusted EBITDA	(0.3)	(5.5)	2.8	(24.3)
Unrealized loss on equity derivative contracts	–	(2.0)	–	(2.9)
Foreign currency forward contracts, net	(0.1)	10.3	(9.9)	10.2
Unrealized gains (losses) related to commodity
risk management	1.3	(10.2)	12.5	15.4
Unrealized gain (loss) on U.S. dollar debt issued
by a Canadian entity	(6.4)	12.4	(18.7)	14.1
(Loss) gain on derivatives and foreign currency
translation of borrowings	(5.5)	5.0	(13.3)	12.5

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2024 Second Quarter Results

Per MSU amounts

Per MSU amounts represent the operating results of Certarus divided by the average number of MSUs for the period. Superior uses per average MSU amounts to evaluate operating productivity. Per MSU amounts are presented in thousands of dollars.

Adjusted EBITDA per average MSU

Adjusted EBITDA per average MSU is used to evaluate the productivity during a reporting period. Adjusted EBITDA per average MSU is equal to Adjusted EBITDA divided by the average number of MSUs for the period.

Operating Costs

Operating costs for the U.S., Canadian, Wholesale Propane and Certarus segments include wages and benefits for employees, drivers, service and administrative labour, fleet maintenance, freight and distribution expenses excluded from cost of sales, along with the costs associated with owning and maintaining land, buildings and equipment, such as rent, repairs and maintenance, environmental, utilities, insurance and property tax costs. Operating costs exclude gains or losses on disposal of assets, depreciation and amortization, transaction, restructuring and integration costs.

Corporate operating costs include wages and benefits for employees, professional fees and other costs associated with the corporate function. Corporate operating costs are defined as SD&A expenses related to the corporate office adjusted for amortization and depreciation, gains or losses on disposal of assets and transaction, restructuring and integration costs. As a result of implementing hedge accounting for Superior’s long-term incentive plan and related equity derivatives, Superior now includes these unrealized gains/losses as part of Corporate operating costs. See above for a reconciliation of gains (losses) on derivatives and foreign currency translation of borrowings included in Adjusted EBITDA.

Net Debt, Pro Forma Adjusted EBITDA and Leverage Ratio

Pro Forma Adjusted EBITDA and Net debt are Non-GAAP financial measures. Superior uses Pro Forma Adjusted EBITDA and Net debt to calculate its Leverage ratio and, as a result, Leverage ratio is a Non-GAAP ratio. This ratio is used by Superior, investors and other users of financial information to assess its ability to service debt.

Pro Forma Adjusted EBITDA is Adjusted EBITDA calculated on a 12-month trailing basis giving pro forma effect to acquisitions to the first day of the calculation period. Pro Forma Adjusted EBITDA is used by Superior to calculate its Leverage Ratio.

2023 Pro Forma Adjusted EBITDA is used to provide comparable 2023 results which reflect pro forma adjustment impact related to Certarus for the period of January 1, 2023 to the date of the acquisition on May 31, 2023. This adjustment is reconciled to Certarus’ net income for the same period above.

Net Debt is calculated by the sum of borrowings and lease liabilities before deferred financing fees reduced by Superior cash and cash equivalents and Vendor Note. Net Debt is used by Superior to calculate its Leverage Ratio.

Leverage ratio is determined by dividing Superior’s Net Debt by their Pro Forma Adjusted EBITDA.

Superior Plus Corp.

2024 Second Quarter Results

Reconciliation of Net debt and Pro Forma Adjusted EBITDA

Reconciliation of Net debt and Pro Forma Adjusted EBITDA
	June 30	December 31
(in millions)	2024	2023
Current borrowings	7.6	8.5
Current lease liabilities	49.2	48.0
Non-current borrowings	1,571.3	1,684.7
Non-current lease liabilities	120.6	132.9
	1,748.7	1,874.1
Add back deferred financing fees and discounts	15.5	17.4
Deduct cash and cash equivalents	(30.0)	(30.7)
Net debt	1,734.2	1,860.8
Adjusted EBITDA for the year ended December 31, 2023	414.7	414.7
Adjusted EBITDA for the six months ended June 30, 2023	(233.8)	–
Adjusted EBITDA for the six months ended June 30, 2024	278.9	–
Pro-forma adjustment	-	67.5
Pro-forma Adjusted EBITDA for the trailing-twelve months	459.8	482.2
Leverage Ratio	3.8x	3.9x

RISK FACTORS TO SUPERIOR

Superior’s assessment and summary of its material risk factors are detailed in Superior’s most recent Annual Information Form (“AIF”) under “Risks associated with our business” which is filed on the Canadian Securities Administrators’ website, www.sedarplus.ca, and on Superior’s website, www.superiorplus.com. The AIF describes some of the most material risks to Superior’s business by type of risk: financial; corporate; operational; and legal.

Superior Plus Corp.

2024 Second Quarter Results

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Superior Plus Corp. — Management Reports 2024

42632_rns_2024-08-13_c7c90a65-2205-481e-a5a1-6017292e6f5a.pdf

MANAGEMENT’S DISCUSSION AND ANALYSIS

THREE MONTHS ENDED JUNE 30, 2024 AND 2023

Non-GAAP Financial Measures

Forward-Looking Information

Overview of Superior and Basis of Presentation

HIGHLIGHTS

FINANCIAL RESULTS

Summary of Adjusted EBITDA

Results for the three months ended June 30, 2024

Results for the six months ended June 30, 2024

RESULTS OF SUPERIOR’S OPERATING SEGMENTS

U.S. PROPANE

U.S. Propane Adjusted Gross Profit

U.S. Propane Sales Volumes

End-Use Application

Volumes by Region[ (1)]

Financial Outlook

CANADIAN PROPANE

Canadian Propane’s operating results:

Canadian Propane Gross Profit

Canadian Propane Sales Volumes Volumes by End-Use Application

Volumes by Region[ (1)]

Financial Outlook

WHOLESALE PROPANE

Wholesale Propane Sales Volumes

Financial Outlook

CERTARUS

Financial Outlook

CORPORATE OPERATING COSTS

CONSOLIDATED CAPITAL EXPENDITURE SUMMARY

TRANSACTION, RESTRUCTURING AND OTHER COSTS

FINANCIAL OVERVIEW - GAAP FINANCIAL INFORMATION

Condensed Consolidated Statements of Net Earnings

INCOME TAXES

LIQUIDITY AND CAPITAL RESOURCES

Debt Management Update

Borrowing

Net Working Capital

Compliance

Pension Plans

Contractual Obligations and Other Commitments[(1) ]

SHAREHOLDERS’ CAPITAL

DIVIDENDS

Dividends Declared to Common Shareholders

Dividends Declared to Preferred Shareholders

SUMMARY OF CASH FLOW

FINANCIAL OUTLOOK

FINANCIAL INSTRUMENTS – RISK MANAGEMENT

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING

Changes in Internal Controls over Financial Reporting

Effectiveness

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Changes in Accounting Policies and Disclosures

Presentation Currency

Recent Accounting Pronouncements

Amendments to IAS 21, The Effects of Changes in Foreign Exchange Rates

IFRS 18, Presentation and Disclosure in Financial Statements

Amendments to IFRS 9, Financial Instruments and IFRS 7, Financial Instruments: Disclosures

QUARTERLY FINANCIAL AND OPERATING INFORMATION

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

Adjusted EBITDA and Adjusted EBITDA per share

Adjusted EBTDA and Adjusted EBTDA per share

Adjusted EBITDA from operations

Adjusted Gross Profit

Per MSU amounts

Adjusted EBITDA per average MSU

Operating Costs

Net Debt, Pro Forma Adjusted EBITDA and Leverage Ratio

Reconciliation of Net debt and Pro Forma Adjusted EBITDA

RISK FACTORS TO SUPERIOR

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Superior Plus Corp. Management Reports 2024