8-1-13 3:57 PM EDT | Email Article
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CALGARY, ALBERTA -- (Marketwired) -- 08/01/13 -- Superior Plus Corp. (TSX:SPB)

Highlights


--  Execution of Superior's Destination 2015 initiatives continue to be on
    track. 
--  For the quarter ended June 30, 2013, Superior generated adjusted
    operating cash flow (AOCF) per share of $0.24 which was consistent with
    the prior year quarter of $0.25 per share. Superior's results for the
    second quarter were also consistent with management's expectations.
    Superior's second quarter results reflect the seasonality of the Energy
    Services business. AOCF per share was impacted by reduced interest
    expense which was offset by a higher number of weighted average common
    shares outstanding. EBITDA from operations was consistent with the prior
    year quarter. 
--  Superior's 2013 financial outlook of AOCF per share has been updated to
    $1.60 to $1.85. Superior has increased the bottom end of its 2013
    financial outlook by $0.05 per share from the 2013 financial outlook
    provided at the first quarter of 2013 which was previously $1.55 to
    $1.85 per share due to actual results achieved to date combined with
    management's confidence in the second half of 2013. See "2013 Financial
    Outlook" for additional details. 
--  As previously communicated, Superior anticipates an improvement of 7% to
    10% per year in 2013 through 2015 in adjusted operating cash flow (AOCF)
    per share.  
--  Energy Services results for the second quarter were consistent with the
    prior year quarter as improved gross profits in all lines of business
    except for fixed-price energy services were offset by higher operating
    costs. Improvements in gross profits, in particular within the Canadian
    propane and U.S. refined fuels businesses, were due in part to higher
    sales volumes as a result of colder weather experienced at the end of
    the first quarter and the beginning of the second quarter as well as the
    impact of the ongoing business improvement initiatives. 
--  Specialty Chemicals results for the second quarter were modestly lower
    than the prior year as a result of reduced sodium chlorate gross profits
    due to slightly lower sales volumes and higher cost of sales resulting
    from higher average electricity costs. Chloralkali gross profits were
    consistent with the prior year quarter as higher caustic gross profits
    were offset by reduced chlorine gross profits. 
--  The expansion of the hydrochloric acid production capacity at the Port
    Edwards, Wisconsin and Saskatoon, Saskatchewan chloralkali facilities
    are on time and on budget. 
--  The Construction Products Distribution business results for the quarter
    benefitted from higher average selling prices, improved average sales
    margins and higher sales volumes. 
--  Superior's forecasted December 31, 2013, total debt to EBITDA ratio of
    3.3X to 3.7X is consistent with the update provided at the first quarter
    of 2013. See "Debt Management Update" for additional details. 
--  Subsequent to June 30, 2013, Superior completed an offering of $97.0
    million, 6.00% convertible unsecured subordinated debentures which
    mature on June 30, 2019. 
--  On July 22, 2013, Superior announced that on September 3, 2013, it will
    early redeem the entire $68.9 million principal amount of its 7.50%
    convertible unsecured subordinated debentures which mature on December
    31, 2014. The early redemption allows for Superior to benefit from lower
    average interest rates in addition to actively managing its balance
    sheet maturities. 
--  On July 2, 2013, DBRS confirmed Superior Plus Corp.'s corporate credit
    rating as BB high (stable), Superior Plus LP's secured debt rating as BB
    high (stable), and Superior Plus LP's unsecured debt rating as BB low
    (stable). 

Second Quarter Financial Summary


----------------------------------------------------------------------------
                                     Three months ended    Six months ended 
                                               June 30,            June 30, 
(millions of dollars except per                                             
 share amounts)                          2013      2012      2013      2012 
----------------------------------------------------------------------------
Revenue                                 854.4     834.3   1,904.3   1,900.2 
Gross profit                            190.0     184.1     443.1     422.2 
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EBITDA from operations (1)               48.1      49.0     153.6     139.5 
Interest                                (13.8)    (17.1)    (30.8)    (36.8)
Cash income tax expense                  (0.4)     (0.3)     (0.8)     (0.5)
Corporate costs                          (3.7)     (3.4)     (9.8)     (7.4)
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Adjusted operating cash flow (1)         30.2      28.2     112.2      94.8 
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Adjusted operating cash flow per                                            
 share, basic (1)(2)(3)                 $0.24     $0.25     $0.94     $0.85 
Adjusted operating cash flow per                                            
 share, diluted (1)(2)(3)(4)            $0.24     $0.25     $0.91     $0.83 
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Dividends paid per share                $0.15     $0.15     $0.30     $0.30 
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(1) EBITDA from operations and adjusted operating cash flow are key         
    performance measures used by management to evaluate the performance of  
    Superior. These measures are defined under "Non-IFRS Financial Measures"
    in Superior's 2013 Second Quarter Management's Discussion and Analysis  
    (MD&A).                                                                 
(2) The prior year results have been restated for the impact of adopting    
    International Accounting Standard 19 - "Employee Benefits" effective    
    January 1, 2013. The impact to EBITDA from operations was a decrease to 
    Energy Services of $0.3 million and $0.6 million for the three and six  
    months ended period June 30, 2012, and a decrease to Specialty Chemicals
    of $0.5 million and $0.5 million for the three and six months ended June
    30, 2012. See Superior's 2013 Second Quarter MD&A for additional        
    details.                                                                
(3) The weighted average number of shares outstanding for the three months  
    ended June 30, 2013 is 126.2 million (2012 - 111.6 million) and for the 
    six months ended June 30, 2013 is 119.9 million (2012 - 111.4 million). 
(4) For the three months ended June 30, 2013 and 2012 there were no dilutive
    instruments. For the six months ended June 30, 2013, the dilutive impact
    of the 7.50%, October 31, 2016 convertible debentures was 6.6 million   
    shares (126.5 million total shares on a dilutive basis) with a resulting
    impact on AOCF of $2.8 million ($115.0 million total on a dilutive      
    basis). For the six months ended June 30, 2012, the dilutive impact of  
    the 7.50%, October 31, 2016 convertible debentures was 6.6 million      
    shares (118.0 million total shares on a dilutive basis) with a resulting
    impact on AOCF of $2.8 million ($97.6 million total on a dilutive       
    basis).                                                                 

Segmented Information


----------------------------------------------------------------------------
                                     Three months ended    Six months ended 
                                                June 30,            June 30,
(millions of dollars)                     2013      2012      2013      2012
----------------------------------------------------------------------------
EBITDA from operations:                                                     
  Energy Services                         15.2      16.1      82.8      74.2
  Specialty Chemicals                     25.1      26.8      58.0      55.9
  Construction Products Distribution       7.8       6.1      12.8       9.4
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                                          48.1      49.0     153.6     139.5
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Energy Services


--  Energy Services EBITDA from operations for the second quarter was $15.2
    million compared to $16.1 million in the prior year quarter. Results
    were impacted by higher gross profits from all the businesses except for
    the fixed-price energy services business. 
--  The Canadian propane business generated gross profit of $50.2 million in
    the second quarter compared to $47.5 million in the prior year quarter
    due to improved sales volumes and higher average sales margins. 
--  Canadian propane average sales margins were 18.9 cents per litre in the
    second quarter compared to 18.6 cents per litre in the prior year
    quarter. The increase in the average sales margin was due to improved
    pricing on industrial and commercial contracts and improvements to
    overall pricing management. 
--  Canadian propane distribution sales volumes were 10 million litres or 4%
    higher than the prior year quarter due to improved sales volumes in all
    lines of business except for industrial. Industrial volumes were
    consistent with the prior year quarter. Sales volumes, specifically
    residential and commercial sale volumes, benefited from colder average
    temperatures across Canada at the end of the first quarter and the
    beginning of the second quarter. The impact of weather for both the
    Canadian propane and the U.S. refined fuels businesses is not as
    significant in the second and third quarters due to the seasonal nature
    of heating related sales volumes. 
--  Average weather across Canada, as measured by degree days, for the
    second quarter was 5% colder than the prior year and 4% colder than the
    5-year average. 
--  The U.S. refined fuels business generated gross profits of $24.5 million
    in the second quarter compared to $23.6 million in the prior year
    quarter. The increase in gross profit was due to higher sales volumes. 
--  U.S. refined fuels average sales margins of 6.4 cents per litre in the
    quarter were consistent with the prior year quarter of 6.5 cents per
    litre. 
--  Sales volumes within the U.S. refined fuels business were 20.8 million
    litres or 6% higher than the prior year. Sales volumes in all segments
    were higher than the prior year quarter due to colder weather
    experienced at the end of the first quarter and the beginning of the
    second quarter. Additionally, sales volumes benefitted from the timing
    of agricultural sales and an increase in demand for gasoline and diesel.
--  Average weather for the U.S. refined fuel business, as measured by
    degree days, for the second quarter was 15% colder than the prior year
    and 7% colder than the 5-year average. The impact of colder weather
    benefited sales in the second quarter, but to a lesser degree than the
    impact that would be expected in the first and fourth quarters due to
    the seasonal nature of heating related volumes. 
--  The fixed-price energy services business generated gross profits of $4.4
    million compared to $8.9 million in the prior year quarter due to
    reduced natural gas profits. Lower natural gas gross profits were due to
    a reduction in sales volumes as a result of a reduced contribution from
    the residential segment which has been in decline due to a change in
    strategy in prior years to exit that market and focus on small
    commercial and industrial accounts. Gross profit related to the
    electricity segment was lower than the prior year as reduced
    contributions from the Ontario market more than offset improvements in
    the U.S. market.  
--  The supply portfolio management business generated gross profits of $5.7
    million in the second quarter compared to $3.3 million in the
    comparative period as market based trading conditions were more
    favourable compared to the prior year quarter. 
--  Operating expenses were $78.8 million in the second quarter compared to
    $74.3 million in the prior year quarter. Operating expenses were
    impacted by higher sales volumes in the Canadian propane and U.S.
    refined fuels businesses, offset in part, by cost reduction initiatives
    implemented throughout 2012. 
--  Superior expects business conditions in 2013 for its Energy Services
    business will be similar to 2012. EBITDA from operations is anticipated
    to be higher in 2013 than in 2012 due in part to the assumption that
    weather will be consistent with the 5-year average in 2013. Superior's
    2012 results were negatively impacted by warm weather, as average
    weather in the first quarter of 2012, as measured by degree days, across
    Canada and the Northeastern U.S. was at record or near record levels.
    Additionally, Superior expects to realize ongoing improvements in its
    financial results as a result of its business initiative activities
    which will more than offset a reduction in the contribution from the
    fixed-price energy services business due to exiting the Canadian
    residential market in prior years. 

Specialty Chemicals


--  EBITDA from operations for the second quarter was $25.1 million compared
    to $26.8 million in the prior year quarter. 
--  Sodium chlorate gross profits were modestly lower than the prior year
    quarter due to reduced sales volumes and higher cost of sales as a
    result of higher average electricity costs. 
--  Sodium chlorate sales volumes were 1% lower than the prior year quarter
    due primarily to reduced customer demand as a result of pulp mill
    maintenance. The market for sodium chlorate continues to be balanced due
    to a stable market for pulp. 
--  Chloralkali gross profits were consistent with the prior year quarter as
    improved sales volumes were fully offset by reduced average selling
    prices. Sales volumes in the second quarter benefitted from improved
    plant operating performance and higher customer demand. The reduction in
    average selling prices for chloralkali was due to a weak pricing
    environment for chlorine, the impact of which was offset in part, by
    improved average pricing on caustic sales volumes. 
--  Operating expenses of $33.6 million were $1.0 million lower than the
    prior year due to reduced employee compensation costs. 
--  As previously announced, Superior has approved an expansion of its
    hydrochloric acid production capacity at its Port Edwards, Wisconsin and
    Saskatoon, Saskatchewan facilities. Upon completion of both projects,
    Superior will have doubled its total hydrochloric acid production
    capacity to 360,000 wet metric tonnes. The expansion of the production
    capacity will allow Superior to optimize overall returns at both
    facilities by converting a larger portion of its chlorine into higher
    value hydrochloric acid. The Port Edwards project is anticipated to cost
    $18 million with commercial production expected in the first quarter of
    2014, the Saskatoon project is anticipated to cost $25 million with
    commercial production expected in the second half of 2014. To date,
    cumulative costs of $6.4 million have been incurred with respect to both
    projects. 
--  During the second quarter ERCO reached an agreement with its unionized
    employees at its North Vancouver, British Columbia facility which had
    expired on November 30, 2012. The new agreement is for a period of six
    years. 
--  Superior expects business conditions in 2013 for its Specialty Chemicals
    business will be similar to 2012. EBITDA from operations, excluding the
    impact of the $12.5 million one-time payment from TransCanada received
    in the third quarter of 2012, is anticipated to be modestly higher in
    2013 due to improved performance of the chloralkali product segment as a
    result of higher gross profits from hydrochloric acid and modestly
    higher selling prices for caustic soda, which will more than offset
    reduced pricing for chlorine. Superior does anticipate that electricity
    prices will be modestly higher than the prior year. Superior continues
    to see a stable market for sodium chlorate as a result of the current
    market for pulp. Superior also expects a stable market for chloralkali
    sales volumes and pricing as North American supply demand fundamentals
    continue to be balanced. The market for chloralkali continues to be
    supported by historically low natural gas prices. 

Construction Products Distribution


--  EBITDA from operations for the second quarter was $7.8 million compared
    to $6.1 million in the prior year quarter. Results in the second quarter
    of 2013 benefited from higher average selling prices, improved average
    sales margins and higher overall sales volumes. 
--  Gross profit was higher than the prior year quarter as improved average
    selling prices and modestly higher average sales margins combined with
    improved sales volumes. Gypsum sales volumes were higher than the prior
    year quarter as a result of improved U.S. sales volumes due to ongoing
    improvements in residential construction activity. The improvement in
    U.S. sales volumes was partially offset by reduced sales in Canada due
    in part to the closing of a number of branch locations as part of 2012
    restructuring activities, combined with a slowdown in new housing starts
    and general construction related activity. Gypsum sales margins
    benefited from improved board pricing and the withdrawal from certain
    Canadian markets that were less profitable, partially offset, by the
    introduction of lower margin products and a slowdown in the Ontario
    market. 
--  Commercial and industrial insulation (C&I) sales volumes were modestly
    higher than the prior year quarter, although end-use markets continue to
    be challenging. C&I gross margins were consistent with the prior year. 
--  Operating expenses for the second quarter were $40.7 million compared to
    $39.5 million in the prior year quarter. Operating costs were impacted
    by costs associated with higher sales volumes and inflationary increases
    of wages and other operating costs. Operating expenses as a percentage
    of sales were consistent with the prior year quarter. 
--  Superior expects business conditions in 2013 for its Construction
    Products Distribution business to be similar to 2012 with slightly
    improving conditions in the U.S. and lower residential construction in
    Canada. EBITDA from operations is anticipated to be higher in 2013 than
    2012 due in part to the absence of restructuring costs incurred in 2012.
    In addition, results will benefit from the ongoing business initiative
    activities. Superior continues to see difficult market conditions in
    both the residential and commercial segments in Canada and the U.S,
    although the U.S. residential market continues to show signs of
    improvement. Superior does not anticipate significant improvements in
    the end-use markets in the near term. 

Corporate Related


--  Total interest expense for the second quarter was $13.8 million compared
    to $17.1 million in the prior year quarter. Interest expense was lower
    than the prior year quarter as a result of lower average debt levels due
    to Superior's ongoing focus to reduce its total debt levels. 
--  Corporate costs were $3.7 million in the second quarter which was
    consistent with the prior year quarter. 
--  Superior's total debt (including convertible debentures) to Compliance
    EBITDA was 3.5X as at June 30, 2013, compared to 4.4X as at December 31,
    2012 and 4.4X as at June 30, 2012. The reduction in total leverage
    compared to December 31, 2012 is due primarily to reduced debt levels as
    a result of the $137.8 million in net proceeds from the common share
    equity issue in the first quarter of 2013, cash flow from operations in
    excess of dividends and capital expenditures, and the normal course
    reduction in working capital requirements due to the seasonal nature of
    Superior's energy businesses. Superior continues to focus on reducing
    its total leverage through ongoing debt reduction, including reducing
    working capital requirements and improving business operations. See
    "Debt Management Update" for details on Superior's anticipated December
    31, 2013 total debt to EBITDA ratio. 
--  On July 2, 2013, DBRS confirmed Superior Plus Corp.'s corporate credit
    rating as BB high (stable), Superior Plus LP's secured debt rating as BB
    high (stable), and Superior Plus LP's unsecured debt rating as BB low
    (stable). 
--  On July 22, 2013, Superior announced that on September 3, 2013, it will
    early redeem the entire $68.9 million principal amount of its 7.50%
    convertible unsecured subordinated debentures which mature on December
    31, 2014. The early redemption allows for Superior to benefit from lower
    average interest rates in addition to actively managing its balance
    sheet maturities. 

CRA Income Tax Update

As anticipated in Superior's previous disclosure, Superior received on April 2, 2013 from the CRA Notices of Reassessment for Superior's 2009 and 2010 taxation years reflecting the CRA's intent to challenge the tax consequences of Superior's corporate conversion transaction (Conversion) which occurred on December 31, 2008. The CRA's position is based on the acquisition of control rules, in addition to the general anti-avoidance rules in the Income Tax Act (Canada). The table below summarizes Superior's estimated tax liabilities and payment requirements associated with the received and anticipated Notices of Reassessment.


----------------------------------------------------------------------------
                                                                            
                         Taxes Payable   50% of the Taxes                   
      Taxation Year             (1)(2)     Payable (1)(2)      Payment Dates
----------------------------------------------------------------------------
          2009/2010              $13.0               $6.5 Paid in April 2013
               2011          $10.0 (3)               $5.0            Q3 2013
               2012          $10.0 (3)               $5.0            Q3 2013
               2013          $20.0 (3)              $10.0            Q3 2014
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              Total              $53.0              $26.5                   
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(1) In millions of dollars                                                  
(2) Includes estimated interest and penalties.                              
(3) Estimated based on Superior's previously filed tax returns and the      
    midpoint of Superior's 2013 outlook.                                    

On May 8, 2013, Superior filed a Notice of Objection with the CRA's appeals division. After 90 days, if the CRA has not responded to or settled the Notice of Objection with Superior, then Superior can make an application to the Tax Court of Canada. Superior anticipates filing its application to the Tax Court of Canada in August 2013 and that a decision in the Tax Court of Canada could be rendered by the end of 2014 or early 2015. If a decision of the Tax Court of Canada were to be appealed, the appeal process could reasonably be expected to take an additional 2 years. If Superior receives a positive decision then any taxes, interest and penalties paid to the CRA will be refunded plus interest and if Superior is unsuccessful then any remaining taxes payable plus interest and penalties will have to be remitted.

Superior remains confident in the appropriateness of its tax filing position and the expected tax consequences of the Conversion and intends to vigorously defend such position and intends to file its future tax returns on a basis consistent with its view of the outcome of the Conversion.

Superior's 2013 financial outlook includes the impact of the reassessment although the interim tax payments made by Superior will be recorded to the balance sheet and will not impact either adjusted operating cash flow or net earnings.

Based on the midpoint of Superior's current 2013 financial outlook of adjusted operating cash flow per share of $1.70, if the tax pools from the Conversion were not available to Superior, the impact would be an increase to cash income taxes of approximately $0.15 per share for 2013. As previously stated, Superior intends to file its future income tax returns on a basis consistent with its view of the outcome of the Conversion.

2013 Financial Outlook

Superior expects 2013 AOCF per share of $1.60 to $1.85, which is an increase of $0.05 per share to the bottom end of the 2013 outlook from the outlook provided at the end of the first quarter of 2013 of $1.55 to $1.80 per share. Superior's 2013 financial outlook is consistent with Superior's 2012 actual results as the impact of ongoing improvements in the businesses as a result of Superior's business initiative projects, average weather, as measured by degree days being consistent with the five year average, the absence of one-time restructuring costs, will be offset by the absence of the one-time TransCanada payment received in third quarter 2012 and a greater number of common shares outstanding due to the issuance of 12,960,500 shares on March 27, 2013. Superior's 2013 financial outlook has been provided on the basis that Superior will continue to prepare and file its future tax returns on a basis consistent with its view of the outcome of the CRA's challenge of its corporate conversion transaction.

For additional details on the assumptions underlying the 2013 financial outlook, see Superior's 2013 Second Quarter Management's Discussion and Analysis.

Debt Management Update

Superior's anticipated debt repayment for 2013 and total debt to EBITDA leverage ratio as at December 31, 2013, based on Superior's 2013 financial outlook is detailed in the chart below.


----------------------------------------------------------------------------
                                           (Dollar Per         (Millions of 
                                                  Share)            Dollars)
----------------------------------------------------------------------------
2013 financial outlook AOCF per                                             
 share - mid-point (1)                             1.73               212.8 
Maintenance capital expenditures,                                           
 net                                              (0.26)              (31.7)
Capital lease obligation repayments               (0.13)              (15.4)
Payments to CRA in relation to tax                                          
 reassessment (2)                                 (0.13)              (16.5)
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Cash flow available for dividends                                           
 and debt repayment before growth                                           
 capital                                           1.21               149.2 
Expansion of Port Edward's and                                              
 Saskatoon facilities                             (0.23)              (28.2)
Other growth capital expenditures                 (0.15)              (18.5)
Proceeds from dividend reinvestment                                         
 program                                           0.04                 4.9 
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Estimated 2013 free cash flow                                               
 available for dividend and debt                                            
 repayment                                         0.87               107.4 
Proceeds from equity issue, net of                                          
 issue costs                                       1.12               137.8 
Dividends                                         (0.60)              (73.8)
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Total estimated debt repayment                     1.39               171.4 
Estimated total debt to EBTIDA as at                                        
 December 31, 2013                          3.3X - 3.7X         3.3X - 3.7X 
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Dividends                                          0.60                73.8 
Calculated payout ratio after all                                           
 capital and payment to CRA                          69%                 69%
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(1) See "Financial Outlook" in Superior's 2013 Second Quarter Management's  
    Discussion and Analysis for additional details including assumptions,   
    definitions and risk factors.                                           
(2) See "CRA Income Tax Update" for additional details.                     

2013 Detailed Second Quarter Results

Superior's 2013 Second Quarter Management's Discussion and Analysis is attached and is also available on Superior's website at www.superiorplus.com under the Investor Relations section.

2013 Second Quarter and Annual Results Conference Call

Superior will be conducting a conference call and webcast for investors, analysts, brokers and media representatives to discuss the 2013 Second Quarter Results at 8:30 a.m. MDT on Friday, August 2, 2013. To participate in the call, dial:1-866-223-7781. An archived recording of the call will be available for replay until midnight, September 30, 2013. To access the recording, dial: 1-800-408-3053 and enter pass code 7706964 followed by the # key. Internet users can listen to the call live, or as an archived call, on Superior's website at www.superiorplus.com.

Forward Looking Information

This document, the documents incorporated herein by reference and other reports and filings made with the securities regulatory authorities include forward-looking statements. All forward-looking statements are based on our beliefs as well as assumptions based on information available at the time the assumption was made and on management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors deemed appropriate in the circumstances. Forward-looking 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, Superior LP and its businesses. 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. Forward-looking statements are not facts, but only predications and can generally be identified by the use of statements that include phrases such as "anticipate", "believe", "continue", "could", "estimate", "foresee", "expect", "plan", "intend", "forecast", "future", "guidance", "may", "predict", "project", "should", "strategy", "target", "will" or similar expressions suggesting future outcomes.

In particular, this document contains forward-looking statements pertaining to the following: future financial position, consolidated and business segment outlooks, expected EBITDA from operations, expected adjusted operating cash flow (AOCF) and adjusted operating cash flow per share, expected leverage ratios and debt repayment, debt management summary, expectations in terms of the cost of operations, capital spend and maintenance and the variability of these costs, business strategy and objectives, development plans and programs, business expansion and improvement projects, expected timing of commercial production and the costs associated therewith, market conditions in Canada and the U.S., expected tax consequences of the Conversion, the expected challenge by the CRA of the tax consequences of the Conversion (and the expected timing and impact of such process including any payment of taxes and the quantum of such payments), future income taxes, the impact of proposed changes to Canadian tax legislation or U.S. tax legislation, the anticipated redemption of the 7.50% debentures, future economic conditions, future exchange rates and exposure to such rates, dividend strategy, payout ratio, expected weather, expectations in respect to the global economic environment, our trading strategy and the risk involved in these strategies, the impact of certain hedges on future reported earnings and cash flows, commodity prices and costs, the impact of contracts for commodities, demand for chemicals including sodium chlorate and chloralkali, effect of operational and technological improvements, business enterprise system upgrade plans, future account receivable levels, expected governmental regulatory regimes and legislation and their expected impact on regulatory and legislative compliance costs, expectations for the outcome of existing or potential legal and contractual claims, our ability to obtain financing on acceptable terms, expected life of facilities and statements regarding net working capital and capital expenditure requirements of Superior or Superior Plus LP, the assumptions set forth under the "Financial Outlook" section of our MD&A and are 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 materialize or should underlying assumptions prove incorrect, as many important factors are beyond our control, Superior's or Superior LP's actual performance and financial results may vary materially from those estimates and intentions contemplated, expressed or implied in the forward-looking information. These risks and uncertainties include incorrect assessments of value when making acquisitions, increases in debt service charges, the loss of key personnel, fluctuations in foreign currency and exchange rates, inadequate insurance coverage, liability for cash taxes, counterparty risk, compliance with environmental laws and regulations, operational risks involving our facilities, force majeure, our ability to access external sources of debt and equity capital, and the risks identified in (i) our MD&A under the heading "Risk Factors" and (ii) Superior's most recent Annual Information Form. The preceding list of assumptions, risks and uncertainties is not exhaustive.

Readers are urged to consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements included in this document are made only as of the date hereof and, except as required by law, neither Superior nor Superior LP undertakes to publicly update or revise such information to reflect new information, future events or otherwise. In light of these risks, uncertainties, and assumptions, the forward-looking events might occur to a different extent or at a different time than we have described, or might not occur. We cannot assure that projected results or events will be achieved.

Management's Discussion and Analysis of 2013 Second Quarter Results

August 1, 2013

The following Management Discussion & Analysis (MD&A) is a review of the financial performance and position of Superior Plus Corp. (Superior) as at June 30, 2013 and for the three and six months ended June 30, 2013 and 2012. The information in this MD&A is current to August 1, 2013. This MD&A should be read in conjunction with Superior's audited consolidated financial statements and notes to those statements as at and for the twelve months ended December 31, 2012 and its December 31, 2012 MD&A. Additional information regarding Superior, including the Annual Information Form, is available on SEDAR at www.sedar.com, and on Superior's website, www.superiorplus.com.

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 were prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB). Dollar amounts in this MD&A are expressed in Canadian dollars and millions except where otherwise noted.

Overview of Superior

Superior is a diversified business corporation. Superior holds 99.9% of Superior Plus LP (Superior LP), a limited partnership formed between Superior General Partner Inc. (Superior GP) as general partner and Superior as limited partner. Superior owns 100% of the shares of Superior GP and Superior GP holds 0.1% of Superior LP. The cash flow of Superior is solely dependent on the results of Superior LP and is derived from the allocation of Superior LP's income to Superior by means of partnership allocations. Superior, through its ownership of Superior LP and Superior GP, has three operating segments: the Energy Services segment, which includes a Canadian propane distribution business, a U.S. refined fuels distribution business, a fixed-price energy services business and a supply portfolio management business; the Specialty Chemicals segment; and the Construction Products Distribution segment.

Second Quarter Results

Summary of Adjusted Operating Cash Flow


----------------------------------------------------------------------------
                                     Three months ended    Six months ended 
                                               June 30,            June 30, 
(millions of dollars except per                                             
 share amounts)                          2013    2012(4)     2013    2012(4)
----------------------------------------------------------------------------
EBITDA from operations: (1)                                                 
  Energy Services                        15.2      16.1      82.8      74.2 
  Specialty Chemicals                    25.1      26.8      58.0      55.9 
  Construction Products Distribution      7.8       6.1      12.8       9.4 
----------------------------------------------------------------------------
                                         48.1      49.0     153.6     139.5 
Interest expense                        (13.8)    (17.1)    (30.8)    (36.8)
Cash income tax expense                  (0.4)     (0.3)     (0.8)     (0.5)
Corporate costs                          (3.7)     (3.4)     (9.8)     (7.4)
----------------------------------------------------------------------------
Adjusted operating cash flow (AOCF)                                         
 (1)                                     30.2      28.2     112.2      94.8 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Adjusted operating cash flow per                                            
 share, basic (2)                       $0.24     $0.25     $0.94     $0.85 
Adjusted operating cash flow per                                            
 share, diluted (3)                     $0.24     $0.25     $0.91     $0.83 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Earnings before interest, taxes, depreciation and amortization (EBITDA) 
    and adjusted operating cash flow are not IFRS measures. See "Non-IFRS   
    Financial Measures".                                                    
(2) The weighted average number of shares outstanding for the three months  
    ended June 30, 2013, is 126.2 million (2012 - 111.6 million) and the six
    months ended June 30, 2013, is 119.9 million (2012 - 111.4 million).    
(3) For the three months ended June 30, 2013, there were no dilutive        
    instruments. For the three months ended June 30, 2012, there were no    
    dilutive instruments. For the six months ended June 30, 2013, the       
    dilutive impact of the 7.50%, October 31, 2016 convertible debentures   
    was 6.6 million shares (126.5 million total shares on a dilutive basis) 
    with a resulting impact on AOCF of $2.8 million ($115.0 million total on
    a dilutive basis). For the six months ended June 30, 2012, the dilutive 
    impact of the 7.50%, October 31, 2016 convertible debentures was 6.6    
    million shares (118.0 million total shares on a dilutive basis) with a  
    resulting impact on AOCF of $2.8 million ($97.6 million total on a      
    dilutive basis).                                                        
(4) The prior year quarter has been restated for the impact of adopting IAS 
    19 Employee Benefits on January 1, 2013. The impact to EBITDA from      
    operations was a decrease to Energy Services of $0.3 million and $0.6   
    million for the three and six months ended period June 30, 2012 and a   
    decrease to Specialty Chemicals of $0.5 million and $0.5 million for the
    three and six months ended June 30, 2012.                               

Adjusted Operating Cash Flow Reconciled to Net Cash Flow from Operating Activities (1)


----------------------------------------------------------------------------
                                     Three months ended    Six months ended 
                                               June 30,            June 30, 
(millions of dollars)                    2013      2012      2013      2012 
----------------------------------------------------------------------------
Net cash flow from operating                                                
 activities                              97.0     141.0     192.3     261.9 
                                                                            
Add: Non cash interest expense            1.7       1.6       3.4       3.3 
Less: Increase (decrease) in non-                                           
 cash working capital                   (52.6)    (95.4)    (48.5)   (129.8)
  Gain on debenture redemption           (0.2)        -      (0.4)        - 
  Income tax expense                     (0.4)     (0.3)     (0.8)     (0.5)
  Finance costs recognized in net                                           
   earnings                             (15.3)    (18.7)    (33.8)    (40.1)
----------------------------------------------------------------------------
Adjusted operating cash flow             30.2      28.2     112.2      94.8 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See the unaudited condensed consolidated financial statements for net   
    cash flow from operating activities and changes in non-cash working     
    capital.                                                                

Second quarter adjusted operating cash flow was $30.2 million, an increase of $2.0 million or 7% from the prior year quarter. The increase in adjusted operating cash flow was due to higher operating results at Construction Products Distribution and lower interest costs. Adjusted operating cash flow of $0.24 per share, decreased by $0.01 per share as compared to the prior year quarter due to a 7% increase in adjusted operating cash flow as noted above more than offset by a 13% increase in the weighted average number of shares outstanding. The average number of shares outstanding increased in 2013 as a result of shares issued from Superior's Dividend Reinvestment Program and Optional Share Purchase Plan (DRIP) and the completion of an equity offering on March 27, 2013.

Adjusted operating cash flow for the six months ended June 30, 2013 was $112.2 million, an increase of $17.4 million or 18% from the prior year. The increase in adjusted operating cash flow was due to higher operating results at all of Superior's operating segments and lower interest costs. Adjusted operating cash flow of $0.94 per share, increased by $0.09 per share as compared to the prior year due to an 18% increase in adjusted operating cash flow as noted above offset in part by an 8% increase in the weighted average number of shares outstanding. The average number of shares outstanding increased in 2013 as a result of shares issued from Superior's Dividend Reinvestment Program and Optional Share Purchase Plan (DRIP) and the completion of an equity offering on March 27, 2013.

The net losses for the second quarter were $25.5 million, compared to net earnings of $12.7 million in the prior year quarter. Net losses were primarily impacted by unrealized losses on derivative financial instruments which were offset in part by higher gross profits and lower interest costs. The change in the unrealized losses on financial instruments was due principally to losses in the current quarter on Superior's foreign currency forward contracts due to exchange rate fluctuations. Revenues of $854.4 million were $20.1 million higher than the prior year quarter due to increased Energy Services revenue as a result of higher sale volumes and higher revenues at Construction Products Distribution due to increased U.S. based gypsum specialty products demand. Gross profit of $190.0 million was $5.9 million higher than the prior year quarter primarily due to increased sales volumes and gross margins at Energy Services and higher Construction Products Distribution gross profits and gross margins. Operating expenses of $170.3 million in the second quarter were $4.0 million higher than in the prior year quarter due to higher operating costs associated with increases sales volumes within the Energy Services segment and general inflationary increases. Total income tax recovery for the second quarter of $3.1 million was consistent with the income tax recovery of $3.8 million in the prior year quarter.

The net earnings for the six months ended June 30, 2013 were $5.9 million, compared to net earnings of $40.6 million in the prior year. Net earnings were primarily impacted by unrealized losses on derivative financial instruments which more than offset higher gross profits and lower interest costs. The change in the unrealized losses on financial instruments was due principally to losses on Superior's embedded debenture conversion feature derivatives compared to the prior year as a result of fluctuations in Superior's share price and losses on Superior's foreign currency forward contracts due to exchange rate fluctuations. Revenues of $1,904.3 million were $4.1 million higher than the prior year due to increased Specialty Chemicals sales volumes and increased Construction Products Distribution pricing and sales volumes offset in part by lower Energy Services revenues. Gross profit of $443.1 million was $20.9 million higher than the prior year primarily due to increased sales volumes and gross margins at Energy Services and gross margins at Construction Products Distribution due to the closure of lower margin branches in 2012. Operating expenses of $349.4 million were $2.8 million higher than in the prior year due to higher operating costs associated with increases sales volumes within the Energy Services segment offset in part by reduced amortization and depreciation expense and lower one-time restructuring costs. Total income tax expense was $12.7 million compared to income tax expense of $2.3 million in the prior year. The increase in income tax expense was due to an increase in permanent items and a decrease in the income tax recovery on the true up in the second quarter of 2013 as compared to the prior year quarter.

Energy Services

Energy Services' condensed operating results for 2013 and 2012;


----------------------------------------------------------------------------
                                     Three months ended    Six months ended 
                                               June 30,            June 30, 
(millions of dollars)                    2013   2012 (2)     2013   2012 (2)
----------------------------------------------------------------------------
Revenue(1)                              511.3     498.0   1,231.0   1,245.6 
Cost of sales(1)                       (417.3)   (407.6)   (983.5) (1,013.2)
----------------------------------------------------------------------------
Gross profit                             94.0      90.4     247.5     232.4 
Less: Cash operating and                                                    
 administrative costs(1)                (78.8)    (74.3)   (164.7)   (158.2)
----------------------------------------------------------------------------
EBITDA from operations                   15.2      16.1      82.8      74.2 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) In order to better reflect the results of its operations, Superior has  
    reclassified certain amounts for purposes of this MD&A to present its   
    results as if it had accounted for various transactions as accounting   
    hedges. See "Reconciliation of Divisional Segmented Revenue, Cost of    
    Sales and Cash Operating and Administrative Costs Included in this MD&A"
    for detailed amounts.                                                   
(2) The prior year quarter has been restated for the impact of adopting IAS 
    19 Employee Benefits on January 1, 2013. Cash operating and             
    administrative costs were increased by $0.3 million for the three months
    ended June 30, 2012 and $0.6 million for the six months ended June 30,  
    2012 due to the accounting standard change.                             

Revenues for the second quarter of 2013 were $511.3 million, an increase of $13.3 million from revenues of $498.0 million in 2012. The increase in revenues is primarily due to higher sales volumes offset in part lower commodity prices as compared to the prior year quarter. Total gross profit for the second quarter of 2013 was $94.0 million, an increase of $3.6 million or 4% over the prior year quarter. The increase in gross profit was primarily due to higher Canadian propane distribution and supply portfolio management gross profits as a result of higher gross margins and sale volumes offset in part by lower Fixed-price energy services gross profits. A summary and detailed review of gross profit is provided below.

Gross Profit Detail


----------------------------------------------------------------------------
                                      Three months ended    Six months ended
                                                June 30,            June 30,
(millions of dollars)                     2013      2012      2013      2012
----------------------------------------------------------------------------
Canadian propane distribution             50.2      47.5     127.3     120.3
U.S. refined fuels distribution           24.5      23.6      77.4      69.3
Other services                             9.2       8.0      20.1      18.5
Supply portfolio management                5.7       2.4      13.6       7.9
Fixed-price energy services                4.4       8.9       9.1      16.4
----------------------------------------------------------------------------
Total gross profit                        94.0      90.4     247.5     232.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Canadian Propane Distribution

Canadian propane distribution gross profit for the second quarter was $50.2 million, an increase of $2.7 million or 6% from 2012, due to higher sales volumes and gross margins. Residential sales volumes increased by 3 million litres or 18% from the prior year quarter, due to colder weather during the second quarter of 2013 as compared to the prior year quarter and successful customer acquisition and retention programs. Average weather across Canada for the second quarter, as measured by degree days, was 5% colder than the prior year quarter and 4% colder than the five-year average. However, heating related volumes in the second and third quarters are generally not materially impacted by average weather due to the seasonality of Canadian propane distributions operations. Industrial and commercial sales volumes increased by 6 million litres or 3% as compared to the prior year quarter due to successful customer additions and customer retention efforts. Automotive propane volumes increased by 2 million litres or 10%, this increase is in contrast to the historical structural decline in this end-use market due to the continued favourable price spread between propane and gasoline.

Average propane sales margins for the second quarter increased to 18.9 cents per litre from 18.6 cents per litre in the prior year quarter. The increase is principally due to improved pricing management, impact of a lower supply cost environment and favourable sales mix as the current quarter included a higher proportion of higher-margin sales volumes.

Canadian Propane Distribution Sales Volumes


Volumes by End-Use Application          Volumes by Region(1)                
----------------------------------------------------------------------------
                  Three months ended                      Three months ended
                            June 30,                                June 30,
(millions of litres)    2013    2012    (millions of litres)    2013    2012
------------------------------------    ------------------------------------
Residential               20      17    Western Canada           150     143
Commercial                49      43    Eastern Canada            93      90
Agricultural               7       6    Atlantic Canada           22      22
Industrial               166     168                                        
Automotive                23      21                                        
------------------------------------    ------------------------------------
                         265     255                             265     255
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Volumes by End-Use Application          Volumes by Region(1)                
----------------------------------------------------------------------------
                    Six months ended                        Six months ended
                            June 30,                                June 30,
(millions of litres)    2013    2012    (millions of litres)    2013    2012
------------------------------------    ------------------------------------
Residential               72      64    Western Canada           405     386
Commercial               156     140    Eastern Canada           237     228
Agricultural              24      22    Atlantic Canada           52      55
Industrial               404     408                                        
Automotive                38      35                                        
------------------------------------    ------------------------------------
                         694     669                             694     669
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Regions: Western Canada region consists of British Columbia, Alberta,   
    Saskatchewan, Manitoba, Northwest Ontario, Yukon and Northwest          
    Territories; Eastern Canada region consists of Ontario (except for      
    Northwest Ontario) and Quebec; and Atlantic Canada region consists of   
    New Brunswick, Newfoundland & Labrador, Nova Scotia and Prince Edward   
    Island.                                                                 

U.S. Refined Fuels Distribution

U.S. refined fuels distribution gross profit for the second quarter was $24.5 million, an increase of $0.9 million from the prior year quarter. The increase in gross profit was due to higher sales volumes. Sales volumes of 383 million litres, increased by 20 million litres or 6% from the prior year quarter. The increase was primarily due to colder weather at the beginning of the quarter, timing of agricultural sales volumes and increase in gasoline and diesel fuel demand. Weather as measured by heating degree days for the second quarter was 15% higher than the prior year quarter. However, heating related volumes in the second and third quarters are generally not materially impacted by average weather due to the seasonality of U.S. Refined fuels distributions operations. Average U.S. refined fuels sales margins of 6.4 cents per litre were consistent with the 6.5 cents per litre in the prior year quarter.

U.S. Refined Fuels Distribution Sales Volumes


Volumes by End-Use Application(1)       Volumes by Region (2)               
----------------------------------------------------------------------------
                  Three months ended                      Three months ended
                            June 30,                                June 30,
(millions of litres)2013    2012        (millions of litres)    2013    2012
----------------------------------------------------------------------------
Residential         42      37          Northeast United         383     363
                                        States                              
Commercial          189     184                                             
Automotive          152     141                                             
----------------------------------------------------------------------------
                    383     363                                  383     363
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Volumes by End-Use Application(1)       Volumes by Region (2)               
----------------------------------------------------------------------------
                    Six months ended                        Six months ended
                            June 30,                                June 30,
(millions of litres)2013    2012        (millions of litres)    2013    2012
----------------------------------------------------------------------------
Residential         184     163         Northeast United         896     835
                                        States                              
Commercial          416     400                                             
Automotive          296     272                                             
----------------------------------------------------------------------------
                    896     835                                  896     835
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1) Volume: Volume of heating oil, propane, diesel and gasoline sold        
    (millions of litres).                                                   
(2) Regions: Northeast United States region consists of Pennsylvania,       
    Connecticut, New York, and Rhode Island.                                

Other Services

Other services gross profit was $9.2 million in the second quarter, an increase of $1.2 million from the prior year quarter due to higher service calls and installation work.

Supply Portfolio Management

Supply portfolio management gross profits were $5.7 million in the second quarter, an increase of $3.3 million from the prior year quarter due to favourable market conditions, favourable new supply contracts and optimization of arbitrage opportunities through logistics management.

Fixed-Price Energy Services

Fixed-Price Energy Services Gross Profit


----------------------------------------------------------------------------
                                            Three months ended June 30, 2013
     (millions of dollars                                                   
    except volume and per                                                   
            unit amounts)     Gross Profit           Volume         Per Unit
----------------------------------------------------------------------------
          Natural gas (1)              2.9           5.0 GJ    58.0 cents/GJ
          Electricity (2)              1.5        204.9 KWh   0.73 cents/KWh
----------------------------------------------------------------------------
                    Total              4.4                                  
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                              Six months ended June 30, 2013
     (millions of dollars                                                   
    except volume and per                                                   
            unit amounts)     Gross Profit           Volume         Per Unit
----------------------------------------------------------------------------
          Natural gas (1)              5.9           9.5 GJ    62.1 cents/GJ
          Electricity (2)              3.2        410.1 KWh   0.78 cents/KWh
----------------------------------------------------------------------------
                    Total              9.1                                  
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            

----------------------------------------------------------------------------
                                            Three months ended June 30, 2012
     (millions of dollars                                                   
    except volume and per                                                   
            unit amounts)     Gross Profit           Volume         Per Unit
----------------------------------------------------------------------------
          Natural gas (1)              6.6           4.6 GJ   143.5 cents/GJ
          Electricity (2)              2.3        186.6 KWh   1.23 cents/KWh
----------------------------------------------------------------------------
                    Total              8.9                                  
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                              Six months ended June 30, 2012
     (millions of dollars                                                   
    except volume and per                                                   
            unit amounts)     Gross Profit           Volume         Per Unit
----------------------------------------------------------------------------
          Natural gas (1)             11.8           9.4 GJ   125.5 cents/GJ
          Electricity (2)              4.6        371.7 KWh   1.24 cents/KWh
----------------------------------------------------------------------------
                    Total             16.4                                  
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1) Natural gas volumes are expressed in thousands of gigajoules (GJ).      
(2) Electricity volumes are expressed in thousands of kilowatt hours (KWh). 

Fixed-price energy services gross profit was $4.4 million in the second quarter, a decrease of $4.5 million or 51% from $8.9 million in the prior year quarter. Natural gas gross profit was $2.9 million, a decrease of $3.9 million from the prior year quarter due to lower gross margins offset in part by higher sales volumes. Gross profit per unit was 58.0 cents per gigajoule (GJ), a decrease of 85.5 cents per GJ or 60% from the prior year quarter. The decrease in natural gas gross margin was due to sales mix as the existing customer base contains a lower proportion of higher margin residential customers and the continued decline in the total number of higher margin residential customers. Sales volumes of natural gas was 5.0 million GJ, 0.4 million GJ or 9% higher than the prior year quarter due to colder weather. Electricity gross profit in the second quarter of 2013 was $1.5 million, a decrease of $0.8 million or 35% from the prior year quarter due to an increase in the supply cost of electricity, customer mix and an increase in capacity rates.

Operating Costs

Cash operating and administrative costs were $78.8 million in the second quarter of 2013, an increase of $4.5 million or 6% from the prior year quarter. The increase in expenses was primarily due to higher employee costs associated with increased sales volumes and system conversion costs offset in part by the impact of cost reduction initiatives implemented in 2012.

Outlook

EBITDA from operations is anticipated to be higher in 2013 than in 2012 due in part to the assumption that weather will be consistent with the 5-year average in 2013. Superior's 2012 results were negatively impacted by warm weather, as average weather in the first quarter of 2012, as measured by degree days, across Canada and the Northeastern U.S. was at record or near record warmer than normal levels. Additionally, Superior expects to realize ongoing improvements in its financial results as a result of its business initiative activities which will more than offset a reduction in the contribution from the fixed-price energy services business due to Superior exiting the Canadian residential market in prior years.

Initiatives to improve results in the Energy Services business continued during the first half of 2013 in conjunction with Superior's goal for each of its businesses to become best-in-class. Business improvement projects for 2013 include: a) improving customer service, b) improving overall logistics and procurement functions, c) enhancing the management of margins, d) working capital management, and e) improving existing and implementing new technologies to facilitate improvements to the business.

System Conversion

In 2013, Canadian propane distribution commenced the implementation of an order to cash, billing and logistics IT system to replace the distribution and invoicing functions of the present enterprise system. To mitigate the risk associated with system changes, Canadian propane distribution will leverage the learnings from the U.S Refined fuels organization that have been using this new system and implementation will be rolled out one region at a time. The total estimated cost of the implementation is $16.0 million, approximately $9.8 million has been incurred to date and the estimated completion is the summer of 2014.

In addition to the significant assumptions detailed above, refer to "Risk Factors to Superior" for a detailed review of significant business risks affecting the Energy Services' businesses.

Specialty Chemicals

Specialty Chemicals' condensed operating results for 2013 and 2012;


----------------------------------------------------------------------------
(millions of dollars                                                        
 except per metric       Three months ended           Six months ended      
 tonne (MT) amounts)          June 30,                    June 30,          
                                                                            
                         2013         2012(2)        2013         2012(2)   
----------------------------------------------------------------------------
                       $ per MT      $ per MT      $ per MT      $ per MT   
Chemical revenue(1)  137.7   692   137.6   726   282.3   702   270.5   717  
Chemical cost of                                                            
 sales (1)           (79.0) (397)  (76.2) (402) (157.9) (393) (148.0) (392) 
----------------------------------------------------------------------------
Chemical gross                                                              
 profit               58.7   295    61.4   324   124.4   309   122.5   325  
Less: Cash operating                                                        
 and administrative                                                         
 costs(1)            (33.6) (169)  (34.6) (182)  (66.4) (165)  (66.6) (177) 
----------------------------------------------------------------------------
EBITDA from                                                                 
 operations           25.1   126    26.8   142    58.0   144    55.9   148  
Chemical volumes                                                            
 sold (thousands of                                                         
 MTs)                     199           190           402           377     
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1) In order to better reflect the results of its operations, Superior has  
    reclassified certain amounts for purposes of this MD&A related to       
    derivative financial instruments, non-cash amortization and foreign     
    currency translation losses or gains related to U.S.-denominated working
    capital. See "Reconciliation of Divisional Segmented Revenue, Cost of   
    Sales and Cash Operating and Administrative Costs Included in this MD&A"
    for detailed amounts.                                                   
(2) The prior year quarter and period ended June 30, 2012 has been restated 
    for the impact of adopting IAS 19 Employee Benefits on January 1, 2013. 
    Cash operating and administrative costs were increased by $0.5 million  
    for the three months ended June 30, 2012 and $1.0 million for the six   
    months ended June 30, 2012 due to the accounting standard change.       

Chemical revenue for the second quarter of $137.7 million was $0.1 million or nil% higher than in the prior year quarter primarily due to higher sales volumes offset in part by lower pricing. Second quarter gross profit of $58.7 million was $2.7 million lower than in the prior year quarter due to reduced sodium chlorate gross profits. Sodium chlorate gross profits decreased due to lower sales volumes as a result of pulp mill shutdowns for maintenance and lower export sales. Sodium chlorate sales volumes decreased by 1,000 tonnes or 1% compared to the prior year quarter. Sodium Chlorate gross margins were lower than the prior year quarter due to higher average electricity costs. Chloralkali/potassium products gross profits were consistent with the prior year quarter as higher sales volumes were offset by lower pricing. Sales volumes increased by 10,000 tonnes or 15% due to improved plant operational performance and increased customer demand. Pricing was weaker than the prior year quarter particularly for chlorine which remains soft.

Cash operating and administrative costs of $33.6 million were $1.0 million or 3% lower than in the prior year quarter due to lower employee compensation costs.

Major Capital Projects

As announced in the first quarter of 2012, Superior has approved an $18 million expansion of hydrochloric acid production capacity at the Port Edwards, Wisconsin chloralkali facility. The existing capacity of 110,000 wet metric tonnes (WMT), or 36,000 dry metric tonnes, will be increased to approximately 220,000 WMT. The expansion project commenced in 2012, with commercial production expected in the first quarter of 2014.

As announced in the third quarter of 2012, Superior has approved a $25 million expansion of the hydrochloric acid production capacity at the Saskatoon, Saskatchewan chloralkali facility. The existing capacity of 70,000 WMT, or 22,000 dry metric tonnes, will be increased to approximately 140,000 WMT. The expansion project commenced in 2012, with commercial production expected in the fourth quarter of 2014.

As of June 30, 2013, a total of $6.4 million has been spent on the two projects. Upon completion of both projects, Superior will have total hydrochloric acid production capacity of approximately 360,000 WMT. The two expansions will allow Superior to optimize overall returns at both facilities by converting a larger portion of its chlorine into higher-value hydrochloric acid.

Outlook

Superior expects business conditions in 2013 for its Specialty Chemicals business will be similar to 2012. EBITDA from operations, excluding the impact of the $12.5 million one-time payment from TransCanada received in the third quarter of 2012, is anticipated to be slightly higher in 2013 as improved performance of the chloralkali product segment as a result of higher gross profits from hydrochloric acid and modestly higher selling prices for caustic soda will be offset in part by reduced pricing for chlorine. Superior does anticipate that electricity prices will be modestly higher than the prior year. Superior continues to see a stable market for sodium chlorate as a result of the current market for pulp. Superior also expects a stable market for chloralkali sales volumes and pricing as North American supply demand fundamentals continue to be balanced. The market for chloralkali continues to be supported by historically low natural gas prices.

In addition to the significant assumptions detailed above, refer to "Risk Factors to Superior" for a detailed review of the significant business risks affecting Superior's Specialty Chemicals' segment.

Construction Products Distribution

Construction Products Distribution's condensed operating results for 2013 and 2012;


----------------------------------------------------------------------------
                                     Three months ended    Six months ended 
                                               June 30,            June 30, 
(millions of dollars)                    2013      2012      2013      2012 
----------------------------------------------------------------------------
Revenue                                                                     
 Gypsum Specialty Distribution (GSD)                                        
  revenue                               138.7     133.4     262.2     254.5 
 Commercial and Industrial                                                  
  Insulation (C&I) revenue               68.2      66.3     131.2     129.4 
Cost of sales                                                               
 GSD cost of sales                     (107.5)   (104.8)   (202.6)   (198.9)
 C&I cost of sales                      (50.9)    (49.3)    (97.2)    (95.4)
----------------------------------------------------------------------------
Gross profit                             48.5      45.6      93.6      89.6 
Less: Cash operating and                                                    
 administrative costs                   (40.7)    (39.5)    (80.8)    (80.2)
----------------------------------------------------------------------------
EBITDA from operations                    7.8       6.1      12.8       9.4 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(1) In order to better reflect the results of its operations, Superior has  
    reclassified certain amounts for purposes of this MD&A to present its   
    results as if it had accounted for various transactions as accounting   
    hedges. See "Reconciliation of Divisional Segmented Revenue, Cost of    
    Sales and Cash Operating and Administrative Costs Included in this MD&A"
    for detailed amounts.                                                   

GSD and C&I revenues of $206.9 million for the second quarter of 2013 were $7.2 million or 4% higher than in the prior year quarter. GSD revenue increased due to higher sales volumes as U.S. residential construction improved, and project work in most U.S. regions offset in part by lower contribution from the Ontario market due to the impact of a slowdown in residential construction and branch closures completed during 2012. C&I revenues were consistent with the prior year quarter.

Gross profits of $48.5 million in the second quarter were $2.9 million or 6% higher than in the prior year quarter primarily due to the higher revenues as noted above and increased gross margins. The increase in GSD gross margins was due to price increases, achievement of certain rebate plateaus, benefit of closing lower margin branches in 2012 and limiting the amount of lower margin work. C&I gross margins were consistent with the prior year.

Cash operating and administrative costs were $40.7 million in the second quarter, an increase of $1.2 million or 3% from the prior year quarter. The increase was primarily due to higher employee costs.

Outlook

Superior expects business conditions in 2013 for its Construction Products Distribution business to be similar to 2012 with slightly improving conditions in the U.S. and lower residential construction in Canada. EBITDA from operations is anticipated to be higher in 2013 than 2012 due in part to the absence of restructuring costs incurred in 2012. In addition, results will benefit from the ongoing business initiative activities. Superior continues to see difficult market conditions in both the residential and commercial segments in Canada and the U.S. commercial market. Superior does not anticipate significant improvements in the end-use markets in the near term.

Initiatives to improve results in the Construction Products Distribution business continued during the second quarter. Ongoing business improvement projects for 2013 include: a) assessment of overall logistics and existing branch network, b) review of supply chain management including procurement and transportation, c) review of product pricing, d) working capital management and e) sales growth in select focus products/markets.

In addition to the Construction Products Distribution segment's significant assumptions detailed above, refer to "Risk Factors to Superior" for a detailed review of the significant business risks affecting Superior's Construction Products Distribution segment.

Consolidated Capital Expenditure Summary


----------------------------------------------------------------------------
                                     Three months ended    Six months ended 
                                               June 30,            June 30, 
(millions of dollars)                    2013      2012      2013      2012 
----------------------------------------------------------------------------
Efficiency, process improvement and                                         
 growth-related                          10.9       0.5      19.4       2.3 
Other capital                             6.3       6.7       9.5      10.9 
----------------------------------------------------------------------------
                                         17.2       7.2      28.9      13.2 
Proceeds on disposition of capital       (0.5)     (2.8)     (1.0)     (3.7)
----------------------------------------------------------------------------
Total net capital expenditures           16.7       4.4      27.9       9.5 
Investment in finance leases              0.4       0.5       1.4       3.8 
----------------------------------------------------------------------------
Total expenditures                       17.1       4.9      29.3      13.3 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Efficiency, process improvement and growth related expenditures were $10.9 million in the second quarter compared to $0.5 million in the prior year quarter. These are primarily related to Energy Services' purchases of rental assets, truck related expenditures and additional expenditures made during the quarter on the Canadian Propane distribution system conversion as well as the expansion projects at Specialty Chemicals. Other capital expenditures were $6.3 million in the second quarter compared to $6.7 million in the prior year quarter, consisting primarily of required maintenance and general capital across all of Superior's segments. Proceeds on the disposal of capital were $0.5 million in the second quarter and consisted of Superior's disposition of surplus tanks, cylinders and other assets. During the second quarter Superior entered into new leases with capital equivalent value of $0.4 million primarily related to delivery vehicles for the Energy Services and Construction Products Distribution segments.

Corporate and Interest Costs

Corporate costs for the second quarter were $3.7 million, compared to $3.4 million in the prior year quarter. The increase was primarily due to higher long term incentive costs as a result of an increase in Superior's share price and estimated payout amounts offset in part by realized gains on long term incentive hedges.

Interest expense on borrowing and finance lease obligations for the second quarter was $6.4 million compared to $8.2 million in the prior year quarter. The decrease was due to lower average debt as a result of Superior's $143.9 million equity offering ($137.6 million net of issuance costs) which closed on March 27, 2013, higher cash flows and the benefit of debt repayments efforts during the past 12 months offset in part by the convertible debenture redemptions completed during that time. See "Liquidity and Capital Resources" discussion for further details on the change in average debt levels.

Interest on Superior's convertible unsecured subordinated debentures ("Debentures" which include all series of convertible unsecured subordinated debentures) for the second quarter was $7.4 million compared to $8.0 million in the prior year quarter. The decrease was due to the redemption of $49.9 million of Superior's 5.75% convertible subordinated debentures due December 31, 2012 on August 1, 2012 and $50.0 million of Superior's 5.85% convertible subordinated debentures due October 31, 2015 on January 3, 2013 and $25.0 million on April 9, 2013.

Income Taxes

Total income tax recovery for the second quarter was $3.1 million and consists of $0.4 million in cash income tax expense and $3.5 million in deferred income tax recovery, compared to a total income tax recovery of $3.8 million in the prior year quarter, which consisted of $0.3 million in cash income tax expense and a $4.1 million deferred income tax expense.

Cash income tax expense for the second quarter was $0.4 million and consisted of income tax expense in the U.S. of $0.4 million (2012 Q2 - $0.3 million of U.S. cash tax expense). Deferred income tax expense for the second quarter was $3.5 million (2012 Q2 - $4.1 million deferred income tax recovery), resulting in a corresponding net deferred income tax asset of $283.9 million as at June 30, 2013. Deferred income tax recovery was consistent with the prior year quarter.

Canada Revenue Agency (CRA) Income Tax Update

As anticipated in Superior's previous disclosures, Superior received on April 2, 2013 from the CRA, Notices of Reassessment for Superior's 2009 and 2010 taxation years reflecting the CRA's intent to challenge the tax consequences of Superior's corporate conversion transaction (Conversion) which occurred on December 31, 2008. The CRA's position is based on the acquisition of control rules, in addition to the general anti-avoidance rules in the Income Tax Act (Canada). The table below summarizes Superior's estimated tax liabilities and payment requirements associated with the received and anticipated Notices of Reassessment. Upon receipt of the Notices of Reassessment, 50% of the taxes payable pursuant to such Notices of Reassessment, must be remitted to the CRA.


----------------------------------------------------------------------------
                                                                            
                        Taxes Payable    50% of the Taxes                   
     Taxation Year             (1)(2)      Payable (1)(2)      Payment Dates
----------------------------------------------------------------------------
         2009/2010              $13.0                $6.5 Paid in April 2013
              2011          $10.0 (3)                $5.0            Q3 2013
              2012          $10.0 (3)                $5.0            Q3 2013
              2013          $20.0 (3)               $10.0            Q3 2014
----------------------------------------------------------------------------
             Total              $53.0               $26.5                   
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) In millions of dollars                                                  
(2) Includes estimated interest and penalties.                              
(3) Estimated based on Superior's previously filed tax returns and the      
    midpoint of Superior's 2013 outlook.                                    

On May 8, 2013, Superior filed a Notice of Objection with the CRA's appeals division. After 90 days, if the CRA has not responded to or settled the Notice of Objection with Superior, then Superior can make an application to the Tax Court of Canada. Superior anticipates filing its application to the Tax Court of Canada in August 2013 and that a decision in the Tax Court of Canada could be rendered by the end of 2014 or early 2015. If a decision of the Tax Court of Canada were to be appealed, the appeal process could reasonably be expected to take an additional 2 years. If Superior receives a positive decision then any taxes, interest and penalties paid to the CRA will be refunded plus interest and if Superior is unsuccessful then any remaining taxes payable plus interest and penalties will have to be remitted.

Superior remains confident in the appropriateness of its tax filing position and the expected tax consequences of the Conversion and intends to vigorously defend such position and intends to file its future tax returns on a basis consistent with its view of the outcome of the Conversion.

Superior's 2013 financial outlook as provided in this MD&A includes the impact of the reassessments received to date although the interim tax payments made by Superior will be recorded to the balance sheet and will not impact either adjusted operating cash flow or net earnings. Please refer to the Debt Management Summary on page22 for the cash flow implications.

Based on the midpoint of Superior's current 2013 financial outlook of adjusted operating cash flow per share of $1.73, if the tax pools from the Conversion were not available to Superior, the impact would be an increase to cash income taxes of approximately $0.15 per share for 2013. As previously stated, Superior intends to file its future income tax returns on a basis consistent with its view of the outcome of the Conversion.

Financial Outlook

Superior's outlook is for adjusted operating cash flow for 2013 to be between $1.60 per share and $1.85 per share, the bottom end of the outlook has been increased by $0.05 per share from the $1.55 per share to $1.85 per share included in Superiro's first quarter MD&A. The increase in the bottom end of the outlook is due to the actual results achieved to date and management's confidence in the second half of 2013. Achieving Superior's adjusted operating cash flow is dependent on the operating results of its three operating segments.

In addition to the operating results of Superior's three operating segments, significant assumptions underlying Superior's 2013 outlook are:


--  Economic growth in Canada and the U.S. is expected to be similar to or
    modestly higher than in 2012; 
--  Superior is expected to continue to attract capital and obtain financing
    on acceptable terms; 
--  Superior's estimated total debt to EBITDA ratio is based on maintenance
    and growth related expenditures of $78.4 million and working capital
    funding requirements which do not contemplate any significant commodity
    price changes; 
--  The foreign currency exchange rate between the Canadian dollar and US
    dollar is expected to average 1.03 in 2013 on all unhedged foreign
    currency transactions; 
--  Financial and physical counterparties are expected to continue
    fulfilling their obligations to Superior; 
--  Regulatory authorities are not expected to impose any new regulations
    impacting Superior; 
--  Superior's average interest rate on floating-rate debt is expected to
    remain consistent with 2012 levels; and 
--  Canadian and U.S. based cash taxes are expected to be minimal for 2013
    based on existing statutory income tax rates and the ability to use
    available losses. 

Energy Services


--  Average temperatures across Canada and the Northeast U.S. are expected
    to be consistent with the recent five-year average for 2013; 
--  Total propane and U.S. refined fuels-related sales volumes are expected
    to increase in 2013, due to assumptions that weather will be consistent
    with the five-year average and that there will be an impact from
    customer win-back and retention programs; 
--  Wholesale propane and U.S. refined fuels-related prices are not
    anticipated to significantly impact demand for propane, refined fuels
    and related services; 
--  Supply portfolio management market results in 2013 are expected to
    increase as compared to 2012 due to supply chain management efforts,
    favourable supply contract renewals and higher sales volumes due to a
    return to normal weather; and 
--  Fixed-price energy services is expected to be able to access sales
    channel agents on acceptable contract terms although gross profits in
    2013 will decrease from 2012. The decrease will be primarily related to
    lower natural gas gross margins due to lower transportation-related
    gross profits and lower contribution from residential customer renewals
    and residential customer count. Total new customer aggregation volumes
    are expected to decline from 2012 as the system price for natural gas
    remains low. Growth in the fixed-price electricity segment is expected
    to offset a portion of the decline in natural gas gross profits. 

Specialty Chemicals


--  Sodium chlorate sales volumes are expected to increase in 2013 as
    compared to 2012 due to strong demand from North American and Chilean
    markets. Sodium chlorate pricing is expected to increase due to
    continued strong market conditions and impact of contract renewals
    although gross margins are expected to decline slightly as a result of
    higher electricity pricing; 
--  Chloralkali sales volumes are expected to increase in 2013 as compared
    to 2012 due to higher demand for all products. Pricing is expected to be
    soft for chlorine in 2013 as compared to 2012 although it will be
    consistent for other products. Gross profits are expected to be
    consistent with 2012 as lower margins for chlorine products are offset
    by higher on caustic and potassium products; 
--  Electrical costs are expected to increase slightly in 2013 as compared
    to the prior year; and 
--  Average plant utilization will approximate 91% in 2013. 

Construction Products Distribution


--  GSD sales revenue from Canada is expected to decline in 2013 due to
    branch closures and lower residential construction activity, offset in
    part by the successful introduction of new products and price
    management. GSD sales revenue from the U.S. is expected to increase in
    2013 due to continued expansion of existing product lines into U.S.
    branches, emphasis on specific product opportunities, pricing
    initiatives and residential market improvements. C&I sales revenue is
    expected to increase in 2013 due to emphasis on specific product/market
    opportunities and pricing initiatives; 
--  Sales margins for GSD and C&I are expected to increase slightly from
    2012 due to price management initiatives, procurement strategy and
    closure of low-margin branches; and 
--  Operating costs as a percentage of revenue are expected to increase
    slightly due to investment in supply chain capability and inflationary
    increases of wages and other operating costs, offset in part by savings
    from branch closures and restructuring completed in 2012. 

Debt Management Update

Superior's anticipated debt repayment for 2013 and total debt to EBITDA leverage ratio as at December 31, 2013, based on Superior's 2013 financial outlook is detailed in the chart below. Superior will continue to focus on reducing its total debt.

Debt Management Summary


----------------------------------------------------------------------------
                                                                Millions of 
                                              Per Share             dollars 
----------------------------------------------------------------------------
2013 financial outlook AOCF per                                             
 share - mid-point (1)                            $1.73               212.8 
Maintenance capital expenditures,                                           
 net                                              (0.26)              (31.7)
Capital lease obligation repayments               (0.13)              (15.4)
Payment to CRA in relation to tax                                           
 reassessment (2)                                 (0.13)              (16.5)
----------------------------------------------------------------------------
Cash flow available for dividends                                           
 and debt repayment before growth                                           
 capital                                          $1.21               149.2 
Expansion of Port Edward's and                                              
 Saskatoon facilities                             (0.23)              (28.2)
Other growth capital expenditures                 (0.15)              (18.5)
Proceeds from dividend reinvestment                                         
 program                                           0.04                 4.9 
----------------------------------------------------------------------------
Estimated 2013 free cash flow                                               
 available for dividend and debt                                            
 repayment                                        $0.87               107.4 
Proceeds from equity issue, net of                                          
 issue costs                                       1.12               137.8 
Dividends (annualized)                            (0.60)              (73.8)
----------------------------------------------------------------------------
Total estimated debt repayment                                              
 (including YTD 2013 actuals)                     $1.39               171.4 
Estimated total debt to EBITDA ratio                                        
 as at December 31, 2013                    3.3X - 3.7X         3.3X - 3.7X 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Dividend per share (annualized)                   $0.60                73.8 
Calculated payout ratio after all                                           
 capital and payment to CRA                          69%                 69%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See "Financial Outlook" for additional details including assumptions,   
    definitions and risk factors.                                           
(2) See "Canada Revenue Agency Income Tax Update" for additional details.   

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

Liquidity and Capital Resources

Superior's revolving syndicated bank facility (Credit Facility), term loans and finance lease obligations (collectively Borrowing) before deferred financing fees totaled $492.1 million as at June 30, 2013, a decrease of $147.5 million from December 31, 2012. The decrease in Borrowing was primarily due to the equity offering that Superior closed on March 27, 2013 for net proceeds of $137.8 million, the seasonal decrease in net working capital funding requirements offset in part by the $50.0 million debenture redemption (see Redemptions below) on January 3, 2013 and $25.0 million debenture redemption (see Redemptions below) on April 9, 2013.

On June 10, 2013, Superior completed an extension of its $570 million Credit Facility with eight lenders. The Credit Facility matures on June 27, 2016 and can be expanded to $750 million. Financial covenant ratios were unchanged with consolidated secured debt to consolidated EBITDA ratio and a consolidated debt to consolidated EBITDA ratio of 3.0x and 5.0x, respectively. See "Summary of Cash Flow" for details on Superior's sources and uses of cash.

As at June 30, 2013, Debentures (before deferred issue costs) issued by Superior totaled $466.4 million which was $75.1 million lower than the balance as at December 31, 2012 due to the redemption of the 5.75% convertible unsecured subordinated debentures during the third quarter of 2012, first and second quarters of 2013, see Redemptions below for further details. See Note 11 to the unaudited condensed consolidated financial statements for additional details on Superior's Debentures.

Redemptions

On August 1, 2012, Superior completed the redemption of the remaining $49.9 million principal amount of its previously issued 5.75% convertible subordinated debentures (2012 Debentures) due December 31, 2012. Superior used funds from its credit facility to fund the redemption of the 2012 Debentures. The debentures were, in accordance with their terms, redeemed at the redemption price of $1,000 in cash per $1,000 principal amount of 2012 Debentures plus accrued and unpaid interest thereon up to the redemption date.

On January 3, 2013, Superior completed the redemption of $50.0 million principal amount of its previously issued 5.85% convertible subordinated debentures (2015 Debentures) due October 31, 2015. Superior used funds from its Credit Facility to fund the redemption of the 2015 Debentures. The debentures were redeemed, at the redemption price of $1,000 in cash per $1,000 principal amount of 2015 Debentures plus accrued and unpaid interest up to but excluding the redemption date.

On April 9, 2013, Superior redeemed the remaining $25.0 million principal amount of its 5.85% convertible unsecured subordinated debentures ("5.85% Debentures") due October 31, 2015 in accordance with the indenture governing such debentures. The debentures were redeemed at the redemption price which is equal to the outstanding principal amount of 5.85% Debentures to be redeemed, together with all accrued and unpaid interest thereon up to the redemption date.

As at June 30, 2013, approximately $364.1 million was available under the Credit Facility which Superior considers sufficient to meet its expected net working capital, capital expenditure and refinancing requirements.

Consolidated net working capital was $242.3 million as at June 30, 2013, a decrease of $45.5 million from net working capital of $287.8 million as at December 31, 2012. The decrease was primarily due to the seasonal decline in net working capital requirements within the Energy Services segment. This decrease was offset in part by higher net working capital at Specialty Chemicals was due to a decrease in unearned revenue as a prepayment contract with one customer is near completion. Superior's net working capital requirements are financed from revolving term bank credit facilities.

Proceeds received from the DRIP were $1.3 million for the three months ended June 30, 2013 (three months ended June 30, 2012 $3.4 million), a decrease of 2.1 million from the prior year quarter due to the announcement by Superior on March 7, 2013 that it will stop the active operation of its DRIP program effective after payment of the March dividend in April. Proceeds received from the DRIP were $4.9 million for the six months ended June 30, 2013 (six months ended June 30, 2012 $7.0 million).

As at June 30, 2013, when calculated in accordance with the Credit Facility, the consolidated secured debt to compliance EBITDA ratio was 1.2 to 1.0 (December 31, 2012 - 1.9 to 1.0) and the consolidated debt to compliance EBITDA ratio was 1.8 to 1.0 (December 31, 2012 - 2.4 to 1.0). For both of these covenants all outstanding Debentures are not included. These ratios are within the requirements contained in Superior's debt covenants. In accordance with the Credit Facility, Superior must maintain a consolidated secured debt to compliance EBITDA ratio of not more than 3.0 to 1.0 and not more than 3.5 to 1.0 as a result of acquisitions. In addition, Superior must maintain a consolidated debt to compliance EBITDA ratio of not more than 5.0 to 1.0, excluding Debentures. Also, Superior is subject to several distribution tests and the most restrictive stipulates that Distributions (including Debenture holders and related payments) cannot exceed compliance EBITDA less cash income taxes, plus $35.0 million on a trailing 12-month rolling basis. On a 12-month rolling basis as at June 30, 2013, Superior's available distribution amount was $80.0 million under the above noted distribution test.

On March 28, 2013, Standard and Poor's confirmed both Superior and Superior LP's long-term corporate credit rating as BB- and the secured debt rating as BB+. The outlook rating for Superior remains stable. On July 2, 2013, DBRS confirmed Superior LP's senior secured rating of BB (high) and Superior LP's senior unsecured rating of BB (low). The trend for both ratings is stable.

As at June 30, 2013, Superior had an estimated defined benefit pension solvency deficiency of approximately $27.1 million (December 31, 2012 - $36.7 million) and a going concern solvency deficiency of approximately $1.2 million (December 31, 2012 - $6.5 million). Funding requirements required by applicable pension legislation are based upon going concern and solvency actuarial assumptions. These assumptions differ from the going concern actuarial assumptions used in Superior's financial statements. Superior has sufficient liquidity through existing revolving term bank credits and anticipated future operating cash flow to fund this deficiency over the prescribed funding period.

In the normal course of business, Superior is subject to lawsuits and claims. Superior believes the resolution of these matters will not have a material adverse effect, individually or in the aggregate, on Superior's liquidity, consolidated financial position or results of operations. Superior records costs as they are incurred or when they become determinable.

Shareholders' Capital

The weighted average number of common shares issued and outstanding during the second quarter was 119.9 million shares, an increase of 8.3 million weighted average number of common shares from the prior year quarter due to the issuance of 14,291,726 common shares over the year and the resulting impact on weighted average number of common shares outstanding. The following table provides details:


----------------------------------------------------------------------------
                                               Average      Issued Number of
                                            Issuance Price   Common Shares  
                            Closing Date      per Share        (millions)   
----------------------------------------------------------------------------
As at June 30, 2012                                              111.9      
 Issuance of common        July 13, 2012                                    
  shares under Superior's     through                                       
  DRIP                     April 15, 2013       $9.36              1.3      
 Issuance of common                                                         
  shares                   March 27, 2013       $11.10            13.0      
----------------------------------------------------------------------------
As at June 30, 2013                                              126.2      
----------------------------------------------------------------------------
----------------------------------------------------------------------------

As at August 1, 2013, June 30, 2013 and December 31, 2012, the following common shares and securities convertible into common shares were issued and outstanding:


                   August 1, 2013       June 30, 2013     December 31, 2012 
(millions)      Convertible         Convertible         Convertible         
                 Securities   Shares Securities   Shares Securities   Shares
----------------------------------------------------------------------------
Common shares                                                               
 outstanding                   126.2               126.2               112.8
5.85% Debentures                                                            
 (1)                      -        -          -        -      $75.0      2.4
7.50% Debentures                                                            
 (2)                  $69.0      5.3      $69.0      5.3      $69.0      5.3
5.75% Debentures                                                            
 (3)                 $172.5      9.1     $172.5      9.1     $172.5      9.1
6.00% Debentures                                                            
 (4)                 $150.0      9.9     $150.0      9.9     $150.0      9.9
7.50% Debentures                                                            
 (5)                  $75.0      6.6      $75.0      6.6      $75.0      6.6
6.00% Debentures                                                            
 (6)                  $97.0      5.8          -        -          -        -
----------------------------------------------------------------------------
Shares                                                                      
 outstanding and                                                            
 issuable upon                                                              
 conversion of                                                              
 Debentures                    162.9               157.1               146.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Convertible at $31.25 per share.                                        
(2) Convertible at $13.10 per share.                                        
(3) Convertible at $19.00 per share.                                        
(4) Convertible at $15.10 per share.                                        
(5) Convertible at $11.35 per share.                                        
(6) Convertible at $16.75 per share.                                        

Dividends Paid to Shareholders

Dividends paid to Superior's 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 Operating Cash Flow" and "Summary of Cash Flow" for additional details.

Dividends paid to shareholders in the second quarter were $19.0 million (before DRIP proceeds of $1.3 million) or $0.15 per share, an increase of $2.3 million due to the issuance of shares under Superior DRIP during the past 12 months and the equity issuance completed on March 27, 2013. Dividends paid to shareholders in during the six months ended June 30, 2013 was $35.9 million (before DRIP proceeds of $4.9 million) or $0.15 per share, an increase of $2.5 million as compared to the prior year due to the issuance of shares under Superior DRIP during the past 12 months and the equity issuance completed on March 27, 2013. Superior's monthly dividend is $0.05 per share or $0.60 per share on an annualized basis. See "Debt Management Update" for further details. Dividends to shareholders are declared at the discretion of Superior's Board of Directors.

Subsequent Events

On July 22, 2013, Superior announced the successful closing of the previously announced issue of 6.00% convertible unsecured subordinated debentures (the "Debentures") for gross proceeds of $80,000,000 at a price of $1,000 per Debenture (the "Offering"). The underwriters maintain an over-allotment option to purchase up to an additional $12,000,000 aggregate principal amount of Debentures at the same price, exercisable in whole or in part at any time for a period of up to 30 days following July 22, 2013. Concurrent with the closing of the Offering, Superior issued an additional $5,000,000 in Debentures at a price of $1,000 per Debenture pursuant to a private placement to one of its directors. Superior intends to use the net proceeds from the Offering and the private placement initially to repay existing revolving term bank debt which will then be available to be drawn as required to fund the redemption of Superior's 7.50% convertible unsecured subordinated debentures due December 31, 2014 (the "7.50% Debentures") and for working capital and/or general corporate purposes.

On July 22, 2013, Superior announced that on September 3, 2013, it will early redeem the entire $68.9 million principal amount of its 7.50% convertible unsecured subordinated debentures due December 31, 2014. The early redemption allows for Superior to benefit from lower average interest rates in addition to actively managing its balance sheet maturities.

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

Summary of Cash Flow (1)


----------------------------------------------------------------------------
                                    Three months ended     Six months ended 
                                              June 30,             June 30, 
(millions of dollars)                   2013      2012      2013       2012 
----------------------------------------------------------------------------
                                                                            
Cash flow from operating activities     74.8     121.2     165.4      237.6 
Investing activities(2):                                                    
  Purchase of property, plant and                                           
   equipment                           (17.1)     (7.2)    (28.8)     (13.2)
  Proceeds on disposal of property,                                         
   plant and equipment                   0.5       2.8       1.0        3.7 
----------------------------------------------------------------------------
Cash flow used in investing                                                 
 activities                            (16.6)     (4.4)    (27.8)      (9.5)
----------------------------------------------------------------------------
                                                                            
Financing activities:                                                       
  Net proceeds (repayment) of of                                            
   revolving term bank credits and                                          
   other debt                          (32.7)    (94.4)   (156.3)    (186.6)
  Repayment of finance lease                                                
   obligation                           (3.8)     (4.0)     (7.7)      (7.6)
  Redemption of 5.75% convertible                                           
   debentures                          (25.0)        -     (75.0)         - 
  Issuance of common shares                -         -     143.9          - 
  Issue costs on issuance of common                                         
   shares                               (0.2)        -      (6.3)         - 
  Proceeds from the dividend                                                
   reinvestment plan                     1.3       3.4       4.9        7.0 
  Dividends paid to shareholders       (19.0)    (16.7)    (35.9)     (33.4)
----------------------------------------------------------------------------
Cash flow used in financing                                                 
 activities                            (79.4)   (111.7)   (132.4)    (220.6)
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Net (decrease) increase in cash and                                         
 cash equivalents                      (21.2)      5.1       5.2        7.5 
Cash and cash equivalents,                                                  
 beginning of period                    33.9       7.3       7.6        5.2 
Effect of translation of foreign                                            
 denominated cash and cash                                                  
 Equivalents                             0.2       0.1       0.1       (0.2)
----------------------------------------------------------------------------
Cash and cash equivalents, end of                                           
 period                                 12.9      12.5      12.9       12.5 
----------------------------------------------------------------------------
(1) See the consolidated statement of cash flow for additional details.    
(2) See "Consolidated Capital Expenditure Summary" for additional details. 

Financial Instruments - Risk Management

Derivative and non-financial derivatives are used by Superior to manage its exposure to fluctuations in foreign currency exchange rates, interest rates, 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. Refer to Superior's 2012 Annual MD&A for further details on financial instrument risk management.

As at June 30, 2013, Superior has hedged approximately 83% of its estimated US dollar exposure for 2013. The estimated sensitivity of adjusted operating cash flow for Superior, including divisional US exposures with respect to a $0.01 change in the Canadian to United States exchange rate for 2013 is $0.2 million after giving effect to United States forward contracts for 2013, as shown in the table below. Superior's sensitivities and guidance are based on an anticipated average Canadian to US dollar foreign currency exchange rate for 2013 of 1.03.


----------------------------------------------------------------------------
(US$ millions except                                         2018 and       
 exchange rates)         2013  2014   2015  2016     2017  Thereafter Total 
----------------------------------------------------------------------------
Energy Services - US$                                                       
 forward sales           12.4  26.0   26.0     -        -           -  64.4 
Construction Products                                                       
 Distribution - US$                                                         
 forward sales           12.0  12.0   12.0  12.0        -           -  48.0 
Specialty Chemicals -                                                       
 US$ forward sales       84.0 181.0  142.0 101.4     51.0           - 559.4 
Corporate - US$ forward                                                     
 purchases              (35.5)(27.0)     -     -        -           - (62.5)
----------------------------------------------------------------------------
Net US $ forward sales   72.9 192.0  180.0 113.4     51.0           - 609.3 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Energy Services -                                                           
 Average US$ forward                                                        
 sales rate              1.05  1.01   1.01     -        -           -  1.02 
Construction Products                                                       
 Distribution - Average                                                     
 US$ forward sales rate  1.07  1.00   1.00  1.03        -           -  1.02 
Specialty Chemicals -                                                       
 Average US$ forward                                                        
 sales rate              1.04  1.03   1.01  1.04     1.04           -  1.03 
Corporate - US$ forward                                                     
 purchases rate          1.01  1.01      -     -        -           -  1.00 
----------------------------------------------------------------------------
Net average external                                                        
 US$/CDN$ exchange rate  1.05  1.02   1.01  1.04     1.04           -  1.03 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

For additional details on Superior's financial instruments, including the amount and classification of gains and losses recorded in Superior's second quarter condensed consolidated financial statements, summary of fair values, notional balances, effective rates and terms, and significant assumptions used in the calculation of the fair value of Superior's financial instruments, see Note 12 to the unaudited condensed consolidated financial statements.

Disclosure Controls and Procedures and Internal Controls Over Financial Reporting

No changes have been made in Superior's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, Superior's internal control over financial reporting in the quarter ended June 30, 2013.

Critical Accounting Policies and Estimates

Superior's unaudited condensed consolidated financial statements have been prepared in accordance with IFRS. The significant accounting policies are described in the unaudited condensed consolidated financial statements for the period ended June 30, 2013. Certain of these accounting policies, as well as estimates made by management in applying such policies, are recognized as critical because they require management to make subjective or complex judgments about matters that are inherently uncertain. Our critical accounting estimates relate to the allowance for doubtful accounts, employee future benefits, future income tax assets and liabilities, the valuation of derivatives and non-financial derivatives and asset impairments and the assessment of potential asset retirement obligations.

Recent Accounting Pronouncements

Certain new standards, interpretations, amendments or improvements to existing standards were issued by the IASB or the International Financial Reporting Interpretations Committee (IFRIC) that are mandatory for accounting periods beginning on January 1, 2013 or later. The affected standards that apply to Superior are as follows:

IFRS 9 - Financial Instruments: Classification and Measurement

IFRS 9, Financial Instruments, was issued in November 2009 and is intended to replace International Accounting Standard (IAS) 39, Financial Instruments: Recognition and Measurement. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. Requirements for financial liabilities were added in October 2010 and they largely carried forward existing requirements in IAS 39, except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss would generally be recorded in other comprehensive income. This standard is required to be applied for accounting periods beginning on or after January 1, 2015, with earlier adoption permitted. Superior is assessing the effect of IFRS 9 on its financial results and financial position; changes, if any, are not expected to be material.

Superior adopted the following on January 1, 2013:

IFRS 10 - Consolidated Financial Statements

IFRS 10 establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 requires an entity to consolidate an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Under existing IFRS, consolidation is required when an entity has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The revised standard was effective for Superior on January 1, 2013. Superior adopted the amendments on January 1, 2013, with no impact to Superior.

IFRS 11 - Joint Arrangements

IFRS 11 requires a venture to classify its interest in a joint arrangement as a joint venture or joint operation. Joint ventures will be accounted for using the equity method of accounting, whereas joint operations will require the venture to recognize its share of the assets, liabilities, revenue and expenses. This standard became applicable on January 1, 2013. Superior adopted the amendments on January 1, 2013, with no impact to Superior.

IFRS 12 - Disclosure of Interests in Other Entities

IFRS 12 establishes disclosure requirements for interests in other entities, such as joint arrangements, associates, special purpose vehicles and off-balance-sheet vehicles. The standard carries forward existing disclosure and also introduces significant additional disclosure requirements that address the nature of, and risks associated with, an entity's interests in other entities. This standard became effective for Superior on January 1, 2013. Superior adopted the amendments on January 1, 2013, with no impact to Superior.

IFRS 13 - Fair Value Measurement

IFRS 13 defines fair value, sets out a single IFRS framework for measuring fair value and requires disclosure about fair value measurements. IFRS 13 applies to accounting standards that require or permit fair value measurements or disclosure about fair value measurements (and measurements, such as fair value less costs to sell, based on fair value or disclosure about those measurements), except in specified circumstances. IFRS 13 became applicable on January 1, 2013. Superior adopted the amendments on January 1, 2013, with no impact to Superior.

IAS 1 - Presentation of Other Comprehensive Income

The amendments to IAS 1, Presentation of Financial Statements, issued in June 2011, require entities to group items presented in other comprehensive income on the basis of whether they might be reclassified to the consolidated statement of income in subsequent periods and items that will not be reclassified to the consolidated statement of income. The amendments did not address which items are presented in other comprehensive income and did not change the option to present items net of tax. The amendments to IAS 1 became effective for annual periods beginning on or after July 1, 2012, which was January 1, 2013 for Superior, and are to be applied retrospectively. Superior adopted the amendments on January 1, 2013, with no financial impact to Superior.

IAS 19 - Employee Benefits, amendments

IAS 19 amendments were issued in June 2011, and changed the accounting and disclosure for defined benefit plans and termination benefits. The standard requires that the changes in defined benefit obligations are recognized as they occur, eliminating the corridor approach and accelerating the recognition of past service costs. The changes in defined benefit obligations and plan assets are to be disaggregated into three components: service costs, net interest on the net defined benefit liabilities (assets) and re-measurements of the net defined benefit liabilities (assets). This standard applies for accounting periods beginning on or after January 1, 2013. Superior adopted IAS 19 on January 1, 2013 and the financial impact is an increase of $3.1 million to pension expenses and a corresponding decrease to accumulated other comprehensive loss for the year ended December 31, 2012. The impact on Superior's balance sheet as at January 1, 2012 is a $4.0 million increase to retained deficit, a $0.1 million decrease in employee benefit obligations and a corresponding decrease to accumulated other comprehensive loss of $4.1 million. See below for the quarterly impact to AOCF in 2012.

Reconciliation of the retrospective impact of IAS 19


----------------------------------------------------------------------------
                                             (millions of                   
                                                  dollars)       (per share)
----------------------------------------------------------------------------
AOCF as reported under IFRS in 2012                 193.5             $1.73 
                                                                            
IAS 19 Quarterly impact:                                                    
  Q1 decrease in AOCF                                (0.8)           $(0.01)
  Q2 decrease in AOCF                                (0.8)           $(0.01)
  Q3 decrease in AOCF                                (0.8)           $(0.01)
  Q4 decrease in AOCF                                (0.7)                - 
----------------------------------------------------------------------------
AOCF as revised for 2012                            190.4             $1.70 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Quarterly Financial and Operating Information


----------------------------------------------------------------------------
(millions of                                                                
 dollars except                                                             
 per share                                                                  
 amounts)       2013 Quarters        2012 Quarters (2)        2011 Quarters 
               -------------------------------------------------------------
                Second   First Fourth  Third  Second   First  Fourth  Third 
----------------------------------------------------------------------------
Canadian                                                                    
 propane sales                                                              
 volumes                                                                    
 (millions of                                                               
 litres)           265     429    383    240     255     413     368    239 
U.S. refined                                                                
 fuels sales                                                                
 volumes                                                                    
 (millions of                                                               
 litres)           383     512    428    335     363     473     440    344 
Natural gas                                                                 
 sales volumes                                                              
 (millions of                                                               
 GJs)                5       5      5      5       5       5       5      5 
Electricity                                                                 
 sales volumes                                                              
 (millions of                                                               
 KwH)              205     205    200    245     187     185     167    176 
Chemical sales                                                              
 volumes                                                                    
 (thousands of                                                              
 metric tonnes)    199     203    200    193     190     188     187    197 
Revenues         854.4 1,049.9  934.0  790.1   834.3 1,065.9 1,043.4  845.0 
Gross profit     190.0   253.1  228.2  195.9   184.1   238.1   234.6  178.5 
Net earnings                                                                
 (loss)          (25.5)   31.4   13.5   35.9    12.7    27.9  (231.4)(113.4)
Per share,                                                                  
 basic          ($0.20)  $0.28  $0.12  $0.32   $0.11   $0.25  ($2.10)($1.04)
Per share,                                                                  
 diluted        ($0.20)  $0.27  $0.12  $0.29   $0.11   $0.24  ($2.10)($1.04)
Adjusted                                                                    
 operating cash                                                             
 flow             30.2    82.0   61.9   33.7    28.2    66.6    63.8   23.5 
Per share,                                                                  
 basic           $0.24   $0.72  $0.55  $0.30   $0.25   $0.60   $0.58  $0.21 
Per share,                                                                  
 diluted         $0.24   $0.69  $0.55  $0.30   $0.25   $0.60   $0.58  $0.21 
Net working                                                                 
 capital (1)                                                                
 (millions of                                                               
 dollars)        242.3   280.5  287.8  218.3   234.4   325.3   377.3  295.0 
----------------------------------------------------------------------------
(1) Net working capital reflects amounts as at the quarter-end and is       
    comprised of accounts receivable and inventories, less trade and other  
    payables and deferred revenue.                                          
(2) Superior's 2012 quarterly results have been restated for the adoption of
    IAS 19 Employee Benefits.                                               

Non-IFRS Financial Measures

Adjusted Operating Cash Flow

Adjusted operating cash flow is equal to cash flow from operating activities as defined by IFRS, adjusted for changes in non-cash working capital, other expenses, non-cash interest expense, current income taxes and finance costs. Superior may deduct or include additional items in its calculation of adjusted operating cash flow; these items would generally, but not necessarily, be items of a non-recurring nature. Adjusted operating cash flow is the main performance measure used by management and investors to evaluate Superior's performance. Readers are cautioned that adjusted operating cash flow is not a defined performance measure under IFRS and that adjusted operating cash flow cannot be assured. Superior's calculation of adjusted operating cash flow may differ from similar calculations used by comparable entities. Adjusted operating cash flow represents cash flow generated by Superior that is available for, but not necessarily limited to, changes in working capital requirements, investing activities and financing activities of Superior.

The seasonality of Superior's individual quarterly results must be assessed in the context of annualized adjusted operating cash flow. Adjustments recorded by Superior as part of its calculation of adjusted operating cash flow include, but are not limited to, the impact of the seasonality of Superior's businesses, principally the Energy Services segment, by adjusting for non-cash working capital items, thereby eliminating the impact of the timing between the recognition and collection/payment of Superior's revenues and expenses, which can differ significantly from quarter to quarter. Adjustments are also made to reclassify the cash flow related to natural gas and electricity customer contract-related costs in a manner consistent with the income statement's recognition of these costs. Adjusted operating cash flow is reconciled to net cash flow from operating activities on page 11.

EBITDA

EBITDA represents earnings before taxes, depreciation, amortization, finance expense and certain other non-cash expenses, and is used by Superior to assess its consolidated results and the results of its operating segments. EBITDA is not a defined performance measure under IFRS. Superior's calculation of EBITDA may differ from similar calculations used by comparable entities. The EBITDA of Superior's operating segments may be referred to as EBITDA from operations. Net earnings before income taxes are reconciled to EBITDA from operations on page 31.

Compliance EBITDA

Compliance EBITDA represents earnings before interest, taxes, depreciation, amortization and certain other non-cash expenses calculated on a 12 month trailing basis, giving pro forma effect to acquisitions and divestitures, and is used by Superior to calculate its debt covenants and other credit information. Compliance EBITDA is not a defined performance measure under IFRS. Superior's calculation of compliance EBITDA may differ from similar calculations used by comparable entities. See Note 14 to the unaudited condensed consolidated financial statements for a reconciliation of net earnings to compliance EBITDA.

Payout Ratio

Payout ratio represents dividends as a percentage of adjusted operating cash flow less other capital expenditures, and is used by Superior to assess its financial results and leverage. Payout ratio is not a defined performance measure under IFRS. Superior's calculation of payout ratio may differ from similar calculations used by comparable entities.

Reconciliation of Net Earnings before income taxes to EBITDA from Operations (1) (2)


----------------------------------------------------------------------------
                                                                Construction
For the three months ended June        Energy      Specialty        Products
 30, 2013                            Services      Chemicals    Distribution
----------------------------------------------------------------------------
Net Earnings before income                                                  
 taxes                                    0.4           16.4             6.1
Add: Amortization of property,                                              
 plant and equipment and                                                    
 intangible assets                       12.9              -             1.5
  Amortization included in cost                                             
   of sales                                 -            9.7               -
  Gains on disposal of assets            (0.1)             -               -
  Amortization of customer                                                  
   contract related costs                 0.7              -               -
  Customer contract related                                                 
   costs                                 (0.1)             -               -
  Finance costs                           0.7              -             0.2
  Unrealized losses (gains) on                                              
   derivative financial                                                     
   instruments                            0.7           (1.0)              -
----------------------------------------------------------------------------
EBITDA from operations                   15.2           25.1             7.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                Construction
For the three months ended June        Energy      Specialty        Products
 30, 2012                            Services      Chemicals    Distribution
----------------------------------------------------------------------------
Net Earnings before income                                                  
 taxes                                   24.1           13.5             4.5
Add: Amortization of property,                                              
 plant and equipment and                                                    
 intangible assets                       13.8            1.7             1.5
  Amortization included in cost                                             
   of sales                                 -           11.6               -
  (Gains) losses on disposal of                                             
   assets                                (1.5)             -             0.1
  Amortization of customer                                                  
   contract-related costs                 0.9              -               -
  Customer contract-related                                                 
   costs                                 (0.2)             -               -
  Finance costs                           1.0              -               -
  Unrealized gains on                                                       
   derivative financial                                                     
   instruments                          (21.9)             -               -
----------------------------------------------------------------------------
EBITDA from operations                   16.1           26.8             6.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                Construction
For the six months ended June          Energy      Specialty        Products
 30, 2013                            Services      Chemicals    Distribution
----------------------------------------------------------------------------
Net Earnings before income                                                  
 taxes                                   71.7           39.0             9.4
Add: Amortization of property,                                              
 plant and equipment and                                                    
 intangible assets                       25.5              -             3.0
  Amortization included in cost                                             
   of sales                                 -           20.0               -
  Losses on disposal of assets            0.2              -             0.1
  Amortization of customer                                                  
   contract related costs                 1.4              -               -
  Customer contract related                                                 
   costs                                 (0.3)             -               -
  Finance costs                           1.5            0.1             0.3
  Unrealized gains on                                                       
   derivative financial                                                     
   instruments                          (17.2)          (1.1)              -
----------------------------------------------------------------------------
EBITDA from operations                   82.8           58.0            12.8
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                Construction
For the six months ended June          Energy      Specialty        Products
 30, 2012                            Services      Chemicals    Distribution
----------------------------------------------------------------------------
Net Earnings before income                                                  
 taxes                                   58.9           30.0             6.0
Add: Amortization of property,                                              
 plant and equipment and                                                    
 intangible assets                       27.6            3.3             3.0
  Amortization included in cost                                             
   of sales                                 -           22.5               -
  (Gains) losses on disposal of                                             
   assets                                (1.1)             -             0.1
  Amortization of customer                                                  
   contract-related costs                 1.7              -               -
  Customer contract-related                                                 
   costs                                 (0.6)             -               -
  Finance costs                           2.0            0.1             0.3
  Unrealized gains on                                                       
   derivative financial                                                     
   instruments                          (14.3)             -               -
----------------------------------------------------------------------------
EBITDA from operations                   74.2           55.9             9.4
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) See the unaudited condensed consolidated financial statements for net   
    earnings (loss) before income taxes, amortization of property, plant and
    equipment, intangible assets and accretion of convertible debenture     
    issue costs, amortization included in cost of sales, amortization of    
    customer contract costs, customer contract related costs and unrealized 
    (gains) losses on derivative financial instruments.                     
(2) See "Non-IFRS Financial Measures" for additional details.               

Reconciliation of Segmented Revenue, Cost of Sales and Cash Operating and Administrative Costs included in this MD&A


----------------------------------------------------------------------------
                                                For the three months ended  
                                                              June 30, 2013 
                                                               Construction 
                                       Energy      Specialty       Products 
                                     Services      Chemicals   Distribution 
----------------------------------------------------------------------------
Revenue per financial                                                       
 statements                             511.3          136.2          206.9 
 Foreign currency gains related                                             
  to working capital                        -            1.5              - 
----------------------------------------------------------------------------
Revenue per the MD&A                    511.3          137.7          206.9 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Cost of products sold per                                                   
 financial statements                  (417.3)         (88.7)        (158.4)
 Non-cash amortization                      -            9.7              - 
----------------------------------------------------------------------------
Cost of products sold per the                                               
 MD&A                                  (417.3)         (79.0)        (158.4)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Gross profit                             94.0           58.7           48.5 
                                                                            
Selling, distribution and                                                   
 administrative costs per                                                   
 financial statements                   (92.2)         (32.1)         (42.2)
 Amortization and depreciation                                              
  expenses                               12.9              -            1.5 
 (Gains) losses on disposal of                                              
  assets                                 (0.1)             -              - 
 Amortization of customer                                                   
  contract related costs                  0.7              -              - 
 Customer contract related                                                  
  costs                                  (0.1)             -              - 
 Reclassification of foreign                                                
  currency gains related to                                                 
  working capital                           -           (1.5)             - 
----------------------------------------------------------------------------
Cash operating and                                                          
 administrative costs per the                                               
 MD&A                                   (78.8)         (33.6)         (40.7)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            

----------------------------------------------------------------------------
                                                For the three months ended  
                                                              June 30, 2012 
                                                               Construction 
                                       Energy      Specialty       Products 
                                     Services      Chemicals   Distribution 
----------------------------------------------------------------------------
Revenue per financial                                                       
 statements                             498.0          136.6          199.7 
 Foreign currency gains related                                             
  to working capital                        -            1.0              - 
----------------------------------------------------------------------------
Revenue per the MD&A                    498.0          137.6          199.7 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Cost of products sold per                                                   
 financial statements                  (407.6)         (87.8)        (154.1)
 Non-cash amortization                      -           11.6              - 
----------------------------------------------------------------------------
Cost of products sold per the                                               
 MD&A                                  (407.6)         (76.2)        (154.1)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Gross profit                             90.4           61.4           45.6 
                                                                            
Selling, distribution and                                                   
 administrative costs per                                                   
 financial statements                   (87.2)         (35.3)         (41.1)
 Amortization and depreciation                                              
  expenses                               13.8            1.7            1.5 
 (Gains) losses on disposal of                                              
  assets                                 (1.5)             -            0.1 
 Amortization of customer                                                   
  contract related costs                  0.8              -              - 
 Customer contract related                                                  
  costs                                  (0.2)             -              - 
 Reclassification of foreign                                                
  currency gains related to                                                 
  working capital                           -           (1.0)             - 
----------------------------------------------------------------------------
Cash operating and                                                          
 administrative costs per the                                               
 MD&A                                   (74.3)         (34.6)         (39.5)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
                                                  For the six months ended  
                                                              June 30, 2013 
                                                               Construction 
                                       Energy      Specialty       Products 
                                     Services      Chemicals   Distribution 
----------------------------------------------------------------------------
Revenue per financial                                                       
 statements                           1,231.0          279.9          393.4 
 Foreign currency gains                                                     
  (losses) related to working                                               
  capital                                   -            2.4              - 
----------------------------------------------------------------------------
Revenue per the MD&A                  1,231.0          282.3          393.4 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Cost of products sold per                                                   
 financial statements                  (983.5)        (177.9)        (299.8)
 Non-cash amortization                      -           20.0              - 
----------------------------------------------------------------------------
Cost of products sold per the                                               
 MD&A                                  (983.5)        (157.9)        (299.8)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Gross profit                            247.5          124.4           93.6 
                                                                            
Selling, distribution and                                                   
 administrative costs per                                                   
 financial statements                  (191.5)         (64.0)         (83.9)
 Amortization and depreciation                                              
  expenses                               25.5              -            3.0 
 (Gains) losses on disposal of                                              
  assets                                  0.2              -            0.1 
 Amortization of customer                                                   
  contract related costs                  1.4              -              - 
 Customer contract related                                                  
  costs                                  (0.3)             -              - 
 Reclassification of foreign                                                
  currency (gains) and losses                                               
  related to working capital                -           (2.4)             - 
----------------------------------------------------------------------------
Cash operating and                                                          
 administrative costs per the                                               
 MD&A                                  (164.7)         (66.4)         (80.8)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                                                  For the six months ended  
                                                              June 30, 2012 
                                                               Construction 
                                       Energy      Specialty       Products 
                                     Services      Chemicals   Distribution 
----------------------------------------------------------------------------
Revenue per financial                                                       
 statements                           1,245.6          270.7          383.9 
 Foreign currency gains                                                     
  (losses) related to working                                               
  capital                                   -           (0.2)             - 
----------------------------------------------------------------------------
Revenue per the MD&A                  1,245.6          270.5          383.9 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Cost of products sold per                                                   
 financial statements                (1,013.2)        (170.5)        (294.3)
 Non-cash amortization                      -           22.5              - 
----------------------------------------------------------------------------
Cost of products sold per the                                               
 MD&A                                (1,013.2)        (148.0)        (294.3)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Gross profit                            232.4          122.5           89.6 
                                                                            
Selling, distribution and                                                   
 administrative costs per                                                   
 financial statements                  (185.8)         (70.1)         (83.3)
 Amortization and depreciation                                              
  expenses                               27.6            3.3            3.0 
 (Gains) losses on disposal of                                              
  assets                                 (1.1)             -            0.1 
 Amortization of customer                                                   
  contract related costs                  1.7              -              - 
 Customer contract related                                                  
  costs                                  (0.6)             -              - 
 Reclassification of foreign                                                
  currency (gains) and losses                                               
  related to working capital                -            0.2              - 
----------------------------------------------------------------------------
Cash operating and                                                          
 administrative costs per the                                               
 MD&A                                  (158.2)         (66.6)         (80.2)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Risk Factors to Superior

The risks factors and uncertainties detailed below are a summary of Superior's assessment of its material risk factors as detailed in Superior's 2012 Annual Information Form under "Risk Factors" which is filed on the Canadian Securities Administrators' website, www.sedar.com, and on Superior's website, www.superiorplus.com.

Risks to Superior

Superior depends entirely on the operations and assets of Superior LP. Superior's ability to make dividend payments to its shareholders depends on the ability of Superior LP to make distributions on its outstanding limited partnership units, as well as on the operations and business of Superior LP.

There is no assurance regarding the amount of cash to be distributed by Superior LP or generated by Superior LP and, therefore, there is no assurance regarding funds available for dividends to shareholders. The amount distributed in respect of the limited partnership units will depend on a variety of factors including, without limitation, the performance of Superior LP's operating businesses, the effect of acquisitions or dispositions on Superior LP, and other factors that may be beyond the control of Superior LP or Superior. In the event significant sustaining capital expenditures are required by Superior LP or the profitability of Superior LP declines, there would be a decrease in the amount of cash available for dividends to shareholders and such decrease could be material.

Superior's dividend policy and the distribution policy of Superior LP are subject to change at the discretion of the Board of Directors of Superior or the Board of Directors of Superior General Partner Inc., the general partner of Superior LP, as applicable. Superior's dividend policy and the distribution policy of Superior LP are also limited by contractual agreements including agreements with lenders to Superior and its affiliates and by restrictions under corporate law.

Since the beginning of 2010, the CRA has requested and reviewed information from Superior relating to the plan of arrangement involving Superior Plus Income Fund and Ballard Power Systems Inc. and the Conversion. On February 11, 2013, Superior received the proposal letter from the CRA. The proposal letter proposes to deny the availability of capital losses of approximately $623 million and other tax basis of approximately $1,000 million. On April 2, 2013, Superior received from the CRA, Notices of Reassessment for Superior's 2009 and 2010 taxation years. On May 8, 2013, Superior filed a Notice of Objection with the CRA's appeals division. Superior remains confident in the appropriateness of its tax filing position and the expected tax consequences of the Arrangement and the Conversion and intends to vigorously defend such position. Superior also strongly believes that the acquisition of control or the general anti-avoidance rule do not apply to the Arrangement and the Conversion and intends to file its future tax returns on a basis consistent with its view of the outcome of the Arrangement and the Conversion.

The credit facilities and U.S. Notes of Superior LP contain covenants that require Superior LP to meet certain financial tests and that restrict, among other things, the ability of Superior LP to incur additional debt, dispose of assets or pay dividends/distributions in certain circumstances. These restrictions may preclude Superior LP from returning capital or making distributions on the limited partnership units.

The payout by Superior LP of substantially all of its available cash flow means that capital expenditures to fund growth opportunities can only be made in the event that other sources of financing are available. Lack of access to such additional financing could limit the future growth of the business of Superior LP and, over time, have a material adverse effect on the amount of cash available for dividends to shareholders.

To the extent that external sources of capital, including public and private markets, become limited or unavailable, Superior's and Superior LP's ability to make the necessary capital investments to maintain or expand the current business, and to make necessary principal payments and debenture redemptions under its term credit facilities may be impaired.

Superior maintains a substantial floating interest rate exposure through a combination of floating interest rate borrowing and the use of derivative instruments. Demand levels for approximately half of Energy Services' sales and substantially all of Specialty Chemicals' and Construction Products Distribution's sales are affected by general economic trends. Generally speaking, when the economy is strong, interest rates increase, as does demand from Superior's customers, thereby increasing Superior's sales and its ability to pay higher interest costs, and vice-versa. In this way, there is a common relationship between economic activity levels, interest rates and Superior's ability to pay higher or lower rates. Increased interest rates, however, will affect Superior's borrowing costs, which may have an adverse effect on Superior.

A portion of Superior's net cash flow is denominated in US dollars. Accordingly, fluctuations in the Canadian/US dollar exchange rate can affect profitability. Superior attempts to mitigate this risk by hedging.

The timing and amount of capital expenditures incurred by Superior LP or by its subsidiaries will directly affect the amount of cash available to Superior for dividends to shareholders. Dividends may be reduced, or even eliminated, at times when significant capital expenditures are incurred or other unusual expenditures are made.

If the Board of Directors of Superior decides to issue additional common shares, preferred shares or securities convertible into common shares, existing shareholders may suffer significant dilution.

There can be no assurance that income tax laws in the numerous jurisdictions in which Superior operates will not be changed, interpreted or administered in a manner which adversely affects Superior and its shareholders. In addition, there can be no assurance that the CRA (or provincial tax agency), U.S. Internal Revenue Service (or a state or local tax agency), or the Chilean Internal Revenue Service (collectively, the Tax Agencies) will agree with how Superior calculates its income for tax purposes or that the various Tax Agencies will not change their administrative practices to the detriment of Superior or its shareholders.

Risks to Superior's segments

Energy Services

Canadian Propane Distribution and U.S. Refined Fuels

Propane is sold in competition with other energy sources such as fuel oil, electricity and natural gas. While propane is usually more cost-effective than electricity, electricity is a major competitor in most areas. Fuel oil is also used as a residential, commercial and industrial source of heat. Except for certain industrial and commercial applications, propane is generally not competitive with natural gas in areas where natural gas service exists. Other alternative energy sources such as compressed natural gas, methanol and ethanol are available or could be further developed and could have an impact on the propane industry in general and Canadian propane distribution in particular, in the future. The trend towards increased conservation measures and technological advances in energy efficiency may have a detrimental effect on propane demand and Canadian propane distribution's sales. Demand for traditional propane end-use applications is increasing marginally with general economic growth. However, increases in the cost of propane encourage customers to reduce fuel consumption and to invest in more energy efficient equipment, reducing demand. Automotive propane demand is presently stabilizing after several years of decline but this trend could return depending upon propane pricing and the market acceptance of propane conversion options and the availability of infrastructure.

Competition in the U.S. refined fuels' business markets generally occurs on a local basis between large, full-service, multi-state marketers and smaller, independent local marketers. Marketers primarily compete based on price and service and tend to operate in close proximity to customers, typically within a 35-mile marketing radius from a central depot, in order to minimize delivery costs and provide prompt service.

Weather and general economic conditions affect distillates market volumes. Weather influences the immediate demand for distillates, primarily for heating, while longer-term demand declines due to economic conditions as customers trend towards conservation and supplement heating with alternative sources such as wood pellets.

The trend towards increased conservation measures and technological advances in energy efficiency may have a detrimental effect on propane and heating oil demand and Superior's sales. Further, increases in the cost of propane encourage customers to conserve fuel and to invest in more energy-efficient equipment, reducing demand. Changes in propane supply costs are normally passed through to customers, but timing lags (between when Superior purchases the propane and when the customer purchases the propane) may result in positive or negative gross margin fluctuations.

Superior offers its customers various fixed-price propane and heating oil programs. In order to mitigate the price risk from offering these services, Superior uses its physical inventory position, supplemented by forward commodity transactions with various third parties having terms and volumes substantially the same as its customers' contracts. In periods of high propane price volatility the fixed-price programs create exposure to over or under-supply positions as the demand from customers may significantly exceed or fall short of supply procured. In addition, if propane prices decline significantly subsequent to customers signing up for a fixed-price program, there is a risk that customers will default on their commitments.

Superior's operations are subject to the risks associated with handling, storing and transporting propane in bulk. Slight quantities of propane may also be released during transfer operations. To mitigate risks, Superior has established a comprehensive environmental, health and safety protection program. It consists of an environmental policy, codes of practice, periodic self-audits, employee training, quarterly and annual reporting and emergency prevention and response.

The U.S. refined fuels business, through a centralized safety and environment management system, ensures that safety practices and regulatory compliance are an important part of its business. The storage and delivery of refined fuels pose the potential for spills which impact the soil and water of storage facilities and customer properties.

Superior's fuel distribution businesses are based and operate in Canada and the United States and, as a result, such operations could be affected by changes to laws, rules or policies which may either be more favourable to competing energy sources or increase compliance costs or otherwise negatively affect the operations of Energy Services in comparison to such competing energy sources. Any such changes could have an adverse effect on the operations of Energy Services.

In 2013, Canadian propane distribution commenced the implementation of an order to cash, billing and logistics IT system to replace the distribution and invoicing functions of the present enterprise system. To mitigate the risk associated with system changes, Canadian propane distribution will leverage the learnings from the U.S refined fuels organization that have been using this new system and implementation will be rolled out one region at a time.

Approximately 19% of Superior's Canadian propane distribution business employees are unionized and 5% of U.S. refined fuels distribution business employees are unionized. Collective bargaining agreements are renegotiated in the normal course of business. While labour disruptions are not expected, there is always risk associated with the renegotiation process that could have an adverse impact on Superior.

Fixed-price energy services business

There may be new market entrants in the energy retailing business that compete directly for the customer base that Superior targets, slowing or reducing its market share.

Superior Energy Management (SEM) purchases natural gas to meet its estimated commitments to its customers based on their historical consumption of gas. Depending on a number of factors, including weather, customer attrition and poor economic conditions affecting commercial customers' production levels, customer natural gas consumption may vary from the volume purchased. This variance must be reconciled and settled at least annually and may require SEM to purchase or sell natural gas at market prices which may have an adverse impact on the results of this business. To mitigate potential balancing risk, SEM closely monitors its balancing position and takes measures such as adjusting gas deliveries and transferring gas between pools of customers, minimizing imbalances. The reserve is reviewed on a monthly basis to ensure that it is sufficient to absorb any losses that might arise from balancing.

SEM matches its customers' estimated electricity requirements by entering into electricity swaps as customers are acquired customers within pre-determined risk tolerances. Depending on several factors, including weather, customers' energy consumption may vary from the volumes purchased by SEM. SEM is able to invoice existing commercial electricity customers for balancing charges when the amount of energy used is greater than or less than the tolerance levels set initially. In certain circumstances, there can be balancing issues for which SEM is responsible when customer aggregation forecasts are not realized.

Fixed-price energy services manages its fixed-price term natural gas sales commitments by entering into various physical natural gas and US dollar foreign exchange purchase contracts for similar terms and volumes to create an effective Canadian dollar fixed-price cost of supply. Superior transacts with eight financial and physical natural gas counterparties. There can be no assurance that any of these counterparties will not default on any of their obligations to Superior. The financial condition of each counterparty is, however, evaluated and credit limits are established to minimize Superior's exposure to this risk. There is also a risk that supply commitments and foreign exchange positions may become unmatched; however, this is monitored daily in compliance with Superior's risk management policy.

Fixed-price energy services must retain qualified sales agents in order to properly execute its business strategy. The continued growth of fixed-price energy services is reliant on the services of agents to sign up new customers. There can be no assurance that competitive conditions will allow these agents to achieve these customer additions. Lack of success in the marketing programs of fixed-price energy services would limit future growth of cash flow.

Fixed-price energy services operates in the highly regulated energy industry in Ontario and Quebec. Changes to laws could impact this business' operations. As part of the current regulatory framework, local delivery companies are mandated to perform certain services on behalf of fixed-price energy services, including invoicing, collection, assuming specific bad debt risks, and storage and distribution of natural gas. Any elimination or changes to these rules could have a significant adverse effect on the results of this business. Fixed-price energy services also markets electricity in Pennsylvania and New York State and natural gas in New York State only. The regulatory environment in Pennsylvania is favourable to retail choice. The Pennsylvania Utility Commission's Retail Market Investigation focused on solutions to increase retail market share and included orders for utilities to investigate retail opt-in auctions to entice customers to consider retail choice, reduce enrolment timelines, implement retail referral programs and design seamless moves that would reduce churn as a customer moves or changes accounts.

Specialty Chemicals

Specialty Chemicals competes with sodium chlorate, chloralkali and potassium producers on a worldwide basis. Key competitive factors include price, product quality, logistics capability, reliability of supply, technical capability and service. The end-use markets for products are correlated to the general economic environment and the competitiveness of customers, all of which are outside of the segment's control, along with market pricing for pulp.

Specialty Chemicals has long-term electricity contracts or electricity contracts that renew automatically with power producers in each of the jurisdictions where its plants are located. There is no assurance that Specialty Chemicals will remain able to secure adequate supplies of electricity at reasonable prices or on acceptable terms.

Potassium chloride (KCl) is a major raw material used in the production of potassium hydroxide at the Port Edwards, Wisconsin facility. Substantially all of Specialty Chemicals KCl is received from Potash Corporation of Saskatchewan. Specialty Chemicals currently has a limited ability to source KCl from additional suppliers.

Specialty Chemicals is exposed to fluctuations in the US dollar and the euro versus the Canadian dollar. Specialty Chemicals manages its exposure to fluctuations between the US dollar and Canadian dollar by entering into hedge contracts with external third parties and internally with other Superior businesses.

Specialty Chemicals' operations involve the handling, production, transportation, treatment and disposal of materials that are classified as hazardous and are regulated by environmental and health and safety laws, regulations and requirements. There is potential for the release of highly toxic and lethal substances, including chlorine. Equipment failure could result in damage to facilities, death or injury and liabilities to third parties. If at any time the appropriate regulatory authorities deem any of the segment's facilities unsafe, they may order that such facilities be shut down.

Specialty Chemicals' operations and activities in various jurisdictions require regulatory approval for the handling, production, transportation and disposal of chemical products and waste substances. The failure to obtain or comply fully with such applicable regulatory approval may materially adversely affect Specialty Chemicals.

Specialty Chemicals' production facilities maintain complex process and electrical equipment. The facilities have existed for many years and undergone upgrades and improvements. Routine maintenance is regularly completed to ensure equipment is operated within appropriate engineering and technical requirements. Notwithstanding Specialty Chemicals' operating standards and history of limited downtime, breakdown of an electrical transformer or rectifier equipment and certain other equipment would temporarily reduce production at the affected facility. Although the segment has insurance coverage to mitigate substantial loss due to equipment outage, Specialty Chemicals' reputation and its ability to meet customer requirements could be negatively affected by a major electrical equipment failure.

Approximately 24% of Specialty Chemicals' employees are unionized. Collective bargaining agreements are renegotiated in the normal course of business. While labour disruptions are not expected, there is always risk associated with the negotiation process that could have an adverse impact on Superior.

Construction Products Distribution

Activity in the Construction Products Distribution segment is subject to changes in general economic activity and, in particular, residential and non-residential construction. New residential construction is subject to such factors as household income, employment levels, customer confidence, population changes and the local supply of residential units. Residential renovation is not as sensitive to these factors and can provide some balance in the demand for residential construction product distribution. Non-residential activity can be subdivided into commercial, industrial and institutional. New construction in these sectors is subject to many of the same general economic factors as for residential activity. In the industrial and institutional subsectors, government and regulatory programs can also have a significant impact on the outlook for product distribution, particularly as related to Superior's insulation businesses. As a result, changes to general economic activity or other factors mentioned above that affect the amount of construction or renovation in residential and non-residential markets can have an adverse effect on the segment's business and Superior.

Construction Products Distribution competes with other specialty construction distributors servicing the builder/contractor market, in addition to big-box home centres and independent lumber yards. The ability to remain competitive depends on the segment's ability to provide reliable service at competitive prices.

The GSD market is driven largely by residential and non-residential construction. Demand for wall and ceiling building materials is affected by changes in general and local economic factors including demographic trends, employment levels, interest rates, consumer confidence and overall economic growth. These factors in turn affect existing housing sales, new home construction, new non-residential construction, and office/commercial space turnover, all of which are significant factors in determining demand for products and services.

The C&I market is driven largely by C&I construction spending and economic growth. Demand is influenced by commercial construction and renovation, the construction, maintenance and expansion of industrial process facilities (such as oil refineries, petrochemical plants and power generation facilities) and institutional facilities in the government, healthcare and education sectors.

The distribution of walls and ceilings and C&I products involves risks, including the failure or substandard performance of equipment, human error, natural disasters, suspension of operations and new governmental statutes, regulations, guidelines and policies. Operations are also subject to various hazards incidental to the handling, processing, storage and transportation of certain hazardous materials, including industrial chemicals. These hazards can result in personal injury including fatalities, damage to and destruction of property and equipment and environmental damage. There can be no assurance that as a result of past or future operations, there will not be claims of injury by employees or members of the public due to exposure, or alleged exposure, to these materials. There can be no assurance as to the actual amount of these liabilities or the timing of them, if any. The business maintains safe working practices through proper procedures and direction and utilization of equipment such as forklifts, boom trucks, fabrication equipment and carts/dollies. The business handles and stores a variety of construction materials and maintains appropriate material handling compliance programs in accordance with local, state/provincial and federal regulations.

Approximately 4% of Construction Products Distribution's employees are unionized. Collective bargaining agreements are renegotiated in the normal course of business. While labour disruptions are not expected, there is always risk associated with the negotiation process that could have an adverse impact on the segment and Superior.


SUPERIOR PLUS CORP.                                                         
Condensed Consolidated Balance Sheets                                       
----------------------------------------------------------------------------
(unaudited, millions of Canadian                   June 30,    December 31, 
 dollars)                              Notes           2013         2012(1) 
----------------------------------------------------------------------------
Assets                                                                      
Current Assets                                                              
Cash and cash equivalents                              12.9             7.6 
Trade and other receivables             4&12          349.4           389.0 
Prepaid expenses                                       37.7            24.7 
Inventories                                           178.6           213.7 
Unrealized gains on derivative                                              
 financial instruments                    12            7.8            16.6 
----------------------------------------------------------------------------
Total Current Assets                                  586.4           651.6 
----------------------------------------------------------------------------
                                                                            
Non-Current Assets                                                          
Property, plant and equipment              6          833.0           829.9 
Intangible assets                                      35.5            39.6 
Goodwill                                              189.1           189.1 
Notes and finance lease receivables                    10.3            10.1 
Deferred tax                              13          289.0           303.1 
Unrealized gains on derivative                                              
 financial instruments                    12            7.7            12.9 
----------------------------------------------------------------------------
Total Non-Current Assets                            1,364.6         1,384.7 
----------------------------------------------------------------------------
                                                                            
Total Assets                                        1,951.0         2,036.3 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Liabilities and Equity                                                      
Current Liabilities                                                         
Trade and other payables                   8          295.1           314.1 
Deferred revenue                           9            9.0            18.2 
Borrowing                                 10           57.4            59.7 
Convertible unsecured subordinated                                          
 debentures                            11&21              -            50.0 
Dividends and interest payable                         19.3             7.3 
Unrealized losses on derivative                                             
 financial instruments                    12           29.5            36.5 
----------------------------------------------------------------------------
Total Current Liabilities                             410.3           485.8 
----------------------------------------------------------------------------
                                                                            
Non-Current Liabilities                                                     
Borrowing                                 10          430.0           574.7 
Convertible unsecured subordinated                                          
 debentures                               11          452.5           475.1 
Other liabilities                          9            0.3             1.0 
Provisions                                 7           16.2            17.6 
Employee future benefits                               40.2            54.0 
Deferred tax                              13            5.1             2.5 
Unrealized losses on derivative                                             
 financial instruments                    12           71.7            42.6 
----------------------------------------------------------------------------
Total Non-Current Liabilities                       1,016.0         1,167.5 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Total Liabilities                                   1,426.3         1,653.3 
----------------------------------------------------------------------------
                                                                            
Equity                                                                      
Capital                                             1,788.4         1,646.5 
Deficit                                            (1,240.0)       (1,209.4)
Accumulated other comprehensive loss                  (23.7)          (54.1)
----------------------------------------------------------------------------
Total Equity                              14          524.7           383.0 
----------------------------------------------------------------------------
                                                                            
Total Liabilities and Equity                        1,951.0         2,036.3 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) December 31, 2012 has been restated for the impact of adopting IAS 19   
    Employee Benefits,amendments on January 1, 2013. Refer to Note 2.       
                                                                            
See accompanying Notes to the Condensed Consolidated Financial Statements.  
                                                                            
SUPERIOR PLUS CORP.                                                         
                                                                            
Condensed Consolidated Statement of Changes in Equity                       
----------------------------------------------------------------------------
(unaudited,                                              Accumulated        
 millions of                                                   other        
 Canadian         Share Contributed    Total           comprehensive        
 dollars)       Capital  Surplus(1)  Capital   Deficit          loss  Total 
----------------------------------------------------------------------------
January 1, 2012 1,629.8         3.3  1,633.1  (1,228.2)        (55.3) 349.6 
 Impact of                                                                  
  adopting IAS                                                              
  19, Employee                                                              
  Benefits,                                                                 
  amendments                                                                
  (note 2)            -           -        -      (4.0)          4.1    0.1 
----------------------------------------------------------------------------
Restated as at                                                              
 January 1,                                                                 
 2012           1,629.8         3.3  1,633.1  (1,232.2)        (51.2) 349.7 
 Net earnings         -           -        -      40.6             -   40.6 
 Shares issued                                                              
  under                                                                     
  Dividend                                                                  
  Reinvestment                                                              
  Plan              7.0           -      7.0         -             -    7.0 
 Dividends                                                                  
  declared to                                                               
  shareholders        -           -        -     (33.5)            -  (33.5)
 Unrealized                                                                 
  foreign                                                                   
  currency                                                                  
  losses on                                                                 
  translation                                                               
  of foreign                                                                
  operations          -           -        -         -           1.6    1.6 
 Actuarial                                                                  
  defined                                                                   
  benefit gains       -           -        -         -          (3.6)  (3.6)
 Income tax                                                                 
  recovery on                                                               
  other                                                                     
  comprehensive                                                             
  loss                -           -        -         -           1.4    1.4 
----------------------------------------------------------------------------
June 30, 2012   1,636.8         3.3  1,640.1  (1,225.1)        (51.8) 363.2 
----------------------------------------------------------------------------
 Net earnings         -           -        -      49.4             -   49.4 
 Option value                                                               
  associated                                                                
  with                                                                      
  redemption of                                                             
  convertible                                                               
  debentures          -        (0.8)    (0.8)        -             -   (0.8)
 Shares issued                                                              
  under                                                                     
  Dividend                                                                  
  Reinvestment                                                              
  Plan              7.2           -      7.2         -             -    7.2 
 Dividends                                                                  
  declared to                                                               
  shareholders        -           -        -     (33.7)            -  (33.7)
 Unrealized                                                                 
  foreign                                                                   
  currency                                                                  
  losses on                                                                 
  translation                                                               
  of foreign                                                                
  operations          -           -        -         -         (10.6) (10.6)
 Actuarial                                                                  
  defined                                                                   
  benefit gains       -           -        -         -          10.8   10.8 
 Income tax                                                                 
  expense on                                                                
  other                                                                     
  comprehensive                                                             
  loss                -           -        -         -          (2.5)  (2.5)
----------------------------------------------------------------------------
December 31,                                                                
 2012           1,644.0         2.5  1,646.5  (1,209.4)        (54.1) 383.0 
----------------------------------------------------------------------------
Net earnings          -           -        -       5.9             -    5.9 
 Option value                                                               
  associated                                                                
  with                                                                      
  redemption of                                                             
  convertible                                                               
  debentures          -        (0.6)    (0.6)        -             -   (0.6)
 Shares issued                                                              
  under                                                                     
  Dividend                                                                  
  Reinvestment                                                              
  Plan              4.9           -      4.9         -             -    4.9 
 Issuance of                                                                
  common shares   137.6           -    137.6         -             -  137.6 
 Dividends                                                                  
  declared to                                                               
  shareholders        -           -        -     (36.5)            -  (36.5)
 Unrealized                                                                 
  foreign                                                                   
  currency                                                                  
  gains on                                                                  
  translation                                                               
  of foreign                                                                
  operations          -           -        -         -          23.1   23.1 
 Actuarial                                                                  
  defined                                                                   
  benefit gains       -           -        -         -          11.9   11.9 
 Income tax                                                                 
  expense on                                                                
  other                                                                     
  comprehensive                                                             
  loss                -           -        -         -          (4.6)  (4.6)
----------------------------------------------------------------------------
June 30, 2013   1,786.5         1.9  1,788.4  (1,240.0)        (23.7) 524.7 
----------------------------------------------------------------------------
(1) Contributed surplus represents Superior's equity reserve for the option 
    value associated with the issuance of convertible unsecured subordinated
    debentures and warrants.                                                
                                                                            
See accompanying Notes to the Condensed Consolidated Financial Statements.  


                                                                            
SUPERIOR PLUS CORP.                                                         
Condensed Consolidated Statement of Net Earnings and Total Comprehensive    
 Income                                                                     
----------------------------------------------------------------------------
                                   Three months ended      Six months ended 
                                             June 30,              June 30, 
(unaudited, millions of                                                     
 Canadian dollars except                                                    
 per share amounts)        Notes      2013    2012(1)       2013    2012(1) 
----------------------------------------------------------------------------
REVENUES                      17     854.4      834.3    1,904.3    1,900.2 
Cost of sales (includes                                                     
 products & services)         17    (664.4)    (650.2)  (1,461.2)  (1,478.0)
----------------------------------------------------------------------------
Gross profit                         190.0      184.1      443.1      422.2 
----------------------------------------------------------------------------
                                                                            
EXPENSES                                                                    
Selling, distribution and                                                   
 administrative costs         17     170.3      166.3      349.4      346.6 
Finance expense               17      15.3       18.7       33.8       40.1 
Unrealized losses (gains)                                                   
 on derivative financial                                                    
 instruments                  12      33.0       (9.8)      41.3       (7.4)
----------------------------------------------------------------------------
                                     218.6      175.2      424.5      379.3 
----------------------------------------------------------------------------
                                                                            
Net earnings (loss)                                                         
 before income taxes                 (28.6)       8.9       18.6       42.9 
Income tax recovery                                                         
 (expense)                    13       3.1        3.8      (12.7)      (2.3)
----------------------------------------------------------------------------
Net earnings (loss)                  (25.5)      12.7        5.9       40.6 
----------------------------------------------------------------------------
                                                                            
Net earnings (loss)                  (25.5)      12.7        5.9       40.6 
Other comprehensive                                                         
 income (loss):                                                             
Unrealized foreign                                                          
 currency gains on                                                          
 translation of foreign                                                     
 operations                           15.3        8.1       23.1        1.6 
Actuarial defined benefit                                                   
 gains (losses)                        5.8       (8.7)      11.9       (3.6)
Income tax recovery                                                         
 (expense) on other                                                         
 comprehensive income                                                       
 (loss)                               (3.2)       2.5       (4.6)       1.4 
----------------------------------------------------------------------------
Other comprehensive                                                         
 income (loss)                        17.9        1.9       30.4       (0.6)
----------------------------------------------------------------------------
Total comprehensive                                                         
 income (loss) for the                                                      
 period                               (7.6)      14.6       36.3       40.0 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings (loss) per                                                     
 share                                                                      
Basic and diluted             15 $   (0.20) $    0.11  $    0.05  $    0.36 
----------------------------------------------------------------------------
(1) Three and six months ended June 30, 2012 has been restated for the      
    impact of adopting IAS 19 Employee Benefits,amendments on January 1,    
    2013. Refer to Note 2.                                                  
                                                                            
See accompanying Notes to the Condensed Consolidated Financial Statements.  
                                                                            
SUPERIOR PLUS CORP.                                                         
Condensed Consolidated Statement of Cash Flows                              
----------------------------------------------------------------------------
                                   Three months ended      Six months ended 
                                             June 30,              June 30, 
(unaudited, millions of                                                     
 Canadian dollars except                                                    
 per share amounts)        Notes      2013    2012(1)       2013    2012(1) 
----------------------------------------------------------------------------
OPERATING ACTIVITIES                                                        
Net earnings (loss) for                                                     
 the period                          (25.5)      12.7        5.9       40.6 
Adjustments for:                                                            
  Depreciation included                                                     
   in selling,                                                              
   distribution and                                                         
   administrative costs        6      10.3       10.6       20.6       21.2 
  Amortization of                                                           
   intangible assets                   4.2        6.4        8.1       12.7 
  Depreciation included                                                     
   in cost of sales            6       9.7       11.6       20.0       22.5 
  Amortization of                                                           
   customer contract-                                                       
   related costs                       0.7        0.8        1.4        1.7 
  (Gains) Losses on                                                         
   disposal of assets                 (0.1)      (1.4)       0.3       (1.0)
  Unrealized losses                                                         
   (gains) on derivative                                                    
   financial instruments      12      33.0       (9.8)      41.3       (7.4)
  Customer contract-                                                        
   related costs                      (0.1)      (0.2)      (0.3)      (0.6)
  Finance expense                                                           
   recognized in net                                                        
   earnings (loss)                    15.3       18.7       33.8       40.1 
  Income tax expense                                                        
   (recovery) recognized                                                    
   in net earnings                                                          
   (loss)                             (3.1)      (3.8)      12.7        2.3 
  Decrease in non-cash                                                      
   operating working                                                        
   capital                    16      52.6       95.4       48.5      129.8 
----------------------------------------------------------------------------
Net cash flows from                                                         
 operating activities                 97.0      141.0      192.3      261.9 
Income taxes received                                                       
 (paid)                               (6.3)         -       (6.3)       0.4 
Interest paid                        (15.9)     (19.8)     (20.6)     (24.7)
----------------------------------------------------------------------------
Cash flows from                                                             
 operating activities                 74.8      121.2      165.4      237.6 
----------------------------------------------------------------------------
                                                                            
INVESTING ACTIVITIES                                                        
Purchase of property,                                                       
 plant and equipment          19     (17.1)      (7.2)     (28.8)     (13.2)
Proceeds from disposal                                                      
 of property, plant and                                                     
 equipment                             0.5        2.8        1.0        3.7 
----------------------------------------------------------------------------
Cash flows used in                                                          
 investing activities                (16.6)      (4.4)     (27.8)      (9.5)
----------------------------------------------------------------------------
                                                                            
FINANCING ACTIVITIES                                                        
Net repayment of                                                            
 revolving term bank                                                        
 credits and other debt              (32.7)     (94.4)    (156.3)    (186.6)
Repayment of finance                                                        
 lease obligations                    (3.8)      (4.0)      (7.7)      (7.6)
Redemption of 5.85%                                                         
 convertible debentures              (25.0)         -      (75.0)         - 
Proceeds from issuance                                                      
 of common shares                        -          -      143.9          - 
Issue costs on issuance                                                     
 of common shares                     (0.2)         -       (6.3)         - 
Proceeds from the                                                           
 dividend reinvestment                                                      
 program                               1.3        3.4        4.9        7.0 
Dividends paid to                                                           
 shareholders                        (19.0)     (16.7)     (35.9)     (33.4)
----------------------------------------------------------------------------
Cash flows used in                                                          
 financing activities                (79.4)    (111.7)    (132.4)    (220.6)
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Net (decrease) increase                                                     
 in cash and cash                                                           
 equivalents                         (21.2)       5.1        5.2        7.5 
Cash and cash                                                               
 equivalents, beginning                                                     
 of period                            33.9        7.3        7.6        5.2 
Effect of translation of                                                    
 foreign currency-                                                          
 denominated cash and                                                       
 cash equivalents                      0.2        0.1        0.1       (0.2)
----------------------------------------------------------------------------
Cash and cash                                                               
 equivalents, end of                                                        
 period                               12.9       12.5       12.9       12.5 
----------------------------------------------------------------------------
(1) Three and six months ended June 30, 2012 has been restated for the      
    impact of adopting IAS 19 Employee Benefits,amendments on January 1,    
    2013. Refer to Note 2.                                                  
                                                                            
See accompanying Notes to the Condensed Consolidated Financial Statements.  

Notes to the Unaudited Condensed Consolidated Financial Statements

(unaudited, Tabular amounts in millions of Canadian dollars, except per share amounts)

1. Organization

Superior Plus Corp. (Superior) is a diversified business corporation, incorporated under the Canada Business Corporations Act. The registered office is at suite 1400, 840 - 7th Avenue S.W., Calgary, Alberta. Superior holds 100% of Superior Plus LP (Superior LP), a limited partnership formed between Superior General Partner Inc., as general partner and Superior as limited partner. Superior holds 100% of the interest of Superior General Partner Inc. Superior does not conduct active business operations but rather distributes to shareholders a portion of the income it receives from Superior Plus LP in the form of partnership allocations, net of expenses and interest payable on the convertible unsecured subordinated debentures (the debentures). Superior's investments in Superior Plus LP are financed by share capital and debentures. Superior is a publicly traded company with its common shares trading on the Toronto Stock Exchange ("TSX") under the exchange symbol SPB.

The accompanying unaudited condensed consolidated financial statements (consolidated financial statements) of Superior as at June 30, 2013 and the three and six months ended June 30, 2013 and 2012 were authorized for issuance by the Board of Directors on August 1, 2013.

Reportable Operating Segments

Superior operates three distinct reportable operating segments: Energy Services, Specialty Chemicals and Construction Products Distribution. Superior's Energy Services operating segment provides distribution, wholesale procurement and related services in relation to propane, heating oil and other refined fuels. Energy Services also provides fixed-price natural gas and electricity supply services. Specialty Chemicals is a leading supplier of sodium chlorate and technology to the pulp and paper industries and a regional supplier of potassium and chloralkali products in the U.S. Midwest. Construction Products Distribution is one of the largest distributors of commercial and industrial insulation in North America and the largest distributor of specialty construction products to the walls and ceilings industry in Canada (See Note 19).

2. Basis of Presentation

The accompanying consolidated financial statements were prepared in accordance and comply with International Accounting Standards 34 Interim Financial Reporting (IAS 34) as issued by the International Accounting Standards Board (IASB) using the accounting policies Superior adopted in its annual consolidated financial statements as at and for the year ended December 31, 2012 other than the standards adopted as at January 1, 2013. The accounting policies are based on the International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations that were applicable at that time. These accounting policies have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently throughout the consolidated entities.

The consolidated financial statements are presented in Canadian dollars, which is Superior's functional currency. All financial information presented in Canadian dollars has been rounded to the nearest hundred-thousand. These consolidated financial statements should be read in conjunction with Superior's 2012 annual consolidated financial statements.

The consolidated financial statements were prepared on the historical cost basis except for certain financial instruments that are measured at fair value as explained in Superior's 2012 annual consolidated financial statements and incorporate the accounts of Superior and its wholly-owned subsidiaries. Subsidiaries are all entities over which Superior has the power to govern the financial and operating policies generally accompanying a shareholding of more than one-half of the voting rights. The results of subsidiaries are included in Superior's statement of net earnings (loss) from date of acquisition or, in the case of disposals, up to the effective date of disposal. All transactions and balances between Superior and Superior's subsidiaries are eliminated on consolidation. Superior's subsidiaries are all wholly owned directly or indirectly by Superior Plus Corp.

Significant Accounting Policies

(a) Significant Accounting Judgments, Estimates and Assumptions

The preparation of Superior's consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, net earnings (loss) and related disclosure. The estimates and associated assumptions are based on historical experience and various other factors deemed reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The areas involving a higher degree of judgment or complexity, or where assumptions and estimates are significant to the financial statements are consistent with those disclosed in Superior's 2012 annual consolidated financial statements.

(b) Recent Accounting Pronouncements

Certain new standards, interpretations, amendments and improvements to existing standards were issued by the IASB or International Financial Reporting Interpretations Committee (IFRIC) that are mandatory for accounting periods beginning January 1, 2013 or later periods. The affected standards are consistent with those disclosed in Superior's 2012 annual consolidated financial statements.

Superior adopted the following standards on January 1, 2013:

IFRS 10 - Consolidated Financial Statements

IFRS 10 establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 requires an entity to consolidate an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Under previous IFRS, consolidation is required when an entity has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The revised standard was effective for Superior on January 1, 2013. Superior adopted the amendments on January 1, 2013, with no impact to Superior.

IFRS 11 - Joint Arrangements

IFRS 11 requires a venture to classify its interest in a joint arrangement as a joint venture or joint operation. Joint ventures will be accounted for using the equity method of accounting, whereas joint operations will require the venture to recognize its share of the assets, liabilities, revenue and expenses. This standard became applicable on January 1, 2013. Superior adopted the amendments on January 1, 2013, with no impact to Superior.

IFRS 12 - Disclosure of Interests in Other Entities

IFRS 12 establishes disclosure requirements for interests in other entities, such as joint arrangements, associates, special purpose vehicles and off-balance-sheet vehicles. The standard carries forward existing disclosure and also introduces significant additional disclosure requirements that address the nature of, and risks associated with, an entity's interests in other entities. This standard became effective for Superior on January 1, 2013. Superior adopted the amendments on January 1, 2013, with no impact to Superior.

IFRS 13 - Fair Value Measurement

IFRS 13 defines fair value, sets out a single IFRS framework for measuring fair value and requires disclosure about fair value measurements. IFRS 13 applies to accounting standards that require or permit fair value measurements or disclosure about fair value measurements (and measurements, such as fair value less costs to sell, based on fair value or disclosure about those measurements), except in specified circumstances. IFRS 13 became applicable on January 1, 2013. Superior adopted the amendments on January 1, 2013, with no impact to Superior.

IAS 1 - Presentation of Other Comprehensive Income

The amendments to IAS 1, Presentation of Financial Statements, issued in June 2011, require entities to group items presented in other comprehensive income on the basis of whether they might be reclassified to the consolidated statement of income in subsequent periods and items that will not be reclassified to the consolidated statement of income. The amendments did not address which items are presented in other comprehensive income and did not change the option to present items net of tax. The amendments to IAS 1 became effective for annual periods beginning on or after July 1, 2012, which was January 1, 2013 for Superior, and are to be applied retrospectively. Superior adopted the amendments on January 1, 2013, with no impact to Superior.

IFRS 9 - Financial Instruments: Classification and Measurement

IFRS 9, Financial Instruments, was issued in November 2009 and is intended to replace IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. Requirements for financial liabilities were added in October 2010 and they largely carried forward existing requirements in IAS 39, Financial Instruments - Recognition and Measurement, except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss would generally be recorded in other comprehensive income. This standard is required to be applied for accounting periods beginning on or after January 1, 2015, with earlier adoption permitted. Superior adopted the amendments on January 1, 2013, with no impact to Superior.

IAS 19 - Employee Benefits, amendments

IAS 19 amendments were issued in June 2011 that changed the accounting and disclosure for defined benefit plans and termination benefits. This standard requires that the changes in defined benefit obligations are recognized as they occur, eliminating the corridor approach and accelerating the recognition of past service costs. The changes in defined benefit obligations and plan assets are to be disaggregated into three components: service costs, net interest on the net defined benefit liabilities (assets) and re-measurements of the net defined benefit liabilities (assets). This standard must be applied for accounting periods beginning on or after January 1, 2013. Superior adopted IAS 19 on January 1, 2012 and the financial impact is an increase of $3.1 million to pension expense and a corresponding decrease to accumulated other comprehensive loss (AOCL) for the year ended December 31, 2012. The impact on Superior's balance sheet as at January 1, 2012 is a $4.0 million increase to deficit, a $0.1 million decrease in employee benefit obligations and a corresponding decrease to accumulated other comprehensive loss of $4.1 million. The impact on the three and six months ended June 30, 2012 was an increase in Selling, distribution and administrative costs of $0.8 million and 1.6 million, respectively.

3. Seasonality of Operations

Energy Services

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 from heating end-use customers. They then decline through the second and third quarters rising seasonally again in the fourth quarter with heating demand. Similarly, net working capital is typically at seasonally high levels during the first and fourth quarters, and normally declines to seasonal low in the second and third quarters. Net working capital is also significantly influenced by wholesale propane prices and other refined fuels.

Construction Products Distribution

Sales typically peak during the second and third quarters with the seasonal increase in building and renovation activities. They then decline through the fourth quarters and into the subsequent first quarter. Similarly, net working capital is typically at seasonally highs levels during the second and third quarters, and normally decline to seasonal lows in the fourth and first quarters.

4. Trade and Other Receivables

A summary of trade and other receivables is as follows:


                                                     June 30,   December 31,
                                          Note           2013           2012
----------------------------------------------------------------------------
Trade receivables, net of allowances        12          322.4          355.9
Accounts receivable - other                              26.1           32.3
Finance lease receivable                                  0.9            0.8
----------------------------------------------------------------------------
Trade and other receivables                             349.4          389.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------

5. Inventories

The cost of inventories recognized as an expense during the three and six months ended June 30, 2013 was $599.4 million (June 30, 2012 - $582.9 million) and $1,342.9 million (June 30, 2012 - $1,339.1 million). Superior recorded an inventory write down during the three and six months ended June 30, 2013 and 2012 of $nil million (June 30, 2012 - $3.6 million) and $nil million (June 30, 2012 - $2.9 million), respectively. Superior recorded no reversals of inventory write downs during the three and six months ended June 30, 2013 and 2012.

6.Property, Plant and Equipment


----------------------------------------------------------------------------
                                                  Specialty  Energy Services
                                            Chemicals Plant        Retailing
                           Land   Buildings     & Equipment        Equipment
----------------------------------------------------------------------------
Cost                                                                        
----------------------------------------------------------------------------
Balance at December                                                         
 31, 2012                  29.7       148.6           738.3            589.8
----------------------------------------------------------------------------
Balance at June 30,                                                         
 2013                      30.0       150.9           765.8            605.6
----------------------------------------------------------------------------
                                                                            
Accumulated                                                                 
 Depreciation                                                               
----------------------------------------------------------------------------
Balance at December                                                         
 31, 2012                     -        43.4           346.3            306.0
----------------------------------------------------------------------------
Balance at June 30,                                                         
 2013                         -        47.1           369.0            321.0
----------------------------------------------------------------------------
                                                                            
Carrying Amount                                                             
----------------------------------------------------------------------------
Balance at December                                                         
 31, 2012                  29.7       105.2           392.0            283.8
----------------------------------------------------------------------------
Balance at June 30,                                                         
 2013                      30.0       103.8           396.8            284.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                              Construction                                  
                                  Products                                  
                              Distribution           Leasehold              
                                 Equipment        Improvements         Total
----------------------------------------------------------------------------
Cost                                                                        
----------------------------------------------------------------------------
Balance at December                                                         
 31, 2012                             43.3                 9.7       1,559.4
----------------------------------------------------------------------------
Balance at June 30,                                                         
 2013                                 44.6                 9.6       1,606.5
----------------------------------------------------------------------------
                                                                            
Accumulated                                                                 
 Depreciation                                                               
----------------------------------------------------------------------------
Balance at December                                                         
 31, 2012                             25.6                 8.2         729.5
----------------------------------------------------------------------------
Balance at June 30,                                                         
 2013                                 28.5                 7.9         773.5
----------------------------------------------------------------------------
                                                                            
Carrying Amount                                                             
----------------------------------------------------------------------------
Balance at December                                                         
 31, 2012                             17.7                 1.5         829.9
----------------------------------------------------------------------------
Balance at June 30,                                                         
 2013                                 16.1                 1.7         833.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Depreciation per cost category:


                                  Three Months Ended        Six Months Ended
                                            June 30,                June 30,
                                    2013        2012        2013        2012
----------------------------------------------------------------------------
Cost of sales                        9.7        11.6        20.0        22.5
Selling, distribution and                                                   
 administrative costs               10.3        10.6        20.6        21.2
----------------------------------------------------------------------------
Total                               20.0        22.2        40.6        43.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------

The carrying amount of Superior's property, plant, and equipment includes $64.2 million of leased assets as at June 30, 2013 (December 31, 2012 - $67.8 million).

7. Provisions


----------------------------------------------------------------------------
                                   Decommissioning   Environmental          
                                             Costs    Expenditures    Total 
----------------------------------------------------------------------------
Balance at the beginning of the                                             
 period                                       16.2             1.4     17.6 
Additions                                        -             0.1      0.1 
Utilization                                      -            (0.2)    (0.2)
Unwinding of discount                          0.2               -      0.2 
Impact of change in discount rate             (2.1)              -     (2.1)
Net foreign currency exchange                                               
 difference                                    0.5             0.1      0.6 
----------------------------------------------------------------------------
Balance at the end of the period              14.8             1.4     16.2 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Decommissioning costs

Specialty Chemicals

Superior makes full provision for the future cost of decommissioning Specialty Chemicals' chemical facilities. The provision is on a discounted basis and is based on existing technologies at current prices or long-term price assumptions, depending on the activity's expected timing. As at June 30, 2013, the discount rate used in Superior's calculation was 2.9% (December 31, 2012 - 2.4%). Superior estimates the total undiscounted amount of expenditures required to settle its decommissioning liabilities is approximately $20.5 million (December 31, 2012 - $20.1 million) which will be paid over the next nineteen to twenty-seven years. While Superior's provision for decommissioning costs is based on the best estimate of future costs and the economic lives of the chemical facilities, the amount and timing of these costs is uncertain.

Energy Services

Superior makes full provision for the future costs of decommissioning certain assets associated with the Energy Services segment. Superior estimates the total undiscounted expenditures required to settle its decommissioning liabilities to be approximately $9.4 million at June 30, 2013 (December 31, 2012 - $8.8 million) which will be paid out over the next nineteen years. The risk-free rate of 2.9% at June 30, 2012 (December 31, 2012 - 2.4%) was used to calculate the present value of the estimated cash flows.

Environmental Expenditures

Provisions for environmental remediation are made when a clean-up is probable and the amount of the obligation can be reliably estimated. Generally, this coincides with commitment to a formal plan or, if earlier, on divestment or closure of inactive sites. Superior estimates the total undiscounted expenditures required to settle its environmental expenditures to be approximately $1.4 million at June 30, 2013 (December 31, 2012 - $1.4 million) which will be paid out over the next two years. The provision for environmental expenditures has been estimated using existing technology, at current prices and discounted using a risk-free discount rate of 2.9% at June 30, 2013 (December 31, 2012 - 2.4%). The extent and cost of future remediation programs are inherently difficult to estimate. They depend on the scale of any possible contamination, the timing and extent of corrective actions, and Superior's share of the liability.

8. Trade and Other Payables

A summary of trade and other payables is as follows:


                                                    June 30,    December 31,
                                                        2013            2012
----------------------------------------------------------------------------
Trade payables                                         228.7           241.6
Net benefit obligation                                   3.8             3.6
Other payables                                          34.5            57.7
Amounts due to customers under construction                                 
 contracts                                               1.6             1.3
Share-based payments                                    26.5             9.9
----------------------------------------------------------------------------
Trade and other payables                               295.1           314.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------

9. Deferred Revenue


                                                   June 30,    December 31, 
                                                       2013            2012 
----------------------------------------------------------------------------
Balance at the beginning of the period                 19.2            14.2 
Deferred during the period                              5.7            29.1 
Released to net earnings (loss)                       (16.0)          (23.9)
Foreign exchange impact                                 0.4            (0.2)
----------------------------------------------------------------------------
Balance at the end of the period                        9.3            19.2 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                    June 30,    December 31,
                                                        2013            2012
----------------------------------------------------------------------------
Current                                                  9.0            18.2
Non-current                                              0.3             1.0
----------------------------------------------------------------------------
                                                         9.3            19.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------

The deferred revenue relates to Energy Services' unearned service revenue and Specialty Chemicals' unearned product-related revenues.

10. Borrowing


                      Year of  Effective Interest     June 30,  December 31,
                     Maturity  Rate                       2013          2012
----------------------------------------------------------------------------
Revolving term bank                                                         
 credits(1)                                                                 
  Bankers                      Floating BA rate                             
   Acceptances (BA)            plus applicable                              
                         2016  credit spread              58.8         148.6
  Canadian Prime               Prime rate plus                              
   Rate Loan             2016  credit spread              13.0          13.0
  LIBOR Loans                  Floating LIBOR rate                          
                               plus applicable                              
                         2016  credit spread              80.9         137.3
  (US77.0 million;                                                          
   2012 US $138.0                                                           
   million)                                                                 
  US Base Rate Loan            US Prime rate plus                           
                         2016  credit spread              27.5          34.5
  (US$26.1 million;                                                         
   2012- US$34.6                                                            
   million)                                                                 
----------------------------------------------------------------------------
                                                         180.2         333.4
----------------------------------------------------------------------------
Other Debt                                                                  
  Accounts                                                                  
   receivable                                                               
   factoring                                                                
   program(2)               -  Floating BA Plus            6.9             -
  Deferred                     Non-interest-                                
   consideration    2013-2016  bearing                     2.5           2.7
----------------------------------------------------------------------------
                                                           9.4           2.7
----------------------------------------------------------------------------
Senior Secured                                                              
 Notes(3)                                                                   
----------------------------------------------------------------------------
  Senior secured                                                            
   notes subject to                                                         
   fixed interest                                                           
   rates (US$92.0                                                           
   million; 2012 -                                                          
   US$92.0 million) 2013-2015  7.65%                      96.7          91.5
----------------------------------------------------------------------------
                                                                            
Senior Unsecured                                                            
 Debentures                                                                 
----------------------------------------------------------------------------
  Senior unsecured                                                          
   debentures            2016  8.25%                     150.0         150.0
----------------------------------------------------------------------------
                                                                            
Finance Lease                                                               
 Obligations                                                                
----------------------------------------------------------------------------
  Finance lease                                                             
   obligations                                            55.9          62.0
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
  Total borrowing                                                           
   before deferred                                                          
   financing fees                                        492.2         639.6
  Deferred                                                                  
   financing fees                                        (4.8)         (5.2)
----------------------------------------------------------------------------
  Borrowing                                              487.4         634.4
  Current                                                                   
   maturities                                           (57.4)        (59.7)
----------------------------------------------------------------------------
  Borrowing                                              430.0         574.7
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) On June 10, 2013, Superior and its wholly-owned subsidiaries, Superior  
    Plus Financing Inc. and Commercial E Industrial (Chile) Limitada,       
    extended its $570 million credit facility which can be expanded up to   
    $750 million. The credit facilities matures on June 27, 2016 and are    
    secured by a general charge over the assets of Superior and certain of  
    its subsidiaries. As at June 30, 2013, Superior had $25.6 million of    
    outstanding letters of credit (December 31, 2012 - $31.1 million) and   
    approximately $116.5 million of outstanding financial guarantees        
    (December 31, 2012 - $121.9 million). The fair value of Superior's      
    revolving term bank credits, other debt, letters of credit, and         
    financial guarantees approximates their carrying value as a result of   
    the market based-interest rates, the short-term nature of the underlying
    debt instruments and other related factors.                             
(2) Superior has entered into a Master Receivables Purchase Agreement (MRPA)
    with a financial institution where it may purchase from time to time, on
    an uncommitted revolving basis, a 100% interest in receivables from     
    Superior. The maximum aggregate amount of purchased receivables         
    purchased by the financial institution under this agreement and         
    outstanding at any time is limited to $15.0 million. As at June 30,     
    2013, the accounts receivable factoring program totaled CDN $6.9 million
    (CDN$nil million at December 31, 2012).                                 
(3) Senior secured notes (the Notes) totaling US$92.0 million and US$92.0   
    million (respectively, CDN$96.7 million at June 30, 2013 and CDN $91.5  
    million at December 31, 2012) are secured by a general charge over the  
    assets of Superior and certain of its subsidiaries. Principal repayments
    began in the fourth quarter of 2009. Management has estimated the fair  
    value of the Notes based on comparisons to treasury instruments with    
    similar maturities, interest rates and credit risk profiles. The        
    estimated fair value of the Notes as at June 30, 2013 was CDN$105.7     
    million (December 31, 2012 - CDN$94.4 million).                         

Repayment requirements of Borrowing before deferred financing costs are as follows:


Current maturities                                                      57.4
Due in 2014                                                             49.6
Due in 2015                                                             47.2
Due in 2016                                                            336.7
Due in 2017                                                              0.9
Due in 2018                                                              0.4
Subsequent to 2018                                                         -
----------------------------------------------------------------------------
Total                                                                  492.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------

11. Convertible Unsecured Subordinated Debentures

Superior's debentures are as follows:


----------------------------------------------------------------------------
                     October    December    June    June  October           
Maturity         2015 (1) (2)       2014    2017    2018     2016      Total
Interest rate            5.85%      7.50%   5.75%   6.00%    7.50%  Carrying
Conversion price                                                            
 per share             $31.25     $13.10  $19.00  $15.10   $11.35      Value
----------------------------------------------------------------------------
Debentures                                                                  
 outstanding as                                                             
 at June 30,                                                                
 2013                       -       67.6   168.1   144.4     72.4      452.5
Debentures                                                                  
 outstanding as                                                             
 at December 31,                                                            
 2012                    74.1       67.4   167.6   144.0     72.0      525.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Quoted market                                                               
 value as at                                                                
 June 30, 2013              -       70.3   175.1   152.3     84.3      482.0
Quoted market                                                               
 value as at                                                                
 December 31,                                                               
 2012                    75.2       71.4   169.2   148.0     84.2      548.0
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Superior redeemed $50.0 million of the outstanding amount of the 5.85%  
    October 2015 convertible unsecured subordinated debenture, on January 3,
    2013.                                                                   
(2) Superior made a final redemption of $25.0 million being the total       
    outstanding amount on the 5.85% October 2015 convertible unsecured      
    subordinated debentures, on April 9, 2013.                              

The debentures may be converted into shares at the option of the holder at any time prior to maturity and may be redeemed by Superior in certain circumstances. Superior may elect to pay interest and principal upon maturity or redemption by issuing shares to a trustee in the case of interest payments, and to the debenture holders in the case of payment of principal. The number of any shares issued will be determined based on market prices for the shares at the time of issuance. Superior also has a cash conversion put option which allows Superior to settle any conversion of debentures in cash, in lieu of delivering common shares to the debenture holders of the June 2018 and October 2016 convertible debentures. The cash conversion put option has been classified as an embedded derivative and measured at fair value through net earnings (loss) (FVTNEL) (see Note 12 for further details).

12. Financial Instruments

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


--  Level 1 - quoted prices in active markets for identical instruments. 
--  Level 2 - quoted prices for similar instruments in active markets;
    quoted prices for identical or similar instruments in markets that are
    not active; and model-derived valuations in which all significant inputs
    and significant value drivers are observable in active markets. 
--  Level 3 - valuations derived from valuation techniques in which one or
    more significant inputs or significant value drivers are unobservable. 

The fair value of a financial instrument is the consideration estimated to be agreed upon in an arm's-length transaction between knowledgeable, willing parties who are under no compulsion to act. Fair values are determined by reference to quoted bid or asking prices, as appropriate, in the most advantageous active market for that instrument to which Superior has immediate access (Level 1). Where bid and ask prices are unavailable, Superior uses the closing price of the most recent transaction of the instrument. In the absence of an active market, Superior estimates fair values based on prevailing market rates (bid and ask prices, as appropriate) for instruments with similar characteristics and risk profiles or internal or external valuation models, such as discounted cash flow analysis using, to the extent possible, observable market-based inputs (Level 2). Superior uses internally developed methodologies and unobservable inputs to determine the fair value of some financial instruments when required (Level 3).

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

During August 2012, Specialty Chemicals received a payment of $15.8 million from TransCanada Energy Ltd., a subsidiary of TransCanada Corporation, in connection with the arbitration ruling related to the Sundance Power Purchase Agreement (PPA) between TransAlta Corporation and TransCanada Corporation. The payment resulted from the Electrical Sales Agreement (ESA) between TransCanada Corporation and Superior whereby TransCanada Corporation supplies Superior with fixed-priced energy from the PPA. A one-time gain of $12.5 million, representing the payment, net of certain settlement costs, is recorded in cost of goods sold. This settlement relates to Specialty Chemicals' fixed-price electricity purchase agreement which expires in 2017. Specialty Chemicals expects to receive electricity production from the PPA by July 31, 2013 once the production units have been returned to service.

With respect to the valuation of Specialty Chemicals' fixed-price electricity agreement, the valuation of this agreement requires Superior to make assumptions about the long-term price of electricity in electricity markets for which active market information is not available. The impact of the assumption for the long-term forward price curve of electricity has a material impact on the fair value of this agreement. A $1/MWh change in the forecast price of electricity would result in a change in the fair value of this agreement of $0.8 million, with a corresponding impact to net earnings (loss) before income taxes.

No changes in valuation techniques were made by Superior during the period ended June 30, 2013 and no financial instruments have been reclassified between the different fair value input levels.


----------------------------------------------------------------------------
                                                                 Asset      
                                                              (Liability)   
----------------------------------------------------------------------------
                                                        Fair                
                                                       Value  June December 
                  Notional                Effective    Input   30,      31, 
Description            (1)       Term          Rate    Level  2013     2012 
----------------------------------------------------------------------------
Natural gas                                                                 
 financial                                CDN$4.62/                         
 swaps-AECO     22.86 GJ(2) 2013-2018            GJ  Level 1 (27.1)   (42.2)
Foreign                                                                     
 currency                                                                   
 forward                                                                    
 contracts,                                                                 
 net sale       US$642.4(3) 2013-2017          1.03  Level 1 (26.6)    10.7 
Foreign                                                                     
 currency                                                                   
 forward                                                                    
 contracts,                                                                 
 balance                                                                    
 sheet-related   US$59.0(3) 2013-2014          1.01  Level 1   3.0      0.2 
Interest rate                          Six-month BA                         
 swaps - CDN$                             rate plus                         
               $   150.0(3) 2013-2017          2.65% Level 2   6.4      9.4 
Equity                                                                      
 derivative                                                                 
 contracts     $   12.6 (3) 2013-2015 $ 10.26/share  Level 2   0.7      0.5 
Debenture-                                                                  
 embedded                                                                   
 derivative    $   255.0(3) 2013-2018             -  Level 3 (37.0)   (19.8)
Energy                                                                      
 Services                                                                   
 Butane                                                                     
 wholesale                                                                  
 purchase and                                                               
 sale                                                                       
 contracts,       0.22 USG                                                  
 net sale               (4) 2013-2014 $    1.65/USG  Level 2     -     (0.2)
Energy                                                                      
 Services                                                                   
 Diesel                                                                     
 wholesale                                                                  
 purchase and                                                               
 sale                                                                       
 contracts,                                                                 
 net sale       0.7 USG (4) 2013-2014 $    3.85/USG  Level 2   0.1        - 
Energy                                                                      
 Services                                                                   
 Propane                                                                    
 wholesale                                                                  
 purchase and                                                               
 sale                                                                       
 contracts,                                                                 
 net sale       1.36 USG(4)      2013 $    0.96/USG  Level 2  (0.3)     0.7 
Energy                                                                      
 Services                                                                   
 electricity                                                                
 swaps          0.97MWh (5) 2013-2017 $   39.93/MWh  Level 2  (7.8)   (10.3)
Energy                                                                      
 Services                                                                   
 heating oil                                                                
 purchase and                                                               
 sale                 7.69                     3.03                         
 contracts       Gallons(4)      2013 $   US/Gallon  Level 2   0.3     (0.2)
Specialty                                                                   
 Chemicals                                                                  
 fixed-price                                                                
 electricity                                                                
 purchase                                                                   
 agreement      12-45 MW(6) 2013-2017 $  37-$59/MWh  Level 3   2.6      1.6 
----------------------------------------------------------------------------
(1) Notional values as at June 30, 2013                                     
(2) Millions of gigajoules (GJ) purchased.                                  
(3) Millions of dollars.                                                    
(4) Millions of United States gallons purchased.                            
(5) Millions of mega watt hours (MWh).                                      
(6) Megawatts (MW) on a 24/7 continual basis per year purchased.            

All financial and non-financial derivatives are designated as fair value through net earnings (loss) upon their initial recognition.


----------------------------------------------------------------------------
                          Current     Long-term      Current       Long-term
Description                Assets        Assets  Liabilities     Liabilities
----------------------------------------------------------------------------
Natural gas financial                                                       
 swaps -AECO                    -             -         18.8             8.3
Energy Services                                                             
 electricity swaps            0.1             -          4.0             3.9
Foreign currency forward                                                    
 contracts, net sale          1.2           0.3          5.6            22.5
Foreign currency forward                                                    
 contracts, balance                                                         
 sheet-related                1.5           1.5            -               -
Interest rate swaps           2.6           3.9          0.1               -
Equity derivative                                                           
 contracts                    0.7             -            -               -
Debenture-embedded                                                          
 derivative                     -             -            -            37.0
Energy Services propane                                                     
 wholesale purchase and                                                     
 sale contracts               0.5             -          0.7               -
Energy Services propane                                                     
 purchase and sale                                                          
 contracts                      -             -          0.1               -
Energy Services butane                                                      
 wholesale purchase and                                                     
 sale contracts               0.2             -          0.2               -
Energy Services heating                                                     
 oil purchase and sale                                                      
 contracts                    0.3             -            -               -
Energy Services diesel                                                      
 purchase and sale                                                          
 contracts                    0.1             -            -               -
Specialty Chemicals                                                         
 fixed-price electricity                                                    
 purchase agreement           0.6           2.0            -               -
----------------------------------------------------------------------------
As at June 30, 2013           7.8           7.7         29.5            71.7
As at December 31, 2012      16.6          12.9         36.5            42.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
                     For the three months ended  For the three months ended 
                                  June 30, 2013               June 30, 2012 
                       Realized      Unrealized     Realized    Unrealized  
Description          gain (loss)    gain (loss)  gain (loss)    gain (loss) 
----------------------------------------------------------------------------
Natural gas financial                                                       
 swaps - AECO               (5.9)           0.6        (15.9)          18.0 
Energy Services                                                             
 electricity swaps          (1.7)          (1.3)        (3.4)           5.4 
Foreign currency                                                            
 forward contracts,                                                         
 net sale                    1.5          (23.7)         1.2          (12.7)
Foreign currency                                                            
 forward contracts,                                                         
 balance sheet-                                                             
 related                       -            2.1            -            1.4 
Interest rate swaps          1.2           (3.3)         1.2            1.2 
Equity derivative                                                           
 contracts                   0.4           (0.9)           -              - 
Energy Services                                                             
 propane wholesale                                                          
 purchase and sale                                                          
 contracts                     -           (0.2)           -            1.6 
Energy Services                                                             
 propane purchase and                                                       
 sale contracts                -           (0.2)           -              - 
Energy Services                                                             
 butane wholesale                                                           
 purchase and sale                                                          
 contracts                     -              -            -           (0.4)
Energy Services                                                             
 heating oil purchase                                                       
 and sale contracts          1.1            0.2          2.7           (2.0)
Energy Services                                                             
 diesel purchase and                                                        
 sale contracts                -              -            -              - 
Specialty Chemicals                                                         
 fixed-price power                                                          
 purchase agreements           -            0.9         (0.7)             - 
----------------------------------------------------------------------------
Total (losses) gains                                                        
 on financial and                                                           
 non-financial                                                              
 derivatives                (3.4)         (25.8)       (14.9)          12.5 
----------------------------------------------------------------------------
Foreign currency                                                            
 translation of                                                             
 senior secured notes          -           (3.4)           -           (2.5)
Change in fair value                                                        
 of debenture                                                               
 embedded derivative           -           (3.8)           -           (0.2)
----------------------------------------------------------------------------
Total realized and                                                          
 unrealized (losses)                                                        
 gains                      (3.4)         (33.0)       (14.9)           9.8 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                        For the six months ended   For the six months ended 
                                   June 30, 2013              June 30, 2012 
                        Realized      Unrealized     Realized   Unrealized  
Description           gain (loss)    gain (loss)  gain (loss)   gain (loss) 
----------------------------------------------------------------------------
Natural gas                                                                 
 financial swaps -                                                          
 AECO                       (13.6)          15.1        (30.4)         15.4 
Energy Services                                                             
 electricity swaps           (3.3)           2.3         (7.1)         (1.4)
Foreign currency                                                            
 forward contracts,                                                         
 net sale                     1.6          (37.3)         2.6          (5.9)
Foreign currency                                                            
 forward contracts,                                                         
 balance sheet-                                                             
 related                        -            3.1            -           1.1 
Interest rate swaps           1.2           (3.0)         1.2          (1.5)
Equity derivative                                                           
 contracts                    0.4            0.1            -             - 
Energy Services                                                             
 propane wholesale                                                          
 purchase and sale                                                          
 contracts                      -           (1.2)           -           1.6 
Energy Services                                                             
 propane purchase                                                           
 and sale contracts             -            0.2            -             - 
Energy Services                                                             
 butane wholesale                                                           
 purchase and sale                                                          
 contracts                      -            0.2            -          (0.4)
Energy Services                                                             
 heating oil                                                                
 purchase and sale                                                          
 contracts                    1.8            0.4          0.5          (0.9)
Energy Services                                                             
 diesel purchase and                                                        
 sale contracts                 -            0.1            -             - 
Specialty Chemicals                                                         
 fixed-price power                                                          
 purchase agreements            -            1.0         (1.4)            - 
----------------------------------------------------------------------------
Total (losses) gains                                                        
 on financial and                                                           
 non-financial                                                              
 derivatives                (11.9)         (19.0)       (34.6)          8.0 
----------------------------------------------------------------------------
Foreign currency                                                            
 translation of                                                             
 senior secured                                                             
 notes                          -           (5.2)           -          (0.3)
Change in fair value                                                        
 of debenture                                                               
 embedded derivative            -          (17.1)           -          (0.3)
----------------------------------------------------------------------------
Total realized and                                                          
 unrealized (losses)                                                        
 gains                      (11.9)         (41.3)       (34.6)          7.4 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Realized (losses) gains on financial and non-financial derivatives and foreign currency translation (losses) gains on the revaluation of Canadian domiciled US-denominated working capital have been classified on the statement of net earnings (loss) based on the underlying nature of the financial statement line item and/or the economic exposure being managed.

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


----------------------------------------------------------------------------
                                            Classification       Measurement
----------------------------------------------------------------------------
Financial Assets                                                            
Cash and cash equivalents            Loans and receivables    Amortized cost
Trade and other receivables          Loans and receivables    Amortized cost
Derivative assets                                   FVTNEL        Fair Value
Notes and finance lease receivables  Loans and receivables    Amortized cost
Financial liabilities                                                       
Trade and other payables                 Other liabilities    Amortized cost
Dividends and interest payable           Other liabilities    Amortized cost
Borrowing                                Other liabilities    Amortized cost
Convertible unsecured subordinated                                          
 debentures(1)                           Other liabilities    Amortized cost
Derivative liabilities                              FVTNEL        Fair Value
----------------------------------------------------------------------------
(1) Except for derivatives embedded in the related financial instruments    
    that are classified as FVTNEL and measured at fair value.               

Non-Derivative Financial Instruments

The fair value of Superior's cash and cash equivalents, trade and other receivables, notes and finance lease receivables, trade and other payables, and dividends and interest payable approximates their carrying value due to the short-term nature of these amounts. The carrying value and the fair value of Superior's borrowing and debentures is provided in Notes 10 and 11.

Financial Instruments - Risk Management

Market Risk

Financial derivatives and non-financial derivatives are used by Superior to manage its exposure to fluctuations in foreign currency exchange rates, interest rates and commodity prices. Superior assesses the inherent risks of these instruments by grouping derivative and non-financial derivatives related to the exposures these instruments mitigate. Superior's policy is not to use financial derivative or non-financial derivative instruments for speculative purposes. Superior does not formally designate its derivatives as hedges and, as a result, Superior does not apply hedge accounting and is required to designate its financial derivatives and non-financial derivatives as fair value through net earnings or loss. Details on Superior's market risk policies are consistent with those disclosed in Superior's 2012 annual consolidated financial statements.

Credit Risk

Superior utilizes a variety of counterparties in relation to its derivative and non-financial derivative instruments in order to mitigate its counterparty risk. Superior assesses the credit-worthiness of its significant counterparties at the inception and throughout the term of a contract. Superior is also exposed to customer credit risk. Energy Services deals with a large number of small customers, thereby reducing this risk. Specialty Chemicals, due to the nature of its operations, sells its products to a relatively small number of customers. Specialty Chemicals mitigates its customer credit risk by actively monitoring the overall credit-worthiness of its customers. Energy Services has minimal exposure to customer credit risk as local natural gas and electricity distribution utilities have been mandated, for a nominal fee, to provide Energy Services with invoicing, collection and the assumption of bad debt risk for residential customers. Energy Services actively monitors the credit-worthiness of its commercial customers. Overall, Superior's credit quality is enhanced by its portfolio of customers which is diversified across geographical (primarily Canada and the United States) and end-use (primarily commercial, residential and industrial) markets.

Allowances for doubtful accounts receivables are reviewed by Superior at each balance sheet date. Superior updates its estimate of the allowance for doubtful accounts based on the evaluation of the recoverability of trade receivables with each customer, taking into account historical collection trends of past due accounts and current economic conditions. Trade receivables are written-off once it is determined they are not collectable.

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


                                                    June 30,    December 31,
                                                        2013            2012
----------------------------------------------------------------------------
Current                                                232.5           243.1
Past due less than 90 days                              82.7           108.2
Past due over 90 days                                   13.7            11.8
----------------------------------------------------------------------------
Trade receivables                                      328.9           363.1
----------------------------------------------------------------------------
----------------------------------------------------------------------------

The current portion of Superior's trade receivables is neither impaired nor past due and there are no indications as of the reporting date that the debtors will not make payment.

Superior's trade receivables are stated after deducting a provision of $6.5 million as at June 30, 2013 (December 31, 2012 - $7.2 million). The movement in the provision for doubtful accounts was as follows:


                                                   June 30,    December 31, 
                                                       2013            2012 
----------------------------------------------------------------------------
Allowance for doubtful accounts, at the                                     
 beginning of the period                               (7.2)          (20.8)
  Impairment losses recognized on                                           
   receivables                                         (1.7)           (3.9)
  Amounts written off during the period as                                  
   uncollectible                                        2.4            17.5 
----------------------------------------------------------------------------
Allowance for doubtful accounts at the end                                  
 of the period                                         (6.5)           (7.2)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Liquidity Risk

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

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

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

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


                                                          2018 and          
                      2013   2014    2015   2016   2017 Thereafter    Total 
----------------------------------------------------------------------------
Borrowing             57.4   49.6    47.2  336.7    0.9        0.4    492.2 
Convertible                                                                 
 unsecured                                                                  
 subordinated                                                               
 debentures              -   67.6       -   72.4  168.1      144.4    452.5 
US$ foreign currency                                                        
 forward sales                                                              
 contracts           109.8  224.4   182.0  117.4   52.9          -    686.5 
US$ foreign currency                                                        
 forward purchases                                                          
 contracts           (32.2) (27.2)      -      -      -          -    (59.4)
CDN$ natural gas                                                            
 purchases            10.2    3.4     0.8    0.4    0.2          -     15.0 
CDN$ butane                                                                 
 purchases             0.5      -       -      -      -          -      0.5 
CDN$ propane                                                                
 purchases             1.8    0.1       -      -      -          -      1.9 
US$ propane                                                                 
 purchases             0.8      -       -      -      -          -      0.8 
Fixed-price                                                                 
 electricity                                                                
 purchase                                                                   
 commitments           3.7    8.9     8.9    8.9    8.9          -     39.3 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Superior's contractual obligations are considered normal-course operating commitments and do not include the impact of mark-to-market fair values on financial and non-financial derivatives. Superior expects to fund these obligations through a combination of cash flow from operations, proceeds on revolving term bank credits and proceeds on the issuance of share capital. Superior's financial instruments' sensitivities as at June 30, 2013 are consistent with those disclosed in Superior's 2012 annual consolidated financial statements.

13. 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 United States income tax and Chilean income tax.

Total income tax recovery (expense), comprised of current taxes and deferred taxes for the three and six months ended June 30, 2013 was $3.1 million and $(12.7) million respectively, compared to $3.8 million and $(2.3) million in the comparative period. For the three and six months ended June 30, 2013, deferred income tax recovery (expense) from operations in Canada, the United States and Chile was $3.4 million and $(11.9) million, respectively, which resulted in a corresponding total net deferred income tax asset of $283.9 million at June 30, 2013.

On April 2, 2013, Superior received from the CRA, Notices of Reassessment for Superior's 2009 and 2010 taxation years reflecting the CRA's intent to challenge the tax consequences of Superior's corporate conversion transaction (Conversion) which occurred on December 31, 2008. The CRA's position is based on the acquisition of control rules, in addition to the general anti-avoidance rules in the Income Tax Act (Canada). The table below summarizes Superior's estimated tax liabilities and payment requirements associated with the received and anticipated Notices of Reassessment. Upon receipt of the Notices of Reassessment, 50% of the taxes payable pursuant to such Notices of Reassessment, must be remitted to the CRA.


---------------------------------------------------------------------------
                        Taxes Payable      50% of the Taxes                
Taxation Year                  (1)(2)        Payable (1)(2)   Payment Dates
---------------------------------------------------------------------------
2009/2010                                                     Paid in April
                              $13.0                    $6.5            2013
2011                          $10.0(3)                 $5.0         Q3 2013
2012                          $10.0(3)                 $5.0         Q3 2013
2013                          $20.0(3)                $10.0         Q3 2014
---------------------------------------------------------------------------
Total                         $53.0                   $26.5                
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(1) In millions of dollars                                                  
(2) Includes estimated interest and penalties.                              
(3) Estimated based on Superior's previously filed tax returns and the      
    midpoint of Superior's 2013 outlook.                                    

On May 8, 2013, Superior filed a Notice of Objection with the CRA's appeals division. After 90 days, if the CRA has not responded to or settled the Notice of Objection with Superior, then Superior can make an application to the Tax Court of Canada. Superior anticipates filing its application to the Tax Court of Canada in August 2013 and that a decision in the Tax Court of Canada could be rendered by the end of 2014 or early 2015. If a decision of the Tax Court of Canada were to be appealed, the appeal process could reasonably be expected to take an additional 2 years. If Superior receives a positive decision then any taxes, interest and penalties paid to the CRA will be refunded plus interest and if Superior is unsuccessful then any remaining taxes payable plus interest and penalties will have to be remitted.

Superior remains confident in the appropriateness of its tax filing position and the expected tax consequences of the Conversion and intends to vigorously defend such position and intends to file its future tax returns on a basis consistent with its view of the outcome of the Conversion.

14. Total Equity

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

Preferred shares are issuable in series with each class of preferred share having such rights as the Board of Directors may determine. Holders of preferred shares are entitled, in priority to holders of common shares, to be paid ratably with holders of each other series of preferred shares the amount of accumulated dividends, if any, specified to be payable preferentially to the holders of such series upon liquidation, dissolution or winding up of Superior. Superior does not have any preferred shares outstanding.


                                               Issued Number of             
                                                 Common Shares        Total 
                                                     (Millions)      Equity 
----------------------------------------------------------------------------
Total Equity, December 31, 2012                           112.8       383.0 
  Net earnings                                                -         5.9 
  Other comprehensive income                                  -        30.4 
  Option value associated with the                                          
   redemption of convertible debentures                       -        (0.6)
  Shares issued under Dividend Reinvestment                                 
   Plan                                                     0.4         4.9 
  Issuance of common shares                                13.0       137.6 
  Dividends declared to shareholders (1)                      -       (36.5)
----------------------------------------------------------------------------
Total Equity, June 30, 2013                               126.2       524.7 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Dividends to shareholders are declared at the discretion of Superior.   
    During the six months ended June 30, 2013, Superior paid dividends of   
    $35.9 million or $0.30 per share (June 30, 2012 - $33.4 million or $0.30
    per share).                                                             
                                                                            
                                                   June 30,    December 31, 
                                                       2013            2012 
----------------------------------------------------------------------------
Accumulated other comprehensive loss before                                 
 reclassification                                                           
  Currency translation adjustment                                           
    Balance at the beginning of the period            (22.8)          (13.8)
    Unrealized foreign currency gains and                                   
     (losses) on translation of foreign                                     
     operations                                        23.1            (9.0)
----------------------------------------------------------------------------
    Balance at the end of the period                    0.3           (22.8)
----------------------------------------------------------------------------
                                                                            
  Actuarial defined benefits                                                
    Balance at the beginning of the period            (25.3)          (31.4)
    Actuarial defined benefit gains                    11.9             7.2 
    Income tax expense                                 (4.6)           (1.1)
----------------------------------------------------------------------------
    Balance at the end of the period                  (18.0)          (25.3)
----------------------------------------------------------------------------
  Total accumulated other comprehensive loss                                
   before reclassification                            (17.7)          (48.1)
----------------------------------------------------------------------------
                                                                            
Amounts reclassified from accumulated other                                 
 comprehensive loss                                                         
  Accumulated derivative losses                                             
    Balance at the beginning of the period             (6.0)           (6.0)
    Reclassification of derivative gains                                    
     (losses) previously deferred(1)                      -               - 
----------------------------------------------------------------------------
    Balance at the end of the period                   (6.0)           (6.0)
----------------------------------------------------------------------------
  Total amounts reclassified from                                           
   accumulated other comprehensive loss                (6.0)           (6.0)
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Accumulated other comprehensive loss at the                                 
 end of the period                                    (23.7)          (54.1)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The reclassification of derivative gains (losses) previously deferred   
    are included in unrealized losses (gains) on derivative financial       
    instruments on the statement of net earnings (loss).                    

Other Capital Disclosures

Additional Capital Disclosure

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

In the management of capital, Superior includes shareholders' equity (excluding accumulated other comprehensive loss) current and long-term debt, convertible debentures, securitized accounts receivable and cash and cash equivalents.

Superior manages its capital structure and makes adjustments in light of changes in economic conditions and nature of the underlying assets. In order to maintain or adjust the capital structure, Superior may adjust the amount of dividends to Shareholders, issue additional share capital, issue new debt or convertible debentures, or issue new debt or convertible debentures with different characteristics.

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

Superior is subject to various financial covenants in its credit facility agreements, including senior debt, total debt to EBITDA ratio and restricted payments test which are measured on a quarterly basis. As at June 30, 2013 and December 31, 2012 Superior was in compliance with all of its financial covenants.

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

Financial Measures utilized for bank covenant purposes

Compliance EBITDA

Compliance EBITDA represents earnings before interest, taxes, depreciation, amortization and other non-cash expenses calculated on a 12 month trailing basis giving pro forma effect to acquisitions and divestitures and is used by Superior to calculate its debt covenants and other credit information. Compliance EBITDA is not a defined performance measure under IFRS. Superior's calculation of compliance EBITDA may differ from similar calculations used by comparable entities.

The capital structure of Superior and the calculation of its key capital ratios are as follows:


                                                   June 30,    December 31, 
As at                                                  2013            2012 
----------------------------------------------------------------------------
Total shareholders' equity                            524.7           383.0 
Exclude accumulated other comprehensive loss           23.7            54.1 
----------------------------------------------------------------------------
Shareholders' equity excluding accumulated                                  
 other comprehensive loss                             548.4           437.1 
                                                                            
Current borrowing (1)                                  57.4            59.7 
Borrowing (1)                                         434.8           579.9 
Less: Senior unsecured debentures                    (150.0)         (150.0)
----------------------------------------------------------------------------
Consolidated secured debt                             342.2           489.6 
Add: Senior unsecured debentures                      150.0           150.0 
----------------------------------------------------------------------------
Consolidated debt                                     492.2           639.6 
Current portion of convertible unsecured                                    
 subordinated debentures (1)                              -            50.0 
Convertible unsecured subordinated                                          
 debentures (1)                                       466.4           491.5 
----------------------------------------------------------------------------
Total Debt                                            958.6         1,181.1 
----------------------------------------------------------------------------
Total Capital                                       1,507.0         1,618.2 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Borrowing and convertible unsecured subordinated debentures are before  
    deferred issuance costs and option value.                               
                                                                            
                                                    June 30,   December 31, 
Twelve months ended                                     2013           2012 
----------------------------------------------------------------------------
  Net earnings                                          55.3           90.0 
  Adjusted for:                                                             
    Finance expense                                     71.3           77.6 
    Realized gains on derivative financial                                  
     instruments included in finance expense             2.4            2.2 
    Depreciation of property, plant and                                     
     equipment                                          41.8           42.4 
    Depreciation and amortization included                                  
     in cost of sales                                   42.4           44.9 
    Losses on disposal of assets                         2.3            1.0 
    Amortization of intangible assets                   18.9           23.5 
    Impairment of property, plant and                                       
     equipment                                           4.7            4.7 
    Income tax expense                                  19.4            9.0 
    Unrealized (gains) losses on derivative                                 
     financial instruments                              16.6          (32.1)
    Pro-forma impact of acquisitions                       -            0.6 
----------------------------------------------------------------------------
Compliance EBITDA (1)(2)                               275.1          263.8 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) EBITDA, as defined by Superior's revolving-term credit facility, is     
    calculated on a trailing 12-month basis taking into consideration the   
    pro-forma impact of acquisitions and dispositions in accordance with the
    requirements of Superior's credit facility. Superior's calculation of   
    EBITDA and debt to EBITDA ratios may differ from those of similar       
    entities.                                                               
(2) The twelve months ended December 31, 2012 has been restated for the     
    impact of adopting IAS 19 Employee Benefits,amendments on January 1,    
    2013. Refer to Note 2.                                                  
                                                                            
                                                    June 30,    December 31,
                                                        2013         2012(1)
----------------------------------------------------------------------------
Consolidated secured debt to Compliance                                     
 EBITDA                                                1.2:1           1.9:1
Consolidated debt to Compliance EBITDA                 1.8:1           2.4:1
Total debt to Compliance EBITDA                        3.5:1           4.5:1
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) The compliance ratios have been restated for the impact of adopting IAS 
    19 Employee Benefits,amendments on January 1, 2013. Refer to Note 2.    

15. Net Earnings per Share


                                      Three months ended    Six months ended
                                                June 30,            June 30,
                                         2013       2012      2013      2012
----------------------------------------------------------------------------
Net earnings (loss) per share                                               
 computation, basic and diluted                                             
  Net earnings (loss) for the period    (25.5)      12.7       5.9      40.6
  Weighted average shares                                                   
   outstanding (millions)               126.2      111.6     119.9     111.4
----------------------------------------------------------------------------
Net earnings (loss) per share, basic                                        
 and diluted                         $  (0.20) $    0.11 $    0.05 $    0.36
----------------------------------------------------------------------------
----------------------------------------------------------------------------

16. Supplemental Disclosure of Non-Cash Operating Working Capital Changes


                                     Three months ended    Six months ended 
                                               June 30,            June 30, 
                                         2013      2012      2013      2012 
----------------------------------------------------------------------------
Changes in non-cash working capital                                         
Trade receivables and other              52.5      94.2      26.4     134.7 
Inventories                              (5.0)     13.7      35.1      41.8 
Trade and other payables                 (9.0)    (15.6)    (28.8)    (47.4)
Other                                    14.1       3.1      15.8       0.7 
----------------------------------------------------------------------------
                                         52.6      95.4      48.5     129.8 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

17. Supplemental Disclosure of Condensed Consolidated Statement of Comprehensive Income


                                     Three months ended    Six months ended 
                                               June 30,            June 30, 
                                         2013      2012      2013      2012 
----------------------------------------------------------------------------
Revenues                                                                    
  Revenue from products                 833.6     812.7   1,861.8   1,853.1 
  Revenue from the rendering of                                             
   services                              13.5      11.6      28.7      27.5 
  Rental revenue                          6.3       6.0      11.8      11.3 
  Construction contract revenue           0.1       2.7      (0.4)      5.3 
  Realized gains on derivative                                              
   financial instruments                  0.9       1.3       2.4       3.0 
----------------------------------------------------------------------------
                                        854.4     834.3   1,904.3   1,900.2 
----------------------------------------------------------------------------
                                                                            
Cost of sales (includes products and                                        
 services)                                                                  
  Cost of products and services        (649.6)   (621.3) (1,427.6) (1,416.8)
  Depreciation of property, plant                                           
   and equipment                         (9.7)    (11.6)    (20.0)    (22.5)
  Realized losses on derivative                                             
   financial instruments                 (5.1)    (17.3)    (13.6)    (38.7)
----------------------------------------------------------------------------
                                       (664.4)   (650.2) (1,461.2) (1,478.0)
----------------------------------------------------------------------------
                                                                            
Selling, distribution and                                                   
 administrative costs                                                       
  Other selling, distribution and                                           
   administrative costs                  66.4      82.1     134.8     167.5 
  Employee future benefit expense         1.7       1.5       3.2       3.0 
  Employee costs                         89.3      68.2     184.8     143.1 
  Depreciation of property, plant                                           
   and equipment                         10.3      10.6      20.6      21.2 
  Amortization of intangible assets       4.2       6.4       8.1      12.7 
  (Gains) Losses on disposal of                                             
   assets                                (0.1)     (1.4)      0.3      (1.0)
  Realized (gains) losses on the                                            
   translation of U.S. denominated                                          
   net working capital                   (1.5)     (1.1)     (2.4)      0.1 
----------------------------------------------------------------------------
                                        170.3     166.3     349.4     346.6 
----------------------------------------------------------------------------
                                                                            
Finance expense                                                             
  Interest on borrowing                   6.9       8.0      15.1      17.2 
  Interest on convertible unsecured                                         
   subordinated debentures                7.4       9.3      15.3      18.5 
  Interest on obligations under                                             
   finance leases                         0.8       0.9       1.7       2.2 
  Gain on debenture redemption           (0.2)        -      (0.4)        - 
  Unwinding of discount on                                                  
   debentures, borrowing and                                                
   decommissioning liabilities            1.7       1.6       3.4       3.3 
  Realized gains on derivative                                              
   financial instruments                 (1.3)     (1.1)     (1.3)     (1.1)
----------------------------------------------------------------------------
                                         15.3      18.7      33.8      40.1 
----------------------------------------------------------------------------

18. Related Party Transactions

Transactions between Superior and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. For the three and six months ended June 30, 2013, Superior incurred $0.1 million and $0.2 million (June 30, 2012 - $0.3 million) in legal fees respectively, with Norton Rose Canada LLP, a related party with Superior as a member of Superior's Board of Directors is a Partner at the law firm.

19. Reportable Segment Information

Superior has adopted IFRS 8 Operating Segments, which requires operating segments to be identified on the basis of internal reports about components of the Company that are regularly reviewed by the chief operating decision-maker in order to allocate resources to the segments and to assess their performance. Segment revenues reported below represents revenues generated from external customers.


----------------------------------------------------------------------------
For the three                          Construction                         
 months ended June   Energy  Specialty     Products                   Total 
 30, 2013          Services  Chemicals Distribution Corporate  Consolidated 
----------------------------------------------------------------------------
Revenues              511.3      136.2        206.9         -         854.4 
Cost of sales                                                               
 (includes product                                                          
 and services)       (417.3)     (88.7)      (158.4)        -        (664.4)
----------------------------------------------------------------------------
Gross Profit           94.0       47.5         48.5         -         190.0 
Expenses                                                                    
 Selling,                                                                   
  distribution and                                                          
  administrative                                                            
  costs                92.2       32.1         42.2       3.8         170.3 
 Finance expense        0.7          -          0.2      14.4          15.3 
 Unrealized                                                                 
  (gains) losses                                                            
  on derivative                                                             
  financial                                                                 
  instruments           0.7       (1.0)           -      33.3          33.0 
----------------------------------------------------------------------------
                       93.6       31.1         42.4      51.5         218.6 
----------------------------------------------------------------------------
Net earnings                                                                
 (loss) before                                                              
 income taxes           0.4       16.4          6.1     (51.5)        (28.6)
Income tax                                                                  
 recovery                 -          -            -       3.1           3.1 
----------------------------------------------------------------------------
Net Earnings                                                                
 (Loss)                 0.4       16.4          6.1     (48.4)        (25.5)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
For the three                          Construction                         
 months ended June   Energy  Specialty     Products                   Total 
 30, 2012          Services  Chemicals Distribution Corporate  Consolidated 
----------------------------------------------------------------------------
Revenues              498.0      136.6        199.7         -         834.3 
Cost of sales                                                               
 (includes product                                                          
 and services)       (408.3)     (87.8)      (154.1)        -        (650.2)
----------------------------------------------------------------------------
Gross Profit           89.7       48.8         45.6         -         184.1 
Expenses                                                                    
 Selling,                                                                   
  distribution and                                                          
  administrative                                                            
  costs                86.5       35.3         41.1       3.4         166.3 
 Finance expense        1.0          -            -      17.7          18.7 
 Unrealized                                                                 
  (gains) losses                                                            
  on derivative                                                             
  financial                                                                 
  instruments         (21.9)         -            -      12.1          (9.8)
----------------------------------------------------------------------------
                       65.6       35.3         41.1      33.2         175.2 
----------------------------------------------------------------------------
Net earnings                                                                
 (loss) before                                                              
 income taxes          24.1       13.5          4.5     (33.2)          8.9 
Income tax                                                                  
 recovery                 -          -            -       3.8           3.8 
----------------------------------------------------------------------------
Net Earnings                                                                
 (Loss)                24.1       13.5          4.5     (29.4)         12.7 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
For the six months                     Construction                         
 ended June 30,      Energy  Specialty     Products                   Total 
 2013              Services  Chemicals Distribution Corporate  Consolidated 
----------------------------------------------------------------------------
Revenues            1,231.0      279.9        393.4         -       1,904.3 
Cost of sales                                                               
 (includes product                                                          
 and services)       (983.5)    (177.9)      (299.8)        -      (1,461.2)
----------------------------------------------------------------------------
Gross Profit          247.5      102.0         93.6         -         443.1 
Expenses                                                                    
 Selling,                                                                   
  distribution and                                                          
  administrative                                                            
  costs               191.5       64.0         83.9      10.0         349.4 
 Finance expense        1.5        0.1          0.3      31.9          33.8 
 Unrealized                                                                 
  (gains) losses                                                            
  on derivative                                                             
  financial                                                                 
  instruments         (17.2)      (1.1)           -      59.6          41.3 
----------------------------------------------------------------------------
                      175.8       63.0         84.2     101.5         424.5 
----------------------------------------------------------------------------
Net earnings                                                                
 (loss) before                                                              
 income taxes          71.7       39.0          9.4    (101.5)         18.6 
Income tax expense        -          -            -     (12.7)        (12.7)
----------------------------------------------------------------------------
Net Earnings                                                                
 (Loss)                71.7       39.0          9.4    (114.2)          5.9 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
For the six                          Construction                           
 months ended     Energy   Specialty     Products                     Total 
 June 30, 2012   Services  Chemicals Distribution  Corporate   Consolidated 
----------------------------------------------------------------------------
Revenues          1,245.6      270.7        383.9          -        1,900.2 
Cost of sales                                                               
 (includes                                                                  
 product and                                                                
 services)       (1,013.2)    (170.5)      (294.3)         -       (1,478.0)
----------------------------------------------------------------------------
Gross Profit        232.4      100.2         89.6          -          422.2 
Expenses                                                                    
 Selling,                                                                   
  distribution                                                              
  and                                                                       
  administrative                                                            
  costs             185.8       70.1         83.3        7.4          346.6 
 Finance expense      2.0        0.1          0.3       37.7           40.1 
 Unrealized                                                                 
  (gains) losses                                                            
  on derivative                                                             
  financial                                                                 
  instruments       (14.3)         -            -        6.9           (7.4)
----------------------------------------------------------------------------
                    173.5       70.2         83.6       52.0          379.3 
----------------------------------------------------------------------------
Net earnings                                                                
 (loss) before                                                              
 income taxes        58.9       30.0          6.0      (52.0)          42.9 
Income tax                                                                  
 expense                -          -            -       (2.3)          (2.3)
----------------------------------------------------------------------------
Net Earnings                                                                
 (Loss)              58.9       30.0          6.0      (54.3)          40.6 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Net working capital, Total assets, Total liabilities, and Purchase of property, plant and equipment


----------------------------------------------------------------------------
                                        Construction                        
                      Energy  Specialty     Products                   Total
                    Services  Chemicals Distribution Corporate  Consolidated
----------------------------------------------------------------------------
As at June 30,                                                              
 2013                                                                       
  Net working                                                               
   capital (1)         132.6       34.3        106.5     (31.1)        242.3
  Total assets         637.9      599.3        210.7     503.1       1,951.0
  Total                                                                     
   liabilities         245.2      191.0         84.5     905.6       1,426.3
----------------------------------------------------------------------------
As at December 31,                                                          
 2012                                                                       
  Net working                                                               
   capital (1)         188.1       16.3        105.5     (22.1)        287.8
  Total assets         729.6      585.6        199.6     521.5       2,036.3
  Total                                                                     
   liabilities         298.7      171.7         84.2   1,098.7       1,653.3
----------------------------------------------------------------------------
For the three                                                               
 months ended June                                                          
 30, 2013                                                                   
  Purchase of                                                               
   property, plant                                                          
   and equipment         9.6        7.0          0.5         -          17.1
----------------------------------------------------------------------------
For the three                                                               
 months ended June                                                          
 30, 2012                                                                   
  Purchase of                                                               
   property, plant                                                          
   and equipment         2.4        4.7          0.1         -           7.2
----------------------------------------------------------------------------
For the six months                                                          
 ended June 30,                                                             
 2013                                                                       
  Purchase of                                                               
   property, plant                                                          
   and equipment        15.4       12.6          0.8         -          28.8
----------------------------------------------------------------------------
For the six months                                                          
 ended June 30,                                                             
 2012                                                                       
  Purchase of                                                               
   property, plant                                                          
   and equipment         5.3        7.2          0.7         -          13.2
----------------------------------------------------------------------------
(1) Net working capital reflects amounts as at the quarter end and is       
    comprised of trade and other receivables, prepaid expenses and          
    inventories, less trade and other payables, deferred revenue and        
    dividends and interest payable.                                         

20. Geographical Information


                                                 United                Total
                                        Canada   States  Other  Consolidated
----------------------------------------------------------------------------
Revenues for the three months ended                                         
 June 30, 2013                           300.1    526.3   28.0         854.4
Revenues for the six months ended                                           
 June 30, 2013                           691.7  1,167.4   45.2       1,904.3
Property, plant and equipment as at                                         
 June 30, 2013                           449.1    338.4   45.5         833.0
Intangible assets as at June 30, 2013     15.6     19.9      -          35.5
Goodwill as at June 30, 2013             188.2      0.9      -         189.1
Total assets as at June 30, 2013       1,245.6    639.5   65.9       1,951.0
----------------------------------------------------------------------------
Revenues for the three months ended                                         
 June 30, 2012                           313.6    492.3   28.4         834.3
Revenues for the six months ended                                           
 June 30, 2012                           767.8  1,076.1   56.3       1,900.2
Property, plant and equipment as at                                         
 December 31, 2012                       460.6    324.4   44.9         829.9
Intangible assets as at December 31,                                        
 2012                                     15.8     23.8      -          39.6
Goodwill as at December 31, 2012         188.3      0.8      -         189.1
Total assets as at December 31, 2012   1,320.6    649.6   66.1       2,036.3
----------------------------------------------------------------------------

21. Subsequent Events

On July 22, 2013, Superior successfully completed the closing of the previously announced issue of 6.00% convertible unsecured subordinated debentures (the "Debentures") for gross proceeds of $92.0 million at a price of $1,000 per Debenture (the "Offering"). The gross proceeds for the issue include the previously announced $80.0 million in Debentures and the $12.0 million in Debentures issued upon the full exercise of the over-allotment option on July 30, 2013.

Concurrent with the closing of the Offering, Superior issued an additional $5.0 million in Debentures at a price of $1,000 per Debenture pursuant to a private placement to one of its directors.

On July 22, 2013, Superior announced that on September 3, 2013, it will early redeem the entire $68.9 million principal amount of its 7.50% convertible unsecured subordinated debentures which mature on December 31, 2014. The early redemption allows for Superior to benefit from lower average interest rates in addition to actively managing its balance sheet maturities.

Contacts:
Superior Plus Corp.
Wayne Bingham
Executive Vice-President and Chief Financial Officer
(403) 218-2951
(403) 218-2973 (FAX)

Superior Plus Corp.
Jay Bachman
Vice-President, Investor Relations and Treasurer
(403) 218-2957
(403) 218-2973 (FAX)
Toll Free: 1-866-490-PLUS (7587)

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Morningstar - 2013/8/1 - Superior Plus Corp. Announces 2013 Second Quarter Results and Updates 2013 Financial Outlook
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