Thank you, Latier. Good morning, everyone, and welcome to Superior Plus’ conference call and webcast to review our 2021 annual and fourth quarter results.

Our speakers on the call today will be Luc Desjardins, President and CEO; and Beth Summers, Executive VP and CFO; Darren Hribar, Senior VP and Chief Legal Officer is also joining today's call. Today’s call is being webcast, and we encourage listeners to follow along with the supporting presentation, which is also available on our website.

For this morning's call, Luc and Beth will begin with their prepared remarks, and then we will open up the call for questions. Before I turn the call to Luc, I'd like to remind you that some of the comments made today may be forward-looking in nature and are based on Superior's current expectations, estimates, judgments, projections and risk.

Further, some of the information provided refers to non-GAAP measures. Please refer to Superior's annual MD&A posted on SEDAR and Superior's website yesterday for further details on forward-looking information and non-GAAP measures.

I would encourage listeners to review the MD&A as it includes more detail on the financial information for 2021 and the fourth quarter as we won't be going over each financial metric on today's call. This will allow us to move more quickly into the question-and-answer period.

I'll now turn the call over to Luc.

Well, thank you, Rob, and good morning, everyone. Thanks for joining the call.

Firstly, I'd like to thank the entire Superior Plus team for delivering a solid year despite the challenges we face from COVID-19 pandemic and warm weather in December. I'm proud of our team commitment to safety, reliability as we continue to deliver propane and provide best-in-class service to our customer at U.S.

and in Canada. In 2021, our adjusted EBITDA was $398 million, which was within our 2021 adjusted EBITDA guidance range.

Our fourth quarter adjusted EBITDA of $142 million was modestly below the prior year. In the fourth quarter, our business was negatively impacted by warm weather, especially in December and our U.S.

operating region, December was 15% warmer than December 2020 and 12% warmer than the five-year average. So we never like when the weather is not on our side and quarter-to-quarter very difficult to have a normal flat line.

But the good part of this situation, if you look at quarter one this year, we started the year extremely well, and the weather as all of you know has been on our side for the starting of this New Year, we are very pleased about that. So it balances out over a period of time.

In the fourth quarter, we made two additional acquisitions in Michigan and North Carolina. We are making good progress on the Superior Way Forward, planned initiative, focus on growth through acquisition, continuous improvement and organic growth.

In 2021, we completed seven acquisitions for approximately $325 million. Our acquisition of Kamps Propane, which is expected to close early in the second quarter for total consideration of approximately $300 million, will have a good platform to our California, Western U.S.

footprint where well over 30% of our $1.9 billion target we communicate as part of Superior Way Forward to reach that amount by 2026. We also have a robust pipeline of acquisition and expect acquisition in the range of $200 million to $300 million in 2022.

Our 2022 adjusted EBITDA guidance does not include any contribution from additional acquisition except Kamps, assuming a close in early quarter two, which doesn't reflect quarter one, as you all know. For the Kamps is $17 million to $20 million of estimated adjusted EBITDA historically generated in the first quarter.

So we won't have that resolved for 2022, it will be in 2023. The first quarter typically generated a highest EBITDA, usually between 45% to 60% of the annual EBITDA depending on business and geographic region.

In January, we also announced a collaboration with Charbone Corporation to deliver green hydrogen to commercial and industrial customers in Quebec. This is an exciting opportunity for Superior and align with our strategy to be one of the leading distributor of mobile low-carbon energy in North America.

We are working on other opportunities and the renewable in low-carbon space, and I look forward to sharing detail of those opportunity as they unfold in 2022, 2023. Now I'll turn the call over to Beth to discuss financial results and our 2022 guidance.

Beth, up to you.

Thank you, Luc, and good morning, everyone. Looking at the financial results for the fourth quarter and full-year 2021, Superior’s fourth quarter adjusted EBITDA of $142.2 million was $1.9 million or 1% lower than the prior year quarter.

This was primarily due to lower EBITDA from operations in Canadian propane partially offset by decreased corporate costs and a decrease in the realized gains on foreign currency hedging contracts. The full-year 2021 adjusted EBITDA was $398.4 million, which was $19 million higher than 2020, and this was primarily due to an increase in EBITDA from operations and realized gains on foreign currency hedging contracts, partially offset by increased corporate costs.

The fourth quarter net earnings from continuing operations was $13.8 million, a decrease of $74.1 million compared to the prior year quarter. The primary driver for lower net earnings was the increase in selling, distribution and administrative costs and a loss on derivatives compared to a gain in the prior year quarter, partially offset by the increase in gross profit and decrease in finance expense.

Full-year net earnings from continuing operations of $17.2 million decreased by $45.6 million compared to the prior year, primarily due to higher SG&A costs and higher finance expense and to a lesser extent, lower gross profit, partially offset by higher gains on derivatives and lower income tax expense. Fourth quarter adjusted operating cash flows before transaction and other costs per share was $0.64 per share.

This was a decrease of $0.01 compared to the prior year quarter due to a lower recovery on current income taxes, lower adjusted EBITDA and higher weighted average shares outstanding, partially offset by lower interest expense. AOCF before transaction and other costs per share for 2021 was $1.56 per share or $0.02 higher than the prior year due to an increase in adjusted EBITDA and a decrease in interest expense.

This was partially offset by a current income tax expense in 2021, compared to a recovery in 2020, any increase in weighted average shares outstanding. From a debt and leverage perspective, total net debt to adjusted EBITDA as at December 31, 2021 was 3.9x, which is 0.4x higher than the leverage as at December 31, 2020.

The increase from December 31, 2020 was primarily due to lower adjusted EBITDA, partially offset by lower debt levels and total net debt was lower as proceeds from the sale of Specialty Chemicals were used to repay debt and a decrease in lease liabilities related to the sale of Specialty Chemicals, and this was partially offset by the impact of acquisitions completed in 2021 as well as the refinancing of senior unsecured notes. EBITDA is lower due to the impact from the sale of Specialty Chemicals, partially offset by the contribution from acquisitions completed in 2021.

Turning now to the individual business results. U.S.

propane adjusted EBITDA for the fourth quarter was $79.9 million, a decrease of $0.5 million from the prior year quarter was primarily due to the impact of warm weather and the translation of U.S. denominated adjusted EBITDA.

Average weather across markets were U.S. propane operates for the fourth quarter as measured by degree days with 7% warmer than the prior year quarter and 9% warmer than the five-year average.

Warmer weather in December was particularly impactful as average weather was 15% warmer than December 2020 and 12% warmer than the five-year average. Warmer weather was a primary driver of lower than anticipated volumes and resulted in higher proportionate operating costs.

This was partially offset by higher adjusted gross profit. Residential and wholesale sales volumes were consistent with the prior quarter primarily due to acquisitions, offset by the impact from the warmer weather.

Commercial sales volumes were 10% higher compared to the prior year quarter, primarily due to incremental volumes from acquisitions and the easing of COVID-19 restrictions. Average margins were 3% higher than the prior year quarter, primarily due to our continued focus on growth of high margin propane customers, partially offset by the impact of the stronger Canadian dollar on the translation of U.S.

denominated gross profit. Operating costs increased by 13% compared to the prior year quarter due to acquisitions, partially offset by the impact of the stronger Canadian dollars on U.S.

denominated expenses. U.S.

propane adjusted EBITDA in 2021 was $226.2 million, 9% higher than 2020, primarily due to increased adjusted gross profit, partially offset by increased operating costs. Adjusted gross profit increased primarily due to incremental sales volumes from acquisitions completed in both 2020 and 2021, partially offset by warmer weather in the fourth quarter.

Operating costs increased due to the impact of acquisitions, partially offset by the impact of the stronger Canadian dollar on U.S. denominated operating costs and cost savings initiatives.

U.S. propane adjusted EBITDA is anticipated to be higher than 2021 primarily due to the incremental contribution from acquisitions completed in 2021, the expected contribution from the Kamps acquisition and realized synergies from acquisitions completed in the past 24 months.

This increase is expected to be partially offset by the impact of the stronger Canadian dollar on U.S. denominated EBITDA and the impact of inflationary pressures on operating costs, including labor and fuel costs.

Average weather in areas where we operate is measured by degree days is anticipated to be consistent with the five-year average. Canadian propane EBITDA from operations for the fourth quarter was $63.2 million, a decrease of $2.4 million compared to the prior year quarter as higher sales volumes and higher average margins were offset by higher operating costs.

Residential sales volumes were consistent with the prior year quarter as the impact of acquisitions completed during the first quarter was offset by warmer weather in Eastern Canada. Average weather across Canada for the fourth quarter as measured by degree days was 2% colder than the prior year quarter and 3% warmer than the five-year average.

Average weather in Eastern Canada was 3% warmer than the prior year quarter and 11% warmer than the five-year average. Average weather in Western Canada was 5% colder than the prior year quarter and 3% colder than the five-year average.

Commercial sales volumes were 3% higher than the prior year quarter due to colder weather in Western Canada and incremental volumes from acquisitions completed earlier in 2021. Wholesale propane volumes were 9% higher compared to the prior year quarter due to increased demand in the California market related to the easing of COVID-19 restrictions and to a lesser extent, sales and marketing efforts to increase third-party spot price wholesale propane sales.

Average margins were modestly higher than the prior year quarter due to the incremental carbon offset credit sales and customer mix. Operating costs increased by 23% compared to the prior year quarter due to the impact from the C.

E. W.

S. benefits or the CEWS benefit in the prior year quarter as there was no benefit in the fourth quarter of 2021.

Canadian propane adjusted EBITDA in 2021 was $183.7 million, 6% lower than 2020, primarily due to higher operating costs and to a lesser extent, modestly lower adjusted gross profit. Operating costs were 5% higher than the prior year as less CEWS benefits was received in 2021 and incentive plan costs and volume-related costs increased.

Adjusted gross profit decreased $0.9 million, primarily due to lower average margins, partially offset by higher volumes and modestly higher other services gross profit. Canadian propane adjusted EBITDA in 2022 is anticipated to be modestly lower than 2021 as Superior is no longer eligible for the CEWS benefits and operating costs are expected to increase due to inflation and improved commercial volumes.

These decreases are expected to be partially offset by the contribution from a wholesale propane business included in the Kamps acquisition, the Kiva Energy Inc. portion.

Stronger wholesale propane market fundamentals and higher commercial volume as COVID-19 public health measures are relaxed. Average weather is measured by degree days is expected to be consistent with the five-year average.

Lastly, the corporate results, capital expenditures and adjusted EBITDA guidance and leverage. The corporate costs in the fourth quarter were $1.2 million lower than the prior year quarter due to lower LTIP expense related to the share price performance in the fourth quarter.

The corporate costs for 2021 were $24.1 million, an increase of $3.6 million, primarily due to higher LTIP costs related to share price performance earlier in the year. Interest expense in the fourth quarter was $17.7 million, a decrease of $4.9 million compared to the prior year quarter, due to lower average debt and lower average interest rates.

Debt was lower primarily due to the impact of the proceeds from the specialty chemical sale, which was used to repay debt, partially offset by acquisitions completed in 2021. Lease liabilities were also lower related to the loss of leases related to the specialty chemicals business.

Full-year interest expense was $76.1 million, a decrease of $15.7 million related to lower average debt and average interest rate. Average debt was lower related to the sale of specialty chemicals and interest rates were lower related to the refinancing of the high yield note completed in 2021.

Capital expenditures for the fourth quarter were $58.2 million compared to $21.4 million in the prior year quarter due to higher non-recurring capital expenditures, maintenance CapEx and investments and leases. Capital expenditures in 2021 were $130.3 million compared to $105 million in 2020.

Capital expenditures increased in 2021 due to the curtailing of capital expenditures in 2020, time to preserve capital in response to the COVID-19 pandemic. Superior expects capital spending in 2022 will be in the range of $120 million to $140 million.

We are introducing our 2022 adjusted EBITDA guidance range of $410 million to $450 million, which implies a midpoint of $430 million. Based on the midpoint of our 2022 guidance, this represents an 8% increase compared to the 2021 full-year results.

When also adjusted for the CEWS benefit of approximately $23 million in 2021, this represents a 15% increase year-over-year. The increase is expected due to the contribution from acquisitions completed in 2021 and assumes the acquisition of Kamps Propane and the associated companies in the second quarter of 2022.

Historically, Kamps generates approximately $17 million to $20 million in adjusted EBITDA in the first quarter. The increase is expected to be partially offset by lower adjusted EBITDA for the Canadian propane business related to the loss of the CEWS benefit in 2022, while the commercial business is not expected to improve until the second half of the year.

The adjusted EBITDA guidance does not include any acquisitions other than Kamps. We do expect to execute on acquisitions in the range of $200 million to $300 million in 2022, which is not included in our 2022 adjusted EBITDA guidance.

The low-end of the range accounts for warmer-than-normal weather and delays in commercial demand recovery. The high-end of the range accounts for colder-than-normal weather, stronger wholesale propane market fundamentals and increased drilling activity in Western Canada.

Superior's leverage ratio for the trailing 12 months ended December 31, 2021 was 3.9x, which is at the higher end of Superior's updated target range of 3.5x to 4x. As we announced in our fourth quarter earnings release, we are updating our targeted leverage ratio from a target range of 3x to 3.5x to a target range of 3.5x to 4x while executing our accelerated acquisition strategy.

So with that, I'd now like to turn the call over for Q&A.

Good morning, folks.

Good morning.

Good morning.

Good morning. I just want to unpackage the guidance a little bit.

So the way I look at you, you did $398 million last year, you add in probably from completed acquisitions another $30 million to $35 million. So you're $430 million to $435 million to start, including Kamps for post Q1.

So you're $434 million to $435 million to start, understand the Qs is a bit of a headwind of $23 million, so that takes you back down. But I'm just wondering is this – the guidance looks extremely conservative and when you serve factoring things like synergies from the acquisitions, the volume benefit even from the assumption of a five-year weather average when last year was much warmer.

So obviously a volume kick there and the economy reopening with the commercial and wholesale, so maybe just kind of – maybe you can just walk through it a little bit better because just trying to understand because the market is obviously a little bit spooked, I guess, by the lower number?

Yes. Sure.

And maybe I'll kick it off and maybe suggest a way to triangulate, and then, I mean, obviously Luc jump in. So David, from a year-over-year perspective, so as you look at 2022, I think good way to look at it is say, okay.

So the midpoint is $430 million to compare that to where 2021 is. If you look at the $398 million here remove the wage subsidy impact.

So that would be $23 million. We'd be at roughly $375 million.

So moving then from the $375 million to the $403 million, the growth year-over-year is roughly 15%. And so then if you want to look at it and start from there of the 15%, 8% to 10% would reflect acquisitions that were closed and recall, I mean, Kamps isn't factored in until Q2.

And then roughly 3% of that then would be your COVID recovery that we're seeing, which is slower than we would expect. So you don't have a like-for-like replacement in the Canadian propane business and also some organic growth in there.

So that's roughly 3% and then 2% would be weather normalization.

Sorry, the last three would be the weather normalization. Okay, got it.

Yes, 2%. Yes, 8% to 10%, 3% and 2% for weather normalization.

So what haven't you factored into the guidance? It doesn't seem like you've factored in a lot of the commercial, industrial, wholesale recovery or what have – where are you being uber conservative here?

Yes. So maybe I'll take that one.

So when we sit internally and look at our business, we really see as the business being that solid as ever. I think we were – I think what this year happened to us, it was more of a timing issue and timing wasn’t our friend.

So you have the CRW that goes away, but the commercial business, we don't see it coming back until later in 2022. So how much did you put back is a guess game and we've done our work to think maybe just quarter four.

Then you have this synergy acquisition. We've done some, but Kamps is the big one and didn't come in.

In January, we have $17 million to $20 million in quarter one, not happening now. We didn't write the check and nobody got hurt, but it's delayed.

It's delayed. So it'll be April to then you'll have the full-year, April to April 2023.

So I think the timing issue, the weather 15% warmer. So when we forecast to your point about how conservative we are, we do average forecast.

Now quarter one is much better than average, probably yes. But we didn’t forecast – well we forecast…

Comparables in 4Q too, right Luc?

Yes. So I think we got caught, I think, and the timing zone has nothing to do with the margin, the growth – external growth, nothing to do with potential acquisition that we're working on, improving them by 25%.

Nothing has changed from the machine marching on. What has changed is a timing issue.

COVID disappeared, when disappeared, business doesn't come back. We’re at $25 million.

How do we place that in the business? I mean, we will come back.

That business is not gone, it's a timing issue. So when it comes back, all those customers and all those [indiscernible] of our customers.

And we know it will come back. So you're looking at the puzzle and you're looking at a timing issue that's by not then help us at all.

And if you look 12, 2023, and we don't want to go there, it's like back to normal timing of plus and minus, the business is humming very well, but you have a timing issue on more than one factor, like the weather, the synergy and the acquisition delay is a large one, and then the QEW go away and we don't know how much is coming back when we just don't see it in quarter one that much.

Okay.

Yes. And I think what I will also add David is with respect to like the COVID recovery [indiscernible], I mean, our view is we're still going to be looking at somewhere $10 million to $15 million gap from where it would've been pre-COVID levels.

In 2022, based on what we've been seeing, and of course, things can change, but that's currently the way we're looking at it.

On EBITDA, clearly, right.

Yes.

Okay. Got it.

And then the second question just has to do with the – and kudos to you for raising the leverage range. Because if I look at utilities out there, 5x net debt to EBITDA, and IPPs at 6x, it does make some sense to me given the fact you've gotten rid of Specialty Chemicals, you have less volatility.

But if I look out into the close of 2Q and then you look – and looks like you're going to have availability of around $270 million or something on sub-$300 million post Kamps and then you want to do $200 million to $300 million in potential deals. It does look like you might exceed the top end of that leverage range.

Any thoughts on just on the balance sheet and your aspirational targets for the deals?

Yes. So I mean, David consistent with what I would've communicated historically, as we look we're committed to our BB rating.

So as we look at acquisitions, it's really dependent on size and timing and when they occur. And as a result of that, I mean, we would look at where our balance sheet sits at the point in time.

And then make a call and evaluate the time what makes sense and what's required specifically to maximize the value to our shareholders.

Excellent. Thanks, Luc.

Thanks, Beth.

Take care. Thank you.

Thank you very much, and good morning, everybody. I just have one question.

You talk about COVID recovery, whether it's in commercial, wholesale, industrial, et cetera, and when I think about your markets and where you're at. For the most part, it seems like there aren't as many restrictions anymore.

And so what I'm asking is can you discuss your confidence in how much volume you think will recover in each of those sub segments and when you think that'll happen? I know you did see in the second half.

But what's going to change between now and the second half. Thanks so much.

Yes. Good question.

And I hope I'm close to reality here because there's no crystal wallet can tell us exactly. So for the U.S.

business, mainly retail, so maybe 5% plus retail, there's only a 15% commercial business that gets affected by COVID. And Canada, we've been growing residential very well more than 2%, 3%.

And then the commercial business in Canada represents two-third of our total Canadian business. So that's where the delta is.

It's a big – we're big – we're the national land. We have big, big scale for industrial, commercial.

It's a big advantage. And then when it comes to the COVID business, I tell you, when you look at all of this segment of the commercial industrial, we can look at the history before COVID and what's happening up to now and it's down tremendously.

So it's a big delta and we see a bit of recovery. Like we talk, I think about 3%, but it's nothing compared to the volume that those people were using pre-COVID.

So when you think of commercial, and you go across the country, all the warehouse with the lift truck, all of the auto industry represents 10% to 12% of our business. That's cut in half.

And then you have commercial, the restaurants, the pizza corner store, then you have big industrial and the oil field is – volume wise, they might get a bit more volume right now, but compared to pre-COVID not at all. And we know that some of that is gone forever.

We have it in our gene for the last three years, but some of it is all related to COVID. And then we have a big industrial project in Western Canada to build all the service and with propane and also site to thousands of mile to get the new natural pipeline to the West Coast.

That's slowdown more than half. So you're looking at those segment one by one, let say, they're not gone.

They're just gone now. They're going to come back when the market comes back.

Canada has not reopened fully or even – what percentages reopen, not much. And it looks like now March, April, there's a strong possibility that things starts to go back to normal, somewhat normal.

So to David's question, are we conservative thinking quarter four? And it starts in mid-quarter three, that you cannot predict better than what we see out there from that 70%, 65% of our business is really industrial, commercial.

[CRW] help us to compensate for that. And then it goes away and then the market not coming back for a while.

So you have a timing lag of that business, the CRW replacing the business, business lagging by, let's say, six to nine months after this CRW is gone.

Luc, what I can maybe do is just provide a bit of color. So our assumption is that the recovery isn't really kicking in or we won't be back until Q4 on the way we were previously, but to give you a sense, in particular for Canada because I think the U.S.

wasn't impacted as much as because of the residential business, sort of some of the volume increases that we are expecting for 2022. So in residential, we are still expecting higher as we grow that business.

And that would be somewhere between 9% to 11% growth. Commercial overall we're anticipating 5% to 7% higher volume.

And I could split that a little bit, so an oil field is somewhere between 5% to 8% higher; industrial, we are viewing it’s going to be basically be consistent with 2021; for general commercial higher in that 9% to 11% range again, and then for motor fuels, we do see them modestly higher, still growing from 4% to 6% and then wholesale, we also see being a bit higher from 7% to 8%. So we are seeing increases in the volumes.

It's just because it's towards the end of the year. It doesn't replace where we were prior to the headwind and COVID.

Yes. Thank you for that.

And maybe just to follow-up on that same topic. So it seems like this can really go one or two ways, either we continue to get one or two variants a year, and really this is the new normal, and we'll just have to accept what the volume is going forward, or we really are on the path to recovery.

In which case, wherever we are by, let's say, the end of 2022, that should just be what the new normal is. Is that fair to say?

Well, I have a different perspective, which is I think all of you have your own idea, how things could unfold. To me, my prediction since January has been – when you get to April, May, the whole is going to say, and that is enough.

You'll catch it and we have to live with it. So if I'm right and people that didn't get vaccinated will be more having difficulty and get more sick.

And the rest of the world has to go back to normal. So I think the – to think that the recovery will never come because COVID 4, 5, 6, whatever comes faster, I think we're like – I think everywhere, the world's going to say enough is enough.

We go back to normal and we live with it and we are going to catch a cold because you're vaccinated, not so bad. I'm for everything that's been done, don't get me wrong, my personal point of view, but I think you cannot go on forever and ever like that, and there'll be – some people are going to get sick for years to come because they didn't get vaccinated, but the world has to go back to commercial business and other things go back to normal.

The world will live with that.

Yes. That’s a fair point.

Thank you for that. I appreciate it.

Thanks.

Great. Thanks, and good morning, everyone.

My first question just relates to Kamps. I was just wondering you flagged early Q2 close, what are the remaining approvals required?

I know it doesn't really matter in terms of timing after you've missed Q1, given that Q2 and Q3 are pretty negligible. But I'm just wondering whether it's Q2 or Q3.

I know it financially doesn't matter, but how confident are you that it will finally close in early Q2?

Yes. And Darren Hribar is on the call, he has been on that case every day.

So I'll ask him to give you his point of view in that regard.

Yes. Thanks, Luc.

Yes, so Nelson, I think that where we are currently – both Kamps and Superior complied with the second request, providing extensive information to the FTC. We continue to work with them to answer questions and provide additional information.

I think our expectation right now is that we will close in early Q1 or sorry, early Q2 or very late Q1. So I think that's still our expectation right now, and there's obviously some variability, but that's the approval that is outstanding.

Okay. Thanks for that.

My next question just relates to leverage and funding and it's probably for Beth. So you flagged the new target leverage of 3.5x to 4x.

I think in the past when the target leverage was 3x to 3.5x, you mentioned that in the short-term, you're comfortable going above that range. And then after realizing synergies and things, you would fall back within that range.

So with the 3.5x to 4x does the same hold in terms of your comfortable going above that 4x ratio in the short-term and then fall back within that range after synergies are realized?

Yes. And I think from our perspective, I mean, we moved it to acknowledge the fact that while we're doing the accelerated acquisition, certainly that being said, I mean, I'll always flag it and I always flag it, you're committed to BB rating.

So I think from our perspective, as we look at acquisitions and the timing, we'll look – we know we want to be within the range. There could be an instance where a little bit above the range, but I think we're committed to that BB and we'll do what makes sense.

Every time we look at the acquisition, we'll make a sense on timing and how quickly and how the synergies are rolling in to truly decide what we need to do and if we get to a situation where the best answer is to potentially look at something like going to the capital market.

Okay. And then is preferred shares part of the picture in terms of something that you would look to consider?

I mean, we've done preferred shares in the past. I mean, I'll always say from my perspective, I'll always look to more traditional products where it's possible and where it makes sense, right?

It's part of our structure, we're comfortable with them. But I think from our perspective, as we look at the overall balance sheets, the reality is we're comfortable with them there, but we're also comfortable with all of the other pieces of our balance sheet.

Nelson, I'll add this few point to your question for everybody, which I think maybe all of you on the call knows, but just to be clear. When we get to the end of December at 3.9x, this is going down on its own now.

Quarter one, quarter two, quarter three will go way down because it's the highest touch point of the year. So there's that happening?

And then to the point about the leverage between [indiscernible], I spent 12 years here and every day. And just about, this is a great cash flow business from – you have an 80% net cash flow of EBITDA.

This is solid as of yet and were margin are solid, so very comfortable to 3.5x to 4x because of the history and the industry we're in.

Okay. Thanks Luc.

And then just one last question on the green hydrogen arrangement with Charbone. And can you just give a bit more color in terms of what you are actually doing and the capital commitment required.

So are you essentially buying trucks that could transport hydrogen and kind of doing all the deliveries for a fixed fee or a commitment, or like what's your capital commitment then? And things like that.

Can you just provide some more comment there?

Thank you for that question. I'm actually with them in two weeks and it will be for them and other people we'll talk about them for a second.

They want to build many of many plants across Canada. And for us, we're very fortunate because, okay, we don't invest in the plant and the capital to build.

And for them, they have no way to do the last mile. And the last mile are pretty much customer we all did with or no, because we're big industrial, industrial business.

So what happens is there's a perfect match of a corporation here where they will build the plant, make the product, they sell it to us and we have the customer and we delivered the last mile. We bring it with the capital trucks, by the way we have already, it's the same type of truck of some of our product we delivered and we make the same kind of margin that we make right now selling propane.

So take a bit of not, not much capital, now do we need a bit extra truck? Because this business will grow and we develop across the country.

The answer is somewhat, yes. But very, very light capital, very solid, good margin, as good as we have today and no just good win-win by them being the builder, the product maker.

And they have no FedEx to bring it to the consumer and we have we're the industrial FedEx to bring to the last, to the customers wherever they're located in Canada.

Okay. That makes sense.

And that facility hasn't been constructed yet, right? It's expected to generate some hydrogen starting Q3?

Yes, exactly. I think it's summer, I'll know more in two weeks as I'm with them.

But I believe the plant it's finished and done for this summer, December, 2022.

Okay, great. Thanks Luc.

Those are all my questions for now.

Thank you.

Yes. Good morning guys.

Sort of two part question. First part, just curious if the Kamps experience has – at any respect diminished your ability or your maybe desire is probably the better word to do larger acquisitions in the current environment.

I think we all understand that there really isn't any large anticompetitive issues, but just given the dance you had with the FTC through this whole process and the deferrals it's caused. I mean, do you try and go after the smaller and midsize deals here, at least in the interim?

Or are you still confident enough to go after some of the larger ones?

No. Very good questions, Steve.

I'll do a part and I'll offer Darren to jump in and give more color. So I don't see any issue of buying retail propane company and the East Coast, West Coast and USA.

I think this experience has more to do with new people, FTC new policy thing. We had a look at everything and what about natural gas and the virtual learning curve and to my, to the question discussion that was more driven to the wholesale business and not understanding.

And they wanted to understand the wholesale business who makes a product who delivers, who can distribute. And there's a ton of that.

We don't see issues, but there's a very strong belief in our part that the retail is not going to be affected to buy retail and distribution business. The worst scenario in the West Coast, if we don't buy another wholesale, we don't buy another wholesale because it's complicated and they're getting their heads around what that is.

And I think they're realizing it. There's nothing there and it's ton of people that can do that.

So, net-net, we don't see any slow down in potential capability to do retail acquisition of propane business. Now, Darren, if anything else you'd like to add to that?

Sure, Luc. Thanks.

No, I think you covered most of it, but I mean, the point is right there, the regulatory authorities clearly are looking at more transactions in the U.S. that is the current environment.

But that analysis is very fact specific. And in this circumstance, with Kamps, there's a large wholesale component and based on what we've seen to date the questions and the interaction, that seems to be a focus of what they're trying to understand.

And it's not the most straightforward. So I think there is some learning going on there.

So I agree with you, Luc. I don't think that that should be viewed as a dampening on our ability to do retail propane acquisitions, most of the retail businesses that we've looked at in a number of the locations, you've got 15 or more competitors, its very competitive and fragmented.

And so I don't think you'd get the same kind of analysis. So I think this is particular to these facts.

That's really helpful. And just as a related question to some degree is just, your desire to take the leverage range up a little bit here to pursue the $200 million to $300 million you described this year.

Is there an urgency to go after deals now, as opposed to go a little bit slower and keep the range intact? I'm just trying to understand the balance between those two, tug of war forces in some respects, you always want to go faster, but the leverage keeps you tough, keeps you sort of at a modest pace.

And how do you think about that and why the urgency to go faster now?

Yes, I'll start. And Beth, will clarify some of those issues.

So we are certainly have developed market position to be the lead acquirer because of 17 deals, quality, health, and safety employee communication. We have – we're humming in that regard.

Now deals come not our – come to us, going to a place and say you are not for sale, we'll pay more and want to buy it. We don't do that.

We have a game plan. We have communication all the time, a lot with midsize and larger group.

And the game is one day you're going to be for sale. And this is who we are.

This is how we do things. And we go to association and have all those meetings.

So they get to know us over the last many years. And we don't know when one's going to come for sale, [indiscernible] small or big.

So it's not us to decide that, but we know we want to be in these coasts. And we know when we're buying our backyard of a region like we did with treatment, there's a ton of synergy.

We know getting a scale and a platform in California and adding to it North, South, and going North of California one day. It makes sense.

And then you add, and you just make, have more synergy. So we've strategically have our location, we want to grow and we don't want to pay more.

We lost the deal. We lose deal all the time because if they're going be trading at higher level, we just will stop and say, not for us.

So we're disciplined. We have our value.

We have our 25% improvement on deal. We know before walking in the door day one and we're – without that comes the balance of the debt and all when and how.

So, we're having built that position, we're marching on. And when we know tender zone and it makes sense, do we have the synergy of the 25%?

Okay, let's go do it. And hopefully there be, the timing ideally would be spread out where it works well, but the debt scenario, but it's not the way it unfold.

And sometimes say, boy, that's such a great company. We'll better get it because once it's for sold, it's not coming back.

So then I'll pass it to Beth.

Sure. And I think sort of building on where Luc was coming from, the reality is when we look at the deals and where the deals make sense.

The deals are available and come to market, when they come to market. So as a result of that, we look at it as a business and we say, what makes the most sense long-term for the shareholder.

So as we look at it and we balance it and we say, if we're going to create long-term accretion for a shareholder and it makes sense, we'll look forward. And as we've talked before, depending on timing and evaluation, et cetera.

I mean, as a result of that, there might be things we have to do from a capital perspective. Our view is when the acquisitions are – when they make sense, we're going to be opportunistic and do what makes sense to continue to build that value for the shareholder.

Yes. That's good colors.

Thanks. Appreciate it.

Thanks, Steve.

Thank you. Good morning, everybody.

Just circling back on the Kamps acquisition here, closing in Q2. I'm just curious why missing out on the circa $20 million of EBITDA doesn't reduce your final purchase price there.

And I'm just thinking is this something that you might look to consider within negotiations going forward i.e. have the vendor wholesale or retail take on more of the risk around regulatory approvals or the timing to close, especially for these relatively larger deals?

Yes. So the valuation we have on Kamps and the synergy makes it very accretive to our shareholder.

What you're talking about is we're missing quarter one, but we didn't write the check for quarter one. So we're not really missing anything with the exception of – you have a better first 12 months if you start in January, the company valuation to me, and I think to the market stays the same, but you probably have year one – you write a bigger check year one, and you have the EBITDA only 12 months later, which is not all in the same year.

So there's a bit of a gap there, not big dollar, but there's a gap. From when your write the check and when the return comes, you're not starting the best month going forward.

But then for the next 20 years, it all match up that you pay the right value for the EBITDA that's still there going forward towards the synergy. And now Beth, if I explained it good enough, if you want to take that on.

It's Darren. I just thought I'd add to that.

I think it's a good idea trying to push that risk on to a vendor, if you could. Certainly, the challenge you have is when you're in a competitive process like this to try to push regulatory risk on to a vendor is going to be difficult when you're competing with other bids.

I mean, if you thought you had a leg up, given a number of other things you might consider, but I think that makes it a tough negotiation and a tough sell for a vendor.

Makes sense. Yes.

Appreciate that. And then maybe Luc, could you provide a bit more color on your strategy here to scale your footprint in the Midwest?

I'm just curious if the Hopkins acquisition establishes somewhat of a home base for you in the region, or are you still looking for that larger scale retailer to really kick off a hub-and-spoke model?

Yes, it's a great region, and we did buy a good size company. I go back maybe, Rob on the call could give us the exact date, three, four years, I guess, in Ohio.

And we do have a platform and we've – we take our Superior Way and we centralize a lot of the work. And so you don't have a call centers and people in every branch it's already done with that platform.

So what we are adding now is in the same neighborhood of those regions. We like the region.

We wouldn't go further in the middle USA at this stage. And we don't know about the future in five, 10 years, but that's a great region.

And we do already have some location there and a good team and really great regional manager. So we're building on that as they come along.

And is part of the strategy there, Luc, to have somewhat of a free option on perhaps extending your new green hydrogen initiative into the Midwest at some point down the road?

That's a tougher question. I'll give you my reality check at this stage.

We are going to do extremely well in Canada because we're the big player. With the scale, with the brand, we cover the whole country.

So when anybody that wants to do green energy for the last mile, as we talked earlier about FedEx, we're in. So when it comes to the states, I don't know today how it could unfold and what region I do know with Kamps who have an opportunity for wholesaling some renewable propane with that Kamps region when we expect to – in California to have something in that regard and we'll have the scale to do it in California, what we do in Canada.

So looking forward to that and I can say, I think something there will develop over the next year or two or three. The rest of the U.S, I don't know.

We'll have to wait and see. We're pretty new at it.

Year plus we've been studying and trying to research and understand the market and where do we belong and how do we become the player with the green energy. I can make you a strong commitment.

Canada, we're going to be it. We're going to be good.

California after Kamps, I think we'll work hard to do something quickly there and then on and on, we'll develop the strategy, the plan and we'll present it to the market once we know more.

Fair enough. I appreciate that, Luc.

Last one for me, if I could. Beth, maybe just back on your comments around leverage and potentially looking at the Capital Markets at some point down the road, but maybe you could just speak to what other levers you might have on the liquidity frontier, just in case Capital Markets aren't attractive as you look to execute on this accelerated M&A program.

You obviously have a couple shareholders with deep pockets. So I'm just wondering if there's an understanding there that if you do need additional liquidity to stay on course with the M&A plan that you'll have access to other cash resources outside of the Capital Markets?

Yes. I mean, I can't really speak for what others wouldn't be willing to do as we look going forward, but certainly, we'll always look at things opportunistically.

We do have two, I'm going to say sort of very supportive investors in Brookfield and M&B. So I think from that perspective, I mean, there's certainly all the discussions we have comfortable with what we're doing and from what we have going forward, I don't want to speak for what they might do if we were looking at something.

I think access to liquidity is always something that we would factor in as we looked at the acquisitions going forward. And I think the reality is right now, when you look at the amount of room we have on our credit facility, et cetera, we're comfortable as we move forward.

But I mean, it's going to be very specific to timing, size of transactions, et cetera, right? But I think, the crux of your question around do we have – or our large investors supportive of us?

Yes. Based on our discussions, they're supportive.

Okay. That's great.

Thank you very much.

Thank you.

Good morning, everyone.

Good morning.

Two quick questions for me. So first on the guidance range of $410 million to $450 million, apologies if I missed it.

Do you quantify what you consider abnormal weather to get you to the $450 million? And then how does that compare to what we've seen so far in January, February because I think we're double digits colder than normal at this point?

Will you take that Beth?

Yes, sure. I mean, what we would typically do when we're looking at developing the ranges as we would look and we would say, look over the last five to 10 years, what are some of the extremes from a weather perspective.

So we'll build the ranges looking something that is within the range of what we would've experienced historically. So somewhat you can think about it.

It's not exactly linear. Like it's – you lose a more EBITDA as it's warmer than you gain when it's colder just because you have to keep on some incremental costs, et cetera, when it's warmer just to make sure that you've got to people to deliver et cetera.

But it's almost – if you look at it, it's not perfectly linear, but it's – you do have an increase somewhat proportionate to the change in weather depending on the months that you're looking at. It's a very long drawn out way to say we'll use plausible estimates and creating a range, and we've seen in warm weather historically and cold weather historically to get your outsides of the range.

That being said, it isn't just weather, right? Like we'll build that range on other items as well, right?

Differentials in the market from a wholesale perspective as well.

Okay.

Are you looking more or so for a specific numbers?

Well, I mean, I just – I guess, I'm just trying to tease out how much warmer – or sorry, how much colder are we currently than maybe the range would imply?

Well, I mean, as we talked about, I mean, January was definitely colder and colder in the U.S. I mean, I think one way to say in order for us to work through and get to that high-end, we would need not just a cold Q1 and it would need to be a cold whole Q1.

We'd also need a cold Q4.

Got it. Okay.

And then just one other question, in terms of the five-year guide, based on the amount of capital deployed at this point, I certainly wouldn't have expected the EBITDA to be higher, commercial volumes are obviously a big impact. But could you just maybe give us a sense of if there's been any changes in the assumptions that would've gone into that five-year plan and where you feel in terms of when you sort of hit the midpoint of that?

Difficult to say, but what we don't have in the five-year plan is some additional distribution of green energy that we start to work on. But I don't think there'll be a shortage of deal to get to the numbers.

And like we chat earlier with another question, they're choppy. They come in and out and you don't know when and who will sell at what time, we just know them out and where the door and we're getting the call.

And so I'm probably missing a few points that are key here. So Darren or Beth can jump in or Rob.

Yes. I think from, Luc, what I would say, from the highest perspective, when we look at the Superior Way Forward target of that in 2026 EBITDA.

I think initially we assume that it would occur in a very even pace throughout. We knew it would be choppy as Luc said.

I mean, I think when it comes to the assumptions we were using for multiples and the ability to achieve synergy, they're all still in line. I mean, there's nothing that we would look at now that would change our expectations of what can be delivered.

I think when it comes to acquisitions that we've entered into and executed, there's been no surprises. We haven't had anywhere.

We dramatically saw different synergies than we expected. Any surprises we've had have always been to the upside.

So I don't see anything that would give us any pause or any concern that any of our initial assumptions other than just the choppiness of the timing, we always knew was a potential, is any different than what we were thinking about when we were talking about it in Investor Day.

Okay, great. Thank you.

That's all for me.

Thank you.

Hi, good morning. Can you help us look back a bit?

If you look at whatever two, three, four years, what has been the ROIC, the return on invested capital from the propane acquisition that you've done? So maybe give us a sense of what kind of value creation you have made for shareholders?

Yes. The ROIC, it'll differ depending on the transaction, obviously which makes sense.

But typically it's anywhere from…

Beth, what have you done, but not typically – sorry to interrupt. What have you achieved?

Like I know the 25% you talked about, what can you show us? You've actually achieved in the last three or four years not for typical, but actual performance?

Probably needs an analysis to go back that far. We know what we bought and what the return are when we signed and what as an expectation to Beth’s point has been achieved.

But to go back three, four years, if we have an answer that of those four years really given…

Well, yes, Luc, and we can certainly take it and talk about it offline for specifics and do a detailed analysis. But fundamentally the acquisitions that we've done, they have delivered what we expected them to deliver.

So in fact, because we're achieving the budgets and the synergies as we set them out initially when we did the investments. What we were expecting in theory be where the actual is.

Your question is a little tricky because what occurs when we do an acquisition, the acquisition gets absorbed in the business, right? The synergies occur because it becomes part of the business.

So you don't have an isolated and you can't track it on an isolated basis, but we can track where the cost reductions, et cetera are when it comes to specific cost areas in particular in the first year, once it's fully integrated, then it's just part of the base business. So that's what I was answering.

That's what we would typically expect. And we haven't dramatically had anything that we've seen where acquisitions didn't deliver, what we initially had expected them to.

I think it'd an interesting analysis since you guys are into this, it is your strategy going forward to see where things had happened. And the reason the way I set up my second question, which is the real question, Luc, Superior Plus, as you know, the stock price is in stuck in a range of basically $11 to $12 a share for 15 years.

If you ignore some transient appearance, will you below that range and maybe above that range, we're there today, $11, $12 a share. So the stock market is not giving you any credit for all the things you've done Superior Way, you sold out businesses, you've bought businesses, you've gone to propane pure-play.

So what is the market missing, Luc, if you have achieved a value creation and a ROIC on your propane strategy?

Maybe if I could think more optimistically, I could say maybe once we get to certain size and the roll up are done 17, I think the proof is there, but maybe the market, well they're done 25 now and look at this and return I can tell you on the deal are great. So you're like – what's missing to get the right value for such a business, with such a market position, with such a solid margin with very low risk on the – if not very small risk, almost nothing on the commodity.

You're like, what the heck? That's a good question.

We have a puzzle understanding why isn't stock at the right value, which was not $13.

Thank you for that. Appreciate it.

Do you have any ideas about that?

I think you could in your next investor event, I think you could to my first question, I think if you could show how your propane transition happening from a high level, how you've achieved, what returns you've achieve on your business, where you maybe come in above your targets, you are going to come below your targets, maybe how that shapes your future acquisition choices would be helpful.

Yes. There is a presentation, I and Rob that we made, I don't know if it's on the Internet, but we deal and the average deal, the average return, that was I'll ask, Rob if he have an answer already package ready for that.

Yes. Luc, there is a slide in Investor Day on the pre-synergies and post-synergies multiples.

But there's not a specifically return on invested capital calculations. So that is something we can look at.

Okay. Appreciate that.

Thank you.

And then Joe, one thing that we know from a size, we have big competitors that are losing market share every year that are public. And when you look at you compare us to the MLP because I won't give their name, but you all know them.

It's not a good business model, but they're public with valuation. So I think we get pulled into that valuation.

We never had an approach of 100% dividend not investing in technology, digitalization, system, marketing, we don't operate at all like those three businesses that are public. But we probably put in those, in that bucket, that's one way, maybe one touch point to say, why not more value for that stock?

That certainly comes to our mind. There might be others, but that's one where we have big, large public competitor that are not – don't have a good machine of developing the future properly and they lose market share every year.

It's like are the old income trust, and you call it, you stretch the business. So one time, one day you don't look good.

I think the stretch has happened for them, but we don't operate like that, but we're probably putting that bucket to a degree.

Thank you.

Thank you.

Yes. Just a quick simple follow-up just on the margins.

You've done some things over the last couple of years, some kind of temporary and some permanent. And we've got a new level of margin in the U.S.

[indiscernible] 42.2 and 18.5 in Canada. And just looking out into 2020, the wholesale market fundamentals look decent.

You got some cost savings, you've ripped out some costs permanently out of the structure. And then you've de-marketed some of the lower margin accounts.

So maybe just as you're looking to this year, what's your sort of expectation of what could stay in the cents per leader on both sides of the border?

You kick it on. I'll add.

Yes. I can kick it off.

So from a U.S. perspective, what we are anticipating David, still a range of that $0.38 to $0.44.

$0.38, say it again, Beth, sorry.

In Canadian, it would be $0.38 to $0.40 is typically the range.

Got it. Okay.

And remember that's converted, so US$0.30 to US$0.35, but again, converted into Canadian. So you're right, we were at $0.42.

For 2022, we're thinking that those average margins will be slightly lower, right. We have a slightly different mix.

We've got some growth and commercial volumes as a result of acquisitions, et cetera. So you've got some mix impact, but more importantly, it's an FX impact, right.

And what order of magnitude Beth, US$0.30, US$0.35? What are you thinking in Canadian dollars, like your $0.38 to $0.40, what do you think you're going to be lower end of the range there like $0.38, something?

No, no. When we're saying slightly lower, like $0.42, $0.41, right or somewhere between those.

So just modestly lower, slightly lower. In Canada, we are at the $0.18.

What we're forecasting for 2022 for Canadian margins again is just slightly lower. And again, that's predominantly going to be driven because as we talked about the volume increases, we're going to have increases in wholesale volumes and we're also going to have increases in those commercial volumes, which you just get that impact from that change in the customer mix.

Got it. And what's the potential here.

I mean, you're doing things like the sensors and things like that, more obviously retail, and then you're sort of demarketing some of the lower margin accounts. Like what's the potential here?

Like where could you be aspirationally on these margins?

Yes. I think there's a balance act.

Well, I just talked earlier about the three public company that increased margin more than enough every year, if they lose EBITDA and the warm year or bad year, they'll just increase price and they lose volume. So we're going to be in a position where we can increase price to a degree, let's say penny a year.

And we do real study by branch, by region, what's the competitive landscape. And we come to a conclusion as to, okay, we can increase the $0.41, $0.42, $0.43 without losing the customer.

So we cut with the sensors, the retail, the communication we have with different specialized people and different commercial segment. We've cut the attrition in half over the years.

That's very important, as important as the growth and then we've grow not commercial Canada right now, we've grown retail a bit more than anticipated in Canada. The machine in the state, there's some growth in the states, but all of the application that gets us an extra margin in the state and the better contact and glue with customers by segment and big time retail because of our size of retail in the states.

We haven't executed all of those tools yet in the state. It's a big year coming in 2022 to get there.

It'd been busy. $30 million became $230 million of EBITDA overnight.

And we did put some good talent in marketing sales people, but we're lagging the Canadian maturity of developing those two and that's going to come. So to me, I believe that we could continue to have some good internal growth and increase margin over time slightly.

The big lift, I think on margins are behind us. Now we're more at the point where we can continue to increase slightly margin over time, by adding more glue and more service and easy to do business with all the tools that we've pretty much installed in Canada, more to come and in the states.

So don't see why not.

And if you look at inflation and things like that, Luc, in a low propane, and I know the propane prices are rolled over and now they’re rising again. But I know there's a little bit of a tailwind that goes without it in 1Q, but just from an inflationary perspective, it's got to be much easier when you've got a low propane price and a low rack spread that you can, with the retail customers, you can get more through in terms of pricing.

And in this environment, maybe you're not getting rack plus, plus or so to speak, but is that, are we, am I thinking about that, right?

Yes. As in 2021 and has that been a good year to add a lot of margin because what happens when price on the propane goes up the way it did and then it went down on back up, like you said, you have to be very careful of communicating with customers ahead of time to say, this is like natural gas, the oil that when you go to fill up your car, the bank, we're a pass through.

We make a, a delivery to you, but the whole of energy costs have gone up everywhere in every aspect. And we communicate to customer with email or call centers and all the above.

So we want to be very cautious in those times because what happens to people's mind, even though I think in the last year they know more because when they go with their car to fill the gas or all the cost of energy, it's more known than in the past. If something like that would happen, you have segment of people that know and some don't.

I think most people know today. But its fragile, you cannot increase on top of how those increase and not expect customer when the summer comes, go away.

And that's why we have a balancing act to find the right place to price properly. So we don't want to do like the three other big company have done and just increased price and we'll lose 5% more customer next year.

But our EBITDA might look better short-term. So we're cautious about that.

We're debating that regularly as to what's right here, but to think of your original question, can we continue to tweak slowly, but surely over the years? I believe so.

Okay. Excellent.

Thank you.

Okay.

Yes. So thank you everyone to participate.

I understand and I explained at one stage, we're caught in a bad timing issue, but the business fundamental, the business operation, margin, synergies nothing else changed. It's just the bad timing and those customers and those tanks are in Canada are still owned by us and they'll come back.

And the growth and the acquisition are there and we'll continue to hum. And to Joe's point, I guess we know that something wrong to be at $13 or so, when you have a machine like that.

But usually with market, I don't get overly disappointed. But not to the point, I'm not getting overly concerned because usually there's a time down the road where the market catch it and picks it up.

I don't know if it's when we get a bit bigger and then more investors from U.S. or the world.

But we'll continue to work hard for all of you and we appreciate your interest in our company.