Superior Plus : 2023 Annual Report

Enabling the

Adoption of

Low Carbon

Energy

ANNUAL REPORT 2023

FINANCIAL

HIGHLIGHTS

Financial Results

1. EBITDA from operations and Adjusted EBITDA are not standardized measures under IFRS. See "Non-GAAP Financial Measures and Reconciliations" section in the MD&A for a description of each measure.
2. The weighted average number of shares outstanding for the year ended December 31, 2023 was 259.0 million (year ended December 31, 2022 was 224.9 million). The weighted average number of shares assumes the exchange of the issued and outstanding preferred shares into common shares. There were no other dilutive instruments for the year ended December 31, 2023 and 2022.

Financial Position

1. Includes investment in leases amounting to $57.3 million in 2023 and $48.8 million in 2022. Excludes property, plant and equipment acquired through acquisition.
2. Senior secured debt is stated before deferred issue costs.
3. See "Non-GAAP Financial Measures and Reconciliations" in Superior's Management's Discussion and Analysis (MD&A) for additional details.
4. See "Non-GAAP Financial Measures and Reconciliations" in Superior's MD&A for definition of Leverage Ratio.

Management's Discussion and Analysis

Three months and year ended December 31, 2023 and 2022

This Management's Discussion and Analysis ("MD&A") contains information about the performance and financial position of Superior Plus Corp. ("Superior") as at and for the year ended December 31, 2023 and 2022, as well as forward-looking information about future periods. The information in this MD&A is current to February 21, 2024, and should be read in conjunction with Superior's audited consolidated financial statements and notes thereto as at and for the year ended December 31, 2023 and 2022.

The accompanying audited consolidated financial statements of Superior were prepared by and are the responsibility of Superior's management. Superior's audited consolidated financial statements as at and for the year ended December 31, 2023 and 2022 were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

All financial amounts in this MD&A are expressed in millions of Canadian dollars except where otherwise noted. All tables are for the year ended December 31 of the period indicated, unless otherwise stated. This MD&A includes forward-looking statements and assumptions. See "Forward-Looking Information" for more details.

Non-GAAP Financial Measures

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

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

Forward-Looking Information

Certain information included herein is forward-looking information within the meaning of applicable Canadian securities laws. 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 and its businesses. Such information is typically identified by words such as "anticipate", "believe", "continue", "estimate", "expect", "plan", "forecast", "future", "outlook", "guidance", "may", "project", "should", "strategy", "target", "will" or similar expressions suggesting future outcomes.

Forward-looking information in this document includes: future financial position, consolidated and business segment outlooks,

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

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

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

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

Overview of Superior and Basis of Presentation

Superior consists of the following four reportable segments: U.S. Retail Propane Distribution ("U.S. Propane"), Canadian Retail Propane Distribution ("Canadian Propane"), North American Wholesale Propane Distribution ("Wholesale Propane") and Certarus Ltd. ("Certarus"). The U.S. Propane segment distributes propane gas and liquid fuels primarily in the Eastern United States, as well as California and, to a lesser extent, the Midwest to residential and commercial customers. The Canadian Propane segment distributes propane gas and liquid fuels across Canada to residential and commercial customers. The Wholesale Propane segment distributes propane gas and other natural gas liquids across Canada and the U.S. to wholesale customers and supplies the majority of propane gas required by the Canadian Propane segment and a portion of the propane gas required by the U.S. Propane segment. Certarus is a comprehensive low carbon energy solution provider engaged in the business of transporting and selling compressed natural gas ("CNG"), renewable natural gas ("RNG") and hydrogen. Certarus' principal business is supplying CNG as

an alternative fuel for large-scale industrial and commercial customers in the United States and Canada. Superior acquired all the issued and outstanding shares of Certarus on May 31, 2023.

Highlights

• On May 31, 2023, Superior acquired all the issued and outstanding common shares of Certarus, a leading North American low carbon energy solutions provider (the "Certarus Acquisition"), for total consideration of $840.5 million consisting of $353.2 million in cash and 48.6 million common shares of Superior plus assumed debt of $214.2 million. As part of the regulatory review process and in order to close the transaction, Superior entered into a consent agreement with the Commissioner of Competition agreeing to divest eight retail propane distribution locations and related assets in Northern Ontario.
• Full-year2023 Adjusted EBITDA (1) of $551.6 million, an increase of 23% from prior year Adjusted EBITDA (1) of $449.8 million. Adjusted EBITDA (1) per share was $2.13 per share, an increase of $0.13 per share from $2.00 per share in the prior year.
• Achieved 2023 Pro Forma Adjusted EBITDA of $643.3 million within the guidance range of $630 million to $670 million. Superior is expecting Adjusted EBITDA (1) growth in 2024 of approximately 5% compared to 2023 Pro Forma Adjusted EBITDA of $643.3 million.
• Superior's fourth quarter Adjusted EBITDA (1) was $213.6 million, an increase of $31.0 million from the prior year quarter Adjusted EBITDA (1) of $182.6 million. Adjusted EBITDA (1) per share was $0.77, a decrease of $0.02 per share from $0.79 in the prior year quarter.
• Certarus achieved record fourth quarter Adjusted EBITDA (1) of $47.2 million, a 21% increase from the prior year quarter.
• Superior's Propane Operations Adjusted EBITDA (1) decreased $17.4 million compared to the prior year quarter due to warmer weather, weaker market differentials and the impact of divesting its Northern Ontario assets.
• Superior's Leverage ratio (1) of 3.8x as at December 31, 2023 improved from 4.1x as at December 31, 2022.
• Effective January 1, 2024, Superior will begin reporting results in U.S. dollars to improve year over year comparability given foreign exchange rate fluctuations, as the majority of its business activities are denominated in U.S. dollars. Historical comparative financial information in U.S. dollars can be found on page 33.
• Superior's Net earnings of $77.5 million in the fourth quarter improved $14.5 million compared to the net earnings of

$63.0 million in the prior year quarter.

1. These amounts are Non-GAAP financial measures and/or Non-GAAP ratios, see "Non-GAAP financial measures and reconciliations" on page 34 for more information.

Financial Results

The following summary contains certain Non-GAAP financial information. See "Non-GAAP Financial Measures and Reconciliations" on page 34 for more information about these measures.

Summary of Adjusted EBITDA

1. Fourth quarter results are not required to be disclosed in the annual audited consolidated financial statements for the year ended December 31, 2023 and 2022. The
   GAAP and Non-GAAP financial information below can be derived by subtracting the results of the year ended December 31, 2023 and 2022 by the results of the nine months ended September 30, 2023 and 2022, respectively. The results for the nine months ended September 30, 2023 and 2022 can be found on www.sedarplus.caor http://www.superiorplus.com/investor-relations/financial-reports/.
2. These amounts are Non-GAAP financial measures and/or Non-GAAP ratios, see "Non-GAAP financial measures and reconciliations" on page 34 for more information.
3. The weighted average number of shares outstanding for the three months ended and year ended December 31, 2023 was 278.6 million and 259.0 million, respectively
   (year ended December 31, 2022 was 231.1 million and 224.9 million, respectively). The weighted average number of shares assumes the exchange of the issued and outstanding preferred shares into common shares. There were no other dilutive instruments for the three months ended and year ended December 31, 2023 and 2022.
4. Represents sales to third-parties and excludes sales volumes to the Canadian and U.S. Propane segments.
5. The amounts disclosed in the audited consolidated statements of cash flows for the year ended December 31, 2023 and 2022 are made up of the sum of these amounts.

Results for the year ended December 31, 2023

Adjusted EBITDA for the year ended December 31, 2023 was $551.6 million, an increase of $101.8 million or 23% compared to the prior year Adjusted EBITDA of $449.8 million. The increase is primarily due to higher EBITDA from operations, partially offset by higher corporate costs and an increased realized loss on foreign currency hedging contracts. EBITDA from operations increased $116.7 million or 24% compared to the prior year primarily due to the impact of the Certarus acquisition and, to a lesser extent, higher Adjusted EBITDA from U.S. Propane and Wholesale Propane, partially offset by lower Canadian Propane Adjusted EBITDA. Certarus contributed $95.3 million in Adjusted EBITDA from the date of acquisition to December 31, 2023.

U.S. Propane Adjusted EBITDA was $302.5 million, an increase of $17.6 million or 6% primarily due to the impact of acquisitions, higher unit margins to offset inflation and the impact of the weaker Canadian dollar on the translation of U.S. denominated transactions, partially offset by the impact of warmer weather on sales volumes.

Wholesale Propane Adjusted EBITDA was $63.4 million, an increase of $14.7 million or 30% primarily due to the impact of the Kiva acquisition and exceptionally strong propane wholesale market fundamentals compared to the prior year.

Canadian Propane Adjusted EBITDA was $133.9 million, a decrease of $10.9 million or 8% primarily due to lower sales volumes due to warmer weather, the impact of divesting its Northern Ontario business and the impact of inflation on expenses, partially offset by higher unit margins.

Corporate operating costs were $34.3 million compared to $25.9 million in the prior year. The increase is primarily due to higher incentive plan costs due to fluctuations in Superior's share price, costs related to on-boarding new management and the impact of inflation on costs. Superior realized a higher loss on foreign currency hedging contracts of $9.2 million compared to $2.7 million loss in the prior year due to lower average hedge rates relative to changes in exchange rates.

Results for the three months ended December 31, 2023

Adjusted EBITDA for the three months ended December 31, 2023 was $213.6 million, an increase of $31.0 million or 17% compared to the prior year quarter Adjusted EBITDA of $182.6 million. The increase is primarily due to higher EBITDA from operations and, to a lesser extent, lower corporate costs. EBITDA from operations increased by $29.8 million compared to the prior year quarter primarily due to the Certarus acquisition, partially offset by lower EBITDA from operations in the propane distribution segments. Certarus contributed $47.2 million in Adjusted EBITDA for the three months ended December 31, 2023.

Canadian Propane Adjusted EBITDA was $50.2 million, a decrease of $8.1 million or 14% primarily due to warmer weather and, to a lesser extent, the impact of divesting the Northern Ontario assets, partially offset by higher average unit margins to offset the impact of inflation.

Wholesale Propane Adjusted EBITDA was $16.3 million, a decrease of $6.4 million or 28% primarily due to weaker market differentials compared to the prior year quarter.

U.S. Propane Adjusted EBITDA was $113.8 million, a decrease of $2.9 million or 2% primarily due to the impact of warmer weather on sales volumes, partially offset by higher average unit margins.

Corporate operating costs were $8.0 million compared to $11.0 million in the prior year quarter. The decrease is primarily due to lower incentive plan costs due to fluctuations in Superior's share price and lower insurance provisions. Superior realized a higher loss on foreign currency hedging contracts of $5.9 million compared to the loss in the prior year quarter of $4.1 million.