Superior Plus Corp. Announces 2014 Annual and Fourth Quarter Results
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 02/19/15 -- Superior Plus Corp. (TSX: SPB)
Highlights
Energy Services
Specialty Chemicals
Construction Products Distribution
Corporate Related
CRA Income Tax Update
As previously disclosed, 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 the Conversion. Subsequently on November 7, 2014, Superior received the Notices of Reassessment for the 2011 to 2013 taxation years. The CRA's position is based on the acquisition of control rules and 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.
On May 8, 2013 and August 7, 2013, respectively, Superior filed a Notice of Objection and a Notice of Appeal with respect to the Notice of Reassessments received on April 2, 2013. On February 4, 2015 Superior filed a Notice of Objection with respect to the Notice of Reassessments received on November 7, 2014. Superior anticipates that if the case proceeds in the Tax Court of Canada, the case could be heard within two years, with a decision rendered six to twelve months after completion of the court hearings. If a decision of the Tax Court of Canada were to be appealed, the appeal process could reasonably be expected to take an additional two 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.
Interim tax payments made by Superior will be recorded to the balance sheet and will not materially impact either adjusted operating cash flow or net earnings.
Based on the midpoint of Superior's 2015 financial outlook of AOCF per share of $1.95, if the tax pools from the Conversion were not available to Superior, the impact would be an increase to cash income taxes of approximately $20.0 million or $0.15 per share for 2015. 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.
2015 Financial Outlook
Superior's 2015 financial outlook of AOCF per share of $1.80 to $2.10 is consistent with the financial outlook provided at the end of the third quarter of 2014. Superior sees its 2015 financial results as modestly higher to consistent with its 2014 financial results as ongoing operational and financial improvements in the Energy Services and CPD businesses will be largely offset by the absence of record or near record cold temperatures experienced in 2014, higher interest costs associated with the issuance of high-yield term debt and the impact of lower crude oil prices on certain customer segments. Specialty Chemicals results in 2015 are anticipated to be consistent with 2014.
Superior's AOCF per share for the year ended December 31, 2014 of $1.89 was consistent with the previously provided outlook of $1.75 to 1.95 per share before restructuring charges.
For additional details on the assumptions underlying the 2015 financial outlook, see Superior's 2014 fourth quarter FD&A.
Debt Management Update
Superior remains focused on managing both its total debt and its total debt to EBITDA. Superior is currently forecasting a total debt to EBITDA ratio at December 31, 2015 of 3.0X to 3.4X which would bring Superior into its targeted leverage range of 3.0X to 3.5X. Superior's anticipated debt repayment for 2015 and total debt to EBITDA leverage ratio as at December 31, 2015, based on Superior's 2015 financial outlook is detailed in the chart below.
Superior's total debt (including convertible debentures) to Compliance EBITDA before restructuring costs was 3.5X as at December 31, 2014 (3.6X after restructuring costs), lower than the 3.9X as at December 31, 2013. Debt levels and total leverage as at December 31, 2014 were lower than December 31, 2013 levels due to reduced working capital levels in the Energy Services business due to reduced commodity prices and the impact of higher EBITDA. Superior continues to focus on reducing its total leverage through ongoing debt reduction, including reducing working capital requirements and improving business operations.
Superior's total debt to Compliance EBITDA before restructuring costs of 3.5X as at December 31, 2014 was lower than the previously provided forecast of 3.6X to 4.0X due to higher than anticipated EBITDA.
2014 Detailed Fourth Quarter Results
Superior's 2014 Fourth Quarter Financial Discussion and Analysis is attached and is also available on Superior's website at under the Investor Relations section.
2014 Fourth Quarter Conference Call
Superior will be conducting a conference call and webcast for investors, analysts, brokers and media representatives to discuss the 2014 Fourth Quarter Results at 8:30 a.m. MST on Friday, February 20, 2015. To participate in the call, dial:1-800-355-4959. An archived recording of the call will be available for replay until midnight, April 20, 2015. To access the recording, dial: 1-800-408-3053 and enter pass code 6492762 followed by the # key. Internet users can listen to the call live, or as an archived call, on Superior's website at .
Supplemental Financial Information
Diluted AOCF Per Share
For the three months ended December 31, 2014, the dilutive impact of the 7.50%, October 31, 2016 convertible debentures was 6.6 million shares (132.8 million total shares on a dilutive basis) with a resulting impact on AOCF before restructuring costs of $1.4 million ($87.2 million total on a dilutive basis) and on AOCF of $1.4 million ($87.0 million total on a dilutive basis). For the three months ended December 31, 2013, the dilutive impact of the 7.50%, October 31, 2016 convertible debentures was 6.6 million shares (132.8 million total shares on a dilutive basis) with a resulting impact on AOCF before restructuring costs of $5.6 million ($75.7 million total on a dilutive basis) and on AOCF of $5.6 million ($61.5 million total on a dilutive basis). For the year ended December 31, 2014, the dilutive impact of the 7.50%, October 31, 2016 convertible debentures was 6.6 million shares (132.8 million total shares on a dilutive basis) with a resulting impact on AOCF before restructuring costs of $5.6 million ($244.3 million total on a dilutive basis) and on AOCF of $5.6 million ($233.0 million total on a dilutive basis). For the year ended December 31, 2013, the dilutive impact of the 7.50%, October 31, 2016 convertible debentures was 6.6 million shares (129.7 million total shares on a dilutive basis) with a resulting impact on AOCF before restructuring costs of $5.6 million ($213.2 million total on a dilutive basis) and on AOCF of $5.6 million ($197.9 million total on a dilutive basis).
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, Superior LP and its businesses. Such information is typically identified by words such as "anticipate", "believe", "continue", "could", "estimate", "expect", "plan", "intend", "forecast", "future", "guidance", "may", "predict", "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, 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, timing, costs and benefits of restructuring activities, business strategy and objectives, development plans and programs, business expansion and improvement projects, expected product margins, expected timing of commercial production and the costs and benefits associated therewith, market conditions in Canada and the U.S., expected tax consequences of the Conversion, the 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, 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 propane, heating oil and similar products, demand for chemicals including sodium chlorate and chloralkali, effect of operational and technological improvements, anticipated costs and benefits of business enterprise system upgrade plans, future working capital 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.
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 anticipated financial performance, current business and economic trends, the amount of future dividends paid by Superior, business prospects, availability and utilization of tax basis, regulatory developments, currency, exchange and interest rates, trading data, cost estimates, our ability to obtain financing on acceptable terms, the assumptions set forth under the "Financial Outlook" sections of our fourth quarter financial discussion and analysis ("FD&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, labour relations matters, our ability to access external sources of debt and equity capital, and the risks identified in (i) our FD&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.
When relying on our 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, neither Superior nor Superior LP undertakes 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.
For more information about Superior, visit our website at .
Financial Discussion of 2014 Fourth Quarter and 2014 Year End Results
February 19, 2015
The following Financial Discussion is a review of the financial performance and position of Superior Plus Corp. (Superior) as at December 31, 2014 and for the three and twelve months ended December 31, 2014 and 2013. The information in this Financial Discussion is current to February 19, 2015. This Financial Discussion should be read in conjunction with Superior's audited consolidated financial statements and notes thereto as at and for the twelve months ended December 31, 2014 and its unaudited condensed consolidated financial statements as at and for the three and twelve months ended December 31, 2014 and 2013.
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 Financial Discussion 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.
Fourth Quarter Financial Summary
Fourth quarter adjusted operating cash flow (before restructuring costs of $0.2 million) was $85.8 million, an increase of $15.7 million or 22% from the prior year quarter. The increase in adjusted operating cash flow (AOCF) was primarily due to higher operating results at Energy Services and Construction Products Distribution and lower interest and corporate costs.
AOCF (before restructuring costs) of $0.68 per share, increased by $0.12 per share or 21% from the prior year quarter due to the increase in adjusted operating cash flow offset in part by a modest increase in weighted average number of shares.
Adjusted operating cash flow for the year ended December 31, 2014 (before restructuring costs of $11.3 million) was $238.7 million ($227.4 million after restructuring costs), an increase of $31.1 million or 15% from the prior year before restructuring costs. The increase in AOCF was due to increased EBITDA from the operations of Energy Services and Construction Products Distribution and lower interest costs offset in part by higher corporate costs, lower contribution from Specialty Chemicals and higher cash taxes.
AOCF per share (before restructuring costs) was $1.89 per share ($1.80 per share after restructuring costs) for the year ended December 31, 2014, an increase of $0.20 per share or 12% before restructuring costs and an increase of $0.24 per share or 15% after restructuring costs from the prior year. The increase in AOCF as noted above was partially offset by the 3% increase in the weighted average number of shares outstanding. The number of weighted average shares outstanding increased due to the full year's impact of the equity offering of 13.0 million shares on March 27, 2013.
Net earnings for the fourth quarter were $43.3 million, an increase of $32.4 million or 297% in the prior year quarter. Net earnings increased primarily due to higher revenue and gross profit, lower finance and operating expenses and lower income taxes. The decrease in expenses was due to an impairment charge of $15.5 million recognized during 2013 in the U.S. refined fuels business, and lower finance expenses.
Revenue of $956.8 million was $77.9 million lower than the prior year quarter due to decreased Energy Services revenue, partially offset by increased Specialty Chemicals and CPD revenue. Energy Services revenue decreased due to lower propane prices and sales volumes. Specialty Chemicals revenue increased due to higher sales volumes and pricing. CPD revenue increased due to higher sales volumes related to improvements in end-use markets and the impact of the strengthening U.S. dollar on U.S. denominated sales.
Gross profit of $247.5 million was $6.7 million higher than the prior year quarter primarily due to increased Energy Services, Specialty Chemicals and CPD gross profits. Energy Services gross profits were higher due to increased unit margins associated with effective price management and customer retention and growth initiatives, partially offset by lower volumes. CPD gross profits increased due to improved sales volumes and higher average selling prices. Specialty Chemicals gross profits were modestly higher due to an improved contribution from hydrochloric acid due to the completion of the acid burner expansions in Port Edwards, Wisconsin and Saskatoon, Saskatchewan.
Operating expenses of $182.8 million in the fourth quarter were $18.1 million lower than the prior year quarter due to decreased restructuring costs, the capitalization of tank refurbishment costs that were previously expensed and decreased employee costs related to headcount reduction initiatives at Energy Services, partially offset by an increase in operating expenses at Specialty Chemicals and Construction Products Distribution related to the impact of the appreciation of the U.S. dollar on U.S. dollar denominated expenses. Total income tax recovery for the fourth quarter was $1.3 million, a decrease of $5.9 million compared to the prior year quarter. The decrease in deferred income tax recovery was due to higher net earnings in the fourth quarter of 2014 and decreased impact from permanent items.
Superior had net earnings of $56.9 million for 2014, an increase of $4.2 million from 2013. The increase was due to higher gross profits and lower interest costs, offset in part by higher unrealized losses on financial instruments in 2014 due to the appreciation of the U.S. dollar, higher operating expenses and higher income tax expense.
Consolidated revenues of $3,975.9 million in 2014 were $223.1 million higher than in the prior year. The increase in revenue was due primarily to higher Energy Services revenue, higher Specialty Chemicals revenue and higher Construction Products Distribution revenue. Energy Services revenue was higher due primarily to increased commodity prices in the first quarter and effective price management. Specialty Chemicals revenue is higher due to increased sales volumes and increased chlorate pricing. Construction Products Distribution revenue is higher due to increased sales volumes and the impact of the appreciation of the U.S. dollar on U.S. denominated sales. Gross profit of $919.5 million was $50.7 million higher than in the prior year due to improved gross profit at Energy Services, Specialty Chemicals and Construction Products Distribution.
Operating expenses were $744.7 million in 2014, an increase of $26.7 million or 4% from the prior year, due primarily to higher employee costs and the impact of the appreciation of the U.S. dollar on U.S.-denominated expenses, offset in part by lower restructuring costs and amortization expense. Total restructuring costs of $11.3 million were incurred by Energy Services and Construction Products Distribution as part of Superior's operational improvement efforts. The decrease in amortization expense was due to fully amortizing certain intangible assets during 2013. Corporate costs were higher than in the prior year due to expenses incurred for the Construction Products Distribution strategic review process, partially offset by a decrease in long-term incentive costs related to the decline in Superior's share price.
Total finance expense of $52.7 million was $19.1 million lower than the prior year due principally to lower average debt throughout the year and the full year benefit of redeeming Superior's 8.25% $150.0 million senior unsecured debentures on October 28, 2013, completion of an equity offering on March 27, 2013 and partially offset by the interest on the 6.50% senior unsecured notes. Unrealized losses on derivative financial instruments of $54.1 million was $49.0 million higher than prior year due to an increase in unrealized losses in the current year on Superior's foreign exchange forward contracts related to the appreciation of the U.S. dollar. Gains and losses on Superior's various financial instruments are without consideration of the fair value of the underlying customer or supplier commitment. Total income tax expense of $16.5 million was $10.8 million higher than the prior year due to an increase in net earnings before tax in 2014, changes in statutory tax rates and decreased impact from permanent items.
Energy Services
Energy Services' condensed operating results for 2014 and 2013:
Revenues for the fourth quarter of 2014 were $568.9 million, a decrease of $114.0 million or 17% compared to the prior year quarter. The decrease is primarily due to lower commodity prices and sales volumes compared to the prior year quarter. Total gross profit for the fourth quarter of 2014 was $140.1 million, an increase of $6.0 million or 4% over the prior year quarter. The increase in gross profit is primarily due to higher gross margins within the Canadian propane and U.S. refined fuels segments offset in part by lower fixed-price energy services and supply portfolio management gross profits. A detailed review of gross profit is provided below.
Gross Profit Review
Canadian Propane Distribution
Canadian propane distribution gross profit for the fourth quarter was $76.3 million, an increase of $0.8 million or 1% compared to the prior year quarter, due to higher unit margins, partially offset by lower volumes. Residential and commercial sales volumes decreased by 8 million litres or 6% from the prior year quarter due primarily to warmer weather during the fourth quarter of 2014 as compared to the prior year quarter. Average weather across Canada for the fourth quarter, as measured by degree days, was 11% warmer than the prior year and 4% warmer than the five-year average. Industrial volumes decreased by 12 million litres or 6%, due to lower oilfield demand as a result of customer site gasification and lower customer activity. Agriculture volumes decreased by 8 million litres or 19% due to a delay in crop drying season and unfavourable weather for higher crop drying demand.
Average propane sales margins for the fourth quarter increased to 20.3 cents per litre from 18.6 cents per litre in the prior year quarter. The increase was principally due to improved pricing management in a declining price environment and favourable movement in the sales mix as the current quarter included a higher proportion of higher-margin sales volumes.
Canadian Propane Distribution Sales Volumes
U.S. Refined Fuels Distribution
U.S. refined fuels distribution gross profit for the fourth quarter was $43.8 million, an increase of $7.8 million or 22% compared to the prior year quarter. The increase in gross profit was due to lower sales volumes offset in part by higher gross margins. Sales volumes of 407 million litres decreased by 4 million litres or 1% from the prior year quarter. The decrease was primarily due to warmer weather. Weather as measured by heating degree days for the fourth quarter was 13% lower than the prior year quarter and 7% warmer than the five-year average. Average U.S. refined fuels sales margins of 9.6 cents per litre increased from 8.8 cents per litre in the prior year quarter. Sales margins were positively impacted by declining commodity costs and improved price management.
U.S. Refined Fuels Distribution Sales Volumes
Other Services
Other services gross profit was $10.6 million in the fourth quarter, a decrease of $1.4 million or 12% from the prior year quarter due to decreased installations and the impact of exiting non-core service business lines associated with restructuring.
Supply Portfolio Management
Supply portfolio management gross profits were $7.3 million in the fourth quarter, consistent with the prior year quarter gross profit of $6.9 million.
Fixed-Price Energy Services
Fixed-Price Energy Services Gross Profit
Fixed-price energy services gross profit was $2.0 million in the fourth quarter, a decrease of $1.7 million or 46% from the prior year quarter. Natural gas gross profit was $1.7 million, consistent with the prior year quarter. Electricity gross profit in the fourth quarter of 2014 was $0.3 million, a decrease of $1.5 million or 83% from the prior year quarter due to sales mix as the current quarter includes a higher proportion of lower margin customers, and the impact of selling the U.S. business.
Operating Costs
Cash operating and administrative costs were $81.1 million in the fourth quarter of 2014, a decrease of $7.2 million or 8% from the prior year quarter. The decrease in expenses was primarily due to the capitalization of approximately $5.0 million in tank refurbishment costs that were previously expensed, the impact of lower employee costs associated with headcount reductions, and lower maintenance costs, partially offset by the impact of a stronger U.S. dollar on U.S. denominated expenses.
Financial Outlook
EBITDA from operations for 2015 for the Energy Services business is anticipated to be consistent with 2014. EBITDA from the Canadian propane and U.S. refined fuels businesses will benefit from ongoing operational improvements offset by modestly lower gross profits. Operating costs as a percentage of gross profits are anticipated to continue to improve in 2015 due to a full year run rate of business initiatives and The Superior Way project. Gross profits in 2015 compared to 2014 will be impacted by the absence of record or near record cold temperatures experienced in the first quarter of 2014 which positively impacted 2014 gross profits. In addition, Superior is forecasting a reduction in gross profits related to oil and gas sales volumes within the Canadian propane business as a result of ongoing volatility in crude oil.
Gross profit from the supply portfolio management business is anticipated to be similar to 2014 whereas gross profit from the fixed-price energy business will be higher in 2015 than in 2014 due to the absence of losses that resulted from the temperatures experienced in the first quarter of 2015. Average weather, as measured by degree days, for 2015 is anticipated to be consistent with the 5-year average period. Operating conditions for 2015 are anticipated to be similar to 2014 with the exception of the decline in the wholesale cost of propane experienced in the fourth quarter of 2014 which Superior anticipates will persist throughout 2015.
Initiatives to improve results in the Energy Services business continued during the fourth quarter of 2014 in conjunction with Superior's Destination 2015 initiative and Superior's goal for each of its businesses to become best-in-class. Business improvement projects for 2014 include: a) improving customer service, b) improving overall logistics and procurement functions, c) enhancing the management of margins, d) working capital management e) improving existing and implementing new technologies to facilitate improvements to the business, f) headcount reductions and g) execution of the detailed restructuring plan.
The restructuring plan for the Canadian Propane distribution and U.S. refined fuels businesses are expected to accelerate realization of operating efficiencies by implementing a more disciplined and consistent management operating system across the segment designed to leverage the new processes and information system investments and by sizing the organization to efficiently meet its operational business needs. The restructuring plans have been completed by the end of 2014. All costs associated with the restructuring plans have been recognized and no additional costs are anticipated.
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. During the second quarter of 2014, the new system was successfully rolled out to the final three regions of Ontario, Quebec and Alberta. A total of $21.8 million was incurred in order to complete the entire project.
During 2014, Canadian propane distribution commenced the migration of its current data center located in Calgary, Alberta to a new location in New Jersey, U.S. along with approximately 140 servers and more than 70 applications. The migration was completed in the third quarter.
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 2014 and 2013:
Chemical revenue for the fourth quarter of $170.4 million was $13.7 million or 9% higher than in the prior year quarter primarily due to higher sales volumes and average selling prices for sodium chlorate. Fourth quarter gross profit of $69.0 million was $0.8 million or 1% higher than the prior year quarter due to higher chloralkali/potassium gross profits.
Sodium chlorate gross profits were consistent with the prior year quarter. Sodium chlorate sales volumes increased by 7,000 tonnes or 5% compared to the prior year quarter due primarily to additional sales volume contribution from the Strategic Supply Agreement. Chloralkali/potassium products gross profits were higher than the prior year quarter due primarily to higher hydrochloric sales volumes, offset in part by lower average margins for caustic. Chloralkali/potassium products sales volumes increased by 4,000 tonnes or 6% due primarily to higher hydrochloric sales volumes due to increased production and sales associated with the expansion at the Port Edwards plant.
Cash operating and administrative costs of $40.4 million were $3.3 million or 9% higher than in the prior year quarter due to a full 3 months of operating expenses related to Tronox strategic supply agreement and general inflationary pressures.
Major Capital Projects
As announced in the first quarter of 2012, Superior approved an $18.0 million expansion of hydrochloric acid production capacity at the Port Edwards, Wisconsin chloralkali facility. The plant's capacity of 110,000 wet metric tonnes (WMT), or 36,000 dry metric tonnes, is being increased to approximately 220,000 WMT. The Port Edwards burner expansion was completed and commissioned during September 2014 and hydrochloric acid shipments from the new burner commenced in September.
As announced in the third quarter of 2012, Superior has approved a $25.0 million expansion of hydrochloric acid production capacity at the Saskatoon, Saskatchewan Chloralkali facility. The plant's capacity of 70,000 WMT, or 22,000 dry metric tonnes, will be increased to approximately 140,000 WMT. The hydrochloric acid burner expansion was commissioned and commenced commercial production in December 2014 and the rail loading facilities are expected to be completed during the first quarter of 2015. The total estimated costs are expected to be $33 million as compared to the previously provided estimate of $25 million due to higher than anticipated complexity of the project which extended construction time combined with a tight Western Canada labour market which increased overall contractor costs.
As at December 31, 2014, a total of $46 million had 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.
On June 29, 2014, the Hargrave, Manitoba sodium chlorate facility, which represents 8% of Superior's North American sodium chlorate manufacturing capacity, was impacted by local area flooding. The plant was properly shut-down in advance of the flooding; however certain pumps and motors and some electrical equipment were damaged as a result of the flooding. The facility was successfully restarted during the third quarter and is operating at normal capacity utilization. Physical damage to the property and loss of production is covered by Superior's insurance program subject to customary deductibles and waiting periods.
Strategic Supply Agreement
In October 2013, Specialty Chemicals entered into a supply agreement with Tronox LLC ("Tronox") to purchase up to 130,000 MT of sodium chlorate per year from Tronox's Hamilton, Mississippi facility, as nominated annually by Specialty Chemicals. The initial term of the agreement extends to December 31, 2016 and may be automatically extended in one year increments thereafter. Under the agreement, Tronox will continue to own and operate the facility, and Specialty Chemicals will purchase sodium chlorate to meet customer demands under certain customer contracts being assumed and to supply other existing and new customers. Specialty Chemicals paid an initial fee of $4.3 million and will incur a quarterly fee of $0.8 million during the initial term, plus a cost for sodium chlorate delivered and monthly operating expenses. As part of the Agreement, Specialty Chemicals will acquire finished inventory and assume existing railcar leases and customer contracts, as assigned. Additionally, the parties have entered into a strategic long-term agreement for the supply of chloralalkali product by Specialty Chemicals to service Tronox's requirements in North America. Under the agreement, if the annual nominated volume by Specialty Chemicals is less than the specified volume of product set out in the agreement, Tronox may terminate the agreement early, at its sole option and its sole cost to permanently shut down the plant for the manufacture of sodium chlorate.
Financial Outlook
Superior's 2015 financial outlook of AOCF per share of $1.80 to $2.10 is consistent with the financial outlook provided at the end of the third quarter of 2014. Superior sees its 2015 financial results as modestly higher to consistent with its 2014 financial results as ongoing operational and financial improvements in the Energy Services and CPD businesses will be largely offset by the absence of record or near record cold temperatures experienced in 2014, higher interest costs associated with the issuance of high-yield term debt and the impact of lower crude oil prices on certain customer segments. Specialty Chemicals results in 2015 are anticipated to be consistent with 2014.
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 2014 and 2013:
Revenues of $219.8 million for the fourth quarter of 2014 were $23.1 million or 12% higher than in the prior year quarter. Gypsum Specialty Distribution (GSD) revenues were higher than the prior year quarter due to improved U.S. sales volumes as a result of ongoing improvements in the U.S. residential construction sector, increases in average selling prices and the impact of a stronger U.S. dollar on the translation of U.S. denominated revenues. Canadian revenues were modestly higher than the prior year quarter. Commercial and Industrial (C&I) revenues increased over the prior year quarter due to higher industrial market activity, modest improvements in end-use markets, an increase in market share due to investments in sales and marketing, and the impact of a stronger U.S. dollar on the translation of U.S. denominated revenues.
Gross profits of $55.2 million in the fourth quarter were $4.2 million or 8% higher than in the prior year quarter due to improved sales volumes and higher average selling prices. Average sales margins on a total basis were modestly lower than the prior year due to the timing of the recognition of annual rebates in 2014 compared to 2013, a higher mix of large industrial projects and the impact of Canada/U.S. sales mix.
Cash operating and administrative costs were $43.6 million in the fourth quarter, an increase of $2.4 million or 6% from the prior year quarter. Operating costs were impacted by $1.5 million in non-recurring severance costs incurred in the current year quarter, the impact of a stronger U.S. dollar on the translation of U.S. denominated expenses, and the full quarter impact of costs from the Baton Rouge, Louisiana branch which opened in the fourth quarter of 2013.
Financial Outlook
Superior anticipates that EBITDA from operations in 2015 will be higher than in 2014 due to continued improvements in U.S. residential construction markets, the product expansion of drywall into ceiling-only branches, and benefits resulting from ongoing pricing and procurement initiatives. Superior anticipates that the U.S. commercial market will be modestly improved in 2015 compared to 2014 and that the Canadian residential market will continue to be challenging.
Initiatives to improve results in the Construction Products Distribution business continued during the fourth quarter of 2014. Ongoing business improvement projects 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, e) sales growth in select focus products/markets, and f) execution of the detailed restructuring plan.
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
Efficiency, process improvement and growth related expenditures were $13.7 million in the fourth quarter consistent with the prior year quarter. Other capital expenditures were $20.4 million in the fourth quarter compared to $12.5 million in the prior year quarter, an increase of $7.9 million due primarily to higher tank refurbishment costs at Canadian propane distribution.
During October 2013, Specialty Chemicals entered into a strategic supply agreement which required an initial investment of $4.3 million (see Strategic Supply Agreement).
On November 27, 2013, Superior completed the acquisition of certain assets constituting a retail propane and commercial fuels distribution business (Townsend) in Le Roy, New York for an aggregate price of $9.6 million including deferred consideration and net of adjustments for net working capital. The operations will provide U.S. refined fuels with access to additional propane customers.
Proceeds on the disposal of capital were $0.7 million in the fourth quarter and consisted of Superior's disposition of surplus tanks, cylinders and other assets. During the fourth quarter Superior entered into new leases with capital equivalent value of $6.0 million primarily related to delivery vehicles for the Energy Services and Construction Products Distribution segments. In the prior quarter, Superior entered into a finance lease of $21.5 million related to the strategic supply agreement.
Corporate and Interest Costs
Corporate costs for the fourth quarter were $2.2 million, compared to $4.4 million in the prior year quarter. The decrease was primarily due to lower long term incentive costs as a result of a decrease in Superior's share price.
Interest expense on borrowing and finance lease obligations for the fourth quarter was $10.8 million compared to $12.4 million in the prior year quarter. The decrease was due to lower average effective interest rates and lower average debt. See "Liquidity and Capital Resources" 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 fourth quarter was $6.2 million and consistent with the prior year quarter of $6.3 million.
Non-GAAP Restructuring Costs
Superior's restructuring costs have been categorized together and excluded from segmented results. Below is a table summarizing these costs:
Restructuring costs incurred during the fourth quarter of 2014 and 2013 consists of both costs included and excluded from the restructuring provision. During the fourth quarter 2014, Superior recognized restructuring costs of $0.2 million, which were not recognized under the restructuring provision. During the fourth quarter 2013, Superior recognized restructuring costs of $14.2 million, of which, only $9.0 million was recognized under the restructuring provision. Total restructuring costs incurred during 2013 and 2014 in order to complete the restructuring projects was $26.6 million, higher than the range provided in Superior's first-quarter MD&A of $22 million to $25 million due to higher than expected facility termination costs.
Income Taxes
Total income tax recovery for the fourth quarter was $2.0 million and consists of $0.4 million in cash income tax expense and $2.4 million in deferred income tax recovery, compared to a total income tax recovery of $7.2 million in the prior year quarter, which consisted of $0.2 million in cash income tax recovery and a $7.0 million deferred income tax recovery.
Cash income tax expense for the fourth quarter was $0.4 million and consisted of income tax expense in the U.S. of $0.4 million (2013 Q4 - $0.2 million of U.S. cash tax recovery). Deferred income tax recovery for the fourth quarter was $2.4 million (2013 Q4 - $7.0 million deferred income tax recovery), resulting in a corresponding net deferred income tax asset of $276.1 million as at December 31, 2014. The decrease in deferred income tax recovery was due to higher net earnings in the fourth quarter of 2014 and decreased impact from permanent items.
CRA Income Tax Update
As previously disclosed, 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 the Conversion. Subsequently on November 7, 2014, Superior received the Notice of Reassessment for the 2011 to 2013 taxation years. The CRA's position is based on the acquisition of control rules and 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 Notice of Reassessment, must be remitted to the CRA.
On May 8, 2013 and August 7, 2013, respectively, Superior filed a Notice of Objection and a Notice of Appeal with respect to the Notice of Reassessments received on April 2, 2013. On February 4, 2015 Superior filed a Notice of Objection with respect to the Notice of Reassessments received on November 7, 2014. Superior anticipates that if the case proceeds in the Tax Court of Canada, the case could be heard in late 2015, with a decision rendered six to twelve months after completion of the court hearings. If a decision of the Tax Court of Canada were to be appealed, the appeal process could reasonably be expected to take an additional two 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.
Interim tax payments made by Superior will be recorded to the balance sheet and will not materially impact either adjusted operating cash flow or net earnings.
Based on the midpoint of Superior's 2015 financial outlooks of AOCF per share of $1.95, if the tax pools from the Conversion were not available to Superior, the impact would be an increase to cash income taxes of approximately $20.0 million or $0.15 per share for 2015. 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 achieved adjusted operating cash flow per share for 2014 of $1.89 (before restructuring costs), within the 2014 financial outlook range provided in its third-quarter MD&A. See the detailed discussion on each segment for a breakdown of the results achieved.
Superior's 2015 financial outlook of AOCF per share of $1.80 to $2.10 is consistent with the financial outlook provided at the end of the third quarter of 2014. Superior sees its 2015 financial results as modestly higher to consistent with its 2014 financial results as ongoing operational and financial improvements in the Energy Services and CPD businesses will be largely offset by the absence of record or near record cold temperatures experienced in 2014, higher interest costs associated with the issuance of high-yield term debt and the impact of lower crude oil prices on certain customer segments. Specialty Chemicals results in 2015 are anticipated to be consistent with 2014.
In addition to the operating results of Superior's three operating segments, significant assumptions underlying Superior's 2015 outlooks are:
Energy Services
Specialty Chemicals
Construction Products Distribution
Restructuring Charges
Superior's anticipated debt repayment for 2015 and total debt to EBITDA leverage ratio as at December 31, 2015, based on Superior's 2015 financial outlook and year-to-date results, are detailed in the chart below.
Debt Management Update
Superior remains focused on managing both its total debt and its total debt to EBITDA. Superior is currently forecasting a total debt to EBITDA ratio at December 31, 2015 of 3.0X to 3.4X which would bring Superior into its targeted leverage range of 3.0X to 3.5X. Superior's anticipated debt repayment for 2015 and total debt to EBITDA leverage ratio as at December 31, 2015, based on Superior's 2015 financial outlook is detailed in the chart below.
Debt Management Summary
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 $533.2 million as at December 31, 2014, a decrease of $45.5 million from December 31, 2013. The decrease in Borrowing was primarily due to lower net working capital requirements associated with the exit of the heating season and cash flow from operating activities offset in part by capital expenditures and dividend payments.
On June 20, 2014, and November 26, 2014, Superior extended the maturity date of its Credit Facility to June 27, 2018. Financial covenant ratios were unchanged with a consolidated secured debt to consolidated EBITDA ratio and a consolidated debt to consolidated EBITDA ratio of 3.0x and 5.0x, respectively. Superior maintains the flexibility to expand the facility up to $750.0 million. See "Summary of Cash Flow" for details on Superior's sources and uses of cash.
On December 9, 2014, Superior completed an offering of $200.0 million 6.50% senior unsecured notes (the "Senior Notes"). The Senior Notes were issued at Par value and mature on December 9, 2021. The Senior Notes contain certain early redemption options under which Superior has the option to redeem all or a portion of the Senior Notes at various redemption prices, which include the principal amount plus accrued and unpaid interest, if any, to the application redemption date. Interest is payable semi-annually on June 9 and December 9, commencing June 9, 2015.
As at December 31, 2014, Debentures (before deferred issuance fees and discount values) issued by Superior totaled $494.2 million which was $0.3 million lower than the balance as at December 31, 2013 due to the conversion of $0.3 million of 7.50% convertible debentures into common shares. See Note 15 to the unaudited condensed consolidated financial statements for additional details on Superior's Debentures.
As at December 31, 2014, approximately $321.5 million was available under the Credit Facility, which Superior considers sufficient to meet its expected net working capital, capital expenditure and refinancing requirements during 2015.
Consolidated net working capital was $264.8 million as at December 31, 2014, a decrease of $28.3 million from $293.1 million as at December 31, 2013. The decrease was primarily due to the decline in net working capital requirements at Energy Services related to lower commodity prices, offset in part by higher net working capital requirements at Construction Products Distribution associated with increased accounts receivable from the pickup in construction activity. Superior's net working capital requirements are financed from its Credit Facility.
As at December 31, 2014, when calculated in accordance with the Credit Facility, the consolidated secured debt to compliance EBITDA ratio was 1.2:1 (December 31, 2013 - 2.2:1) and the consolidated debt to compliance EBITDA ratio was 1.9:1 (December 31, 2013 - 2.2:1). For both of these covenants, Debentures are excluded. These ratios are within the requirements of 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 3.0:1 and not more than 3.5:1 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. As at December 31, 2014, Superior's total debt to compliance EBITDA ratio was 3.6 to 1.0, and 3.5 to 1.0 on a before restructuring cost basis. 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 December 31, 2014, Superior's available distribution amount was $130.0 million under the above noted distribution test.
As of December 31, 2014, US$30 million of U.S. Notes, issued October 29, 2003 by way of private placement, were outstanding. On March 30, 2010, certain financial covenant ratios of the U.S. Note Agreement were amended to make them consistent with the financial covenant ratios under its amended Credit Facility other than the exclusion of any obligations owing under an accounts receivable securitization program from the calculation of consolidated secured debt for purposes of the consolidated secured debt to compliance EBITDA ratio calculation.
On June 27, 2014, Standard & Poor's confirmed Superior and Superior LP's long-term corporate credit rating of BB and the senior secured debt rating of BBB-. The outlook rating for Superior remains stable. On June 27, 2014, Dominion Bond Rating Service 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 December 31, 2014, Superior had an estimated defined benefit pension solvency deficiency of approximately $12.3 million (December 31, 2013 - $12.8 million deficiency) and a going-concern surplus of approximately $22.6 million (December 31, 2013 - $11.5 million surplus). Funding requirements required by applicable pension legislation are based on 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 its Credit Facility and anticipated future operating cash flow to fund this deficiency over the prescribed 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 fourth quarter was 126.2 million shares, consistent with prior year quarter.
As at February 19, 2015, December 31, 2014 and December 31, 2013, the following common shares and securities convertible into common shares were issued and outstanding:
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.
On October 30, 2014, Superior announced the monthly dividend will be increased by 20% to $0.06 per share or $0.72 per share on an annualized basis from the current dividend of $0.05 or $0.60 per share on an annualized basis. Dividends paid to shareholders for 2014 were $77.0 million (before DRIP proceeds of $nil) or $0.62 per share compared to $73.7 million (before DRIP proceeds of $4.9 million) or $0.60 per share in 2013. Dividends paid to shareholders increased by $3.3 million due primarily to the higher dividend and a higher number of shares outstanding associated with the equity offering completed on March 27, 2013. See "Debt Management Update" for further details. Dividends to shareholders are declared at the discretion of Superior's Board of Directors.
Superior's primary sources and uses of cash are detailed below:
Summary of Cash Flow (1)
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 2014 Annual MD&A for further details on financial instrument risk management.
As at February 19, 2015, Superior had hedged approximately 97% of its estimated U.S. dollar exposure for 2015, and due to the hedge position, a change in the Canadian to U.S, dollar exchange rate for 2015 would not have a material impact to Superior. A summary of Superior's U.S. dollar forward contracts for 2015 and beyond is provided in the table below.
For additional details on Superior's financial instruments, including the amount and classification of gains and losses recorded in Superior's year-end 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 16 to the unaudited condensed consolidated financial statements.
Disclosure Controls and Procedures (DC&P) and Internal Controls Over Financial Reporting (ICFR)
Disclosure controls and procedures are designed by or designed under the supervision of Superior's President and Chief Executive Officer (CEO) and the Executive Vice President and Chief Financial Officer (CFO) in order to provide reasonable assurance that all material information relating to Superior is communicated to them by others in the organization as it becomes known and is appropriately disclosed as required under the continuous disclosure requirements of securities legislation and regulation. In essence, these types of controls are related to the quality and timeliness of financial and non-financial information in securities filings. The CEO and CFO are assisted in this responsibility by a Disclosure Committee (DC), which is composed of senior managers of Superior. The DC has established procedures so that it becomes aware of any material information affecting Superior in order to evaluate and discuss this information and determine the appropriateness and timing of its public releases.
Internal Controls over Financial Reporting are also designed by or under the supervision of Superior's President and CEO and the Executive Vice President and CFO and effected by Superior's board of directors, management and other personnel in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.
As previously disclosed in the third quarter 2014 MD&A, management discovered that certain controls in Superior's ICFR at Supply portfolio management and U.S. refined fuels were not operating as intended. The following accounting practices led to adjustments in Superior's third quarter results:
Based on an analysis by management, these errors were the result of the following:
Management was able to detect these issues through compensating controls within the organization. Management assessed the impact of these issues on its ICFR and concluded that there was no material weakness in the design or operation of Superior's ICFR as at December 31, 2013, nor any material weakness in the design of Superior's ICFR at September 30, 2014.
Please refer to the 2014 Annual MD&A for a summary of the financial impact of the accounting adjustments.
Changes in ICFR
Since September 30, 2014 and prior to December 31, 2014, Superior implemented certain changes to its ICFR that have materially affected such ICFR. These changes were designed to strengthen corporate governance, compliance and control processes, specifically at Supply portfolio management and U.S. refined fuels to address the issues identified, and, more generally, to enhance Superior's overall compliance and control processes.
No other changes were made in Superior's internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, Superior's internal control over financial reporting in the year ended December 31, 2014.
Effectiveness
An evaluation of the effectiveness of the design and operation of Superior's DC&P was conducted as at December 31, 2014 by and under the supervision of Superior's management, including the CEO and CFO. Based on this evaluation, the CEO and CFO have concluded that Superior's DC&P were effective at December 31, 2014. An evaluation of the effectiveness of Superior's internal controls over financial reporting was conducted as at December 31, 2014 by and under the supervision of Superior's management, including the CEO and CFO. Based on this evaluation, the CEO and CFO have concluded that Superior's internal controls over financial reporting were effective at December 31, 2014.
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 year ended December 31, 2014. 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, 2014 or later. The affected standards that apply to Superior are as follows:
International Accounting Standard (IAS) 32 - Financial Instruments: Presentation
The amendments to IAS 32 clarify the requirements relating to the offsetting of financial assets and financial liabilities. Specifically, the amendments clarify the meaning of "currently has a legally enforceable right of off-set" and "simultaneous realization and settlement". Superior adopted the amendments on January 1, 2014, with no impact to Superior.
IAS 36 - Impairment of Assets
The IASB issued Recoverable Amount
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Datum: 19.02.2015 - 22:01 Uhr
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