CALGARY, AB, March 3, 2022 /PRNewswire-HISPANIC PR WIRE/ – Parkland Corporation (”Parkland”, “we”, the “Company”, or “our”) (TSX:PKI), a leading food and convenience store operator, independent supplier and marketer of fuel and petroleum products and leader in renewable energy, announced today its financial and operating results for the three months and year ended December 31, 2021, increased its 2022 Guidance and announced it is raising its annual dividend for the tenth consecutive year. Highlights include:
Q4 2021 Highlights
- Adjusted EBITDA attributable to Parkland (”Adjusted EBITDA”)1 of $260 million reflects record performance in all our marketing segments. We estimate an approximately $35 million negative impact on Adjusted EBITDA from the British Columbia floods, which required the shutdown of the Transmountain Pipeline and led to a pause in refinery processing operations.2
- Net earnings attributable to Parkland (”net earnings”) of $23 million, or $0.15 per share, basic, a decrease of 57 percent from prior year, and Adjusted earnings attributable to Parkland (”Adjusted earnings”)3 of $55 million, or $0.36 per share, basic, up approximately 28 percent year-over-year.4
2021 Highlights
- Adjusted EBITDA of $1.260 billion, up over 30 percent from prior year.
- Net earnings of $97 million, or $0.64 per share, basic, up approximately 20 percent from 2020 and Adjusted earnings of $372 million, up 200 percent from 2020.
- Trailing twelve months distributable cash flow per share3 of $4.34, up 35 percent from 2020.
- Cash flow from operating activities of $904 million fully funded capital expenditures, dividend payments, and interest on leases and long-term debt.
- Undertook a record number of acquisitions for attractive values with significant synergy potential; accelerating delivery of our strategy and building on our track record of prudent acquisitions.
- Maintained strong liquidity position, with cash and cash equivalents of $284 million and unused credit facilities of $1,270 billion as at December 31, 2021. Continued to enhance financial strength by taking advantage of favourable conditions to refinance senior notes. Parkland has no debt maturities until 2026.
- Delivered 12 percent year-over-year growth in our Canada, USA and International marketing segments.
- Fuel and petroleum volume of 24 billion litres, up over 10 percent from 2020, reflecting the impact of acquisitions, resilient customer demand and ongoing recovery from COVID.
- Continued to expand our ON the RUN convenience brand with 107 additional locations and grow the reach of our JOURNIE™ rewards program to 1,200 locations. Over the past year, we have almost doubled JOURNIE™ membership, from 1.5 million active members to over 2.9 million.
2022 Outlook
- Increased 2022 Adjusted EBITDA guidance to $1.5 billion +/- 5 percent, reflecting our execution confidence and the expected close of previously announced acquisitions.
- Increased the annual dividend by 5.3 percent to $1.300 per share and starting in the second quarter will switch to a quarterly payment schedule.
“I want to thank the Parkland team for an incredible year,” said Bob Espey President and Chief Executive Officer. “While the BC floods prevented us delivering record Adjusted EBITDA, I am proud of the way we supported impacted communities. We accelerated all aspects of our strategy in 2021 and announced a record number of acquisitions. We expanded our retail, food and loyalty business, and made significant progress on our decarbonization strategy by doubling our renewable fuel production, growing our voluntary carbon offset business and advancing our electric vehicle charging network.”
“Parkland is poised for continued growth,” added Espey. “We enter 2022 ahead of our plan to deliver $2 billion of run-rate Adjusted EBITDA by the end of 2025. We are focused on integrating and capturing synergies from the businesses we acquired, driving returns and deleveraging. Our base business and recent acquisitions are on track to deliver strong cash flow, giving us confidence to increase our dividend. Our opportunities for growth and value creation have never been greater.”
Q4 2021 Segment Highlights
- Canada delivered Adjusted EBITDA of $117 million, up almost 5 percent, from $112 million in Q4 2020. Performance was underpinned by robust fuel and convenience margins, company C-store same-store sales growth5 (”SSSG”) of 4.7 percent (excluding cigarettes) and ongoing economic recovery. We continued to expand our ON the RUN convenience brand and successfully extended JOURNIETM Rewards across our FasGas network, and now have 2.9 million active members.
- International delivered Adjusted EBITDA of $78 million, up over 8 percent, from $72 million in Q4 2020. Performance was underpinned by a strong base and resource business, with growing wholesale volumes. We continue to see signs of recovery in some of the larger tourism markets with others expected to reopen in 2022.
- USA delivered Adjusted EBITDA of $41 million, up over 400 percent, from $8 million in Q4 2020. Performance was underpinned by the impact of acquisitions, synergy capture and continued organic growth initiatives. We are seeing a gradual return in cruise ship sailings in Florida and our teams continued to offset the impact of inflation.
- Supply delivered Adjusted EBITDA of $58 million, down 28 percent, from $81 million in Q4 2020. Performance was impacted by the BC floods, which required the shutdown of the Transmountain Pipeline and led to a pause in refinery processing operations. We estimate an approximately $35 million negative impact on Adjusted EBITDA from this event. During the quarter, we also completed a minor planned maintenance turnaround. In 2021, we co-processed a record 86 million litres of bio-feedstocks which has the equivalent environmental effect of taking over 70,000 cars off the road. Full-year composite utilization6 was 84 percent driven by safe and consistent operational performance.
Parkland is a Sustainability Leader: Awarded AA ESG Rating from MSCI
Sustainability is deeply embedded across our business and through 2021, we continued to strengthen our focus on this important area. In recognition of our commitment to sustainability, we received an AA ESG Rating from Morgan Stanley Capital International (”MSCI”). This places us in the top 17 percent of index constituents. Key highlights and environmental accomplishments include:
- Published our Sustainability Report which reflects our goal to achieve zero safety incidents, zero spills, zero tolerance for racism and discrimination, zero tolerance for corruption, bribery, and unethical behaviour and to help our governments achieve their goal of net-zero emissions by 2050. Grounded in meaningful and measurable targets, including ambitious greenhouse gas emission reduction targets, our report formalizes our enterprise-wide sustainability strategy and can be viewed by clicking this link: Parkland – Drive to Zero.
- Extended our track record of renewable fuel leadership at the Burnaby Refinery, co-processing a record 86 million litres of bio-feedstocks. These fuels play a crucial role helping our commercial customers decarbonize their energy use. In 2021 this had the equivalent effect of taking over 70,000 cars off the road. We have more than doubled our renewable fuel production every year since 2019.
- Committed to build British Columbia’s largest network (by site count) of Electric Vehicle (”EV”) ultra-fast chargers. Strategically located on key arterial routes between Vancouver Island and Calgary, this network will offer customers unrivalled amenity in the form of high-speed charging, premium ON the RUN convenience stores and food choices. This network is expected to open during the summer of 2022.
- Continued to grow our carbon offset and renewable business, which plays an integral role in our sustainability strategy and in helping our customers meet their environmental commitments. With global demand for voluntary offsets increasing, we delivered significant growth and transacted carbon offset credits across various North American registries.
- Became a signatory of the United Nations Global Compact, a voluntary initiative to support the United Nation’s Sustainable Development Goals.
Updated 2022 Guidance: Adjusted EBITDA of $1.5 billion
Reflecting confidence in our execution capability and continued growth trajectory, as well as the expected close of previously announced acquisitions, we are increasing our Adjusted EBITDA guidance previously disclosed in Parkland’s November 16, 2021 news release. Highlights include:
- Adjusted EBITDA of $1.5 billion +/- 5 percent. This is up approximately 20 percent from 2021 results.
- Capital expenditures (attributable to Parkland) are expected to be at the lower end of between $475 million and $575 million, comprising:
- Growth capital expenditures7 (attributable to Parkland) of between $250 million and $300 million.
- Maintenance capital expenditures7 (attributable to Parkland) of between $225 million and $275 million.
Consolidated Financial Overview
|
($ millions, unless otherwise noted)
|
Three months ended December 31,
|
Year ended December 31,
|
|
Financial Summary
|
2021
|
2020
|
2021
|
2020
|
|
Fuel and petroleum product volume (million litres)(1)
|
6,398
|
5,485
|
23,900
|
21,424
|
|
Sales and operating revenue(1)
|
6,286
|
3,506
|
21,468
|
14,011
|
|
Adjusted EBITDA attributable to Parkland (”Adjusted EBITDA”)(2)
|
260
|
247
|
1,260
|
967
|
|
Canada(4)
|
117
|
112
|
439
|
435
|
|
International
|
78
|
72
|
294
|
270
|
|
USA(5)
|
41
|
8
|
136
|
72
|
|
Supply(4)(5)
|
58
|
81
|
509
|
282
|
|
Corporate
|
(34)
|
(26)
|
(118)
|
(92)
|
|
Net earnings (loss) attributable to Parkland
|
23
|
53
|
97
|
82
|
|
Net earnings (loss) per share – basic ($ per share)
|
0.15
|
0.36
|
0.64
|
0.55
|
|
Net earnings (loss) per share – diluted ($ per share)
|
0.15
|
0.35
|
0.64
|
0.54
|
|
Adjusted earnings (loss) attributable to Parkland (”Adjusted earnings”)(3)
|
55
|
43
|
372
|
124
|
|
Adjusted earnings (loss) per share – basic ($ per share)(3)
|
0.36
|
0.29
|
2.46
|
0.83
|
|
Adjusted earnings (loss) per share – diluted ($ per share)(3)
|
0.36
|
0.28
|
2.45
|
0.82
|
|
TTM Distributable cash flow(3)(6)
|
660
|
480
|
660
|
480
|
|
TTM Distributable cash flow per share(3)(6)(7)
|
4.34
|
3.22
|
4.34
|
3.22
|
|
Dividends
|
47
|
47
|
190
|
184
|
|
Dividends per share(7)
|
0.3087
|
0.3036
|
1.2314
|
1.2110
|
|
Weighted average number of common shares (million shares)
|
153
|
149
|
151
|
149
|
|
Total assets
|
11,550
|
9,094
|
11,550
|
9,094
|
|
Non-current financial liabilities
|
6,033
|
4,377
|
6,033
|
4,377
|
|
(1)
|
Certain amounts within sales and operating revenue and fuel and petroleum product volumes were restated and reclassified to conform to the presentation used in the current period.
|
|
(2)
|
Measure of segment profit. See “Specified Financial Measures” section of this news release.
|
|
(3)
|
Non-GAAP financial measure. See “Specified Financial Measures” section of this news release.
|
|
(4)
|
Canada Retail and Canada Commercial, formerly presented separately as individual segments, and the Canadian distribution business, formerly presented in Supply, are now included in Canada, reflecting a change in organizational structure in 2020.
|
|
(5)
|
For comparative purposes, information for previous periods was restated due to a change in segment presentation. The supply and trading business in the United States, formerly presented in the Supply segment, is now included in the USA segment, reflecting a change in organizational structure in 2021.
|
|
(6)
|
Amounts presented on a trailing-twelve-month basis (”TTM”).
|
|
(7)
|
Calculated based on weighted average number of shares.
|
Announcing a 5.3 percent annual dividend increase and adoption of quarterly payment schedule
Parkland’s annualized common share dividend will increase 5.3 percent from $1.235 to $1.300, effective with the monthly dividend payable on April 15, 2022 to shareholders of record at the close of business on March 22, 2022. Starting in the second quarter, any declared dividends will be paid on a quarterly basis, at the expected rate of $0.325 per share.
Q4 2021 Conference Call and Webcast Details
Parkland will host a webcast and conference call on Friday, March 4, at 6:30am MDT (8:30am EDT) to discuss the results. To listen to the live webcast and watch the presentation, please use the following link:
https://produceredition.webcasts.com/starthere.jsp?ei=1527086&tp_key=bb26fea062
Analysts and institutional investors interested in participating in the question-and-answer session of the conference call may do so by calling 1-888-390-0546 (toll-free) (Conference ID: 33819081). International participants can call 1-587-880-2171 (toll) (Conference ID: 33819081).
Please connect and log in approximately 10 minutes before the beginning of the call. The webcast will be available for replay two hours after the conference call ends at the link above. It will remain available for one year and will also be posted to www.parkland.ca.
MD&A and Consolidated Financial Statements
The management’s discussion and analysis for the quarter and year ended December 31, 2021 (the “Q4 2021 MD&A”) and audited consolidated financial statements for the year ended December 31, 2021 (the “Annual Consolidated Financial Statements”) provide a detailed explanation of Parkland’s operating results for the three months and year ended December 31, 2021. An English version of these documents will be available online at www.parkland.ca and SEDAR after the results are released by newswire under Parkland’s profile at www.sedar.com. The Q4 2021 French MD&A and Annual Consolidated French Financial Statements will be posted to www.parkland.ca and SEDAR as soon as they become available.
About Parkland Corporation
Parkland’s purpose is to Power Journeys and Energize Communities. Through our portfolio of trusted and locally relevant food, convenience, retail, commercial and wholesale brands, we serve over one million customers per day across Canada, the United States, the Caribbean region and Central and South America. In addition to leveraging our supply and storage capabilities to provide the essential fuels that our diverse customers rely on, we are a leader in renewable energy and are building an EV charging network to serve growing demand for convenient charging from EV drivers in select markets and decarbonizing through renewable fuels manufacturing, compliance and carbon offsets marketing and trading.
Parkland’s proven strategy is centered around growing organically, realizing a supply advantage, acquiring prudently, and integrating successfully. We are positioned to lead through the energy transition and are focused on developing our existing business in resilient markets, further diversifying our retail business into food, convenience, and renewable energy solutions (including EV charging), and helping our commercial customers decarbonize their operations. Our strategy is enabled and underpinned by our people, as well as our values of safety, integrity, community, and respect, which are deeply embedded across our organization.
Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking information and statements (collectively, “forward-looking statements”). When used in this news release the words “expect”, “will”, “could”, “would”, “believe”, “continue”, “pursue” and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, business objectives and strategies, Parkland’s ambition to generate run-rate Adjusted EBITDA of $2 billion by 2025 and the key strategic pillars underpinning such ambition; Parkland’s 2022 guidance, including Adjusted EBITDA, growth and maintenance capital expenditure guidance; expected future dividend amounts, timing and frequency; Parkland’s ESG goals and targets, including the expected expansion of our renewables and carbon offset business; expected benefits and synergies to be derived from acquisitions, potential future acquisition opportunities, expected timing of the opening of Parkland’s electric vehicle ultra-fast charging network in British Columbia; and Parkland’s ability to advance its growth agenda.
These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this news release. Parkland does not undertake any obligations to publicly update or revise any forward-looking statements except as required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks, assumptions and uncertainties including, but not limited to, general economic, market and business conditions, including the duration and impact of the COVID-19 pandemic; Parkland’s ability to execute its business strategies, including without limitation, Parkland’s ability to consistently identify accretive acquisition targets and successfully integrate them, successfully implement organic growth initiatives and to finance such acquisitions and initiatives on reasonable terms; Parkland’s ability to grow its supply advantage by leveraging its scale and infrastructure; Parkland’s ability to achieve its ESG targets; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities and other regulators including but not limited to increases in taxes or restricted access to markets; changes and developments in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. See also the risks and uncertainties described in “Forward-Looking Information” and “Risk Factors” included in Parkland’s Annual Information Form dated March 5, 2021, and “Forward-Looking Information” and “Risk Factors” included in the Q4 2021 MD&A dated March 3, 2022, each filed on SEDAR and available on the Parkland website at www.parkland.ca. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
Specified Financial Measures
This news release contains total of segments measures, non-GAAP financial measures and ratios and supplementary financial measures (collectively, “specified financial measures”). Parkland’s management uses certain specified financial measures to analyze the operating and financial performance, leverage and liquidity of the business. These specified financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The specified financial measures should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. See Section 15 of the Q4 2021 MD&A, which is incorporated by reference into this news release, for further details regarding specified financial measures used by Parkland.
Total of Segments Measures
Adjusted EBITDA is a total of segments measure used by the chief operating decision maker to make decisions about resource allocation to the segment and to assess its performance. In accordance with IFRS, adjustments and eliminations made in preparing an entity’s financial statements and allocations of revenue, expenses, and gains or losses shall be included in determining reported segment profit or loss only if they are included in the measure of the segment’s profit or loss that is used by the chief operating decision maker. As such, Parkland’s Adjusted EBITDA is unlikely to be comparable to similarly named measures presented by other issuers, who may calculate these measures differently. Parkland views Adjusted EBITDA as the key measure for the underlying core operating performance of business segment activities at an operational level. Adjusted EBITDA is used by management to set targets for Parkland (including annual guidance and variable compensation targets) and is used to determine Parkland’s ability to service debt, finance capital expenditures and provide for dividend payments to shareholders. Please refer to the table below for the reconciliation of Adjusted EBITDA to net earnings (loss) for the three month and twelve month periods ending December 31, 2020 and December 31, 2021.
|
Three months ended December 31,
|
Year ended December 31,
|
|
($ millions)
|
2021
|
2020
|
2021
|
2020
|
|
Net earnings (loss)
|
27
|
64
|
126
|
112
|
|
Add:
|
|
|
|
|
|
Acquisition, integration and other costs
|
24
|
14
|
52
|
52
|
|
Depreciation and amortization
|
156
|
144
|
616
|
609
|
|
Finance costs
|
86
|
58
|
323
|
250
|
|
(Gain) loss on foreign exchange – unrealized
|
6
|
—
|
(7)
|
(2)
|
|
(Gain) loss on asset disposals
|
(5)
|
1
|
(13)
|
2
|
|
(Gain) loss on risk management and other – unrealized
|
(11)
|
(11)
|
10
|
(10)
|
|
Other (gains) and losses(1)
|
20
|
(29)
|
203
|
(4)
|
|
Other adjusting items(2)
|
4
|
—
|
12
|
6
|
|
Income tax expense (recovery)
|
(22)
|
30
|
36
|
42
|
|
Adjusted EBITDA including NCI
|
285
|
271
|
1,358
|
1,057
|
|
Deduct: Attributable to NCI
|
25
|
24
|
98
|
90
|
|
Adjusted EBITDA attributable to Parkland (”Adjusted EBITDA”)
|
260
|
247
|
1,260
|
967
|
|
(1)
|
Other (gains) and losses for the three months ended December 31, 2021 include the following: (i) $25 million gain (2020 – $34 million loss) due to the change in redemption value of Sol Put Option; (ii) $34 million loss (2020 – $72 million gain) due to the change in fair value of redemption options; and (iii) $11 million loss (2020 – $9 million loss) in Other items. Other (gains) and losses for the year ended December 31, 2021 include the following: (i) $87 million loss (2020 – $23 million loss) due to change in redemption value of Sol Put Option; (ii) $86 million loss (2020 – $34 million gain) due to change in fair value of redemption options; and (iii) $30 million loss (2020 – $7 million loss) in Other items. Refer to Note 22 of the Annual Consolidated Financial Statements.
|
|
(2)
|
Other Adjusting Items for the three months ended December 31, 2021 include the share of depreciation and income taxes for the Isla joint venture of $4 million (2020 – nil). Other Adjusting Items for the year ended December 31, 2021 include the following: (i) $1 million loss (2020 – $5 million loss) on foreign exchange on cash pooling arrangements within gain (loss) on foreign exchange – realized; (ii) an unrealized gain of nil (2020 – $9 million loss) on Intermediation Facility Derivatives within fuel and petroleum product cost of purchases; (iii) share of depreciation and income taxes from the Isla joint venture of $7 million (2020 – nil).
|
Non-GAAP Financial Measures and Ratios
Adjusted earnings is a non-GAAP financial measure and Adjusted earnings per share is a non-GAAP financial ratio included in this news release to assist management, investors and analysts with the analysis of the operating and financial performance and liquidity of Parkland. These non-GAAP financial measures and ratios do not have any standardized meaning under IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. The non-GAAP financial measures and ratios should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. Except as otherwise indicated, these non-GAAP measures and ratios are calculated and disclosed on a consistent basis from period to period. See section 15 of the Q4 2021 MD&A, which is incorporated by reference into this news release, for further details regarding Parkland’s non-GAAP financial measures and ratios. Please see below for the reconciliation of Adjusted earnings (loss) to net earnings (loss) and calculation of Adjusted earnings (loss) per share for the three and twelve month periods ending December 31, 2020 and December 31, 2021.
|
Three months ended December 31,
|
Year ended December 31,
|
|
($ millions, unless otherwise stated)
|
2021
|
2020
|
2021
|
2020
|
|
Net earnings (loss)
|
27
|
64
|
126
|
112
|
|
Add:
|
|
|
|
|
|
Acquisition, integration and other costs
|
24
|
14
|
52
|
52
|
|
Loss on modification of long-term debt
|
18
|
—
|
77
|
3
|
|
(Gain) loss on foreign exchange – unrealized
|
6
|
—
|
(7)
|
(2)
|
|
(Gain) loss on asset disposals
|
(5)
|
1
|
(13)
|
2
|
|
(Gain) loss on risk management and other – unrealized
|
(11)
|
(11)
|
10
|
(10)
|
|
Other (gains) and losses(4)
|
20
|
(29)
|
203
|
(4)
|
|
Other adjusting items(1)
|
4
|
—
|
12
|
6
|
|
Tax normalization(2)
|
(13)
|
15
|
(42)
|
(3)
|
|
Adjusted earnings (loss) including NCI
|
70
|
54
|
418
|
156
|
|
Less: Adjusted earnings (loss) attributable to NCI
|
15
|
11
|
46
|
32
|
|
Adjusted earnings (loss)
|
55
|
43
|
372
|
124
|
|
|
|
|
|
|
Weighted average number of common shares (million shares)(3)
|
153
|
149
|
151
|
149
|
|
Weighted average number of common shares adjusted for the effects of
dilution (million shares)(3) |
153
|
151
|
152
|
151
|
|
|
|
|
|
|
Adjusted earnings (loss) per share ($ per share)
|
|
|
|
|
|
Basic
|
0.36
|
0.29
|
2.46
|
0.83
|
|
Diluted
|
0.36
|
0.28
|
2.45
|
0.82
|
|
(1)
|
Other Adjusting Items for the three months ended December 31, 2021 include the share of depreciation and income taxes for the Isla joint venture of $4 million (2020 – nil). Other Adjusting Items for the year ended December 31, 2021 include the following: (i) $1 million loss (2020 – $5 million loss) on foreign exchange on cash pooling arrangements within gain (loss) on foreign exchange – realized; (ii) an unrealized gain of nil (2020 – $9 million loss) on Intermediation Facility Derivatives within fuel and petroleum product cost of purchases; (iii) share of depreciation and income taxes from the Isla joint venture of $7 million (2020 – nil).
|
|
(2)
|
The tax normalization adjustment was applied to net earnings (loss) adjusting items that were considered temporary differences, such as gains and losses on asset disposals, acquisition, integration and other costs, unrealized foreign exchange gains and losses, gains and losses on risk management and other, changes in fair value of redemption options, changes in estimates of environmental provisions, and debt modifications. The tax impact was estimated using the effective tax rates applicable to jurisdictions where the related items occur.
|
|
(3)
|
Weighted average number of common shares are calculated in accordance with Parkland’s accounting policy contained in Note 2 of the Annual Consolidated Financial Statements.
|
|
(4)
|
Other (gains) and losses for the three months ended December 31, 2021, include the following: (i) $25 million gain (2020 – $34 million loss) due to the change in redemption value of Sol Put Option; (ii) $34 million loss (2020 – $72 million gain) due to the change in fair value of redemption options; (iii) $11 million loss (2020 – $9 million loss) in Other items. Other (gains) and losses for the year ended December 31, 2021, include the following: (i) $87 million loss (2020 – $23 million loss) due to change in redemption value of Sol Put Option; (ii) $86 million loss (2020 – $34 million gain) due to change in fair value of redemption options; (iii) $30 million loss (2020 – $7 million loss) in Other items. Refer to Note 22 of the Annual Consolidated Financial Statements.
|
Distributable cash flow is a cash metric that adjusts for the impact of seasonality in Parkland’s business by removing non-cash working capital items and excludes the effect of items that are not considered representative of Parkland’s ability to generate cash flows. Such items include: (i) acquisition, integration, and other costs; (ii) turnaround maintenance capital expenditures; (iii) the change in certain risk management and other instruments, and (iv) interest on leases and long-term debt, and principal payments on leases attributable to non-controlling interests. Parkland uses this non-GAAP financial measure to monitor normalized cash flows of the business by eliminating the impact of Parkland’s working capital fluctuations and expenditures used in acquisition, integration and other activities, which can vary significantly from quarter-to-quarter. Please refer to the table below for the reconciliation of distributable cash flow to cash generated from (used in) operating activities and a calculation of distributable cash flow per share for the trailing twelve month periods ending December 31, 2020 and December 31, 2021.
|
Three months ended
|
Trailing twelve
months ended |
|
($ millions, unless otherwise noted)
|
March 31,
2021 |
June 30,
2021 |
September 30,
2021 |
December
31, 2021 |
December 31,
2021 |
|
Cash generated from (used in) operating activities(2)
|
264
|
322
|
200
|
118
|
904
|
|
Exclude: Adjusted EBITDA attributable to NCI, net of tax
|
(23)
|
(21)
|
(26)
|
(22)
|
(92)
|
|
241
|
301
|
174
|
96
|
812
|
|
Reverse: Change in other liabilities and other assets(3)
|
(14)
|
(9)
|
4
|
8
|
(11)
|
|
Reverse: Net change in non-cash working capital(3)
|
53
|
22
|
119
|
148
|
342
|
|
Include: Maintenance capital expenditures attributable to Parkland
|
(20)
|
(45)
|
(40)
|
(112)
|
(217)
|
|
Exclude: Turnaround maintenance capital expenditures
|
—
|
—
|
3
|
8
|
11
|
|
Include: Proceeds on asset disposals
|
5
|
1
|
4
|
4
|
14
|
|
Reverse: Acquisition, integration and other costs
|
5
|
11
|
12
|
24
|
52
|
|
Include: Interest on leases and long-term debt
|
(54)
|
(54)
|
(56)
|
(59)
|
(223)
|
|
Exclude: Interest on leases and long-term debt attributable to NCI
|
1
|
1
|
1
|
1
|
4
|
|
Include: Payments on principal amount on leases
|
(35)
|
(33)
|
(36)
|
(38)
|
(142)
|
|
Exclude: Payments on principal amount on leases attributable to NCI
|
4
|
4
|
5
|
5
|
18
|
|
Distributable cash flow(1)
|
186
|
199
|
190
|
85
|
660
|
|
Weighted average number of common shares (million shares)
|
|
|
|
|
152
|
|
Distributable cash flow per share
|
|
|
|
|
4.34
|
|
(1)
|
Prior to March 31, 2021, distributable cash flow was referred to as adjusted distributable cash flow.
|
|
(2)
|
For comparative purposes, information for previous periods was restated due to a change in presentation of cash flows from (used in) operating and financing activities. Interest paid on long-term debt and leases, formerly included in “Cash generated from (used in) operating activities”, is now included in “Cash generated from (used in) financing activities”, reflecting a more relevant presentation of finance costs payments.
|
|
(3)
|
For comparative purposes, information for the quarter ended September 30, 2021 was restated due to a change in presentation for certain emission credits and allowances held for trading which were formerly included in “Risk management and other” and are now included in “Inventories”.
|
|
Three months ended
|
Trailing twelve
months ended |
|
($ millions, unless otherwise noted)
|
March 31,
2020 |
June 30,
2020 |
September 30,
2020 |
December 31,
2020 |
December 31,
2020 |
|
Cash generated from (used in) operating activities(2)
|
328
|
629
|
253
|
(40)
|
1,170
|
|
Exclude: Adjusted EBITDA attributable to NCI, net of tax
|
(20)
|
(15)
|
(24)
|
(20)
|
(79)
|
|
308
|
614
|
229
|
(60)
|
1,091
|
|
Reverse: Change in other liabilities, other assets and other instruments
|
(21)
|
(3)
|
27
|
12
|
15
|
|
Reverse: Net change in non-cash working capital
|
(135)
|
(425)
|
89
|
288
|
(183)
|
|
Include: Maintenance capital expenditures attributable to Parkland
|
(118)
|
(50)
|
(18)
|
(39)
|
(225)
|
|
Exclude: Turnaround maintenance capital expenditures
|
55
|
16
|
1
|
2
|
74
|
|
Include: Proceeds on asset disposals
|
3
|
5
|
2
|
6
|
16
|
|
Reverse: Acquisition, integration and other costs
|
21
|
8
|
9
|
14
|
52
|
|
Include: Interest on leases and long-term debt
|
(59)
|
(59)
|
(59)
|
(56)
|
(233)
|
|
Exclude: Interest on leases and long-term debt attributable to NCI(3)
|
—
|
—
|
1
|
1
|
2
|
|
Include: Payments on principal amount on leases
|
(39)
|
(35)
|
(40)
|
(35)
|
(149)
|
|
Exclude: Payments on principal amount on leases attributable to NCI
|
5
|
5
|
6
|
4
|
20
|
|
Distributable cash flow(1)
|
20
|
76
|
247
|
137
|
480
|
|
Weighted average number of common shares (million shares)
|
|
|
|
|
149
|
|
Distributable cash flow per share
|
|
|
|
|
3.22
|
|
(1)
|
Prior to March 31, 2021, distributable cash flow was referred to as adjusted distributable cash flow.
|
|
(2)
|
For comparative purposes, information for previous periods was restated due to a change in presentation of cash flows from (used in) operating and financing activities. Interest paid on long-term debt and leases, formerly included in “Cash generated from (used in) operating activities”, is now included in “Cash generated from (used in) financing activities”, reflecting a more relevant presentation of finance costs payments.
|
|
(3)
|
Beginning September 30, 2020, interest on leases and long-term debt attributable to NCI is excluded from distributable cash flow.
|
Company C-Store SSSG refers to the period-over-period sales growth generated by retail convenience stores at the same company sites. The effects of opening and closing stores, temporary closures (including closures for ON the RUN / Marché Express conversions), expansions of stores, renovations of stores, and stores with changes in food service models in the period are excluded to derive a comparable same-store metric. Same-store sales growth is a metric commonly used in the retail industry that provides meaningful information to investors in assessing the health and strength of Parkland’s brands and retail network, which ultimately impacts financial performance. Company C-Store SSSG does not have any standardized meaning under IFRS and is therefore unlikely to be comparable to similar measures presented by other companies. Please see below for a reconciliation of convenience store revenue of the Canada segment with the C-Store same store sales (”SSS”) and calculation of the Company C-Store SSSG.
|
Three months ended
December 31, |
|
Three months ended
December 31, |
|
|
($ millions)
|
2021
|
2020
|
%
|
2020
|
2019
|
%
|
|
Convenience Store (”C-store”) revenue
|
93
|
95
|
|
95
|
91
|
|
|
Add:
|
|
|
|
|
|
|
|
Point-of-sale (”POS”) value of goods and services sold at C-stores
operated by retailers(3) |
141
|
143
|
|
143
|
131
|
|
|
Less:
|
|
|
|
|
|
|
|
Rental income from retailers and others(1)(2)
|
(26)
|
(23)
|
|
(23)
|
(25)
|
|
|
Same Store revenue adjustments(4) (excluding cigarettes)
|
(9)
|
(9)
|
|
(6)
|
(4)
|
|
|
Same Store C-store Sales(5)
|
199
|
206
|
(3.2)%
|
209
|
193
|
7.8 %
|
|
Less:
|
|
|
|
|
|
|
|
Same Store revenue adjustments(4) (cigarettes)
|
(102)
|
(114)
|
|
(115)
|
(107)
|
|
|
Same Store C-Store sales (excluding cigarettes)(5)
|
97
|
92
|
4.7%
|
94
|
86
|
8.7 %
|
|
(1)
|
Includes rental income from retailers in the form of a percentage rent on convenience store sales.
|
|
(2)
|
Other excluded revenues include automated teller machine and POS system licensing fees.
|
|
(3)
|
POS values used to calculate Company C-Store SSSG are not a Parkland financial measure and do not form part of Parkland’s consolidated financial statements.
|
|
(4)
|
This adjustment excludes the effects of opening and closing stores, temporary closures (including closures for ON the RUN / Marché Express conversions), expansions of stores, renovations of stores, and stores with changes in food service models, to derive a comparable same-store metric.
|
|
(5)
|
Percentages are calculated based on unrounded numbers.
|
Supplementary Financial Measures
Parkland uses a number of supplementary financial measures, including maintenance capital expenditures and growth capital expenditures, to evaluate the success of our strategic objectives and to set variable compensation targets for employees and which are included in this news release. These measures may not be comparable to similar measures presented by other issuers, as other issuers may calculate these metrics differently. See section 15 of the Q4 2021 MD&A, which is incorporated by reference into this news release, for further details on the supplementary financial measures used by Parkland.
Non-Financial Measures
In addition to specified financial measures, Parkland uses a number of non-financial measures, including composite utilization, in measuring the success of our strategic objectives and to set variable compensation targets for employees. These non-financial measures are not accounting measures, do not have comparable IFRS measures, and may not be comparable to similar measures presented by other issuers, as other issuers may calculate these metrics differently. See Section 15 of the Q4 MD&A, which is incorporated by reference into this news release, for further details on the non-financial measures used by Parkland.
|
__________
|
|
1
|
Total of segment measure. See “Specified Financial Measures” section of this news release.
|
|
2
|
Estimated based on lost crude throughput and refining margins during the temporary pause in refining operations from November 22 to December 11, 2021.
|
|
3
|
Non-GAAP financial measure. See ” Specified Financial Measures” section of this news release.
|
|
4
|
See “Specified Financial Measures” section of this news release for a reconciliation of net earnings to Adjusted earnings.
|
|
5
|
Non-GAAP financial measure. See ” Specified Financial Measures” section of this news release.
|
|
6
|
Non-financial measure. See “Non-Financial Measures” section of this news release.
|
|
7
|
Supplementary financial measure. See “Specified Financial Measures” section of this news release.
|
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