Q4 2021 Superior Plus Corp Earnings Call

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Thank you for standing by and welcome to the Superior plus 2021 fourth quarter and full year results conference call. At this time all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During the session you will need to press star one.

One on your telephone please be advised that today's conference maybe recorded should you require any further assistance. Please press star zero I would now like to hand, the conference over to your host the VP of capital markets. Rob Dora. Please go ahead.

Thank you Latif and good morning, everyone and welcome to Superior Pluses Conference call and webcast to review, our 2021 annual and fourth quarter results. Our speakers on the call today will be linked AJ, Dan President and CEO and Beth Summers executive VP and CFO , Darren Hribar senior VP.

And Chief Legal Officer is also joining today's call today's call is being webcast and we encourage listeners to follow along with the supporting presentation, which is also available on our website.

For this morning's call Luc and Beth will begin with their prepared remarks, and then we will open up the call for questions.

Before I turn the call to Luc I'd like to remind you that some of the comments made today maybe forward looking in nature and are based on superior to current expectations estimates judgments projections and risks.

Further some of the information provided refers to non-GAAP measures. Please refer to superior's annual MD&A posted on SEDAR and superior website yesterday for further details on forward looking information and non-GAAP measures I would encourage listeners to review the MD&A as it can.

<unk> more detail on the financial information for 2021, and the fourth quarter as we won't be going over each financial metric on today's call.

This will allow us to move more quickly into the question and answer period.

Ill turn the call over to Lee.

Thank you, Rob and good morning, everyone. Thanks for joining the call firstly I'd like to thank the entire superior plus team for delivering a solid year. Despite the challenges we face from COVID-19, pandemic and warm weather in December .

I am proud of our team's commitment to safety reliability as we continue to deliver propane and provide best in class service towards customer U S and then Canada.

In 2021, and our adjusted EBITDA was $298 million, which was within our 2021 that adjusted EBITDA guidance range, our fourth quarter adjusted EBITDA of $142 million was modestly below the prior year and the fourth quarter, our business was negatively impacted by warm weather, especially in the <unk>.

Remember and their U S. Operating region December was 15% warmer than December 2020, and 12% warmer than the five year average.

So we never like when the weather is not on their side and quarter to quarter.

Difficult to have a normal flat line, but the good part of this situation when the.

If you look at quarter. One this year, we started the year extremely well where there is all of you know.

On our side for the starting of this new year very pleased about that so it balances out over a period of time.

In the fourth quarter, we made two additional acquisitions in Michigan, and North Carolina, we're making good progress on their superior way forward plan initiative focus on growth through acquisition continuous improvement and organic growth in 2021, we completed seven acquisitions for approximately $225 million or.

Sure enough cats, propane, which is expected to close early in the second quarter for total consideration of approximately $300 million, we'll have a good platform to our California Western U S footprint.

Well over 30% over $1 9 billion target, we communicated as part of the superior way forward to reach that amount by 2026.

We also have a robust pipeline of acquisition, we expect the acquisition to range of $2 <unk> billion in 2022.

2022, adjusted EBITDA guidance does not include any contribution from additional acquisition except can.

Assuming a closing in early quarter, two which doesn't reflect well in quarter. One as you all know.

Forecasted 17% to $20 million of estimated adjusted EBITDA historically generated in the first quarter.

So we won't have that in their results for 2022, it will be in 2023.

First quarter typically generates the highest EBITDA.

It's really between 45% to 60% of the annual EBITDA, depending of business and geographic region.

In January we also announced a collaboration with <unk> Corporation to deliver green hydrogen to commercial and industrial customers in Quebec. This is an exciting opportunity for superior and aligned with our strategy to be one of the leading distributor of mobile low carbon energy in North America, we're working on other.

The opportunities in the renewable and low carbon space and I look forward to sharing details of those opportunity as they unfold in 2022 2023.

Now I will turn the call over to Beth to discuss financial results and our 2022 guidance.

See you.

Thank you Lee and good morning, everyone looking at the financial results for the fourth quarter and full year 2021, imperious fourth quarter, adjusted EBITDA of $142 2 million with $1 $9 million or 1% lower than the prior year quarter. This was primarily due to lower EBIT after moderations in Canadian propane.

Partially offset by decreased corporate cost.

And a decrease in the realized gains on foreign currency currency hedging contracts.

The year 2021, adjusted EBITDA with $398 4 million, which was $19 million higher than 2020.

Primarily due to an increase in EBITDA from operation and realized gains on foreign currency hedging contracts, partially offset by increased corporate costs.

The fourth quarter net earnings from continuing operations with $13 8 million, a decrease of $74 1 million compared to the prior year quarter. The primary driver for lower net earnings with the increase in selling distribution and administrative costs and a loss on derivatives compared to a gain in the prior year quarter.

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Partially offset by the increase in gross profit and decrease in finance expense.

Full year net earnings from continuing operations of $17 2 million decreased by $45 6 million compared to the prior year.

Primarily due to higher SG&A costs, and higher finance expense and to a lesser extent lower gross profit, partially offset by higher gains on derivatives lower income tax expense.

First quarter adjusted operating cash flows before transaction and other costs per share was <unk> 64 cents per share.

This is a decrease of one compared to the prior year quarter.

Lower recovery on current income taxes, lower adjusted EBITDA and higher weighted average shares outstanding partially offset by lower interest expense.

Yossi asked before transaction and other costs per share for 2021.

With 1.56 per share or two cents higher than the prior year due to an increase in adjusted EBITDA and a decrease in interest expense. This was partially offset by current income tax expense in 2021 compared to a recovery in 2020 any increase in weighted average shares outstanding.

From a debt leverage perspective total net debt to adjusted EBITDA as at December 31, 2021, with three nine times.

Which is <unk> four times higher than the leverage as at December 31, 2020.

The increase from December 31, 2020, with primarily due to lower adjusted EBITDA, partially offset by lower debt level.

And total net debt was lower proceeds from the sale of specialty chemicals were used to repay debt and a decrease in lease liabilities related to the sale of specialty chemicals and this was partially offset by the impact of acquisitions completed in 2021 as well as the refinancing of senior and.

Secured note.

EBIT is lower due to the impact from the sale of specialty chemicals, partially offset by the contribution from acquisitions completed in 2021.

Turning now to the individual business results.

U S propane adjusted EBITDA for the fourth quarter with $79 9 million.

A decrease of <unk>.

$5 million from the prior year quarter with.

Primarily due to the impact of warm weather and the translation of U S denominated adjusted EBITDA.

Average weather across market, where U S propane market operate.

U S propane operates for the fourth quarter as measured by degree days was 7% warmer than the prior year quarter and 9% warmer than the five year average.

Warmer weather in December was particularly impactful as average weather was 15% warmer than December 2020, and 12% warmer than the five year average.

Warmer weather was the primary driver of lower than anticipated volume and resulted in higher proportionate operating costs.

Partially offset by higher adjusted gross profit.

Residential in wholesale.

Sales volumes were consistent with the prior year quarter, primarily due to acquisition.

Offset by the impact from the warmer weather.

Commercial sales volumes were 10% higher compared to the prior year quarter, primarily due to incremental volumes from acquisition and the easing of COVID-19 restrictions.

Average margins were 3% higher than the prior year quarter, primarily due to our continued focus on growth of high margin propane customers, partially offset by the impact of the stronger Canadian dollar on the translation of U S denominated gross profit.

Operating cost increased by 13% compared to the prior year quarter due to acquisition, partially offset by the impact of the stronger Canadian dollar on U S denominated expenses.

U S propane adjusted EBITDA in 2021, with $226 2 million, 9% higher than 2020, primarily due to increased adjusted gross profit partially offset by increased operating costs.

Adjusted gross profit increased primarily due to incremental sales volumes from acquisitions completed in both 2020 and 2021, partially offset by warmer weather in the fourth quarter.

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

Denominated operating costs and cost savings initiatives.

U S appropriately adjusted EBITDA.

Two is anticipated to be higher than 2021, primarily due to the incremental.

Acquisitions completed in 2021.

The expected contribution from the Kansas acquisition and realized synergies from acquisitions completed in the past 24 months.

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

Average weather in areas, where we operate as measured by degree days is anticipated to be consistent with the five year average.

Canadian propane EBITDA from operations for the fourth quarter was $63 2 million a decrease of $2 4 million compared to the prior year quarter as higher sales volumes and higher average margins were offset by higher operating costs.

Residential sales volumes were consistent with the prior year quarter as the impact of acquisitions completed during the first quarter was offset by warmer weather in eastern Canada.

Very good weather across Canada for the fourth quarter as measured by degree days with 2% colder than the prior year quarter, and 3% warmer than the five year average.

Average weather in Eastern Canada was 3% warmer than the prior year quarter, and 11% warmer than the five year average.

Average weather in Western Canada was 5% colder than the prior year quarter, and 3% cooler than the five year average <unk>.

Commercial sales volumes were 3% higher than the prior year quarter due to colder weather in Western Canada and incremental volume from acquisitions completed earlier in 2021.

Wholesale propane volumes were 9% higher compared to the prior year quarter due to increased demand in the California market related to the easing of COVID-19 restrictions and to a lesser extent sales and marketing efforts to increase third party spot price wholesale propane sales.

Average margins were modestly higher than the prior year quarter due to incremental carbon offset credit sales and customer mix.

Operating costs increased by 23% compared to the prior year quarter due to the impact from the C. E. W. Asked benefit are they excuse benefit in the prior year quarter as there was no benefit in the fourth quarter of 2021.

Canadian propane adjusted EBITDA in 2021 was $183 7 million.

6% lower than 2020, primarily due to higher operating costs and to a lesser extent modestly lower adjusted gross profit.

Operating costs were 5% higher than the prior year and less Skus benefit was received in 2021 and incentive plan cost and volume related cost increase.

Adjusted gross profit decreased <unk> 9 million, primarily due to lower average margins, partially offset by higher volume and modestly higher other services gross profit.

Canadian propane adjusted EBITDA in 2022 is anticipated to be modestly lower than 2021.

The period no longer eligible for the E. W. S benefit and operating costs are expected to increase due to inflation and improved commercial volume.

These decreases are expected to be partially offset by the contribution from our wholesale propane business included in the Kansas acquisition.

Viva Energy, Inc portion stronger wholesale propane market fundamentals and higher commercial volume as COVID-19 public health measures are relaxed average.

Average weather as measured by degree days is expected to be consistent with the five year average.

Lastly, the corporate results capital expenditures and adjusted EBIT guidance and leverage.

So corporate costs in the fourth in the fourth quarter were $1 2 million lower than the prior year quarter due to lower altitude expense related to the share price performance in the fourth quarter.

Corporate costs for 2021 were $24 1 million, an increase of $3 6 million, primarily due to higher costs related to share price performance earlier in the year.

Interest expense in the fourth quarter was $17 7 million.

A decrease of $4 9 million compared to the prior year quarter due to lower average debt and lower average interest rates.

That was lower primarily due to the impact of the proceeds from the specialty chemical sales, which was used to repay debt.

Partially offset by acquisitions completed in 2021.

Lease liabilities were also lower.

Related to the loss of leases related to the specialty chemicals business.

Full year interest expense was $76 1 million a decrease of $15 7 million related to lower average debt and average interest rates.

Average debt was lower related to the sale of specialty chemicals and interest rates were lower related to the refinancing of the high yield notes.

<unk> in 2021.

Capital expenditures for the fourth quarter were $58 2 million.

The $21 4 million in the prior year quarter due to higher nonrecurring capital expenditures maintenance Capex and investment in leases.

Capital expenditures in 2021 were $130 3 million compared to $105 million in 2020.

Capital expenditures increased in 2021 due to the curtailing of capital expenditures in 2020.

Then to preserve capital in response to the COVID-19 pandemic.

The carrier expect capital spending in 2022 will be in the range of $120 million to a $140 million.

We're introducing our 2022 adjusted EBIT guidance range of $410 million to $450 million, which implies a midpoint of $430 million.

Based on the midpoint of our 2022 guidance. This represents an 8% increase compared to the 2021 full year result.

When also adjusted for the C E Ws benefit of approximately $23 million in 2021. This represents a 15% increase year over year.

The increase is expected due to the contribution from acquisitions completed in 2021.

And as soon as the acquisition of camp propane and the associated companies in the second quarter of 2022.

Historically can't generate approximately $17 million to $20 million and adjusted EBITDA in the first quarter.

The increase is expected to be partially offset by lower adjusted EBITDA for the Canadian propane business related to the loss of the C. Dws benefit in 2022, while the commercial business is not expected to improve until the second half of the year.

The adjusted EBITDA guidance does not include any acquisitions other than cans.

We do expect to execute on acquisitions in the range of 200 million to $300 million in 2022, which is not included in our 2022 adjusted EBITDA guidance.

The low end of the range accounts for warmer than normal weather.

And delays in commercial demand recovery.

The high end of the range accounts for colder than normal weather stronger wholesale propane market fundamentals and increased drilling activity in western Canada.

Superior leverage ratio for the trailing 12 months ended December 31, 2021 with three nine times.

Which is at the higher end of superiors updated target range of three and a half to four times.

As we announced in our fourth quarter earnings release, we're updating our targeted leverage ratio from a target range of three to three and a half times to a target range of three and a half to four times, while executing our accelerated acquisition strategy.

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

Okay.

As a reminder to ask a question you will need to press star one on your Touchtone telephone again Thats Star one on your telephone to ask a question to withdraw your question press the pound key please standby, while we compile the Q&A roster.

Yeah.

Our first question comes from the line.

Newman of Desjardins Your line is open.

Good morning folks.

Let me.

Just want to unpack the good morning, I just wanted a package on package the the guidance a little bit so the way I look at your you did 398 last year yacht in probably from completed acquisitions. Another 30 to 35 share $4 34 to 35.

To start including camps, including camps for post.

Post Q1.

So your $4 34 to 35 sort of understand the Qs is a bit of a headwind of 23 million. So that takes you back down but I'm. Just wondering is this the guidance looks extremely conservative and when you start factoring things like synergies from the.

<unk> the volume benefit even from the assumption of a five year weather average win win last year was much warmer so obviously a volume volume kick there.

And the economy reopening with the commercial and wholesale so maybe just kind of maybe you can talk through it a little bit better because just trying to understand because the market is obviously, a little bit spooked I guess by the lower number.

Yeah, Yeah, sure and maybe I'll I'll I'll kick it off and maybe suggest a way to.

To triangulate and then I mean, obviously look jump in.

David.

If some of you here perspective.

So as you look at 2022, I think a good way to look at it and say okay. So the midpoint is $430 million.

Compare that to where 2021 is if you look at the $398 million he removed the wage subsidy.

Impact so that would be $23 million, we get roughly $375 million.

So moving then from the $375 million to the $403 million the growth year over year is roughly 15%.

And so then if you want to look at it and start from from of the 15%.

8% to 10% would reflect the acquisitions that were closed and recall I mean can't isn't.

Factored in until Q2, and then roughly 3% of that then would be your COVID-19 recovery that we're seeing which is slower than we would expect so you don't have a like for like replacement in the Canadian propane business.

And also some organic growth in there so that's roughly 3% and then 2% would be weather normalization.

Sorry in the last last three would be the weather normalization. Okay got it okay. Yeah, yeah, 2%, yeah eight to 10 three in two for weather normalization. So what haven't you factored into this into the guidance. It doesn't seem like you've factored in a lot of the commercial industrial wholesale recovery.

Or what what where are you being Uber conservative here.

Yeah, So maybe I'll take that one.

So when we sit and it certainly and look for their business, we really see as the business has been solid as ever.

I think we were.

I think with this year happened to us it was more of a timing issue.

And timing was in order for them to you.

The C O W that goes away, but the commercial business, we don't see it coming back until later in 2022. So how much is you put back is.

As a guest game and we've done their work just think maybe just quarter four.

Then you have the synergy acquisition.

We've done some but you know kind of is the big one.

It did come in in January of 17 million to 20 million in quarter, one not happening, though we didn't write the check and then doesn't know nobody got hurt.

It's delayed it so it'll be April to then you'll have the full year April to April 'twenty two 'twenty three.

I think the timing issues of whether 15% warmer.

So when we forecast to your point about our conservative where we do average forecast.

No.

Quarter, one does much better than the average rate probably yeah.

We didn't forecast well.

Okay.

And for Q2 right Luke.

Yeah. So I think we're we got talked I think in the timing zone has nothing to do with the margin the growth I've turned overall nothing to do with potential acquisition that we're working on improving them by pulling up our person nothing has changed from the machine marching on what has changed is a timing issue.

Covid disappear.

This severe business doesn't come back 25 million.

How do you replace that if the business doesn't mean it will come back that business is not gone, it's a timing issue.

When it comes back all those customers and all of those things are things that our customers and we know it won't come back.

So youre looking at the puzzled and you look like a timing issue that spike.

That didn't help us at all.

If you look 12, 2023, and we don't want to go there.

Back to normal timing of plus and minus.

The business is humming very well, but do you have a timing issue.

Okay more than one sector like whether the.

The acquisition delay of a large one.

And then the Q W go away and we don't know how much is coming back when we just don't see it in quarter one that much.

Yeah, and I think what I will also add David is one with respect to like Covid recovery from our back.

Our view is we're still going to be looking at somewhere 10 to 15 million gap from where we would have been pre COVID-19 levels in 2022 based on what we've been seeing and of course things can change, but that's currently the way we're looking at it on EBITDA clearly right.

Okay got it.

Question, just has to do with the.

And kudos to you for raising the debt the leverage range, because if I look at utilities out there you know five times net debt to EBITDA in IPP that six times. It does make some sense to me given the fact, you've gotten rid of the especially chemicals you have less volatility, but if I look out into the close of two.

Q and then you look and if it looks like it looks like youre going to have availability of around 270 or something on a sub sub 300.

Post camps, and then you wanted to do 200 and $300 million in potential deals. It does look like you might exceed the top end of that leverage range and any thoughts on just on the balance sheet and and your aspirational targets for the deals.

Yeah, So I mean, David consistent with you know what I would have communicated historically.

As we look where we're committed to our double b rating.

So as we look at acquisitions, it's really dependent on size and timing.

When they occur.

And as a result of that I mean, we would look we would look at where our balance sheet sits at the point in time, and then make a call and evaluate decline what makes sense and what's required you know.

To maximize the value to our shareholders.

Excellent. Thanks, Luke Thanks Beth.

Thank you.

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Thank you. Our next question comes from Ben Isaacson of Scotia Bank. Your line is open.

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

You talk about Covid recovery, whether it's commercial wholesale industrial et cetera.

And when I think about your markets and where you are right for the most part it seems like there arent as many restrictions anymore and so.

What I'm asking is can you discuss your confidence in how much volume you think will recover and each of those sub segments and when you think that will happen I know you did see in the second half, but whats going to change between now and the second half. Thanks, so much.

Yeah, Good question and I Hope I'm close.

Close to reality here.

There's no crystal ball that can tell us exactly so for the U S business.

Mainly retail so maybe 5% plus retail, there's only a 15% and commercial business.

Gets affected by Covid.

Though we've been growing residential very well more than a two 3% and then the commercial business in Tenda represents two third of our total opinion business.

That's where the Delta is.

The big where big where the national when we have big Big scale for industrial commercial it's a big advantage.

Then.

When it comes to the Covid business.

I can tell you when you look at all.

All of this segment of the commercial and industrial we can look at the history before COVID-19 and what's happening up to now.

Down tremendously.

So you're you're.

The big Delta and we see a bit of a recovery like we've talked I think about 2%, but it's nothing compared to the volume that those people who are using part great cool.

So when you think of commercial and you go across the country Aldo warehouse with the lift truck.

All of the auto industry represents 10% to 12% of our business, that's causing them to have and then you have commercial you know the the rest of us.

Corner store when you have big industrial in the oilfield as well.

Volume wise.

Get a bit more volume right now, but compared to pre COVID-19 none at all.

We know that some of that is gone forever.

Rather than their gene for the last three years, but some of it is all related to Covid and then we'll have a big industrial project in Western Canada to built Oh, the service and with propane and also side too.

Thousands of miles to get the new Mexico pipeline to the West coast, that's slowed down more than half so you're looking at those segment one by one.

<unk> gone there, they're just gone now.

Come back when the market comes back.

Canada, not reopen fully or you know.

No one person just reopened the not much and it looks like now March April .

A strong possibility things starts to go back to normal somewhat normal so to Davids question are we conservative thinking quarter, four and it starts in mid quarter treat that.

Do.

Cannot predict better than what we see out there from that 70% 65% of our business.

Within industrial commercial Cotwo help us to compensate for that.

And then it goes away and then the market.

Back for a while so you have a lag time in Glasgow.

That business this year to begin replacing the business business lagging by let's say six to nine months of service you Gustaf.

Yeah.

What I what I can maybe do is just provide a bit of color. So our assumption is that the recovery isn't really kicking in or we won't be back until Q4 on the way we were previously.

In particular for Canada, because I think the last wasn't impacted as much because of the residential business sort of some of the volume increases that we are expecting.

For 2022, so in residential we are still expecting higher as we grow that business and that would be somewhere between 9% to 11% growth.

Commercial overall, we're anticipating 5% to 7%.

Higher volume and I can split that a little bit so when oil field somewhere between 5% to 8% higher.

Industrial reviewing its going to basically be consistent with 2021.

For general commercial higher in that 9% to 11% range again, and then for motor fuels, we do see the modestly higher still grow in <unk>.

From 4% to 6% and then wholesale we also see being a bit higher from 7% to 8%. So we are seeing increases in the volume just because it towards the end of the air and it doesn't replace where we were prior.

So the headwind, yes, COVID-19 . Thank you for that and maybe just to follow up on that same topic. So it seems like this can really go one of two ways either we continue continued to get one or two variance a year and really this is the new normal and we will just have to accept what the volume is going forward or we really are on the path to recovery.

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

Well I have a different perspective.

Uh huh.

Thank all of you have your own idea, how things could unfold to be.

Predictions since January has been when you get to April may the whole was going to say enough is enough you'll capture it and we have to live with it.

So if I'm right.

You know people that didn't get backs and they will be more and more I mean more difficulty.

Mosaic and the rest of the World is to go back to normal.

I think the to think that the.

The path to recovery will never come because it will be 456.

Ever comes through.

Sure I think were like.

I think I think they agree with the world's going to say enough is enough. We'd go back we'll go back to normal and we live with it and we're going to catch a cold because you're vaccinated, let's go buy them.

For everything Thats been done don't get me wrong from a personal point of view, but I think you cannot go on forever and ever liked that then there'll be some people are going to get sick for years to come because they didn't get vaccinated, but the world has to go back to commercial business and other things go back to normal.

Yes.

With that.

Thank you for that I appreciate it.

Okay.

Our next question comes from Nelson <unk> of RBC capital markets. Please go ahead.

Hey, Thanks, and good morning, everyone.

My first question just relates to cap. So I was just wondering you flagged early Q2 close what are the remaining.

The remaining approvals required I know it doesn't really matter in terms of timing. After you missed Q1, given that Q2 and kicked off pretty.

Pretty negligible.

But I'm just wondering whether it's Q2 or Q3, I know like financially it doesn't matter, but how confident are you that it will finally close in early Q2.

Yeah, and Diamond Green bars on the call.

Has there.

Then the on the case.

Chase every day, so I'll ask him to give you a split.

For the view in that regard.

Thanks Luke.

Yeah, So Nelson I think.

Where we are currently.

Both camps and superior complied with the second request providing information.

Extensive information to the FTC.

We continue to work with them to answer questions and provide additional information.

I think our expectation right now is that we will close and Oh.

Early Q1, or sorry, early Q2 or very late Q1.

That's still our expectation right now.

And.

Theres, obviously, some variability, but that's the approval that is outstanding.

Okay. Thanks for that.

My next question just relates to.

To leverage and funding and it's probably for Pat.

So you flagged the new.

Target leverage of three and a half to four times I think in the past when the target Leverages three to three to three five times that you mentioned that in the short term.

Going above that range and then after realizing synergies and things you would fall back within that range. So with a three five to four times does the same hold in terms of you're comfortable going above that four times.

Ratio in the short term and then fall back within that range.

After synergies are realized.

Yeah, and I think from.

Our perspective, I mean, we moved it to acknowledge the fact that while we're doing it accelerated acquisition.

Certainly that being said I mean, all are we flag it and I always like it was we're committed to our double B rating. So I think from our perspective, as we look at acquisitions and the timing.

Look.

You know.

We know we want to be within the range.

Could be an instance, where a little bit above the range, but I think you.

You know, where we're committed to that double B and we'll do what makes sense. Every time, we look at the acquisition of <unk> will make a sense on timing and how quickly and how the synergies are rolling in to truly decide on what we need to do and if we get to a situation where the best answer is to potentially look at something like going to the capital markets.

Okay and then.

<unk> shares part of the picture in terms of something that you would look to consider.

I mean, we've done preferred shares in the past I mean, I'll always say from my perspective, I'll always look to more traditional products.

Where possible and where it makes sense right as part of our structure, we're comfortable with them, but I think from our perspective as we look at the overall balance sheet.

You know the reality is we're comfortable with him there, but we're also comfortable with all of the other pieces of our balance sheet.

Now onto a few point to your question.

For everybody.

I think maybe all of you on the call knows but just to be clear.

When we get to the end of December of $3. Nine this is going down on its own now quarter, one quarter to quarter three.

Though because it's the highest point of the year.

So there's that's happening and then to your to the point about the leverage going up to four.

12 years here every day and that's just about this.

This is a great cash flow business.

The.

80% net cash flow of the.

So there does it yet and where margins are solid so.

Very comfortable between our core because of the history.

Industry we're in.

Okay. Thanks, Luke and then just one last question on the Green hydrogen arrangement with the sharp bone.

Can you guys give a bit more color in terms of what you're actually doing and your and the capital commitment required so.

Are you essentially buying trucks that could transport hydrogen and kind of doing all the deliveries for a fixed fee or a commitment or.

What's your capital commitment and things like that.

Provide some more color there.

Thank you for that question and I'm actually with them in two weeks and it will.

We'll be for them than other people.

We'll pick up more than four seconds. They wanted to build many many plants across Canada.

And for US, we're very fortunate because it's okay. We don't invest in the plant and the capital to build.

For them they have.

No way to do the last mile and the last mile or pretty much customer, we all deal with or no because we're big industrial.

Industrial business.

So what happens is there is a perfect match of the corporation here, where they will build the plant to make the product.

Well it to us.

And we have the customer and we delivered the last mile. We're bring it with the capital trucks by the way we have already.

Same type of truck some of our product we deliver.

And we make the same kind of margin that we make great, though something perfect.

Sure.

So.

Think of it if not not much capital do we need a bit of extra truck because this business will grow in <unk> across the country. The answer is somewhat yet, but very very light capital very solid good margin or two of those would have today and though.

Sure.

A good win win by them being the builder product maker and they have no fedex to bring it to the to the consumer that we have where the industrial Fedex of bringing it to the left to the customer wherever they are located in Canada.

Okay that makes sense and that facility hasnt been constructed yet right, it's expected to generate somehow starting Q3.

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

I believe the classes finish and done for this summer the summer 2022.

Okay, great. Thanks, Luke was all my questions for now.

Thank you.

Thank you. Our next question comes from Steve Hansen of Raymond James. Please go ahead.

Okay.

Yeah, Good morning, guys.

Two part question first part just curious if the campus experience.

As you know.

At any respect diminished your ability or your maybe desire is probably the better word to do larger acquisitions in the current environment. I think we all understand that there really isn't any large any competitive issues, but just given the.

The dance you've had with the FTC through this whole process and that is deferrals. It's caused I mean do you try and go after the smaller mid sized deals here at least in the interim or are you still confident enough to go after some of the larger ones.

No very good question.

I'll do apart and Oh, well for the Darwin to jump in.

More color so.

I don't see any issue of buying retail propane company and their east coast West Coast and USA.

I think this experience has more to do with.

New people SBC, new public. So you think Oh, we got to look at everything and what about natural gas in the bathroom.

Learning curve.

My two.

Question discussion that was more driven.

To.

The wholesale business and a known understanding and they wanted to understand the wholesale business.

Who makes the product who delivers who can distribute and there's a ton of that.

We don't see issues, but there's a very strong.

I believe than they are apart.

Retail is that's going to be affected by retail and distribution business.

And you know the worst scenario in the West coast, if we don't find out their wholesale without buying out their wholesale.

It's complicated and they're getting their heads around what that is and I think they're realizing it.

They're in the kind of people that can do that so.

Net net we don't see any slowdown in <unk>.

Plus the potential capability.

To do retail acquisition or something different.

Well, Darren if anything else you'd like to add to that.

Sure Luke Thanks, No I think I think you've covered most of it but I mean.

The points right there the regulatory authorities clearly are looking at more transactions in the U S. That's that is the current environment, but you know that.

That analysis is very fact specific.

And in this circumstance.

With camps Theres, a large wholesale component and you know based on what we've seen to date the questions and the interaction that seems to be a focus of what they're trying to understand that it's not the most straightforward. So I think there is some learning going on there so.

I agree with you look I don't think that that should be viewed as a dampening on our ability to do retail propane acquisitions.

Most of the retail businesses that we've looked at and in a number of the locations.

Locations, you have got 15 or more competitors.

Very competitive and fragmented.

And so I don't think you'd get the same kind of analysis.

Right right I think this is particular to to these facts.

That's really helpful and just as a related question to some degree is just your desire to take the leverage range up a little bit here to pursue the two to 300 you've described this year.

Is there an urgency to go after these deals now as opposed to go a little bit slower and keep the range intact I'm just trying to understand the balance between those two.

<unk> took a workforces in some respects.

I wanted to go faster, but the leverage keeps hiccups.

Do you see sort of an.

At a modest pace and how do you think about that and why the urgency to go faster now.

Yeah, I'll start and Beth.

So some of those issues.

No.

We're certainly a dividend up.

Our market position to be the lead acquirer because of 17 deal quality health and safety employee communication.

No.

We have we're coming in that regard no deals come not mature.

They don't come to us going to a place and see units for sale will pay more and more to buy it we don't do that.

Our game plan with communication all the time my luck with mid size and larger drew and the game is.

One thing is going to be for sale.

Who we are this is how we do things and you go to a cessation of always meeting so they get to know us over the last many years.

And we don't we don't know when the fund is going to come to fulfill our small log big.

So it's not the.

Or us to decide that but we know we wanted to be these codes and we know when we're buying in their backyard the region like we did with treatment.

On the synergy we know getting a scale in the platform in California, and I think too with north south and going North of California.

It makes sense and then you add the new just make.

More synergy so we've strategically either location, we want to grow and we don't want to pay more we lost the deal we lose deals all the time, because theyre going to be trading of our level. We just full stop and say look for us. So we're disciplined we hover value we have <unk> 25.

Percent improvement on deal we noted before walking in the door day one.

And we are.

With all of that comes to the balance of the of the death and all the women Hall so were.

Having buildup position, we're marching on and when we know what's in their zone and it makes sense do we have the synergy a midpoint of 5%.

Good let's go do it.

Hopefully that would be the timing ideally would be.

Spread out where it works well, but the best scenario, but it's not the way it unfolded and sometimes we say boy, that's such a great company with better get it once its horses sold is coming back and.

So then I'll pass it to Beth.

Sure and I think sort of building on where liquids coming from there. The reality is when we look at the deals where the deals make sense. The deals are available and come to market when they come to market.

As a result of that.

We look at it as a business and we say what makes the most sense long term for the shareholder so as we look at it and we balance that and we say you know if we're going to create long term.

Accretion for shareholder and it makes sense.

Well look forward and as we've talked before depending on timing and evaluation etcetera, I mean as a result of that there might be things, we have to do from a capital perspective.

RV with when the acquisitions are and when they.

It makes sense, we're going to be opportunistic and do what makes sense to continue to build that value for the shareholder.

That's good color. Thanks appreciate it.

Thanks, Steve.

Yeah.

Thank you. Our next question comes from Patrick Kenny of National Bank Finance Your line is open.

Thank you and good morning, everybody.

Just circling back on the campus acquisition here closing in Q2 and.

I'm just curious why.

Missing out on the circa 20 million of EBITDA doesn't reduce your final purchase price there and I'm just thinking is this something that you have.

It looks to consider within negotiations going forward I E have the vendor.

Sale of our retail take on more of the risk.

Regulatory approvals or the timing to close, especially for these relatively larger deals.

Yes.

The valuation we have camp and this synergy makes it very accretive to our shareholder.

Youre talking about is we're missing a core.

Quarter, one, but we didn't write the check for quarter. One so we're not really missing anything with the exception you have another first 12 months. If you start in January the company valuation to me and I think to the market stays the same but you probably have your one.

You're right you're right the bigger check the year, one and you have the EBITDA only 12 months later, which is not all the same years, so there's a bit of a gap there.

Not big dollars, but there's a guy.

The Rand you write the check and when the return comes you're not starting the best months going forward, but then for the next 20 years, it's all match up with that.

You paid the right value for the EBIT, though that's still there going forward Christmas in nursing.

I know, it's a bet if I explained it.

Good enough.

Yes.

The only thing I think it's Darren I, just thought I'd add to that I think.

No. It's it's a good idea.

To push that risk onto to our vendor if you could.

Certainly the challenge you have is when you're in a competitive process like this.

Hi to push regulatory risk onto our vendors are going to be difficult when youre competing with them with other bids I mean, if you thought you had a makeup.

Given a number of other things you might consider.

I think that makes it a tough spot.

Tough negotiation in a tough sell for.

For a vendor.

It makes sense I appreciate that.

And then maybe Luke could you provide a bit more color on your strategy here to scale your footprint in the Midwest.

I'm just curious if the Hopkins acquisition establishes somewhat of a homebase for you in the region or.

Are you still looking for that larger scale retailer to really kick off.

Ben spoke model.

It's a great great region, Yeah, and we did buy a good sized company I go back maybe Rob on the call because it gave us the exact date.

Three or four years I guess.

Ohio.

And we do have a platform and we've.

You know, we take a superior weight, we centralized a lot of the work.

So you don't have a call centers in them and people that maybe every brand that's already done with that platform. So what we are adding now is in the same neighborhood of those regions.

The reason we wouldn't go further in the middle of USA at this stage.

We don't know about the furniture in 510 years, but that's a great region and we do already have some location there and a good team and it's a really great regional manager. So we're building on that those as they come along yes.

And as part of the strategy there look too.

Somewhat of a free option on perhaps extending your new green hydrogen initiative into the Midwest at some point down the road.

That's a tougher question how it gives you my.

Alrighty check at this stage.

We're going to do extremely well intended though because we're the big player where the scale where their brand we cover the whole country. So when did anybody that wants to do green energy for their last mile. When we talked earlier about Fedex.

We're at.

When it comes to the Steve I don't know today Oh, It was on the poll and what region I do know with camps, who have the.

The opportunity for wholesaling.

Some renewable propane.

Would that come from the region when we expect to.

In California to have something in that regard then we'll have the scale to do it in California, what we do in Canada. So looking forward to that and I can say I think something there will develop over the next year or two or three.

The rest of the U S I don't know.

We'll have to wait and see we're pretty new at this time of year, plus we've been studying and trying to research and understand the market and where do we belong and how do we become the deep player with the Green energy.

Makes you a strong commitment in Canada, we're going to be if we're going to be good.

California After camp I think we will.

<unk> worked hard to do something quickly there and then on the non the little dip loved the strategies of plan and we'll present it to the market once we know more.

Fair enough I appreciate that Luke and last one for me if I could.

Maybe just back on your comments around leverage.

Potentially looking at the capital markets at some point down the road, but maybe you could just speak to what other levers you might have on the liquidity front here just in case.

Capital markets aren't as attractive as you look to execute on this.

Accelerated M&A program obviously.

A couple of shareholders with deep pockets.

So I'm just wondering if theres an understanding there that if you do need additional liquidity to stay on course with.

The M&A plan that Youll have access to other cash resources outside of the capital markets.

Yeah, well I mean, I can't really speak for what others wouldn't wouldn't be willing to do as we look going forward, but certainly you know, we'll always look at things Opportunistically. We do have you know too.

I'm going to say sort of very supportive.

Investors and Brookfield in M. D. So I think from that perspective, I mean, there's certainly all.

The discussions we have comfortable with what we're doing and then what we have going forward I don't want to speak for what they might do if we were looking at something I think access to liquidity.

It's always something that we would factor in as we looked at the acquisitions going forward and I think the reality is right now and you look at the.

Amount of room, we have on our credit facility et cetera.

We're comfortable as we move for them, but it's going to be very specific timing size of transactions et cetera.

But I think the crux of your question around.

Do we have a large investor supportive of US, yes based on our discussions there support enough.

Okay. That's great. Thank you very much.

Okay.

Yeah.

Thank you. Our next question comes from Daryl Young of TD Securities. Your line is open.

Everyone.

Two quick questions for me so first on the guidance range of 410 to $4 50.

And I apologize if I missed it did you quantify what you consider abnormal weather to get you to the $4 50, and then how does that compare to what we've seen so far in January February because I think were double digits colder than normal at this point.

Mhm.

I'll take that.

Yeah sure I mean, what we would typically do when we're looking at developing the ranges as we would like and we would say look over the last you know.

Five to 10 years, what are some of the extreme from a weather perspective.

So we'll build the range is looking at something that is.

Is within the range of what we would have experienced historically.

Well.

At some point you can think about it it's not exactly linear like if you lose more EBITDA.

It's warmer than you gain when it's colder just because you have to keep on some incremental costs et cetera. When it's warmer just to make sure that you've got people to deliver them et cetera, but it's almost if you.

Look at it it's not perfectly linear but it.

You do have an increase somewhat proportionate to the change in weather, depending on the months that youre looking at.

It's a very long drawn out way to say, we'll use plausible estimates and creating a range of what we've seen in warm weather historically and cold weather historically to get your your outside of the range that being said it isn't just weather right like we'll build that range on other items as well right differentials in the market from a hole.

Wholesale perspective as well.

Okay are you looking more sell for a specific number.

Well.

I guess I'm, just trying to tease out how much warmer or sorry, how much colder our.

Currently than than maybe the range would be.

Why.

Well I mean, as we talked about it I mean January was definitely with definitely colder and.

And colder in the U S. I mean, I think one way to say in order for us to.

Work through and get to that high end, we would need not just a cold Q1, and it would need to be a causal Q1, we'd also need a cold Q4.

Got it.

Okay and then just one other question in terms of the five year guide.

Yeah.

Based on the amount of capital deployed at this point certainly one that we expected.

The EBITDA to be higher commercial volumes are obviously, a big impact.

But could you just maybe give us a sense of if there's been any changes in the assumptions that would have gone into that five year plan and where are you.

Feel in terms of when.

When you sort of hit the midpoint of that.

Difficult to say, but.

What we don't have in our five year plan is.

Some additional distribution.

Green energy that were start to work on.

But I don't think there'll be a shortage of deal to get to the numbers.

And like Wechat earlier with another question there.

They're choppy could come in and out and you don't know when in the booths would fill up what I would just note them all.

The door and were getting the call.

So I.

I don't know I'm, probably missing a few points that are key here. So that there are no bev can jump in or Rob.

Yeah, I think from like what I would say from the highest perspective, when we look at the superior way forward target is that.

2026 EBITDA.

I think initially we assumed that it would occur in a very even pace throughout we knew it would be choppy is Lee sang.

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

I think when it comes to acquisitions that we've entered into and execute it.

There's been no surprises, we haven't had any where we dramatically different synergies that we expected any surprises we've had have always been to the upside. So I don't see anything that would give us any pause or any concern that any of our initial assumptions other than just the choppiness of the timing.

New with the potential.

Is any different than what we were thinking about when we were talking about it in investor day.

Okay, great. Thank you that's all for me.

Thank you. Our next question comes from Joel Jackson BMO capital markets. Your line is open.

Hi, good morning.

Can you help us look back a bit if you look at whatever 234 years, what has been the ROIC return on invested capital from the propane acquisitions that you've done.

Can you maybe give us a sense of what kind of value creation you have made.

For shareholders.

Yeah.

The ROIC it'll differ depending on the transaction, obviously, which makes sense, but typically it's anywhere from what do you think.

What are you done, but not typically starting to reps what have you achieved like another 25% you talked about what can you show us you've actually achieved last three or four years not for typical but actual performance.

That's probably needs an analysis I have to go back that far and we know what we bought and what the returns are when we sign and what is the expectation to the point that had been achieved.

Go back three four years old.

We have an answer that.

Of those four years.

Really you can do well.

Yeah look and we can and we can certainly take it and talk about it offline for specifics and do a detailed analysis, but.

Fundamentally the acquisitions that we've done.

They have delivered what we expected them to deliver so and in fact, because we're achieving the budgets and the synergies that we expect the metal initially when we did the investment.

What we were expecting would in theory be where the actual it. Your question is a little tricky because what occurs when we do an acquisition the acquisition gets absorbed in the business right the synergies occurred.

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

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

I think it would be an interesting analysis. Since you guys are interested is your strategy going forward.

See where things that happened and the reason why I say that as I said in my second question, which is the real question Luke.

Superior plus as you know the stock prices and stuck in a range of basically 11 to $12 a share for 15 years. If you ignore some transient apparently below that range and we're above that range, where they're today 11th $12 a share. So the stock market is not giving you any credit for all the things you've done superior way you sold off businesses you bought this is gunther.

Okay and pure play.

So what is the market missing if you have achieved the titration and the ROIC on your propane strategy.

Very good question I really have to invest a lot in this company as you know from there and Laura Burnett is written and they're good pets.

That's a great cash flow and does so well and where the dividend of 6%.

That's a tough one because.

Yes.

It looked like this business.

No where none of the utility, but there were some utility.

The tank and your <unk>.

Cash flow is great and growing every year. So we don't like it because we could not be acquisition of Cabot February six told or you're running a 30.

I mean.

Sure.

Earlier in the phone can tell me what is it.

Where it belongs which is to me.

Third thing.

It makes no sense maybe.

Maybe.

Yes.

Optimistically I could say.

Maybe once we get to a certain size and the roll up or down.

17.

But maybe the market.

25, now and look at this.

The return and I can tell you on the reveal our grade or.

So you are like to them.

What's missing to get the right value for it.

In our business.

Market position, which sets a solid margin with very little risk on the.

They were very small with almost nothing on the commodity or like what the heck.

Good question we.

We have a puzzle.

The spending was in that spot.

<unk> value, which is not $13.

Thank you for that because you have any ideas about that.

I think you could interact investor event, I think you could do to my first question I think if you could show how youre propane transition is happening from a high level. How you would see what returns you've achieved on your business, where where you maybe have come in above your targets even below your target maybe how that shapes your future acquisition choices would be helpful.

Yeah.

On patient that Rob that we made I don't know if it was.

The system, the Internet video and the average deals an average return.

With all that.

Scrub it we haven't answered over the package ready for that yet.

Yeah.

Cloud on the vessel.

The pre synergies and post synergy multiples.

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

Okay I appreciate that yeah.

Yeah.

Alright.

Okay.

Joe.

One thing that we know from our side.

We have big competitors that are losing market share every year that are public and when you look at if you compare us to the MLP, which I won't give their team, but you all know them.

Another good business model, but their public with the valuation. So I think we get pulled into that valuation we don't we never had.

And the approach of the 100% dividend not investing in technology. They just don't do that.

And the system marketing.

We don't operate at all like those three businesses that are public.

But we'd probably put them in those in that bucket. That's one one week, maybe one touch point to say why not more value for that stock.

Certainly comes to our mind, there might be others, but that's one where.

We have big large public competitor that are not don't have a good machine.

Developing the future properly.

They lose market share every year.

So that's.

It's like or deals and come to us.

I called it to stretch the business so.

And when do you don't feel good I think this stretch has happened for them, but whenever we don't operate like that but we'd probably put them that bucket to a degree.

Okay.

Thank you.

Thank you.

Thank you. Our next question comes from David Newman, Our visual Dan Your line is open.

Yes, just a quick simple follow up on just on the margins you've done some things over the last couple of years, some some kind of temporary.

Some permanent.

And we've got a new level of margin in the U S. A and <unk> 42.2, and 18 five in Canada, and just looking out into 2020 to the wholesale market fundamentals look decent you've had some cost saving she is ripped out some costs permanently out of the out of the structure and then you've de marketing some of the lower March.

And that accounts, so maybe just as youre looking to this year, what's your sort of expectation.

What could stay in the cents per liter in both sides of the border.

Yes.

Awesome.

Yeah I'll take that.

Yeah.

I can kick it off.

From your perspective.

What we are anticipating David.

Still a range of that 30% to 44 cents.

And again, that's fair 38 Canadian.

Canadian it would be 38 to 40.

Typically the range got it got it.

And remember that converted so 30% to 35 U S, but again converted into Canadian.

So you're right we were at 42% for 2022, we're thinking that those average margins. It will be it will be slightly lower right. We have a slightly different mix. We've got some growth in commercial volumes as a result of acquisitions et cetera. So you've got some mix impact, but more importantly, it's an FX impact.

What order of magnitude Bachelor Lake for 30, 35 U S.

Are you thinking in Canadian dollars 38 to 40, what do you think you're going to be the lower end of the range, they're like 30.

No no no no when we're saying slightly lower like 40 to.

41 <unk> Scott.

Got it right or somewhere in between those so just just modestly lower slightly lower in Canada, we were at the 18th.

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

Change in the customer mix.

Got it and what's the potential here I mean, youre doing things like the centers and things like that more more obviously retail, but and then you're sort of de marketing some of the lower margin accounts like what's the potential here like where could you be aspirational on these margins.

Yeah, I think there is.

There's a violent act what I've just talked earlier about.

The three public company that increased margin.

More than enough every year.

They lose their EBITDA and no one here whereby you don't just increase price and they lose volume. So we're wanting to be in a position, where we can increase price too.

To a degree lets say a 10 year year end, but we do see real study by branch by region, what's the competitive landscape and we come to <unk>.

Fusion is to okay. We can increase the 41 to 42 43 without losing the customer so we come up with the <unk>.

Sensors, the retail the communication, we have with <unk>.

Different specialized people in different commercial segment we've.

Could the attrition in the half over the years.

Very important is important to note.

The growth and then we grow.

Commercial Canada right now we've grown retail a bit more than anticipated then Canada.

The machine in this day there is some growth in the states, but the all of the application.

Get to us.

Extra margin in the states and the better contact and glue with customers by segment and then big time retail because of our size of retails in the states.

Having executed.

All of those tools. Yet then this thing it's a big year coming in 2022 to get there and they've been busy.

$30 million 230 million of EBITDA with a very nice so.

And we then put some good talent and marketing salespeople, but we're lagging a Canadian maturity of developing those two and that's going to come so to me I believe that we could.

We continue to have some good internal growth and increased margin over time.

Slightly.

The big lift I think on largely behind us nowhere more.

Point, where we can continue to increase slightly margin overtime by adding more glue and lower service and easy to do business with them.

All of the tools that we've pretty much installed in kind of a little more to come and then the state.

So don't see why not.

And if you look at inflation and things like that look.

In a low propane and I know the propane prices have rolled over another rising again, but.

I know, there's a little bit of a tailwind that goes with that in <unk>, but.

Just from an inflationary perspective.

Got it would be much easier when you've got a low propane price in a low rack roc spread that using that with our retail customers you can get more through in terms of pricing.

And in this environment, maybe youre, not getting rack, plus plus or so to speak but is that are we thinking about that right.

Yes.

In 2020 one then.

<unk>.

A good year or two.

I had a lot of the margin because.

What happens if the pricing.

[noise] propane goes up the way it did and then the wind download them back up as you said.

You have to be very careful of communicating with customers ahead of time to say no.

This is like natural gas the oil that when you go to fill up your car. The bank. This is weird.

We're a pass through would make a.

Delivery to you, but the world of energy cost have gone up everywhere in every aspect and we communicate to the customer with E mail or call centers and all of the above so we wanted to be very cautious in those tank cars.

Two people mind, even though I think in the last few they know more because when they go with their car to fill the guys or.

All the all the cost of energy.

<unk> known then.

The past, it's something that that would happen do you have a segment of people that know and some don't.

Most people know today so.

But it's fragile you cannot.

The increase on top of those increase in the other expect customer when the summer comes go away got it so.

That's why we have a balancing act to find the right place to price properly. So we don't want to do like the three other big company have done and.

Increased price and we will lose the 5%.

Customer next year end, but our bid though might look better if short term.

I'm cautious about that we're debating that regularly as to what's right here, but just think of your original question Ken.

Can we continue to tweak slowly, but surely over the years I believe so.

Okay excellent. Thank you.

Okay.

Thank you at this time I would like to turn the call back over to President and CEO Luke.

For closing remarks, Sir.

Yeah. So thank you everyone to participate.

Understand.

Playing that one stage.

Where we're talking to that timing issue.

But the business fundamentals the business operation margin.

There's nothing else change is just so bad timing.

Those customers and do think or you.

In Canada are still owned by us.

And they'll come back.

And the the growth and the acquisition are there and we will continue to harm and to Joe's point.

Yes, we know that there's something wrong to be $13 or so when you have.

Seemed like that but.

Usually with market.

Get overly disappointed but not to the point of not getting overly concerned because.

Usually there's a time down the road where the market.

Chip and picks it up I don't know if its when we get a bit bigger and more investors from U S of the world.

But we will continue.

Continue to work hard for all of you and we appreciate your interest in their company.

Yeah.

And this concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

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Yes.

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Thank you for standing by and welcome to the Superior plus 2021 fourth quarter and full year results conference call.

At this time all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone. Please be advised that today's conference maybe recorded should you require any further assistance. Please press star zero.

I would now like to hand, the conference over to your host the VP of capital markets Rob door. Please go ahead.

Thank you Latif and good morning, everyone and welcome to Superior <unk> Conference call and webcast to review, our 2021 annual and fourth quarter results. Our speakers on the call today will be late stage or Dan President and CEO and Beth summers executive VP and CFO , Darren Hribar senior VP and <unk>.

Chief Medical Officer is also joining today's call.

Today's call is being webcast and we encourage listeners to follow along with the supporting presentation, which is also available on our website.

This morning's call looking Bob will begin with their prepared remarks, and then we will open up the call for questions.

Before I turn the call to Luc I'd like to remind you that some of the comments made today maybe forward looking in nature and are based on superior its current expectations estimates judgments projections and risks.

Further some of the information provided refers to non-GAAP measures. Please refer to superior's annual MD&A posted on SEDAR and Superior's website yesterday for further details on forward looking information and non-GAAP measures I would encourage listeners to review the MD&A as it includes more detail on the financial information from.

2021, and the fourth quarter as we won't be going over each financial metric on today's call.

This will allow us to move more quickly into the question and answer period I'll now turn the call over to Luke.

Well, thank you Rob and good morning, everyone. Thanks for joining the call firstly I'd like to thank the entire superior plus team for delivering a solid year. Despite the challenges we face from COVID-19, pandemic and warm weather in December .

I'm proud of our team's commitment to safety reliability as we continue to deliver propane and provide best in class service to our customer U S and then Canada.

And 2021, and our adjusted EBITDA was $298 million, which was within our 2021 that adjusted EBITDA guidance range, our fourth quarter adjusted EBITDA of 142 million was modestly below the prior year and the fourth quarter, our business was negatively impacted by warm weather, especially in the <unk>.

Lender and our U S operating region December was 15% warmer than December 2020, and 12% warmer than the five year average.

So we never like when the weather is not on the other side and quarter to quarter.

Difficult to have a normal flat line, but the good part of this situation when the if you look at quarter. One this year, we started the year extremely well where there is all of you know has been on our side or the starting of this new year I'm very pleased about that so it balances out over a period of time.

In the fourth quarter, we made two additional acquisitions in Michigan, and North Carolina, we're making good progress on their superior way forward plan initiative focused on growth through acquisition.

Improvement and organic growth in 2020, while we completed seven acquisitions for approximately $325 million or acquisition of cabs propane, which is expected to close early in the second quarter for total consideration of approximately $300 million, we'll have a good platform to our California Western U S.

Footprint.

Well over 30% over $1 9 billion target, we communicated as part of the superior way forward to reach that amount by 2026.

We also have a robust pipeline of acquisition, we expect the acquisition to range of $2 <unk> billion in 2022.

2022 adjusted EBITDA guidance does not include any contribution from additional acquisition, except cat, assuming a closing in early quarter, two which doesn't reflect that.

In quarter, one as you all know our forecast.

For our cabin $17 million to $20 million of estimated adjusted EBITDA historically generated in the first quarter.

So we won't have that then they're resolved for 2022 it will be in 2023.

The first quarter typically generates the highest EBITDA, usually between 45% to 60% of Daniel EBITDA, depending of business and geographic region.

In January we also announced a collaboration with tried one corporation to deliver green larger agenda to commercial and industrial customers in Quebec. This is an exciting opportunity for superior and aligned with our strategy to be one of the leading distributor of mobile low carbon energy in North America, we're working on.

There are opportunities in the renewable and low carbon space and I look forward to sharing details of those opportunity as they unfold in 2022 2023 now.

Now I will turn the call over to Beth to discuss financial results and our 2022 guidance that.

Thank you.

Thank you Liz and good morning, everyone looking at the financial results for the fourth quarter and full year 2021, the period fourth quarter, adjusted EBITDA of $142 2 million with $1 9 million or 1% lower than the prior year quarter. This was primarily due to lower EBITDA from operations in Canadian propane.

Partially offset by decreased corporate costs.

And a decrease in the realized gains on foreign currency currency hedging contracts.

The full year 2021, adjusted EBITDA with $398 4 million, which was $19 million higher than 2020, and this is primarily due to an increase in EBITDA from operation and realized gains on foreign currency hedging contracts, partially offset by increased corporate costs.

The fourth quarter net earnings from continuing operations with $13 8 million, a decrease of $74 1 million compared to the prior year quarter. The primary driver for lower net earnings was the increase in selling distribution and administrative costs and a loss on derivatives compared to a gain in the prior year quarter.

Partially offset by the increase in gross profit and decrease in finance expense.

Full year net earnings from continuing operations of $17 2 million decreased by $45 6 million compared to the prior year.

Narrowly due to higher SG&A costs, and higher finance expense and to a lesser extent lower gross profit, partially offset by higher gains on derivatives and lower income tax expense.

Fourth quarter adjusted operating cash flows before transaction and other costs per share was <unk> 64 cents per share.

This is a decrease of one <unk> compared to the prior year quarter due to a lower recovery on current income taxes, lower adjusted EBITDA and higher weighted average shares outstanding partially offset by lower interest expense.

ALC asked before transaction and other costs per share for 2021.

With 1.56 per share.

<unk> higher than the prior year due to an increase in adjusted EBITDA and a decrease in interest expense. This was partially offset by current income tax expense in 2021 compared to a recovery in 2020 any increase in weighted average shares outstanding.

From a debt leverage perspective total net debt to adjusted EBITDA as at December 31, 2021, with three nine times, which.

Which is <unk> four times higher than the leverage as at December 31, 2020.

The increase from December 31, 2020, with primarily due to lower adjusted EBITDA, partially offset by lower debt level.

And total net debt was lower as proceeds from the sale of specialty chemicals were used to repay debt and a decrease in lease liabilities related to the sale of specialty chemicals and this was partially offset by the impact of acquisitions completed in 2021 as well as the refinancing of senior.

Here unsecured note.

EBIT is lower due to the impact from the sale of specialty chemicals, partially offset by the contribution from acquisitions completed in 2021.

Turning now to the individual business results.

U S propane adjusted EBITDA for the fourth quarter with $79 9 million.

A decrease of <unk> five.

<unk> 5 million from the prior year quarter.

It was primarily due to the impact of warm weather and the translation of U S denominated adjusted EBITDA.

Average weather across markets, where U S propane market operate where U S. Propane operates for the fourth quarter as measured by degree days was 7% warmer than the prior year quarter and 9% warmer than the five year average.

Warmer weather in December was particularly impactful as average weather was 15% warmer than December 2020.

12% warmer than the five year average.

Warmer weather was the primary driver of lower than anticipated volume and resulted in higher proportion of operating cost.

This was partially offset by higher adjusted gross profit.

Residential in wholesale.

Sales volumes were consistent with the prior year quarter, primarily due to acquisition.

Offset by the impact from the warmer weather.

Commercial sales volumes were 10% higher compared to the prior year quarter, primarily due to incremental volumes from acquisition and the easing of COVID-19 restrictions.

Average margins were 3% higher than the prior year quarter, primarily due to our continued focus on growth of high margin propane customers, partially offset by the impact of the stronger Canadian dollar on the translation of U S denominated gross profit.

Operating costs increased by 13% compared to the prior year quarter due to acquisition, partially offset by the impact of the stronger Canadian dollar on U S denominated expenses.

U S propane adjusted EBITDA in 2021, with $226 2 million, 9% higher than 2020, primarily due to increased adjusted gross profit partially offset by increased operating costs.

Adjusted gross profit increased primarily due to incremental sales volumes from acquisitions completed in both 2020 and 2021, partially offset by warmer weather in the fourth quarter.

Operating costs increased due to the impact of acquisition, partially offset by the impact of the stronger Canadian dollar denominated.

Denominated operating costs and cost savings initiatives.

U S propane and adjusted EBITDA.

Two is anticipated to be higher than 2021, primarily due to the incremental ACA.

Acquisitions completed in 2021.

The expected contribution from the <unk> acquisition and realized synergies from acquisitions completed in the past 24 months.

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

Average weather in areas, where we operate as measured by degree days is anticipated to be consistent with the five year average.

Okay.

Canadian propane EBITDA from operations for the fourth quarter was $63 2 million a decrease of $2 4 million compared to the prior year quarter as higher sales volumes and higher average margins were offset by higher operating costs.

Residential sales volumes were consistent with the prior year quarter as the impact of acquisitions completed during the first quarter was offset by warmer weather in eastern Canada.

Very good weather across Canada for the fourth quarter as measured by degree days with 2% colder than the prior year quarter, and 3% warmer than the five year average.

Average weather in Eastern Canada was 3% warmer than the prior year quarter, and 11% warmer than the five year average.

Average weather in Western Canada was 5% colder than the prior year quarter, and 3% cooler than the five year average <unk>.

Commercial sales volumes were 3% higher than the prior year quarter due to colder weather in western Canada and incremental volumes from acquisitions completed earlier in 2021.

Wholesale propane volumes were 9% higher compared to the prior year quarter due to increased demand in the California market related to the easing of COVID-19 restrictions and to a lesser extent sales and marketing effort to increase third party spot price wholesale propane sales.

Average margins were modestly higher than the prior year quarter due to incremental carbon offset credit sales and customer mix.

Operating costs increased by 23% compared to the prior year quarter due to the impact from the <unk> benefit or the excuse benefit in the prior year quarter as there is no benefit in the fourth quarter of 2021.

Canadian propane adjusted EBITDA in 2021.

$183 7 million, 6% lower than 2020, primarily due to higher operating costs and to a lesser extent modestly lower adjusted gross profit.

Operating costs were 5% higher than the prior year.

Excuse benefit was received in 2021 and incentive plan cost and volume related cost increase.

Adjusted gross profit decreased <unk> 9 million, primarily due to lower average margins, partially offset by higher volume and modestly higher other services gross profit.

Canadian propane adjusted EBITDA in 2022 is anticipated to be modestly lower than 2021.

There is no longer eligible for the CW app benefits and operating costs are expected to increase due to inflation and improved commercial volume.

These decreases are expected to be partially offset by the contribution from our wholesale propane business included in the campus acquisition.

Energy, Inc portion stronger wholesale propane market fundamentals and higher commercial volume as COVID-19 public health measures are relaxed.

Average weather as measured by degree days is expected to be consistent with the five year average.

Lastly, the corporate results capital expenditures and adjusted EBITDA guidance and leverage.

So corporate costs in the fourth in the fourth quarter were $1 2 million lower than the prior year quarter due to lower <unk> expense related to the share price performance in the fourth quarter.

Corporate costs for 2021 were $24 1 million, an increase of $3 6 million, primarily due to higher costs related to share price performance earlier in the year.

Interest expense in the fourth quarter was $17 7 million a decrease of $4 9 million compared to the prior year quarter due to lower average debt and lower average interest rates.

That was lower primarily due to the impact of the proceeds from the specialty chemical sales, which was used to repay debt.

Partially offset by acquisitions completed in 2021.

Lease liabilities were also lower.

Related to the loss of leases related to the specialty chemicals business.

Full year interest expense was $76 1 million a decrease of $15 7 million related to lower average debt and average interest rates.

Average debt was lower related to the sale of specialty chemicals and interest rates were lower related to the refinancing of the high yield notes.

Completed in 2021.

Capital expenditures for the fourth quarter were $58 2 million.

Compared to 21 4 million in the prior year quarter.

Due to higher non recurring capital expenditures maintenance capex and investment in leases.

Capital expenditures in 2021 were $133 million compared to $105 million in 2020.

Capital expenditures increased in 2021 due to the curtailing of capital expenditures in 2020.

And then to preserve capital in response to the COVID-19 pandemic.

Superior expect capital spending in 2022 will be in the range of $120 million to $140 million.

We're introducing our 2022 adjusted EBIT guidance range of $410 million to $450 million, which implies a midpoint of $430 million.

Based on the midpoint of our 2022 guidance. This represents an 8% increase compared to the 2021 full year result.

When also adjusted for the <unk> benefit of approximately $23 million in 2021. This represents a 15% increase year over year.

The increase is expected due to the contribution from acquisitions completed in 2021.

And assumes the acquisition of <unk> propane and the associated companies in the second quarter of 2022.

Historically can't generate approximately 17% to $20 million and adjusted EBITDA in the first quarter.

The increase is expected to be partially offset by lower adjusted EBITDA for the Canadian propane business related to the loss of the C. Dws benefit in 2022, while the commercial business is not expected to improve until the second half of the year.

The adjusted EBITDA guidance does not include any acquisitions other than camp.

We do expect to execute on acquisitions in the range of 200 million to $300 million in 2022, which is not included in our 2022 adjusted EBITDA guidance.

The low end of the range accounts for warmer than normal weather and delays and commercial demand recovery.

High end of the range accounts for colder than normal weather stronger wholesale propane market fundamentals and increased drilling activity in western Canada.

Superior leverage ratio for the trailing 12 months ended December 31, 2021 was three nine times.

Which is at the higher end of superiors updated target range of three five to four times.

As we announced in our fourth quarter earnings release, we're updating our targeted leverage ratio from a target range of three to three and a half times to a target range of three and a half to four times, while executing our accelerated acquisition strategy.

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

Okay.

As a reminder to ask a question you will need to press star one on your Touchtone telephone again Thats Star one on your telephone to ask a question to withdraw your question press the pound key please standby, while we compile the Q&A roster.

Our first question comes from the line Dave.

David Neumann.

Dan Your line is open.

Good morning folks.

Good morning.

Just want to unpack the good morning, I just wanted a package on package the the guidance a little bit so the way I look at your you did 398 last year yacht in probably from completed acquisitions. Another 30 to 35 share $4 34 to 35.

To start including camps, including camps for post.

Post Q1.

So your $4 34 to 35, sorry, I understand the Qs is a bit of a headwind of $23 million. So that takes you back down but I'm. Just wondering is this the guidance looks extremely conservative and when you're sort of factoring in things like synergies from.

The acquisitions the volume benefit even from the assumption of a five year weather average win win last year was much warmer so obviously volume volume kick there.

And the economy reopening with the commercial and wholesale so maybe just kind of maybe you can walk through it a little bit better because.

Just trying to understand because the markets obviously.

A bit spooked I guess by the lower number.

Yeah, Yeah, sure and maybe I'll.

I'll I'll kick it off and maybe suggest a way.

Me too.

To triangulate and then I mean, obviously look jump in.

David.

It's on a year over year perspective.

So as you look at 2022, I think a good way to look at it and say okay. So the midpoint is $430 million.

Compare that to where 2021 is if you look at the $398 million he removed the wage subsidy.

Impact so that would be $23 million, we'd be at roughly $375 million.

So moving that from the $375 million to the $403 million the growth year over year is roughly 15%.

And so then if you want to look at it and start from there of the 15%.

8% to 10% would reflect the acquisitions that were closed and recall I mean can't isn't fat.

<unk> factored in until Q2.

And then roughly 3% of that then would be your COVID-19 recovery that we're seeing which is slower than we would expect so you don't have a like for like replacement in the Canadian propane business.

And also some organic growth in there so that's roughly 3% and then 2% would be weather normalization.

I'm sorry in the last plus three would be the weather normalization. Okay got it okay, yeah, 2%, yeah eight to 10 three in two for weather normalization. So what haven't you factored into this into the guidance. It doesn't seem like you've factored in a lot of the commercial industrial wholesale recovery.

Or what what where are you being Uber conservative here.

Yes, so maybe I'll take that one.

So when we sit and certainly and look at our business, we really see as the business has been solid as ever.

I think we were.

I think with this year happened to us it was more of a timing issue.

And timing was in order for them to you.

The C O W.

Those away, but the commercial business, we don't see it coming back until later in 2022. So how much is you put back is.

As a guest game and we've done the work to think maybe just quarter four.

Then you have the synergy acquisition.

We've done some but kind of is the big one and then come in and.

In January you have 17 million to $20 million in quarter, one not happening, though we didn't write the check.

No nobody got hurt.

It's delayed their leg so it'll be April to then you'll have the full year April to April 2023, So I think the timing issue the weather 15% warmer.

So when we forecast to your point about our conservative where we do average forecast.

No.

Quarter, one is much better than the average rate, probably yes, but we didnt forecast.

Josh.

For Q2 right Luke.

Yeah. So I think we got talked I think in the timing zone has nothing to do with the margin the growth of turned overall nothing to do with potential acquisition that we're working on improving them by pulling up our percent nothing has changed from the machine marching on.

Change is a timing issue cuda COVID-19 disappear Grand disappear business doesn't come back or 25 million.

How do you replace that business and it will come back that business is not gone, it's a timing issue.

When it comes back all of those customers and all of those things are things that our customers and we know it won't come back.

So youre looking at the puzzle and you look like a timing issue that spike.

Then I will put subtle.

If you look 12, 2023, and we don't want to go there.

Back to normal timing of plus and minus.

The business is humming very well, but do you have a timing issue.

Okay more than one sector or whether the.

The acquisition delay of a large one.

And then the Q W go away and we don't know how much is coming back when we just don't see it in quarter one best months.

Yeah, and I think what I will also add David is one with respect to like the Covid recovery from that.

Our view is we're still going to be looking at somewhere $10 million to $15 million gap from where we would have been pre COVID-19 levels.

2022 based on what we've been seeing and of course things can change, but thats currently the way we're looking at it on EBITDA clearly right.

Okay got it.

Second question just has to do with the.

And.

Kudos to you for raising the debt the leverage range, because if I look at utilities out there five times net debt to EBITDA in IPP is at six times. It does make some sense to me given the fact, you've gotten rid of the specialty chemicals, you have less volatility, but if I look out into the close of two two.

And then you look and if it looks like it looks like youre going to have availability of around 270 or something on sub sub 300.

Post camps, and then you wanted to do 200 $300 million in potential deals. It does look like you might exceed the top end of that leverage range and any thoughts on just on the balance sheet and and your aspirational targets for the deals.

Yeah, So I mean, David consistent with what I would have communicated historically.

As we look where we're committed to our double b rating.

So as we look at acquisitions, it's really dependent on size and timing.

When they occur and as a result of that I mean, we would look we would look at where our balance sheet sits at the point in time, and then make a call and evaluate declined what make sense and what's required.

<unk> to maximize the value to our shareholders.

Excellent. Thanks, Luke Thanks Beth.

Thank you.

Yeah.

Thank you. Our next question comes from Ben Isaacson of Scotia Bank. Your line is open.

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

Can you talk about Covid recovery, whether it's in commercial wholesale industrial et cetera.

And when I think about your markets and where you are for the most part it seems like there arent as many restrictions anymore. So.

What im asking is can you discuss your confidence in how much volume you think will recover and each of those sub segments and when do you think that will happen I know you did say in the second half, but whats going to change between now and the second half. Thanks, so much.

Yeah, Good question and I Hope I'm.

Close to reality here.

So there's no crystal ball that can tell us exactly so for the U S business.

Mainly retail so maybe 5% plus retail theres, only a 15% and commercial business.

Gets affected by Covid.

Though we've been growing residential very well more than the two 3% and then the commercial business in Canada represents two third of our total Korean business.

That's where the Delta is.

We're big we're done.

National one we have big big scale for industrial commercial it's a big advantage and then.

When it comes to the Covid business.

You are when you look at all of this segment of the commercial and industrial we can.

Look at the history before Covid and what's happening up to now.

I am tremendously.

Your.

So big Delta and we see a bit of a recovery I think we've talked I think about 3%, but it's nothing compared to the volume that those people who are using great cool.

And when do you think of commercial and you go across the country, although warehouse with the lift truck.

All of the auto industry represents 10% to 12% of our business. That's caused them to have and then you have commercial.

The risk around the corner store when you have big industrial and the oil field is.

Volume wise, it might get a bit more volume right now, but compared to pre COVID-19 none at all.

We know that some of that is gone forever.

Rather than their gene for the last three years, but some of it is all related to Covid and then we'll have a big industrial project in Western Canada to build.

Oh, the service and with propane and also side too.

Thousands of miles to get the new metro pipelines to the west coast that slowed down more than that so you're looking at those segment one by one.

They're gone, they're just gone now.

Come back when the market comes back.

Canada, not reopen fully Oregon.

Percentages reopen the not much and it looks like now March April .

A strong possibility things starts to go back to normal.

What normal so to Davids question. The are we conservative thinking quarter, four and it starts in mid quarter three.

Doug.

We cannot predict better than what we see out there.

That 70%, 65% of our business is really industrial commercial cotwo Airbus to compensate for that.

And then it goes away and then the market that's coming back for a while so you have a lag timing lag of that business. This year to begin replacing the business business lagging by let's say six to nine months of service here the lagoon style.

What I what I can maybe do is just provide a bit of color. So our assumption is that the recovery isn't really kicking in or we won't be back until Q4 on the way. We were previously I think gives you a sense and.

<unk> for Canada, because I think Steve.

To ask wasn't impacted as much because of the residential business.

Some of the volume increases that we are expecting.

For 2022, so in residential we are still expecting higher as we grow that business and that would be somewhere between 9% to 11% growth.

Commercial overall, we're anticipating 5% to 7% higher volume and I can split that a little bit so in oilfield somewhere between 5% to 8% higher industrial reviewing its going to basically be consistent with 2021 for general commercial higher than that.

9% to 11% range again, and then for motor fuels, we do see the modestly higher still growing from.

From 4% to 6% and wholesale we also see being a bit higher from 7% to 8%. So we are seeing increases in the volume just because it towards the end of the air and it doesn't replace where we were prior.

So the headwind yes.

Thank you for that and maybe just to follow up on the same topic. So it seems like this can really go one of two ways either we can continue to get one or two variance a year and really this is the new normal and we will just have to accept what the volume is going forward or we really are on the path to recovery in which case wherever we.

We are by let's say the end of 2022.

It should just be what the new normal is that fair to say.

Well I have a different perspective.

I think all of you have your own idea how things could unfold to me.

Predictions since January has been when you get to April may the whole is going to say enough is enough <unk> and we have to live with it.

So if I'm right.

People that didn't get back some of it will be more more.

Or difficulty.

Sick and the rest of the World is to go back to normal.

So I think the to think that the.

The path to recovery will never come because of Covid.

Five six.

Whatever comes through I think were like.

I think I think they agree with the world going to say enough is enough. We'd go back we'll go back to normal and we live with it and we're going to catch a cold because you're vaccinated, let's go buy them.

For everything Thats been done don't get me wrong from a personal point of view, but I think you cannot go on forever and ever liked that then there'll be.

Some people are going to get sick for years to come because they didn't get vaccinated, but the world has to go back to commercial business and other things go back to normal.

Yes.

With that.

Thank you for that I appreciate it.

Okay.

Our next question comes from Nelson <unk> of RBC capital markets. Please go ahead great.

Great. Thanks, and good morning, everyone.

My first question just relates to cap. So I was just wondering you flagged early Q2 close what are the.

Remaining approvals required I know it doesn't really matter in terms of timing. After you missed Q1 given that Q2.

Pretty negligible.

But I'm just wondering whether it's Q2 or Q3, I know like financially it doesn't matter, but how confident are you that it will finally close in early Q2.

Yeah, Darrin, we bars on the call.

Sure.

On the case every day, so I'll ask him to give you a.

We're reviewing both regard.

Thanks Luke.

So Nelson I think that.

Where we are currently.

Both constant superior complied with the second request providing information.

Extensive information to the FTC.

We continue to work with them to answer questions and provide additional information.

I think our expectation right now is that we will close in early Q1 or sorry, early Q2 or very late Q1.

I think thats still our expectation right now.

<unk>.

Theres, obviously, some variability, but thats the approval that is outstanding.

Okay. Thanks for that.

My next question just.

It relates to <unk>.

Leverage and funding and it's probably four or.

So you flagged the new.

Target leverage of three and a half to four times I think in the past when the target leverage was three eight.

Three to three five times that you mentioned that in the short term you are comfortable going above that range and then after realizing synergies and things you would fall back within that range. So with a three five to four times does the same hold in terms of you're comfortable going above that four times.

Ratio in the short term and then fall back within that range.

After synergies are realized.

Yeah, and I think from.

From our perspective, I mean, we moved it to acknowledge the fact that while we're doing it accelerated acquisition.

Certainly that being said I mean, all we flag it and I always like it was we're committed to our double B rating. So I think from our perspective.

We look at acquisitions and the timing will look.

You know.

We know we want to be within the range there could be an instance, where a little bit above the range, but I think.

We're committed to that double B and we'll do what makes sense every time, we look at the acquisition, we'll make a sense on timing and how quickly and how the synergies are rolling in to truly decide on what we need to do and if we get to a situation where that's the best answer is to potentially look at something like going to the capital markets.

Okay and then.

Deferred shares part of the picture in terms of something that you would look to consider.

I mean, we've done preferred shares in the past I mean, I'll always say from my perspective, I'll always look to more traditional products, where its possible and where it makes sense right as part of our structure, we're comfortable with them, but I think from our perspective as we look at the overall balance sheet.

You know the reality is we're comfortable with him there, but we're also comfortable with all of the other pieces very balance sheet. So.

Now onto a few point to your question.

For everybody.

I think maybe all of you on the call knows but just to be clear.

When we get to the end of December of $3. Nine this is going down on its own now quarter, one quarter to quarter three will go away, though because it's the highest point of the year.

So there is that happening and then to your to the point about the leverage going up to four I spent 12 years here every day and that's just about and this is a great cash flow business.

The 80.

80% net cash flow.

Okay.

So that does it get and where margins are solid so.

Very comfortable between our core because of the history and the <unk>.

Industry we're in.

Okay. Thanks, Luke and then just one last question on the Green hydrogen arrangement with sharp bone.

Can you guys give a bit more color in terms of what you're actually doing and your and the capital commitment required. So how are you.

You're essentially buying trucks that could transport hydrogen and kind of doing all the deliveries for.

Fixed fee or a commitment or.

What's your capital commitment and things like that.

Some more color there.

Thank you for the question and I'm actually with them in two weeks.

It will be.

For them than other people.

We'll talk about them for a second they wanted to build many many plants across Canada.

And for US we're very fortunate goes okay, we don't invest in the plant and the capital to build.

And for them they have.

No way to do the last mile and the last mile or pretty much customer, we all deal with or no because we're big industrial.

Industrial business.

So what happens is there is a perfect match of the corporation here, where they will build the plans make their product.

<unk> to us.

And we have the customer and we delivered the last mile. We bring it would the capital trucks by the way we have already.

Same type of truck some of our product we deliver.

And we make the same kind of margin that we made great, though something perfect.

Sure.

So.

Think of it or not not much capital do we need a bit of extra truck because this business will grow in <unk> across the country. The answer is somewhat yet, but very very light capital very solid good margin or two of those would have today and though.

Sure.

A good win win by them being the builder product maker and they have no fedex to bring it to the to the consumer that we have where the industrial Fedex of bringing it to the left to the customer wherever they are located in Canada.

Okay that makes sense and that facility hasnt been constructed you're right. It is expected to generate somehow.

In Q3.

Yes exactly.

Summer I'll know more in two weeks or something with them.

I believe the closet Phoenician done for this summer the summer 2022.

Okay. Great. Thanks look those are all my questions for now.

Thank you.

Thank you. Our next question comes from Steve Hansen of Raymond James. Please go ahead.

Yes, good morning, guys.

Two part question. The first part just curious if the campus experience.

As you know.

In any respect diminished your ability or your maybe desire is probably the better word to do larger acquisitions in the current environment. I think we all understand that there really isn't any large any competitive issues, but just given the.

The dance you've had with the FTC through this whole process and the deferrals. It's caused I mean do you can you try and go after the smaller mid sized deals here at least in the interim or are you still confident enough to go after some of the larger ones.

No very good question.

Do apart.

Although for the Darwin to jump in them.

More color so.

I don't see any issue of buying retail propane company and their east coast West Coast and the USA.

All right.

Think this experience has more to do with it.

New people FCC, New policy, you think Oh, we got to look at everything and what about the actual guys above that so.

The learning curve.

My two question.

Question discussion that was more driven.

To.

The wholesale business and none understanding and they wanted to understand the wholesale business.

Who makes a product who delivers who can distribute and theres a ton of that.

We don't see issue, but there is a.

Very strong.

I believe than they are apart.

Retail is that's going to be affected by retail and distribution business.

The worst scenario in the West coast, if we don't buy another wholesale without buying out their wholesale.

It's complicated and they're getting their heads around what that is and I think they're realizing that there's nothing there and those who come to people that can do that so.

Net net we don't see any slowdown in <unk>.

Plus the potential capability.

To do retail acquisition or stopping business.

Well, Darren if anything else you'd like to add to that.

Sure Luke Thanks, No I think I think you've covered most of it but I mean.

The points right there the regulatory authorities clearly are looking at more transactions in the U S. That's that is the current environment, but.

That analysis is very fact specific and in this circumstance.

With camps Theres, a large wholesale component.

Based on what we've seen to date the questions and the interaction that seems to be a focus on what they're trying to understand and it's it's not the most straightforward. So I think there is some learning going on there so.

I agree with you look I don't think that that should be viewed as a dampening on our ability to do retail propane acquisitions.

Most of the retail businesses that we've looked at it.

And then a number of the locations you have got 15 or more competitors.

Very competitive and fragmented.

So I don't think you'd get the same kind of analysis right.

This is particular to to these facts.

That's really helpful and just as a related question to some degree is just your desire to take the leverage range up a little bit here to pursue the two to 300. You've described this year as there is there an urgency to go. After these deals now as opposed to go a little bit slower and keep the range intact I'm just trying to.

And the balance between those two.

Total workforces in some respects you always want to go faster, but the leverage keeps hiccups.

You can see sort of.

At a modest pace and how do you think about that and why the urgency to go faster now.

Yeah I'll start then.

Barb.

Are those issues.

So [laughter].

We're certainly have developed.

Uh huh.

Our market position to be the lead acquirer because of 17 deal.

<unk> health and safety employee communication.

Uh huh.

We have we're humming in that regard no deals come not want to or they don't come to us going to a play you can see the unit for sale will pay more and more to buy it we don't do that.

Our game plan with communication all the time my luck with mid size and larger group and the game is.

One thing you're going to be for sale.

Who we are this is how we do things and we will go to a cessation of all of those meeting so they get to know us over the last many years.

And we don't we don't know when the fund is going to fulfill our small log big.

So it's not the.

Or us to decide that but we know we wanted to be these codes and we know when we're buying in our backyard. The region like we did with treatment. There is a ton of synergy we know getting a scale in the platform in California, and I think too with north.

And going North of California.

Makes sense and then you add the new just make.

More synergy so we've strategically either location, we wanted to grow and we don't want to pay more we lost the deal we lose deals all the time, because theyre going to be trading at a higher level were just full stop and say look for us. So we're disciplined we hover value we have <unk> 25 per.

Improvement until we know before walking in the door day one.

And we are.

With all of that comes to the balance of the.

Death, and all the women Hall so were.

Having built a position we're marching on and when we know what's in their zone and it makes sense do we have the synergy of the 25% Okay. Let's go do it.

And hopefully there'll be timing ideally would be.

Spread out where it works well, but the best scenario, but it's not the way it unfolded and sometimes we say boy that's such a great company will go together.

Once it's sold it's what's coming back on.

And then I'll pass it to Beth.

Sure and I think sort of building on where liquids coming from there. The reality is when we look at the deals where the deals make sense. The deals are available and come to market when they come to market. So as a result of that.

We look at it as a business and we say what makes the most sense long term for the shareholder so as we look at it and rebalance it and we say you know if we're going to create long term.

Creation for shareholder and it makes sense.

We'll look forward and as we've talked before depending on timing and evaluation et cetera, mainly as a result of that there might be things, we have to do from a capital perspective.

RV with when the acquisitions when they make sense, we're going to be opportunistic and do what makes sense to continue to build that value for the shareholder.

That's good color. Thanks appreciate it.

Thanks, Steve.

Thank you. Our next question comes from Patrick Kenny of National Bank Finance Your line is open.

Thank you and good morning, everybody.

Just circling back on the campus acquisition here closing in Q2 and.

I'm just curious why.

Missing out on the circa 20 million of EBITDA doesn't reduce your final purchase price there.

Just thinking is this something that you might look to consider within negotiations going forward I E have the vendor wholesale or retail take on more of the risk.

<unk> regulatory approvals or the timing to close, especially for these relatively larger deals.

Yes, so the.

The valuation we have on tap in the synergy makes it very accretive to our shareholder.

Youre talking about is we're missing.

Quarter, one, but we didn't write the check for quarter. One so we're not really missing anything with the exception you have a bigger first 12 months. If you start in January the company valuation to me and I think to the market stays the same but you probably have your one.

You're right you're right the bigger check the year, one and you have the EBITDA only 12 months later, which is not all the same years, so theres a bit of a gap there.

Not big dollars, but does it go.

The Rand you write the check and when the return comes Youre, starting the best months going forward, but then for the next 20 years, it's all match up.

You paid the right value for the EBIT, though that's still there going forward Christmas and urgency.

I know, it's a bet if I explained that.

Good enough, yes, do you want to take that on.

Yes, the only thing I think it's Darren I, just thought I'd add to that I think.

It's it's a good idea.

So push that risk onto to our vendor if you could.

Certainly the challenge you have is when you're in a competitive process like this.

You know to try to push regulatory risk onto our vendors is going to be difficult when youre competing with.

Other bids I mean, if you thought you had a leg up.

Given a number of other things you might consider it.

I think that makes it a tough spot.

Tough negotiation in a tough sell for.

For a vendor.

It makes sense I appreciate that.

And then maybe Luke could you provide a bit more color on your strategy here to scale your footprint in the Midwest.

I'm just curious if the Hopkins acquisition establishes somewhat of a homebase for you in the region or.

Are you still looking for that larger scale retailer to really kick off.

Hub and spoke model.

It's a great great region, Yeah, and we did buy a good sized company I go back maybe Rob on the call could you give us the exact date.

Three or four years I guess.

Ohio.

And we do have a platform and we've.

You know, we take a superior weight, we centralized a lot of the work.

So you don't have a call centers and people that maybe every brand that's already done with that platform. So what we are adding now is in the same neighborhood for those regions.

The reason we wouldn't go further in the middle of USA at this stage.

We don't know about the furniture in 510 years.

That's a great region and we do already has the location they're in a good team.

Really great with your gold manager So we're building on that as they come along yes.

And as part of the strategy there look too.

Somewhat of a free option on perhaps extending your new green hydrogen initiative into the Midwest at some point down the road.

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

We're going to do extremely well intended though because we're the big player where the scale where their brand we cover the whole country. So when did anybody.

To do Green energy for their last mile as we talked earlier about Fedex.

We are at.

So when it comes to the steep.

Don't know today Oh, it was on a poll.

What region I do know with camps, who have the.

Tennessee for wholesaling.

Some renewable propane.

Would that come from the region when we expect to.

Sure.

California to have something in that regard then we will have the scale to do it in California, what we do in Canada. So looking forward to that and I can say I think something there will develop over the next year or two or three the rest of the U S. I don't know, we'll have to wait and see we're pretty new at it.

A year plus we've been studying and trying to research and understand the market and where do we belong and how do we become the player with the Green energy.

Makes you a strong commitment Canada, we're going to be if we're gonna be good California. After camp I think we will.

Worked hard to do something quickly there and then on the non will give love the strategy plan and we'll present that to the market once we know more.

Fair enough I appreciate that look last one for me if I could.

First maybe just back on your comments around leverage.

Potentially looking at the capital markets at some point down the road, but maybe you could just speak to what other levers you might have on the liquidity front here just in case the.

Capital markets aren't as attractive as you look to execute on this.

Accelerated M&A program obviously.

A couple of shareholders with deep pockets. So I'm just wondering if there is an understanding there that if you do need additional liquidity to stay on course with.

The M&A plan that Youll have access to other cash resources outside of the capital markets.

Yeah, well I mean, I can't really speak for what others wouldn't you wouldn't be willing to do as we look going forward, but certainly we will always look at things Opportunistically, we do have.

<unk>.

And if they start a very supportive.

<unk> and Brookfield in F&B, So I think from that perspective, I mean, there is certainly.

All the discussions that we have comfortable with what we're doing and then what we have going forward I don't want to speak for what they might do if we were looking at something I think access to liquidity.

It's always something that we would factor in as we looked at the acquisitions going forward and I think the reality is right now and you look at the.

Mount of room, we have on our credit facility et cetera.

We're comfortable as we move forward, but it's going to be very specific timing size of transactions et cetera, right, but I think the crux of your question around.

Do we have our large investors supportive of US yes based on our discussions their support of <unk>.

Okay. That's great. Thank you very much.

Okay.

Thank you. Our next question comes from Daryl Young of TD Securities. Your line is open.

Good morning, everyone.

On a few quick questions for me so first on the guidance range of 410 to $4 50.

And I apologize if I missed it did you quantify what you consider abnormal weather to get you to the $4 50, and then how does that compare to what we've seen so far in January February because I think were double digits colder than normal at this point.

Mhm.

I'll take that.

Yeah sure I mean, what we would typically do when we're looking at developing the ranges as we would look and we would say look over the last.

Five to 10 years, what are some of the extreme from a weather perspective. So we'll build the range is looking at something that is is within the range of what we would have experienced historically.

So.

It sounded like you can think about it it's not exactly linear like if you lose more EBITDA.

It's warmer than you gain when it's colder just because you have to keep on some incremental costs et cetera. When it's warmer just to make sure that you've got people to deliver et cetera, but it's almost.

You look at it it's not perfectly linear but it.

You do have an increase somewhat proportionate to the change in weather, depending on the months that youre looking at.

It's a very long drawn out way to say, we'll use plausible estimate and creating a range of what we've seen in warm weather historically and cold weather historically to get your your outside the range that being said it isn't just weather right like we will build that range on other items as well right differentials in the market from a <unk>.

Wholesale perspective as well.

Okay are you looking more sell for a specific number.

Well.

Just I guess I'm, just trying to tease out how much warmer first of all how much colder or we.

Currently than than maybe the range would imply.

Well I mean, as we talked about I mean January was with definitely.

We are definitely colder and.

And colder in the U S. I mean, I think one way to say in order for us to.

Work through and get to that high end, we would need not just a cold Q1, and it would need to be a causal Q1, we'd also need a cold Q4.

Got it.

Okay and then just one other question in terms of the five year guide.

Yeah.

Based on the amount of capital deployed at this point certainly one that we expected.

The EBITDA could be higher commercial volumes are obviously, a big impact.

But could you just maybe give us a sense of if there's been any changes in the assumptions that would have gone into that five year plan and where you are.

Feel in terms of.

When you sort of hit the midpoint of that.

Difficult to say, but.

What we don't have in the five year plan.

Some additional distribution.

Green energy that were start to work on.

I don't think there'll be a shortage of deal to get to the numbers.

And my quick chat earlier with another question there, they're choppy could come in and out and you don't know when in the Booth tour fill up what I would just note them all and we are in the door and were getting the call.

So.

I know im probably missing a few points that are key here. So that there are no bev can jump in or Rob.

Yes, I think from like what I would say from the highest perspective, when we look at the superior way forward target is that.

2020 EBITDA.

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

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

I think when it comes to acquisitions that we've entered into and execute it.

There's been no surprises, we haven't had any where we dramatically different synergies that we expected any surprises we've had have always been to the upside.

So I don't see anything that would give us any pause or any concern that any of our initial assumptions other than just the choppiness of the timing with new with the potential.

Is any different than what we were thinking about when we were talking about it at Investor day.

Okay, great. Thank you.

All for me thank you.

Yeah.

Thank you. Our next question comes from Joel Jackson BMO capital markets. Your line is open.

Hi, good morning.

Yes.

Help us look back a bit if you look at whatever two three or four years.

Ben the ROIC return on invested capital from the propane acquisitions that you've done.

So maybe give us a sense of what kind of value creation you have made.

For shareholders.

Yeah.

ROIC.

It will differ depending on the transaction, obviously, which makes sense, but typically it's anywhere from what do you think.

But perhaps what is done but not typically start interrupt what have you achieved like I know that 25% can you talk about what can you show us what you've actually achieved the last three or four years not for typical but actual performance.

Probably needs an analysis I have to go back that far in we know what we bought and what the returns are when we sign them. What is the expectation to <unk> point that has been achieved.

Go back four years ago.

We have an answer.

Of those four years.

Really when you can do well.

Yeah look and we can and we can certainly take it and talk about it offline for specifics and do a detailed analysis, but.

Fundamentally the acquisitions that we've done.

They have delivered what we expected them to deliver so and in fact, because we're achieving the budgets and the synergies that we expect the metal initially when we did the investment.

What we were expecting would in theory be where the actual it. Your question is a little tricky because what occurs when we do an acquisition the acquisition gets absorbed in the business right. The.

The synergies occurred because it becomes part of the business. So you don't have an isolated and you can't track it on an isolated basis, but we can track where the cost reductions et cetera are when it comes to specific cost areas in particular in the first year once it's fully integrated than its just part of the base business.

So that's where I was answering it does that's what we would typically expect.

And we haven't dramatically had anything that we've seen where acquisitions didn't deliver what we initially expected them to.

I think it would be an interesting analysis. Since you guys are interested is your strategy going forward.

To see where things that happen and the reason why I say that as I said in my second question, which is the real question Luke.

Superior plus as you know the stock prices and stuck in a range of basically 11 to $12 a share or 15 years. If you ignore some transient parents way below that range and we're above that range, where they are today 11th rather other sure.

Stock market is not giving you any credit for all the things you've done superior way you sold out businesses you bought businesses.

<unk> pure play.

So what is the market missing.

You have achieved the titration and ROIC on your propane strategy.

Very good question I really have.

We invest a lot in this company as you know from the and Laura Burnett is written.

Good.

Thats great cash flow.

So well and where the dividend of 6%.

It's a tough one because.

It's not it's not like this business.

None of the utility but were some utility.

The tank and your cash.

Cash flow is great and growing every year. So we don't like it because we could not be acquisition of Cabot still growing 6 million totaling 30.

I mean.

Sure.

Earlier in the phone didn't tell me why is it the stock.

Belongs which is to me.

Our third theme.

It makes no sense maybe.

Maybe.

I think more optimistically I could say.

Maybe once we get to a certain size and the roll up or down.

<unk> I think the proof of that.

There, but maybe the market.

<unk> five now and look at this.

The return and I can tell you on the reveal our grade.

<unk>.

So you are like.

What's missing to get the right value for structured business, which sets a market position, which sets a solid margin with very low risk on the.

Very small risk almost nothing on the commodity or license them under her.

Good question we.

We have a puzzle.

Understanding why isn't that stock.

<unk> value, which is not taking dollars.

Okay.

Thank you for that if you have any ideas about that.

I think you could in your next Investor event, I think you could do to my first question I think if you could show how youre propane transition is happening from a high level. How you would see what returns you've achieved on your business, where where you maybe have come in above your targets even below your target maybe how that shapes your future acquisition choices would be helpful.

Yes, just on patient that Rob that we made in the mill.

The system, the Internet video and the average deals an average return.

Right.

Scrub, we see we have entered over the package ready for that yet.

Yes.

The woman vessel on the pre synergies and poet synergies multiples.

But theres not as specifically return on invested capital calculation. So that is something we can look at.

Okay I appreciate that yeah.

Yeah.

Uh huh.

Alright.

And then.

Joe.

One thing that we know from our side.

We have big competitors that are losing market share every year.

Public and when you look at if you compare us to the MLP, which I won't give their team, but you all know them.

The other good business model, but their public with the valuation. So I think we get pulled into that valuation we don't we never had.

And the approach of the 100% dividend not investing in technology digital reservation system marketing.

We don't operate at all like those three businesses that are public.

But we'd probably put them those in that bucket. That's one one week, maybe one touch point to say why not more of a need for that.

That's correct.

That certainly comes to our mind.

Might be others, but that's one where we.

We have big large public competitor that are not don't have a good machine.

Developing the fruits are properly and they lose market share every year.

So that's.

It's like our deals and come to us.

I called it to stretch the business so the one times.

One day, you don't feel good I think this stretch has happened for them, but we don't operate like that but we're probably put in that bucket to a degree.

Okay.

Thank you.

Thank you.

Thank you. Our next question comes from David Newman, Our visual Dan Your line is open.

Yes, just a quick simple follow up on just on the margins you've done some things over the last couple of years, some some kind of temporary.

Some permanent.

And we've got a new level of margin in the U S cents per layer $42 2 million 18, five in Canada, and just looking out into 2020 to the wholesale market fundamentals look decent you've had some cost saving she is ripped out some costs permanently out of the out of the structure and then you've de marketing some of the lower Mark.

<unk> accounts, so maybe just as youre looking to this year, what's your sort of expectation.

What could stay in the cents per liter in both sides of the border.

Yes.

Tom.

Yeah I'll take it.

Yeah.

I can kick it off.

So from that perspective.

We are anticipating David.

Still a range of that 30% to 44.

Inventory of Silicon, that's fair sorry 88.

And it would be 38 to 40.

It's typically the rain got it got it okay and remember that converted so 30% to 35 U S, but again converted into Canadian.

So you're right we were at 42% for 2022, we're thinking that those average margins. It will be it will be slightly lower right. We have a slightly different mix. We've got some growth in commercial volumes as a result of acquisitions et cetera. So you've got some mix impact, but more importantly, it's an FX impact.

And what what order of magnitude Bachelor Lake for 30, 35 U S. What do you what are you thinking in Canadian dollars like Youre, 30% to 40, what do you think you are going to be the lower end of the range, they're like 30 <unk> no.

No no no no no when we're seeing slightly lower like 40 to.

<unk> 41 back Scott rate or somewhere in between those so just just modestly lower slightly lower in Canada, we saw.

We are at the 18th.

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

Change in the customer mix.

Got it and what's the potential here I mean, youre doing things like the centers and things like that more and more obviously retail but.

And then you're de marketing some of the lower margin accounts like what's the potential here like where could you be aspirational on these margins.

Yes, I think there is.

There is a balance act just talked earlier about.

The three public company that increased margin more than us every year.

They lose the EBITDA in the one year, where that you don't just decreased price and they lose volume. So we wanted to be in a position where we can increase price.

To a degree less than a year, but we do see real study by branch by region, what's the competitive landscape and we come to it.

<unk> as to Okay. We can increase the 41 to 42 43 without losing the customer so we cut with the sensors the retail the communication we have with <unk>.

Different specialized people in different commercial segments.

Could the attrition in the half over the years.

Very important is important.

The growth.

And then we grow <unk>.

Commercial Canada right now we've grown retail a bit more than anticipated then Canada.

The machine and this Dave there is some growth in the states, but the all of the application.

That gets us.

An extra margin in the states and the better contact in blue with customers by segment and big time retail because of our size of retail in the space.

Having executed.

All of those tools yet in this day, it's a big year coming in 2022 to get there and they've been busy.

$32 million $230 million of EBITDA, we're very nice so.

And we did put some good talent and marketing salespeople, but were lagging the Canadian maturity of developing those two and that's going to come so to me I believe that we could.

We continue to have some good internal growth and increased margin over time.

Slightly.

The big lift I think on margins are behind US now we're more.

Point, where we can do to increase slightly margin overtime.

I think more glue and lower service.

Is it to do business with and all.

All of the tools that we've pretty much installed and kind of more to come and then the state.

So don't see why not.

And if you look at inflation and things like that look.

In a low propane and I know the propane prices have rolled over and now rising again, but.

I know theres, a little bit of a tailwind that goes with that in <unk>, but.

And just from an inflationary perspective, it's.

Got to be much easier when you've got a low propane price in a low rack.

<unk> spread that using that with our retail customers you can get more through in terms of pricing.

And in this environment, maybe youre, not getting rack, plus plus or so to speak but is that are we thinking about that right.

Yes.

2021.

Ben.

Good year or two.

Yeah.

The margin because.

What happens if when pricing.

Paying goes up the way it did and then the wind download back up as you said.

You have to be very careful of communicating with customers ahead of time to say.

This is like natural gas the oil that when you go to fill up your car. The bank. This is we're a pass through would make a.

Delivery to you, but the world of energy cost have gone up everywhere in every aspect and we communicate to the customer with E mail or call centers and all of the above so we wanted to be very cautious in those tank cars.

Since two people mind, even though I think in the last few they know more because when they go with their car to fill the guys or.

All the all the cost of energy.

More known then.

In the past, it's something that that would happen you have segment of people that know and some don't.

Most people know today so.

But it's fragile you cannot.

The increase on top of those increase in the other expect customer when the summer comes go away got it.

And that's why we have a balancing act to find the right.

Place to price properly so.

We don't want to do like the three other big company have done.

Increased price and we will lose a fight for some.

Customer next year, but a bit though might look or better of short term.

I'm cautious about that we're debating that regular and then he is too.

What's right here, but just think of your original question Ken.

Can we continue to tweak slowly, but surely over the years I believe so.

Okay excellent. Thank you.

Okay.

Yeah.

Thank you at this time I'd like to turn the call back over to President and CEO Luke.

For closing remarks, Sir.

Yeah. So thank you everyone to participate.

I understand.

Claim at one stage.

We're talking to that timing issue, but the business fundamental business operation margin.

There is nothing else change is just so bad timing.

Those customers and do think or.

There are still owned by us and they'll come back.

And.

The growth in the acquisition are there and we will continue to come in.

To Joe's point.

I guess, we know that to something wrong to be $13 or so when you have a machine like that but.

Usually with Mark too.

I don't get overly disappointed but not to the point of not getting overly concerned because.

Usually there is a time down the road where the market.

Catch up and picks it up I don't know if its when we get a bit bigger and more investors from U S of the world but.

We will.

Continue to work hard for all of you and we appreciate your interest in their company.

Yeah.

Okay.

And this concludes today's conference call. Thank you for participating you may now disconnect.