Parkland Reports 2025 First Quarter Results

CALGARY, AB, May 5, 2025 /PRNewswire-HISPANIC PR WIRE/ — Parkland Corporation (”Parkland”, “we”, the “Company”, or “our”) (TSX: PKI), today announced its full financial and operating results for the three months ended March 31, 2025.

“Our first quarter of 2025 saw a recovery from 2024 as the refinery offset a slow start to the year and a one-time $53 million impact due to a decision to exit the California compliance market,” said Bob Espey, President and Chief Executive Officer. “It is still early in the year, and as we assess performance across our business, we are encouraged by several positive developments. Our International segment continues to deliver strong growth, refining margins have been stronger than anticipated, and we expect a robust driving season in Canada. While the macroeconomic and regulatory environment remains volatile, these tailwinds highlight the resilience of our portfolio and reinforce my confidence in the foundation we have built at Parkland.”

Q1 2025 Highlights

Achieved Adjusted EBITDA1 of $375 million, an increase of $48 million as compared to Q1 2024, primarily driven by the 11-week unplanned shutdown of the Burnaby Refinery in the comparative period and strong performance in the International business. These were partially offset by the commercial decision to wind down our California compliance market positions, resulting in realized losses of $53 million within the Canadian segment2, and weaker performance in the USA.

Net earnings of $64 million ($0.37 per share, basic), as compared to net loss of $5 million ($0.03 per share, basic) in Q1 2024, and Adjusted earnings3 of $65 million ($0.37 per share, basic3), as compared to $43 million ($0.25 per share, basic) in Q1 2024.

Trailing twelve months (”TTM”) Available cash flow3 of $586 million ($3.37 per share3), as compared to $762 million ($4.34 per share) as of March 31, 2024. TTM Cash generated from (used in) operating activities4 of $1,604 million ($9.21 per share4), as compared to $1,683 million ($9.56 per share) as of March 31, 2024. These decreases were largely due to a significantly lower refining margin environment during the second half of 2024, realized losses due to the wind down of our California compliance market positions in the first quarter of 2025, and higher acquisition, integration and other costs during the last nine months of 2024 primarily associated with restructuring activities and implementing enterprise-wide systems.

Return on invested capital3 (”ROIC”) was 7.6 percent for the trailing twelve months ended March 31, 2025 as compared to 8.9 percent, for the same period in 2024.

Maintained Leverage Ratio5 of 3.6 times (3.6 times in Q4 2024) and liquidity available4 of $2 billion.

__________________________________

(1)

Total of segments measure. See “Measures of Segment Profit (Loss) and Total of Segments Measures” section of this news release.

(2)

These positions are held within our integrated Canadian logistics business, which is reported within the Canada segment.

(3)

Non-GAAP financial measure or non-GAAP financial ratio. See “Non-GAAP Financial Measures and Ratios” section of this news release.

(4)

Supplementary financial measure. See “Supplementary Financial Measures” section of this news release.

(5)

Capital management measure. See “Capital Management Measures” section of this news release.

Q1 2025 Segment Highlights

Canada delivered Adjusted EBITDA of $110 million, as compared to $186 million in Q1 2024. The decrease was primarily driven by the commercial decision to wind down our California compliance market positions, resulting in realized losses of $53 million, and the sale of the commercial propane business in Q4 2024.

International delivered Adjusted EBITDA of $181 million, as compared to $147 million in Q1 2024. The increase was driven by higher volume and margins in the commercial and wholesale businesses from strategic and recurring customers and strength in our South American region.

USA delivered Adjusted EBITDA of $16 million, as compared to $31 million in Q1 2024. The decrease was driven by macroeconomic pressures continuing to impact fuel and convenience demand in line with broader industry trends, as well as regulatory developments that also impacted Parkland’s ability to capture supply optimization opportunities associated with moving refined product between Canada and the U.S.

Refining delivered Adjusted EBITDA of $79 million, as compared to an Adjusted EBITDA loss of $33 million in Q1 2024. The increase relative to Q1 2024 was primarily driven by an 11-week unplanned shutdown in the comparative period. Composite utilization6 at the Burnaby Refinery was approximately 76 percent in Q1 2025, as compared to approximately 20 percent in Q1 2024. The Burnaby Refinery successfully completed a three-week planned maintenance in the quarter and performed safely and reliably which allowed us to benefit from favourable market conditions.

Parkland’s total recordable injury frequency rate6 on a TTM basis was 1.13, compared to 1.07 at Q1 2024.

___________________________

(6)

Non-financial measure. See “Non-Financial Measures” section of this news release.

Consolidated Financial Overview

($ millions, unless otherwise noted)

Three months ended March 31,

Financial Summary

2025

2024

Sales and operating revenue

6,813

6,939

Adjusted EBITDA(1)

375

327

Canada(2)(5)

110

186

International(2)(5)

181

147

USA(2)(5)

16

31

Refining(2)(5)

79

(33)

Corporate(2)(5)

(11)

(4)

Net earnings (loss)

64

(5)

Net earnings (loss) per share – basic ($ per share)

0.37

(0.03)

Net earnings (loss) per share – diluted ($ per share)

0.36

(0.03)

Trailing twelve months (”TTM”) Cash generated from (used in) operating activities(3)

1,604

1,683

TTM Cash generated from (used in) operating activities per share(3)

9.21

9.56

TTM Available cash flow(4)(6)

586

762

TTM Available cash flow per share(4)(6)

3.37

4.34

TTM ROIC(4)

7.6 %

8.9 %

(1)

Total of segments measure. See “Measures of Segment Profit (Loss) and Total of Segments Measures” section of this news release.

(
2)

Measure of segment profit (loss). See “Measures of Segment Profit (Loss) and Total of Segments Measures” section of this news release.

(3)

Supplementary financial measure. See “Supplementary Financial Measures” section of this news release.

(4)

Non-GAAP financial measure or non-GAAP financial ratio. See “Non-GAAP Financial Measures and Ratios” section of this news release.

(5)

For comparative purposes, certain amounts in 2024 were revised to conform to the presentation used in the current period with respect to the allocation of Corporate costs. See Note 2d of the Interim Condensed Consolidated Financial Statements for further details.

(6)

For comparative purposes, certain amounts were reclassified between realized and unrealized gain/(loss) on risk management to conform to the presentation used in the current period.

Q1 2025 Conference Call and Webcast Details

Following the announcement of Parkland’s definitive agreement to be acquired by Sunoco LP and associated conference call held earlier today, our planned webcast and conference call on Thursday, May 6, 2025, at 6:30 am MT (8:30 am ET) has been cancelled.

MD&A and Annual Consolidated Financial Statements

The Management’s Discussion and Analysis for the three months ended March 31, 2025 (the “Q1 2025 MD&A”) and Interim Condensed Consolidated Financial Statements for the three months ended March 31, 2025 (the “Q1 2025 Condensed Consolidated Financial Statements”) provide a detailed explanation of Parkland’s operating results for the three months ended March 31, 2025. An English version of these documents will be available online at www.parkland.ca and the System for Electronic Data Analysis and Retrieval+ (”SEDAR+”) after the results are released by newswire under Parkland’s profile at www.sedarplus.ca. The French versions of the Q1 2025 MD&A and the Q1 2025 Condensed Consolidated Financial Statements will be posted to www.parkland.ca and SEDAR+ as soon as they become available.

About Parkland Corporation

Parkland is a leading international fuel distributor, marketer, and convenience retailer with safe and reliable operations in 26 countries across the Americas. Our retail network meets the fuel and convenience needs of everyday consumers. Our commercial operations provide businesses with fuel to operate, complete projects and better serve their customers. In addition to meeting our customers’ needs for essential fuels, Parkland provides a range of choices to help them lower their environmental impact, including manufacturing and blending renewable fuels, ultra-fast EV charging, a variety of solutions for carbon credits and renewables, and solar power. With approximately 4,000 retail and commercial locations across Canada, the United States and the Caribbean region, we have developed supply, distribution and trading capabilities to accelerate growth and business performance.

Our strategy is focused on two interconnected pillars: our Customer Advantage and our Supply Advantage. Through our Customer Advantage, we aim to be the first choice of our customers through our proprietary brands, differentiated offers, extensive network, competitive pricing, reliable service, and compelling loyalty program. Our Supply Advantage is based on achieving the lowest cost to serve among independent fuel marketers and distributors in the hard-to-serve markets in which we operate, through our well-positioned assets, significant scale, and deep supply and logistics capabilities. Our business is underpinned by our people and our values of safety, integrity, community and respect, which are embedded across our organization.

Forward-Looking Statements

Certain statements contained herein constitute forward-looking information and statements (collectively, “forward-looking statements”). When used the words “expect”, “will”, “could”, “would”, “believe”, “continue”, “pursue” and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things: business strategies, objectives and initiatives; ; International’s continued strong growth; an expected robust driving season in Canada; portfolio resilience; and confidence in Parkland’s foundation.

These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this news release. Parkland does not undertake any obligation to publicly update or revise any forward-looking statements except as required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to: the strategic review that Parkland initiated on March 5, 2025 (the “Strategic Review”), the process and the timing thereof, whether the strategic review will result in Parkland undertaking a transaction, and if so, the terms and timing relating thereto, the completion thereof and realizing benefits resulting therefrom; general economic, market and business conditions; micro and macroeconomic trends and conditions, including increases in interest rates, inflation, imposition of tariffs and fluctuating commodity prices; Parkland’s ability to execute its business objectives, projects and strategies, including the completion, financing and timing thereof, realizing the benefits therefrom, meeting our targets, outlook and commitments relating thereto, and the impact of the Strategic Review thereon; and other factors, many of which are beyond the control of Parkland and the assumptions and risks described in “Cautionary Statement Regarding Forward-Looking Information” and “Risk Factors” included in Parkland’s most recently filed Annual Information Form, and in “Forward-Looking Information” and “Risk Factors” in the Q4 2024 MD&A, each as filed on SEDAR+ and available on the Parkland website at www.parkland.ca. The forward-looking statements contained in this news release as expressly qualified by these cautionary statements.

Specified Financial Measures

This news release contains total of segments measures, non-GAAP financial measures and non-GAAP financial ratios, supplementary financial measures and capital management measures (collectively, “specified financial measures”). Parkland’s management uses certain specified financial measures to analyze the operating and financial performance, leverage, and liquidity of the business. These specified financial measures do not have any standardized meaning under International Financial Reporting Standards as issued by the International Accounting Standards Board (”IFRS Accounting Standards”) and are therefore unlikely to be comparable to similar measures presented by other companies. The specified financial measures should not be considered in isolation or used in substitute for measures of performance prepared in accordance with the IFRS Accounting Standards. See Section 15 of the Q1 2025 MD&A, which is incorporated by reference into this news release, for further details regarding specified financial measures used by Parkland.

Non-GAAP Financial Measures and Ratios

Adjusted earnings (loss) is a non-GAAP financial measure and Adjusted earnings (loss) per share is a non-GAAP financial ratio, each representing the underlying core operating performance of business activities of Parkland at a consolidated level. The most directly comparable financial measure to Adjusted earnings (loss) and Adjusted earnings (loss) per share is Net earnings (loss).

Adjusted earnings (loss) and Adjusted earnings (loss) per share represent how well Parkland’s operational business is performing, while considering depreciation and amortization, interest on leases and long-term debt, accretion and other finance costs, and income taxes. The Company uses these measures because it believes that Adjusted earnings (loss) and Adjusted earnings (loss) per share are useful for management and investors in assessing the Company’s overall performance, as they exclude certain items that are not reflective of the Company’s underlying business operations.

See Section 15 of the Q1 2025 MD&A, which is incorporated by reference into this news release, for the detailed definition and composition of Adjusted earnings (loss) and Adjusted earnings (loss) per share.

Please see below for the reconciliation of Adjusted earnings (loss) to net earnings (loss) and the calculation of Adjusted earnings (loss) per share.

| Three months ended March 31,

($ millions, unless otherwise stated)

2025

2024

Net earnings (loss)

64

(5)

Add/(less): | |

Acquisition, integration and other costs

29

30

(Gain) loss on foreign exchange – unrealized

(5)

3

(Gain) loss on risk management and other – unrealized(4)

3

3

Other (gains) and losses

(19)

10

Other adjusting items(1)(4)

(6)

18

Tax normalization(2)

(1)

(16)

Adjusted earnings (loss)

65

43

Weighted average number of common shares (million shares)(3)

174

175

Weighted average number of common shares adjusted for the effects of dilution (million shares)(3)

176

175

Adjusted earnings (loss) per share ($ per share) | |

Basic

0.37

0.25

Diluted

0.37

0.25

(1)

Other adjusting items for the three months ended March 31, 2025 include: (i) realized gains and losses on risk management and other assets and liabilities related to underlying physical sales activity in another period of $13 million gain (2024 – $11 million loss); (ii) the share of depreciation, income taxes and other adjustments for investments in joint ventures and associates of $5 million (2024 – $4 million); (iii) other income of $2 million (2024 – $2 million); (iv) adjustment to foreign exchange losses related to cash pooling arrangements of nil (2024 – $2 million loss); and (v) adjustment to realized risk management gains related to interest rate swaps, as these gains do not relate to commodity sale and purchase transactions, of nil (2024 – $1 million).

(2)

The tax normalization adjustment was applied to net earnings (loss) adjusting items that were considered temporary differences, such as acquisition, integration and other costs, unrealized foreign exchange gains and losses, unrealized gains and losses on risk management and other, gains and losses on asset disposals, changes in fair value of redemption options, changes in estimates of environmental provisions, loss on inventory write-downs for which there are offsetting associated risk management derivatives with unrealized gains, and impairments of non-current assets. The tax impact was estimated using the effective tax rates applicable to jurisdictions where the related items occur.

(3)

Weighted average number of common shares are calculated in accordance with Parkland’s accounting policy contained in Note 2 of the Annual Consolidated Financial Statements.

(4)

For comparative purposes, certain amounts were reclassified between realized and unrealized gain/(loss) on risk management with no changes to Adjusted earnings (loss) to conform to the presentation used in the current period.

Available cash flow is a non-GAAP financial measure and Available cash flow per share is a non-GAAP financial ratio. The most directly comparable financial measure for Available cash flow and Available cash flow per share is cash generated from (used in) operating activities. Parkland uses these measures to set targets (including annual guidance and variable compensation target) and monitor its ability to generate cash flow for capital allocation, including distributions to shareholders, investment in the growth of the business, and deleveraging. See Section 15 of the Q1 2025 MD&A, which is incorporated by reference into this news release, for the detailed definition and composition of Available cash flow and Available cash flow per share. See the following table for a calculation of historical Available cash flow and Available cash flow per share and a reconciliation to cash generated from (used in) operating activities.

Three months ended

Trailing twelve
months ended

March 31, 2025

($ millions, unless otherwise noted)

June 30,
2024

September 30,
2024

December 31,
2024

March 31,
2025

Cash generated from (used in) operating activities

450

406

462

286

1,604

Reverse: Change in other assets and other liabilities

3

(68)

80

1

16

Reverse: Net change in non-cash working capital related tooperating activities(1)

(34)

21

(180)

53

(140)

Include: Maintenance capital expenditures

(53)

(71)

(96)

(62)

(282)

Include: Dividends received from investments in associates
and joint ventures

8

3

7

5

23

Include: Interest on leases and long-term debt

(88)

(85)

(87)

(89)

(349)

Include: Payments of principal amount on leases

(64)

(69)

(76)

(77)

(286)

Available cash flow

222

137

110

117

586

Weighted average number of common shares (millions)(2)

174

TTM Available cash flow per share

3.37

Three months ended

Trailing twelve
months ended
March 31, 2024

($ millions, unless otherwise noted)

June 30,
2023(1)

September 30,
2023

December 31,
2023

March 31,
2024 (1)

Cash generated from (used in) operating activities | 521 | 528 | 417 | 217 | 1,683
Reverse: Change in other assets and other liabilities | (11) | 7 | (4) | 28 | 20

Reverse: Net change in non-cash working capital related to
operating activities(1)

(145)

(14)

17

55

(87)

Include: Maintenance capital expenditures | (61) | (52) | (93) | (59) | (265)

Include: Dividends received from investments in associates
and joint ventures

2

4

3

2

11

Include: Interest on leases and long-term debt | (89) | (83) | (88) | (85) | (345)
Include: Payments on principal amount on leases | (56) | (57) | (71) | (71) | (255)
Available cash flow | 161 | 333 | 181 | 87 | 762
Weighted average number of common shares (millions)(2) | | | | | 176
TTM Available cash flow per share | | | | | 4.34

(1)

For comparative purposes, certain amounts within the net change in non-cash working capital related to operating activities for the three months ended March 31, 2024, and the three months ended June 30, 2023, were revised to conform to the current period presentation.

(2)

Weighted average number of common shares is calculated in accordance with Parkland’s accounting policy contained in Note 2 of the Annual Consolidated Financial Statements.

ROIC is a non-GAAP financial ratio. The measure is calculated as a ratio of Net operating profit after tax (”NOPAT”) divided by average invested capital. NOPAT describes the profitability of Parkland’s base operations, excluding the impact of leverage and certain other items of income and expenditure that are not considered representative of Parkland’s underlying core operating performance. NOPAT is based on Adjusted EBITDA, defined in the “Measures of Segment Profit (Loss) and Total of Segments Measures” section of this news release, less depreciation and amortization expense, including pro-forma depreciation on assets classified as held for sale, and the estimated tax expense using the expected average tax rate estimated using statutory tax rates in each jurisdiction where Parkland operates. Average invested capital is the amount of capital deployed by Parkland that represents the average of opening and closing debt, including debt liabilities classified as held for sale, as well as shareholder’s equity, including equity reserves, net of cash and cash equivalents. We use this non-GAAP measure to assess Parkland’s efficiency in investing capital.

($ millions, unless otherwise noted) | Three months ended |

ROIC

June 30,
2024

September 30,
2024

December 31,
2024

March 31,
2025

Trailing twelve

months ended

March 31, 2025

Net earnings (loss)

70

91

(29)

64

196

Add/(less): | | | | |

Income tax expense (recovery)

20

17

(8)

8

37

Acquisition, integration and other costs

46

61

81

29

217

Depreciation and amortization

202

207

210

202

821

Finance cost

99

96

92

99

386

(Gain) loss on foreign exchange – unrealized

4

1

(2)

(5)

(2)

(Gain) loss on risk management and other – unrealized

56

(48)

34

3

45

Other (gains) and losses

(1)

(1)

30

(19)

9

Other adjusting items

8

7

20

(6)

29

Adjusted EBITDA

504

431

428

375

1,738

Less: Depreciation and amortization

(202)

(207)

(210)

(202)

(821)

Less: Pro-forma depreciation and amortization on assets
classified as held for sale

—

—

(7)

(7)

(14)

Adjusted EBIT

302

224

211

166

903

Average effective tax rate

20.1 %

Less: Taxes

(182)

Net operating profit after tax

721

Opening invested capital

9,421

Closing invested capital

9,535

Average invested capital

9,478

Return on invested capital

7.6 %

Invested Capital

March 31,

($ millions, unless otherwise noted)

2025

2024

Long-term debt – current portion

244

218

Long-term debt

6,362

6,412

Long-term debt in liabilities classified as held for sale(1)

132

30

Shareholders’ equity

3,159

3,154

Exclude: Cash and cash equivalents

(362)

(393)

Total

9,535

9,421

($ millions, unless otherwise noted) | Three months ended |

ROIC

June 30,
2023

September 30,
2023

December 31,
2023

March 31,
2024

Trailing twelve
months ended
March 31, 2024

Net earnings (loss) | 78 | 230 | 86 | (5) | 389
Add/(less): | | | | |
Income tax expense (recovery) | 18 | 54 | (15) | (29) | 28