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Parkland Fuel Corp TSX: PKI-T

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Parkland reports 2020 results and provides 2021 outlook, including ninth consecutive annual dividend increase

GlobeNewswire - Thu Mar 4, 4:15PM CST

Parkland Corporation ("Parkland", "we", the "Company", or "our") (TSX:PKI.TO) announced today its financial and operating results for the fourth quarter and year ended December 31, 2020 and 2021 outlook. Highlights include:

"I would like to thank our front-line teams for their exemplary work through the ongoing challenges posed by COVID-19, safely and reliably meeting our customers needs with the utmost professionalism," said Bob Espey, President and Chief Executive Officer. "In 2020, we demonstrated financial prudence, safely provided the essential fuels and services our customers and communities rely on, enhanced our customer offerings and proved the resilience of our business through an extremely difficult external environment."

"We are excited about the opportunities ahead of us," added Espey. "We remain focused on our stated strategy and meeting our long-term growth ambitions. In 2021, we will strengthen our customer offerings and continue our organic growth initiatives, advance our disciplined acquisition strategy and deepen our commitment to providing customers with low carbon fuel choices as part of our broader sustainability efforts."

Our Sustainability Journey

As we advance our Sustainability journey, we intend to provide regular updates on our environmental, social and governance efforts as part of our normal disclosure process. A snapshot of our recent successes includes:

2021 Outlook

While we remain vigilant regarding the ongoing impacts of COVID-19, our performance through 2020 demonstrated the strength and resilience of our business model. Our track record gives us confidence in our ability to manage and thrive through periods of uncertainty and volatility. As a result, we are providing 2021 guidance metrics that account for near-term COVID-19 uncertainty but assume an economic recovery in the second half of the year. Highlights of our 2021 outlook include:

Advancing our Disciplined Acquisition Strategy

Q4 2020 Segment Highlights

Consolidated Financial Overview

($ millions, unless otherwise noted)                          Three months ended December 31,              Year ended December 31,
Financial Summary                                             2020           2019           2018           2020         2019         2018
Sales and operating revenue                                   3,474          4,779          3,506          14,011       18,453       14,442
Fuel and petroleum product volume (million litres)            5,416          5,850          4,354          21,424       22,282       16,978
Adjusted gross profit                                         606            728            587            2,360        2,832        1,995
Adjusted EBITDA including non-controlling interest ("NCI")    271            327            285            1,057        1,358        887
Adjusted EBITDA attributable to Parkland ("Adjusted EBITDA")  247            302            285            967          1,265        887
Canada                                                        112            88             105            435          380          409
International                                                 72             73             --             270          281          --
USA                                                           11             15             11             74           56           28
Supply                                                        78             153            199            280          660          561
Corporate                                                     (26    )       (27    )       (30    )       (92    )     (112   )     (111   )
Net earnings (loss)                                           64             186            77             112          414          206
Net earnings (loss) attributable to Parkland                  53             176            77             82           382          206
Net earnings (loss) per share - basic ($ per share)           0.36           1.19           0.58           0.55         2.60         1.56
Net earnings (loss) per share - diluted ($ per share)         0.35           1.17           0.57           0.54         2.55         1.53
Dividends                                                     47             44             41             184          177          159
Per share                                                     0.3036         0.2985         0.2934         1.2110       1.1906       1.1704
Weighted average number of common shares (million shares)     149            148            133            149          147          132
TTM distributable cash flow                                   481            564            416            481          564          416
Per share                                                     3.23           3.84           3.15           3.23         3.84         3.15
TTM adjusted distributable cash flow                          478            561            568            478          561          568
Per share                                                     3.21           3.82           4.30           3.21         3.82         4.30
TTM dividends                                                 184            177            159            184          177          159
TTM dividend payout ratio                                     38         %   31         %   38         %   38        %  31        %  38        %
TTM adjusted dividend payout ratio                            38         %   32         %   28         %   38        %  32        %  28        %
TTM weighted average number of common shares (million shares) 149            147            132            149          147          132
Total assets                                                  9,094          9,283          5,661          9,094        9,283        5,661
Total Funded Debt to Credit Facility EBITDA ratio             2.91           2.79           2.47           2.91         2.79         2.47
Non-current financial liabilities                             4,377          4,328          2,288          4,377        4,328        2,288
Interest coverage ratio                                       5.33           5.32           6.52           5.33         5.32         6.52
Growth capital expenditures attributable to Parkland          45             69             57             110          221          109
Maintenance capital expenditures attributable to Parkland     39             91             52             225          232          187

Measure of segment profit and Non-GAAP financial measures. See Section 14 of the MD&A.

For comparative purposes, information for the year ended December 31, 2019 was restated due to a change in segment presentation. Canada Retail and Canada Commercial, formerly presented separately as individual segments, and the Canadian distribution business, formerly presented in Supply, are now included in Canada, reflecting a change in organizational structure in 2020.

Calculated using the weighted average number of common shares.

2020 and 2019 results reflect the adoption of IFRS 16 as of January 1, 2019. 2018 comparative figures reflect the accounting standards in effect for that year and are not restated to reflect the impact of IFRS 16, as is allowed under the modified retrospective approach for IFRS 16 adoption.

Amounts presented on a trailing-twelve-month ("TTM") basis.

Beginning in Q1 2020, Credit Facility EBITDA includes Adjusted EBITDA attributable to NCI and excludes IFRS 16 impact attributable to NCI, and Total Funded Debt includes long term-debt attributable to NCI, letters of credit attributable to NCI and cash and cash equivalents attributable to NCI. The amounts presented for 2019 and 2018 have not been restated.

Ninth Consecutive Annual Dividend Increase

Parkland's annualized common share dividend will increase $0.0204 per share, our ninth consecutive annual increase, from $1.2144 to $1.2348, effective with the monthly dividend payable on April 15, 2021 to shareholders of record at the close of business on March 22, 2021.

Conference Call and Webcast Details

Parkland will host a webcast and conference call on Friday, March 5, at 6:30am MST (8:30am EST) to discuss the results.

To listen to the live webcast and watch the presentation, please use the following link:

https://produceredition.webcasts.com/starthere.jsp?ei=1432661&tp_key=f1590068d5

Analysts and institutional investors interested in participating in the question and answer session of the conference call may do so by calling 1-888-390-0546 (toll-free) (ConferenceID:87395118). International participants can call 1-587-880-2171 (toll) (ConferenceID:87395118).

Please connect and log in approximately 10 minutes before the beginning of the call.

The webcast will be available for replay two hours after the conference call ends at the link above. It will remain available for one year and will also be posted to www.parkland.ca.

MD&A and Consolidated Financial Statements

The Q4 2020 MD&A and Q4 2020 Financial Statements provide a detailed explanation of Parkland's operating results for the year ended December 31, 2020. An English version of these documents will be available online at www.parkland.ca and SEDAR after the results are released by newswire under Parkland's profile at www.sedar.com. The Q4 2020 French MD&A and Q4 2020 French Financial Statements will be posted to www.parkland.ca and SEDAR as soon as they become available.

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking information and statements (collectively, "forward-looking statements"). When used in this news release the words "expect", "will", "could", "would", "believe", "continue", "pursue" and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, business objectives and strategies, estimated 2021 capital expenditures, expected timing of closing and benefits to be derived from announced acquisitions, potential future acquisition opportunities, expected increase to USA segment's run-rate Adjusted EBITDA from the SVO, Carter, Story and C&B acquisitions, potential projects to extend Parkland's supply advantage, the ongoing roll out of the JOURNIE(TM) Rewards loyalty program, expected Burnaby refinery utilization rates, and Parkland's ability to advance its growth agenda.

These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this news release. Parkland does not undertake any obligations to publicly update or revise any forward-looking statements except as required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to, general economic, market and business conditions, including the duration and impact of the COVID-19 pandemic; Parkland's ability to execute its business strategies; industry capacity; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities and other regulators including but not limited to increases in taxes or restricted access to markets; changes and developments in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. See also the risks and uncertainties described in "Forward-Looking Information" and "Risk Factors" included in Parkland's Annual Information Form dated March 30, 2020, and "Forward-Looking Information" and "Risk Factors" included in the Q4 2020 MD&A dated March 4, 2021, each filed on SEDAR and available on the Parkland website at www.parkland.ca. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Non-GAAP Financial Measures

This news release refers to certain non-GAAP financial measures that are not determined in accordance with International Financial Reporting Standards ("IFRS"). Distributable cash flow, distributable cash flow per share, adjusted distributable cash flow, adjusted distributable cash flow per share, total funded debt to credit facility EBITDA ratio, dividend payout ratio, adjusted dividend payout ratio and growth and maintenance capital expenditures attributable to Parkland are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. Management considers these to be important supplemental measures of Parkland's performance and believes these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. See Section 14 of the Q4 2020 MD&A for a discussion of non-GAAP measures and their reconciliations to the nearest applicable IFRS measure.

Adjusted EBITDA and adjusted gross profit are measures of segment profit. See Section 16 of the Q4 2020 MD&A and Note 24 of the Q4 2020 FS for a reconciliation of these measures of segment profit. Investors are encouraged to evaluate each measure and the reasons Parkland considers it appropriate for supplemental analysis.

In addition to non-GAAP financial measures, Parkland uses a number of operational KPIs, such as SSSG and refinery utilization, to measure the success of our strategic objectives and to set variable compensation targets for employees. These KPIs are not accounting measures, do not have comparable IFRS measures, and may not be comparable to similar measures presented by other issuers, as other issuers may calculate these metrics differently. See Section 14 of the Q4 2020 MD&A for further details.

Expected increase in run-rate USA segment Adjusted EBITDA including SVO, Carter, Story and C&B reflects the reported 2020 Adjusted EBITDA in the USA segment plus the annual run rate Adjusted EBITDA contribution expected from the acquired assets based on trailing-twelve-month performance at the time of acquisition. Due to closing date impacts of the acquisitions, this does not represent guidance for USA segment 2021 Adjusted EBITDA. Further, expected annual run rate Adjusted EBITDA contribution is calculated based on historical performance of the acquired businesses; future performance of such business may differ from historical results.

Investors are cautioned that these measures should not be construed as an alternative to net earnings determined in accordance with IFRS as an indication of Parkland's performance.

Effective January 1, 2019, Parkland adopted the new accounting standard, IFRS 16 - Leases ("IFRS 16"). The adoption of IFRS 16 has a significant effect on Parkland's reported results. Due to Parkland's selected transition method, it has not restated its prior year comparatives. Certain financial statement measures are presented excluding the impact of IFRS 16 ("Pre-IFRS 16 measures").

About Parkland Corporation

Parkland is an independent supplier and marketer of fuel and petroleum products and a leading convenience store operator. Parkland services customers across Canada, the United States, the Caribbean region and the Americas through three channels: Retail, Commercial and Wholesale. Parkland optimizes its fuel supply across these three channels by operating and leveraging a growing portfolio of supply relationships and storage infrastructure. Parkland provides trusted and locally relevant fuel brands and convenience store offerings in the communities it serves.

Parkland creates value for shareholders by focusing on its proven strategy of growing organically, realizing a supply advantage and acquiring prudently and integrating successfully. At the core of our strategy are our people, as well as our values of safety, integrity, community and respect, which are embraced across our organization.

For Further Information

Investor Inquiries

Brad Monaco

Director, Capital Markets

587-997-1447

Brad.Monaco@parkland.ca

Media Inquiries

Simon Scott

Director, Corporate Communications

403-956-9272

Simon.Scott@parkland.ca

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