SUBURBAN PROPANE PARTNERS LP Q1 FY2025 earnings call

• Propane business: Managed through warm weather by leveraging efficient operating model, with colder temperatures in late December and January providing strong momentum into the heating season. - Renewable natural gas: Completed maintenance and upgrades at Stanfield facility, expecting improved performance; advanced capital projects in New York and Ohio; started monetizing PTCs from Stanfield facility. - Capital spending: Total capital spending $23.8 million, $12.7 million higher than prior year first quarter due to growth CapEx for Columbus and New York projects; closed acquisition of a propane business in New Mexico and Arizona for $53 million. - Balance sheet: Borrowed $91.7 million under revolver in first quarter for propane acquisition, seasonal working capital, and growth CapEx. - Distribution: Board declared quarterly distribution of $0.325 per common unit, annualized rate $1.30 per common unit. - Strategic growth: Focus on core propane business growth and renewable energy platform expansion; investments in renewable fuels and hydrogen; write-down of investments in Oberon Fuels and Independence Hydrogen due to industry challenges but belief in their business models.

For the first quarter of fiscal 2025, adjusted EBITDA was $75.3 million, essentially flat to the prior year first quarter. In the propane segment, propane revenues were marginally lower than the prior year first quarter due to widespread unseasonably warm weather and a less active crop drying season, but strong demand in the Southeast after hurricanes Helene and Milton and the benefit of incremental volumes from the acquisition of a propane business in the Southwest in November 2024 offset some of these impacts. Retail propane gallons sold were 105.7 million gallons, 0.8% lower than the prior year. In the renewable natural gas segment, RNG injection for the quarter was lower than the prior year first quarter due to an extended shutdown of the anaerobic digester facility in Stanfield, Arizona, for maintenance and regulatory compliance upgrades. However, upgrades completed during the shutdown are expected to improve operating performance and increase RNG production moving forward. The capital projects for anaerobic digester facilities in Upstate New York and Columbus, Ohio, are expected to be completed toward the end of the calendar year. Production tax credits from the Stanfield facility became effective January 1, 2025, and PTCs at the New York and Ohio facilities are expected to be monetized once RNG production and sales activities start. Propane revenue contribution: offset by various factors including weather and acquisition. RNG segment revenue contribution: impacted by shutdown but expected to improve post-upgrades.

• Capital spending for fiscal 2025: Propane operations expected to be $40-$45 million, RNG projects $35-$45 million. - PTCs: Can monetize PTCs from Stanfield facility effective January 1, 2025, and expect to monetize PTCs at New York and Ohio facilities once RNG production and sales start. - Leverage: Leverage metric expected to benefit from increased earnings as RNG growth projects come online and start generating earnings.

• Weather: Widespread unseasonably warm weather impacted propane demand in the first quarter. - Renewable gas operations: Temporary lower RNG injection due to maintenance and upgrade shutdown. - Investments: Challenges in the clean energy startup landscape affecting investments in Oberon Fuels and Independence Hydrogen, including difficulty in raising capital and uncertainty over government policy support. - Leverage: Leverage ratio elevated relative to historical levels temporarily.

Q: Curious how the system is handling the colder weather operationally and the pricing aspect and unit margins.

A: Our platform is built for this weather, people are stepping up, customers can rely on us. With weather, prices go up, our field is managing selling prices accordingly, currently in $0.85 to $0.90 basis Bellevue range but could move with weather and commodity markets.

Q: Expand on leverage drivers, timing of tax credits coming through, and debt side.

A: Leverage metric is rolling twelve-month, includes last year's challenges. RNG projects in NY and OH coming online towards end of year will bring leverage down. PTCs from Stanfield effective Jan 1, 2025, earning them, and working to monetize. We have plenty of liquidity, balance sheet focused, will continue to strengthen balance sheet as opportunities arise.