[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and internal controls [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20%28UNAUDITED%29) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, cash flows, and partners' capital, along with detailed notes explaining accounting policies, segment information, and specific financial items [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2028%2C%202025%20and%20September%2028%2C%202024) This section provides a snapshot of the Partnership's financial position, detailing assets, liabilities, and partners' capital at period-end Condensed Consolidated Balance Sheets as of June 28, 2025 and September 28, 2024 | Metric | June 28, 2025 ($ thousands) | September 28, 2024 ($ thousands) | | :-------------------------- | :-------------------------- | :------------------------------- | | Total assets | 2,314,602 | 2,272,761 | | Total liabilities | 1,668,492 | 1,725,701 | | Total partners' capital | 646,110 | 547,060 | | Cash and cash equivalents | 1,340 | 3,219 | | Goodwill | 1,157,827 | 1,151,252 | - Total assets increased by **$41,841 thousand**, while total liabilities decreased by **$57,209 thousand**, leading to a **$99,050 thousand** increase in total partners' capital from September 28, 2024, to June 28, 2025 [Condensed Consolidated Statements of Operations (Three Months)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20three%20months%20ended%20June%2028%2C%202025%20and%20June%2029%2C%202024) This section details the Partnership's financial performance for the three-month periods, including revenues, expenses, and net loss Condensed Consolidated Statements of Operations for the three months ended June 28, 2025 and June 29, 2024 | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :----------------------------------- | :-------------------------- | :-------------------------- | :------------------- | :--------- | | Revenues | 260,150 | 254,610 | 5,540 | 2.2% | | Costs and expenses | 254,559 | 246,420 | 8,139 | 3.3% | | Operating income | 5,591 | 8,190 | (2,599) | (31.7%) | | Net (loss) | (14,835) | (17,191) | 2,356 | (13.7%) | | Net (loss) per Common Unit - basic | (0.23) | (0.27) | 0.04 | (14.8%) | - The Partnership reported a reduced net loss of **$(14,835) thousand** for the three months ended June 28, 2025, compared to **$(17,191) thousand** in the prior year, despite a decrease in operating income[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations (Nine Months)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20nine%20months%20ended%20June%2028%2C%202025%20and%20June%2029%2C%202024) This section presents the Partnership's financial results for the nine-month periods, showing revenues, expenses, and net income Condensed Consolidated Statements of Operations for the nine months ended June 28, 2025 and June 29, 2024 | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :----------------------------------- | :-------------------------- | :-------------------------- | :------------------- | :--------- | | Revenues | 1,221,142 | 1,118,531 | 102,611 | 9.2% | | Costs and expenses | 998,076 | 924,733 | 73,343 | 7.9% | | Operating income | 223,066 | 193,798 | 29,268 | 15.1% | | Net income | 141,706 | 118,763 | 22,943 | 19.3% | | Net income per Common Unit - basic | 2.18 | 1.85 | 0.33 | 17.8% | - For the nine months ended June 28, 2025, the Partnership achieved a **19.3% increase in net income to $141,706 thousand**, driven by a **9.2% rise in total revenues** and a **15.1% growth in operating income**[18](index=18&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20for%20the%20three%20and%20nine%20months%20ended%20June%2028%2C%202025%20and%20June%2029%2C%202024) This section outlines the Partnership's comprehensive income, including net income and other comprehensive income components for the specified periods Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended June 28, 2025 and June 29, 2024 | Metric | Three Months Ended June 28, 2025 ($ thousands) | Three Months Ended June 29, 2024 ($ thousands) | Nine Months Ended June 28, 2025 ($ thousands) | Nine Months Ended June 29, 2024 ($ thousands) | | :----------------------------------- | :----------------------------------- | :----------------------------------- | :---------------------------------- | :---------------------------------- | | Net (loss) income | (14,835) | (17,191) | 141,706 | 118,763 | | Other comprehensive income | 333 | 719 | 100 | 1,057 | | Total comprehensive (loss) income | (14,502) | (16,472) | 141,806 | 119,820 | - Total comprehensive income for the nine months ended June 28, 2025, increased to **$141,806 thousand** from **$119,820 thousand** in the prior year, reflecting improved net income despite lower other comprehensive income[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20nine%20months%20ended%20June%2028%2C%202025%20and%20June%2029%2C%202024) This section details the cash inflows and outflows from operating, investing, and financing activities for the nine-month periods Condensed Consolidated Statements of Cash Flows for the nine months ended June 28, 2025 and June 29, 2024 | Cash Flow Activity | Nine Months Ended June 28, 2025 ($ thousands) | Nine Months Ended June 29, 2024 ($ thousands) | | :----------------------------------- | :----------------------------------- | :----------------------------------- | | Net cash provided by operating activities | 144,427 | 123,807 | | Net cash (used in) investing activities | (114,921) | (59,986) | | Net cash (used in) financing activities | (37,324) | (58,344) | | Net (decrease) increase in cash, cash equivalents and restricted cash | (7,818) | 5,477 | | Cash, cash equivalents and restricted cash at end of period | 12,696 | 19,551 | - Operating cash flow increased by **$20,620 thousand**, but a significant increase in cash used for investing activities (up **$54,935 thousand**) led to a net decrease in cash and cash equivalents for the nine months ended June 28, 2025[25](index=25&type=chunk) [Condensed Consolidated Statements of Partners' Capital (Three Months)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Partners%27%20Capital%20for%20the%20three%20months%20ended%20June%2028%2C%202025%20and%20June%2029%2C%202024) This section presents changes in partners' capital for the three-month periods, including net loss, distributions, and equity offerings Condensed Consolidated Statements of Partners' Capital for the three months ended June 28, 2025 and June 29, 2024 | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Balance, beginning of period | 671,809 | 642,670 | | Net (loss) | (14,835) | (17,191) | | Partnership distributions | (21,112) | (20,815) | | Proceeds from ATM public offering | 8,079 | — | | Balance, end of period | 646,110 | 607,223 | - Partners' capital decreased by **$25,699 thousand** during the three months ended June 28, 2025, primarily due to net loss and partnership distributions, partially offset by proceeds from the ATM public offering[28](index=28&type=chunk) [Condensed Consolidated Statements of Partners' Capital (Nine Months)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Partners%27%20Capital%20for%20the%20nine%20months%20ended%20June%2028%2C%202025%20and%20June%2029%2C%202024) This section details the changes in partners' capital for the nine-month periods, reflecting net income, distributions, and equity issuance Condensed Consolidated Statements of Partners' Capital for the nine months ended June 28, 2025 and June 29, 2024 | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Balance, beginning of period | 547,060 | 546,356 | | Net income | 141,706 | 118,763 | | Partnership distributions | (62,896) | (62,266) | | Proceeds from ATM public offering | 16,867 | — | | Balance, end of period | 646,110 | 607,223 | - Partners' capital increased by **$99,050 thousand** for the nine months ended June 28, 2025, driven by net income and proceeds from the ATM public offering, despite partnership distributions[32](index=32&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1. Partnership Organization and Formation](index=12&type=section&id=Note%201.%20Partnership%20Organization%20and%20Formation) This note describes the Partnership's business activities and the formation of its renewable energy platform - Suburban Propane Partners, L.P. is a publicly traded Delaware limited partnership primarily engaged in the retail marketing and distribution of propane, renewable propane, fuel oil, refined fuels, natural gas, and electricity, and invests in low-carbon fuel alternatives[36](index=36&type=chunk) - Suburban Renewable Energy, LLC, formed in January 2022, serves as the platform for the Partnership's investments in innovative, renewable energy technologies and businesses[38](index=38&type=chunk) [Note 2. Basis of Presentation](index=12&type=section&id=Note%202.%20Basis%20of%20Presentation) This note outlines the accounting principles, revenue recognition policies, and impact of new accounting standards on the financial statements - The condensed consolidated financial statements are unaudited and prepared in accordance with SEC rules and US GAAP, including all necessary adjustments for fair statement[43](index=43&type=chunk) - Revenue recognition follows FASB Topic 606, with revenue recognized when goods or services are transferred and performance obligations are satisfied[46](index=46&type=chunk)[47](index=47&type=chunk) - New accounting standards (ASU 2023-07, 2023-09, 2024-03, 2025-01) will impact future disclosures on segment reporting, income taxes, and expense disaggregation, with the Partnership currently assessing their effects[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) [Note 3. Disaggregation of Revenue](index=15&type=section&id=Note%203.%20Disaggregation%20of%20Revenue) This note provides a detailed breakdown of the Partnership's revenues by operating segment and customer type - The propane segment is the primary revenue driver, contributing approximately **89%** of the Partnership's reportable segment revenue[62](index=62&type=chunk) Total Revenues by Customer Type (Three Months Ended) | Customer Type | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | | :------------ | :-------------------------- | :-------------------------- | | Residential | 127,911 | 125,910 | | Commercial | 81,947 | 79,294 | | Industrial | 26,730 | 27,629 | | Government | 11,990 | 10,754 | | Agricultural | 4,969 | 5,650 | | Wholesale | 6,603 | 5,373 | | **Total revenues** | **260,150** | **254,610** | Total Revenues by Customer Type (Nine Months Ended) | Customer Type | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | | :------------ | :-------------------------- | :-------------------------- | | Residential | 665,305 | 609,192 | | Commercial | 335,824 | 304,647 | | Industrial | 95,340 | 95,917 | | Government | 59,455 | 52,850 | | Agricultural | 28,057 | 31,405 | | Wholesale | 37,161 | 24,520 | | **Total revenues** | **1,221,142** | **1,118,531** | [Note 4. Investments in and Acquisitions of Businesses](index=15&type=section&id=Note%204.%20Investments%20in%20and%20Acquisitions%20of%20Businesses) This note details the Partnership's strategic investments and acquisitions, including renewable energy assets and impairment charges - Suburban Renewable Energy acquired RNG production assets for **$190 million** in December 2022 and recorded a **$3 million** increase in contingent consideration fair value in Q1 fiscal 2025[64](index=64&type=chunk) - The Partnership recorded other-than-temporary impairment charges of **$9.6 million** for its **25% equity stake** in Independence Hydrogen (IH) and **$10.2 million** for its **38% equity stake** in Oberon Fuels in Q1 fiscal 2025, reducing Oberon's value to **$0**[67](index=67&type=chunk)[69](index=69&type=chunk) - In November 2024, the Partnership acquired a New Mexico propane retailer for **$53 million**, supporting its core propane business growth[71](index=71&type=chunk) [Note 5. Financial Instruments and Risk Management](index=16&type=section&id=Note%205.%20Financial%20Instruments%20and%20Risk%20Management) This note describes the Partnership's use of derivative instruments to manage commodity price and interest rate risks - The Partnership uses exchange-traded futures and options, and over-the-counter options and swap contracts to hedge commodity price risk for propane and fuel oil, and to manage interest rate risk on variable borrowings[73](index=73&type=chunk)[76](index=76&type=chunk) Fair Value of Derivative Instruments (Not Designated as Hedging Instruments) | Category | June 28, 2025 ($ thousands) | September 28, 2024 ($ thousands) | | :-------------------------- | :-------------------------- | :------------------------------- | | Asset Derivatives | 3,327 | 4,891 | | Liability Derivatives | 3,796 | 5,744 | Unrealized Gains (Losses) on Commodity-Related Derivatives Recognized in Cost of Products Sold | Period | Amount ($ thousands) | | :----------------------------------- | :------------------- | | Three Months Ended June 28, 2025 | (2,919) | | Three Months Ended June 29, 2024 | (3,161) | | Nine Months Ended June 28, 2025 | 1,459 | | Nine Months Ended June 29, 2024 | (8,079) | [Note 6. Selected Balance Sheet Information](index=19&type=section&id=Note%206.%20Selected%20Balance%20Sheet%20Information) This note provides detailed breakdowns of specific balance sheet accounts, including cash, cash equivalents, restricted cash, and inventories Cash, Cash Equivalents and Restricted Cash | Item | June 28, 2025 ($ thousands) | September 28, 2024 ($ thousands) | | :---------------------------------------------------------------- | :-------------------------- | :------------------------------- | | Cash and cash equivalents | 1,340 | 3,219 | | Restricted cash included in other current assets | 3,292 | 9,355 | | Restricted cash included in other assets (noncurrent) | 8,064 | 7,940 | | **Total cash, cash equivalents, and restricted cash** | **12,696** | **20,514** | Inventories | Item | June 28, 2025 ($ thousands) | September 28, 2024 ($ thousands) | | :--------------------------------------- | :-------------------------- | :------------------------------- | | Propane, fuel oil and refined fuels and natural gas | 56,451 | 52,284 | | Appliances | 3,968 | 3,146 | | **Total** | **60,419** | **55,430** | [Note 7. Goodwill and Other Intangible Assets](index=19&type=section&id=Note%207.%20Goodwill%20and%20Other%20Intangible%20Assets) This note discusses the accounting for goodwill and other intangible assets, including impairment review and segment allocation - Goodwill is subject to annual impairment review at the reporting unit level, with fair value estimated using discounted cash flow analyses[84](index=84&type=chunk)[86](index=86&type=chunk) Goodwill by Operating Segment (June 28, 2025) | Segment | Goodwill ($ thousands) | | :------------------------ | :--------------------- | | Propane | 1,114,230 | | Fuel oil and refined fuels | 4,438 | | Natural gas and electricity | 7,900 | | All other | 31,259 | | **Total** | **1,157,827** | - Other intangible assets, net, increased to **$87,800 thousand** as of June 28, 2025, from **$74,500 thousand** as of September 28, 2024, reflecting impacts from acquisitions[89](index=89&type=chunk) [Note 8. Leases](index=20&type=section&id=Note%208.%20Leases) This note details the Partnership's operating lease arrangements, including right-of-use assets, lease liabilities, and future payment obligations - The Partnership leases property, plant, and equipment under operating leases, recognizing right-of-use assets and liabilities based on the present value of lease payments[90](index=90&type=chunk) Lease Information (Nine Months Ended June 28, 2025) | Metric | Value | | :----------------------------------- | :---------- | | Lease expense | $33,455 thousand | | Cash payments for operating leases | $33,700 thousand | | Right-of-use assets obtained | $9,256 thousand | | Weighted-average remaining lease term | 5.5 years | | Weighted-average discount rate | 6.3% | Future Minimum Lease Payments (Operating Leases) as of June 28, 2025 | Fiscal Year | Amount ($ thousands) | | :------------------ | :------------------- | | 2025 (remaining) | 10,968 | | 2026 | 39,637 | | 2027 | 28,959 | | 2028 | 23,173 | | 2029 | 16,644 | | 2030 and thereafter | 27,336 | | **Total lease obligations** | **122,668** | [Note 9. Net Income Per Common Unit](index=21&type=section&id=Note%209.%20Net%20Income%20Per%20Common%20Unit) This note provides the calculation of basic and diluted net income per common unit, including factors affecting dilution Net Income Per Common Unit (Nine Months Ended) | Metric | June 28, 2025 | June 29, 2024 | | :----------------------------------- | :------------ | :------------ | | Net income per Common Unit - basic | $2.18 | $1.85 | | Net income per Common Unit - diluted | $2.17 | $1.83 | | Weighted average Common Units outstanding - diluted | 65,330 | 64,747 | - Diluted loss per unit for the three months ended June 28, 2025 and June 29, 2024, does not include unvested Restricted Units as their effect would be anti-dilutive[95](index=95&type=chunk) [Note 10. Long-Term Borrowings](index=22&type=section&id=Note%2010.%20Long-Term%20Borrowings) This note details the Partnership's long-term debt structure, including Senior Notes, Green Bonds, and the Revolving Credit Facility Long-Term Borrowings as of June 28, 2025 | Item | Amount ($ thousands) | | :---------------------------------------------------------------- | :------------------- | | 5.875% Senior Notes due March 1, 2027 | 350,000 | | 5.00% Senior Notes due June 1, 2031 | 650,000 | | 5.50% Green Bonds due Oct 1, 2028-2033 (net of adjustment) | 69,298 | | Revolving Credit Facility, due March 15, 2029 | 163,600 | | **Total long-term borrowings** | **1,225,343** | - The Green Bonds' debt service coverage ratio covenant was eliminated effective May 2, 2025, with the Operating Partnership guaranteeing all payments due under the Green Bonds[102](index=102&type=chunk)[103](index=103&type=chunk) - The Partnership was in compliance with all covenants and terms of the Senior Notes and the Credit Agreement as of June 28, 2025[109](index=109&type=chunk) [Note 11. Distributions of Available Cash](index=23&type=section&id=Note%2011.%20Distributions%20of%20Available%20Cash) This note explains the Partnership's policy for quarterly distributions to unitholders based on available cash - The Partnership makes quarterly distributions equal to its Available Cash, as defined in the Partnership Agreement, after accounting for cash reserves[112](index=112&type=chunk) - A quarterly distribution of **$0.325 per Common Unit** (**$1.30 annualized**) was announced on July 24, 2025, for the third quarter of fiscal 2025[113](index=113&type=chunk) [Note 12. Unit-Based Compensation Arrangements](index=24&type=section&id=Note%2012.%20Unit-Based%20Compensation%20Arrangements) This note describes the various unit-based compensation plans, including Restricted Unit, Phantom Equity, and Long-Term Incentive Plans - The Restricted Unit Plan had **993,023 units outstanding** at June 28, 2025, with compensation expense of **$6.1 million** for the nine months ended June 28, 2025[117](index=117&type=chunk)[118](index=118&type=chunk) - The Phantom Equity Plan (PEP) and Long-Term Incentive Plan (LTIP) had liabilities of **$10.7 million** and **$11.1 million**, respectively, as of June 28, 2025[120](index=120&type=chunk)[124](index=124&type=chunk) - Compensation expense for the DER Plan was **$1.0 million** for the nine months ended June 28, 2025[122](index=122&type=chunk) [Note 13. Commitments and Contingencies](index=25&type=section&id=Note%2013.%20Commitments%20and%20Contingencies) This note outlines the Partnership's accrued liabilities for insurance claims and potential impacts from regulatory changes - Accrued insurance liabilities for self-insured general, product, workers' compensation, and automobile claims totaled **$58.0 million** as of June 28, 2025, with a corresponding receivable of **$14.5 million**[125](index=125&type=chunk) - The Partnership is assessing the impact of recent New York regulatory changes (GBL amendment and NY PSC UBP amendments) on its natural gas and electricity business, which could negatively affect customer retention[127](index=127&type=chunk) [Note 14. Guarantees](index=25&type=section&id=Note%2014.%20Guarantees) This note discloses the Partnership's residual value guarantees on operating leases, primarily for transportation equipment - The Partnership has residual value guarantees on certain operating leases, primarily for transportation equipment, with a maximum potential aggregate future payment of **$42.6 million** as of June 28, 2025[128](index=128&type=chunk)[129](index=129&type=chunk) [Note 15. Pension Plans and Other Postretirement Benefits](index=26&type=section&id=Note%2015.%20Pension%20Plans%20and%20Other%20Postretirement%20Benefits) This note provides information on the Partnership's pension and postretirement benefit plans, including net periodic benefit costs and contributions Net Periodic Benefit Costs (Nine Months Ended) | Benefit Type | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Pension Benefits | 1,585 | 3,297 | | Postretirement Benefits | (459) | (662) | - The Partnership expects to contribute **$4.0 million** to its defined benefit pension plan in fiscal 2025, with **$3.0 million** already contributed[130](index=130&type=chunk) - Estimated obligation to multi-employer pension plans was **$18.9 million** as of June 28, 2025, due to voluntary full withdrawal from certain plans[131](index=131&type=chunk) [Note 16. Amounts Reclassified Out of Accumulated Other Comprehensive Income](index=27&type=section&id=Note%2016.%20Amounts%20Reclassified%20Out%20of%20Accumulated%20Other%20Comprehensive%20Income) This note details the reclassifications from accumulated other comprehensive income to earnings for pension and postretirement benefits - Accumulated other comprehensive loss was **$(6.0) million** as of June 28, 2025, with reclassifications to earnings for pension benefits totaling **$634 thousand** and for postretirement benefits totaling **$(534) thousand** for the nine months ended June 28, 2025[133](index=133&type=chunk) [Note 17. At-the-Market Public Offering](index=27&type=section&id=Note%2017.%20At-the-Market%20Public%20Offering) This note describes the Partnership's at-the-market public offering of common units and the use of proceeds - On February 20, 2025, the Partnership entered an Equity Distribution Agreement to sell up to **$100 million** in Common Units through an at-the-market public offering[134](index=134&type=chunk) - During the nine months ended June 28, 2025, **903,112 Common Units** were issued, generating net proceeds of **$16.9 million**, used for general partnership purposes including debt reduction and strategic growth[136](index=136&type=chunk) [Note 18. Income Taxes](index=28&type=section&id=Note%2018.%20Income%20Taxes) This note explains the Partnership's income tax treatment, including partnership-level taxation and valuation allowances on deferred tax assets - For federal and most state income tax purposes, the Partnership's earnings are not subject to income tax at the partnership level, but its Corporate Entities are subject to U.S. corporate income tax[138](index=138&type=chunk)[139](index=139&type=chunk) - A full valuation allowance has been provided against deferred tax assets (with exceptions) due to the unlikelihood of sufficient future taxable income to utilize these assets[139](index=139&type=chunk) [Note 19. Segment Information](index=28&type=section&id=Note%2019.%20Segment%20Information) This note provides financial data disaggregated by the Partnership's operating segments, including revenues and operating income - The Partnership operates in four segments: Propane, Fuel Oil and Refined Fuels, Natural Gas and Electricity (all reportable), and 'All other' (including service business, RNG, and IH investment)[140](index=140&type=chunk)[144](index=144&type=chunk) Revenues by Segment (Nine Months Ended) | Segment | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Propane | 1,082,429 | 970,967 | | Fuel oil and refined fuels | 60,746 | 66,447 | | Natural gas and electricity | 19,916 | 20,528 | | All other | 58,051 | 60,589 | | **Total revenues** | **1,221,142** | **1,118,531** | Operating Income (Loss) by Segment (Nine Months Ended) | Segment | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Propane | 343,372 | 301,487 | | Fuel oil and refined fuels | 6,023 | 7,617 | | Natural gas and electricity | 4,682 | 5,917 | | All other | (26,703) | (21,970) | | Corporate | (104,308) | (99,253) | | **Total operating income** | **223,066** | **193,798** | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=30&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the Partnership's financial condition and results of operations, highlighting key factors influencing performance, a detailed comparison of financial results for the three and nine months ended June 28, 2025, and an analysis of liquidity and capital resources [Executive Overview](index=30&type=section&id=Executive%20Overview) This overview summarizes the Partnership's key financial performance metrics and operational highlights for the recent fiscal quarter - Net loss for the third quarter of fiscal 2025 improved to **$14.8 million** (**$0.23 per Common Unit**) from **$17.2 million** (**$0.27 per Common Unit**) in the prior year[159](index=159&type=chunk) - Adjusted EBITDA for the third quarter of fiscal 2025 was **$27.0 million**, remaining flat compared to the prior year quarter[160](index=160&type=chunk) - Retail propane gallons sold in Q3 fiscal 2025 were **71.9 million**, consistent with the prior year, despite average temperatures being **14% warmer than normal** but **5% cooler than the prior year quarter**[161](index=161&type=chunk)[167](index=167&type=chunk) - The Consolidated Leverage Ratio improved to **4.33x** for the twelve-month period ended June 28, 2025[164](index=164&type=chunk) [Results of Operations and Financial Condition](index=31&type=section&id=Results%20of%20Operations%20and%20Financial%20Condition) This section provides a detailed analysis of the Partnership's financial performance and condition over the reporting periods [Three Months Ended June 28, 2025 Compared to Three Months Ended June 29, 2024](index=32&type=section&id=Three%20Months%20Ended%20June%2028%2C%202025%20Compared%20to%20Three%20Months%20Ended%20June%2029%2C%202024) For the third fiscal quarter, total revenues increased slightly, driven by higher propane selling prices and volumes. However, operating income decreased due to higher costs of products sold and increased operating and depreciation expenses, partially offset by lower general and administrative expenses and improved net loss [Revenues](index=32&type=section&id=Revenues_3M) This subsection analyzes the revenue performance across different segments for the three-month periods Revenues (Three Months Ended) | Category | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase (Decrease) ($ thousands) | Percent Increase (Decrease) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------------- | :-------------------------- | | Propane | 226,890 | 220,045 | 6,845 | 3.1% | | Fuel oil and refined fuels | 9,721 | 10,954 | (1,233) | (11.3%) | | Natural gas and electricity | 4,838 | 5,322 | (484) | (9.1%) | | All other | 18,701 | 18,289 | 412 | 2.3% | | **Total revenues** | **260,150** | **254,610** | **5,540** | **2.2%** | - Propane revenues increased by **3.1%** due to a **2.0% rise in average selling prices** and a **0.2% increase in retail gallons sold**[169](index=169&type=chunk) - Fuel oil and refined fuels revenues decreased by **11.3%** due to a **7.3% drop in average selling prices** and a **4.7% decrease in volumes sold**[170](index=170&type=chunk) [Cost of Products Sold](index=33&type=section&id=Cost%20of%20Products%20Sold_3M) This subsection examines the cost of products sold across segments and the impact of derivative instruments for the three-month periods Cost of Products Sold (Three Months Ended) | Category | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase (Decrease) ($ thousands) | Percent Increase (Decrease) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------------- | :-------------------------- | | Propane | 87,044 | 81,327 | 5,717 | 7.0% | | Fuel oil and refined fuels | 5,943 | 7,402 | (1,459) | (19.7%) | | Natural gas and electricity | 2,950 | 2,446 | 504 | 20.6% | | All other | 3,622 | 3,225 | 397 | 12.3% | | **Total cost of products sold** | **99,559** | **94,400** | **5,159** | **5.5%** | - Propane cost of products sold increased by **7.0%** primarily due to higher average wholesale costs[178](index=178&type=chunk) - The net change in fair value of derivative instruments resulted in a **$2.9 million** unrealized non-cash loss in Q3 fiscal 2025, compared to a **$3.2 million** loss in Q3 fiscal 2024[175](index=175&type=chunk) [Operating Expenses](index=34&type=section&id=Operating%20Expenses_3M) This subsection analyzes the changes in operating expenses for the three-month periods, including payroll and benefit costs Operating Expenses (Three Months Ended) | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase ($ thousands) | Increase (%) | | :----------------- | :-------------------------- | :-------------------------- | :--------------------- | :----------- | | Operating expenses | 117,528 | 115,882 | 1,646 | 1.4% | - Operating expenses increased by **1.4%** due to higher payroll and benefit-related costs, partially offset by an insurance recovery gain[182](index=182&type=chunk) [General and Administrative Expenses](index=34&type=section&id=General%20and%20Administrative%20Expenses_3M) This subsection details the changes in general and administrative expenses for the three-month periods, primarily due to compensation costs General and Administrative Expenses (Three Months Ended) | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Decrease ($ thousands) | Decrease (%) | | :-------------------------------- | :-------------------------- | :-------------------------- | :--------------------- | :----------- | | General and administrative expenses | 18,737 | 19,759 | (1,022) | (5.2%) | - General and administrative expenses decreased by **5.2%** primarily due to lower variable compensation costs[184](index=184&type=chunk) [Depreciation and Amortization](index=34&type=section&id=Depreciation%20and%20Amortization_3M) This subsection analyzes the increase in depreciation and amortization expenses for the three-month periods, driven by new investments Depreciation and Amortization (Three Months Ended) | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase ($ thousands) | Increase (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :--------------------- | :----------- | | Depreciation and amortization | 18,735 | 16,379 | 2,356 | 14.4% | - Depreciation and amortization expense increased by **14.4%** due to investments in RNG production facilities, a propane acquisition, and accelerated depreciation[186](index=186&type=chunk) [Interest Expense, net](index=35&type=section&id=Interest%20Expense%2C%20net_3M) This subsection details the net interest expense for the three-month periods, influenced by borrowings and interest rates Interest Expense, net (Three Months Ended) | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase ($ thousands) | Increase (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------------------- | :----------- | | Interest expense, net | 18,881 | 18,429 | 452 | 2.5% | - Net interest expense increased by **2.5%** due to higher average outstanding borrowings under the Revolving Credit Facility, partially offset by lower benchmark interest rates[187](index=187&type=chunk) [Other, net](index=35&type=section&id=Other%2C%20net_3M) This subsection analyzes other net income and expenses for the three-month periods, including equity in losses from investments Other, net (Three Months Ended) | Item | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase (Decrease) ($ thousands) | Percent Increase (Decrease) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------------- | :-------------------------- | | Equity in losses of IH | 547 | 474 | 73 | 15.4% | | Equity in losses of Oberon | 80 | 4,990 | (4,910) | (98.4%) | | Other (1) | 676 | 1,245 | (569) | (45.7%) | | **Other, net** | **1,303** | **6,709** | **(5,406)** | **(80.6%)** | - The significant decrease in 'Other, net' was primarily driven by a **98.4% reduction in equity in losses of Oberon**[188](index=188&type=chunk) [EBITDA and Adjusted EBITDA](index=35&type=section&id=EBITDA%20and%20Adjusted%20EBITDA_3M) This subsection presents the calculation and comparison of EBITDA and Adjusted EBITDA for the three-month periods EBITDA and Adjusted EBITDA (Three Months Ended) | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | | :---------------------------------------------------------------- | :-------------------------- | :-------------------------- | | EBITDA | 23,023 | 17,860 | | Unrealized non-cash losses on changes in fair value of derivatives | 2,919 | 3,161 | | Equity in losses and impairment charges for investments in unconsolidated affiliates | 627 | 5,464 | | Pension settlement charge | 450 | 550 | | **Adjusted EBITDA** | **27,019** | **27,035** | - Adjusted EBITDA remained relatively flat at **$27.0 million** for the third quarter of fiscal 2025 compared to the prior year[191](index=191&type=chunk) [Nine Months Ended June 28, 2025 Compared to Nine Months Ended June 29, 2024](index=36&type=section&id=Nine%20Months%20Ended%20June%2028%2C%202025%20Compared%20to%20Nine%20Months%20Ended%20June%2029%2C%202024) For the first nine months of fiscal 2025, the Partnership experienced strong revenue growth, particularly in propane, leading to a significant increase in operating income and net income. This was supported by higher volumes and selling prices, despite increased operating and general and administrative expenses [Revenues](index=36&type=section&id=Revenues_9M) This subsection analyzes the revenue performance across different segments for the nine-month periods Revenues (Nine Months Ended) | Category | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase (Decrease) ($ thousands) | Percent Increase (Decrease) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------------- | :-------------------------- | | Propane | 1,082,429 | 970,967 | 111,462 | 11.5% | | Fuel oil and refined fuels | 60,746 | 66,447 | (5,701) | (8.6%) | | Natural gas and electricity | 19,916 | 20,528 | (612) | (3.0%) | | All other | 58,051 | 60,589 | (2,538) | (4.2%) | | **Total revenues** | **1,221,142** | **1,118,531** | **102,611** | **9.2%** | - Propane revenues increased by **11.5%** due to a **6.6% increase in retail gallons sold** and a **3.1% increase in average selling prices**[193](index=193&type=chunk) - All other segment revenues decreased by **4.2%** due to reduced RNG injection from planned shutdowns for equipment upgrades and impacts from extremely cold ambient air temperatures[197](index=197&type=chunk) [Cost of Products Sold](index=37&type=section&id=Cost%20of%20Products%20Sold_9M) This subsection examines the cost of products sold across segments and the impact of derivative instruments for the nine-month periods Cost of Products Sold (Nine Months Ended) | Category | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase (Decrease) ($ thousands) | Percent Increase (Decrease) | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------------- | :-------------------------- | | Propane | 429,795 | 370,289 | 59,506 | 16.1% | | Fuel oil and refined fuels | 36,628 | 44,587 | (7,959) | (17.9%) | | Natural gas and electricity | 11,346 | 10,724 | 622 | 5.8% | | All other | 11,314 | 11,973 | (659) | (5.5%) | | **Total cost of products sold** | **489,083** | **437,573** | **51,510** | **11.8%** | - Propane cost of products sold increased by **16.1%** due to higher average wholesale costs and increased volumes[199](index=199&type=chunk) - The net change in fair value of derivative instruments resulted in a **$1.4 million** unrealized non-cash gain in the first nine months of fiscal 2025, a significant improvement from an **$8.1 million** loss in the prior year[198](index=198&type=chunk) [Operating Expenses](index=37&type=section&id=Operating%20Expenses_9M) This subsection analyzes the changes in operating expenses for the nine-month periods, including payroll and benefit costs Operating Expenses (Nine Months Ended) | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase ($ thousands) | Increase (%) | | :----------------- | :-------------------------- | :-------------------------- | :--------------------- | :----------- | | Operating expenses | 380,058 | 366,263 | 13,795 | 3.8% | - Operating expenses increased by **3.8%** primarily due to higher payroll and benefit-related costs, volume-related variable operating costs, and variable compensation[202](index=202&type=chunk) [General and Administrative Expenses](index=38&type=section&id=General%20and%20Administrative%20Expenses_9M) This subsection details the changes in general and administrative expenses for the nine-month periods, primarily due to compensation and legal costs General and Administrative Expenses (Nine Months Ended) | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase ($ thousands) | Increase (%) | | :-------------------------------- | :-------------------------- | :-------------------------- | :--------------------- | :----------- | | General and administrative expenses | 75,501 | 71,400 | 4,101 | 5.7% | - General and administrative expenses increased by **5.7%** due to higher variable compensation costs and legal settlement costs[204](index=204&type=chunk) [Depreciation and Amortization](index=38&type=section&id=Depreciation%20and%20Amortization_9M) This subsection analyzes the increase in depreciation and amortization expenses for the nine-month periods, driven by new investments Depreciation and Amortization (Nine Months Ended) | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase ($ thousands) | Increase (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :--------------------- | :----------- | | Depreciation and amortization | 53,434 | 49,497 | 3,937 | 8.0% | - Depreciation and amortization expense increased by **8.0%** due to additional investments in RNG production facilities, a propane acquisition, and accelerated depreciation[205](index=205&type=chunk) [Loss on Debt Extinguishment](index=38&type=section&id=Loss%20on%20Debt%20Extinguishment_9M) This subsection reports the non-cash charge recognized from the write-off of unamortized debt origination costs - A non-cash charge of **$0.2 million** was recognized in fiscal 2024 due to the write-off of unamortized debt origination costs from refinancing the revolving credit facility[206](index=206&type=chunk) [Interest Expense, net](index=38&type=section&id=Interest%20Expense%2C%20net_9M) This subsection details the net interest expense for the nine-month periods, influenced by borrowings and interest rates Interest Expense, net (Nine Months Ended) | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase ($ thousands) | Increase (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------------------- | :----------- | | Interest expense, net | 59,060 | 56,540 | 2,520 | 4.5% | - Net interest expense increased by **4.5%** due to higher average outstanding borrowings under the Revolving Credit Facility, partially offset by lower benchmark interest rates[207](index=207&type=chunk) [Other, net](index=38&type=section&id=Other%2C%20net_9M) This subsection analyzes other net income and expenses for the nine-month periods, including equity in losses and impairment charges from investments Other, net (Nine Months Ended) | Item | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | Increase (Decrease) ($ thousands) | Percent Increase (Decrease) | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------------- | :-------------------------- | | Equity in losses of Oberon (1) | 12,278 | 13,531 | (1,253) | (9.3%) | | Equity in losses of IH (2) | 11,094 | 1,590 | 9,504 | 597.7% | | Contingent consideration from Equilibrium | (3,000) | — | (3,000) | — | | Other (3) | 1,127 | 2,635 | (1,508) | (57.2%) | | **Other, net** | **21,499** | **17,756** | **3,743** | **21.1%** | - Other, net increased by **21.1%**, primarily due to a significant increase in equity in losses of IH, which included a **$9.6 million impairment charge** in Q1 fiscal 2025[208](index=208&type=chunk)[216](index=216&type=chunk) - Equity in losses of Oberon included a **$10.2 million impairment charge** in Q1 fiscal 2025[208](index=208&type=chunk) [EBITDA and Adjusted EBITDA](index=39&type=section&id=EBITDA%20and%20Adjusted%20EBITDA_9M) This subsection presents the calculation and comparison of EBITDA and Adjusted EBITDA for the nine-month periods EBITDA and Adjusted EBITDA (Nine Months Ended) | Metric | June 28, 2025 ($ thousands) | June 29, 2024 ($ thousands) | | :---------------------------------------------------------------- | :-------------------------- | :-------------------------- | | EBITDA | 255,001 | 225,324 | | Unrealized non-cash (gains) losses on changes in fair value of derivatives | (1,459) | 8,079 | | Equity in losses and impairment charges for investments in unconsolidated affiliates | 23,372 | 15,121 | | Pension settlement charge | 450 | 550 | | Loss on debt extinguishment | — | 215 | | **Adjusted EBITDA** | **277,364** | **249,289** | - Adjusted EBITDA increased by **11.3% to $277.4 million** for the nine months ended June 28, 2025, compared to **$249.3 million** in the prior year[210](index=210&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the Partnership's cash flows, debt obligations, leverage ratio, and capital-raising activities [Analysis of Cash Flows](index=39&type=section&id=Analysis%20of%20Cash%20Flows) This subsection provides a detailed analysis of cash flows from operating, investing, and financing activities - Net cash provided by operating activities for the first nine months of fiscal 2025 was **$144.4 million**, up from **$123.8 million** in the prior year, primarily due to higher earnings[211](index=211&type=chunk) - Net cash used in investing activities significantly increased to **$114.9 million**, including **$57.8 million** for capital expenditures and **$52.6 million** for business acquisitions[212](index=212&type=chunk) - Net cash used in financing activities decreased to **$37.3 million**, reflecting partnership distributions, net borrowings under the Revolving Credit Facility, and **$16.9 million** from the ATM public offering[214](index=214&type=chunk) [Summary of Long-Term Debt Obligations and Revolving Credit Facility](index=40&type=section&id=Summary%20of%20Long-Term%20Debt%20Obligations%20and%20Revolving%20Credit%20Facility) This subsection summarizes the Partnership's long-term debt, including Senior Notes, Green Bonds, and the Revolving Credit Facility - Total long-term debt as of June 28, 2025, was **$1,244.2 million**, including Senior Notes, Green Bonds, and the Revolving Credit Facility[218](index=218&type=chunk) - The Green Bonds' debt service coverage ratio covenant was eliminated, and the Operating Partnership now guarantees all payments, curing prior non-compliance events[219](index=219&type=chunk) - Significant long-term debt maturities include **$513.6 million** in fiscal 2027 and **$718.9 million** thereafter[220](index=220&type=chunk) [Total Consolidated Leverage Ratio](index=40&type=section&id=Total%20Consolidated%20Leverage%20Ratio) This subsection presents the calculation and trend of the Partnership's total consolidated leverage ratio Total Consolidated Leverage Ratio | Metric | June 28, 2025 | September 28, 2024 | | :----------------------------------- | :------------ | :----------------- | | Total debt, less cash and cash equivalents | $1,242,905 | $1,228,426 | | Adjusted EBITDA for use in calculation | $287,223 | $258,234 | | **Total Consolidated Leverage Ratio** | **4.33 x** | **4.76 x** | - The Total Consolidated Leverage Ratio improved to **4.33x** as of June 28, 2025, from **4.76x** as of September 28, 2024[221](index=221&type=chunk) [At-the-Market Public Offering](index=41&type=section&id=At-the-Market%20Public%20Offering) This subsection details the issuance of common units through the at-the-market public offering and remaining availability - The Partnership issued **903,112 Common Units** under its at-the-market public offering for net proceeds of **$16.9 million** during the nine months ended June 28, 2025[226](index=226&type=chunk) - Approximately **$82.2 million** in gross sale proceeds remains available under the Equity Distribution Agreement[227](index=227&type=chunk) [Partnership Distributions](index=41&type=section&id=Partnership%20Distributions) This subsection reports the quarterly distributions declared for common unitholders - A quarterly distribution of **$0.325 per Common Unit** (**$1.30 annualized**) was declared for the third quarter of fiscal 2025, payable on August 12, 2025[229](index=229&type=chunk) [Other Commitments](index=41&type=section&id=Other%20Commitments) This subsection outlines other significant financial commitments, including pension and insurance liabilities - As of June 28, 2025, the Partnership had a liability of **$10.6 million** for its defined benefit pension plan and **$58.0 million** in accrued insurance liabilities[230](index=230&type=chunk)[231](index=231&type=chunk) [Legal Matters](index=41&type=section&id=Legal%20Matters_MD%26A) This subsection refers to other sections for details on legal matters and contingencies - Refers to Item 1, Note 13 for details on legal matters and commitments and contingencies[232](index=232&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=42&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details the Partnership's exposure to market risks, specifically commodity price risk and interest rate risk, and outlines the strategies and instruments used to manage these exposures, including hedging activities and sensitivity analysis [Commodity Price Risk](index=42&type=section&id=Commodity%20Price%20Risk) This subsection describes how the Partnership manages exposure to fluctuations in propane and fuel oil prices through various hedging strategies - The Partnership manages commodity price risk through short-term pricing, forward fixed price purchase contracts, and derivative instruments (futures, options, and swaps) for propane and fuel oil[233](index=233&type=chunk)[235](index=235&type=chunk) - Derivative instruments are used for hedging, not speculative trading, with realized gains/losses typically offsetting physical inventory gains/losses[235](index=235&type=chunk) [Credit Risk](index=42&type=section&id=Credit%20Risk) This subsection explains the Partnership's approach to managing credit risk associated with its derivative contracts - Credit risk for exchange-traded contracts is minimal due to NYMEX guarantees, but the Partnership evaluates counterparties and sets credit limits for over-the-counter contracts[237](index=237&type=chunk) [Interest Rate Risk](index=42&type=section&id=Interest%20Rate%20Risk) This subsection details the Partnership's exposure to interest rate fluctuations on variable-rate borrowings and potential hedging strategies - The Partnership is exposed to interest rate risk on variable-rate borrowings (SOFR-based) and may use interest rate swap agreements to manage this risk, though none were active as of June 28, 2025[238](index=238&type=chunk) [Derivative Instruments and Hedging Activities](index=43&type=section&id=Derivative%20Instruments%20and%20Hedging%20Activities) This subsection describes the accounting treatment for derivative instruments and their impact on the financial statements - All derivative instruments are reported at fair value on the balance sheet, with changes recorded in current period earnings or OCI depending on hedge designation and effectiveness[239](index=239&type=chunk) [Sensitivity Analysis](index=43&type=section&id=Sensitivity%20Analysis) This subsection quantifies the potential impact of hypothetical market price changes on the fair value of derivative instruments - A hypothetical **10% adverse change** in market prices for open derivative instruments as of June 28, 2025, would result in an estimated **$0.2 million increase** in potential future net losses[240](index=240&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=43&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of the Partnership's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=43&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This subsection confirms the effectiveness of the Partnership's disclosure controls and procedures as of the reporting date - The Partnership's disclosure controls and procedures were evaluated and deemed effective as of June 28, 2025, providing reasonable assurance for timely and accurate reporting[241](index=241&type=chunk)[242](index=242&type=chunk) [Changes in Internal Control Over Financial Reporting](index=43&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This subsection reports on any material changes in the Partnership's internal control over financial reporting during the quarter - There have been no material changes in the Partnership's internal control over financial reporting during the quarter ended June 28, 2025[243](index=243&type=chunk) [PART II. OTHER INFORMATION](index=44&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes disclosures on legal proceedings, risk factors, equity sales, and other miscellaneous information [ITEM 1. LEGAL PROCEEDINGS](index=44&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section states that there are no legal proceedings to report - No legal proceedings are reported in this section[246](index=246&type=chunk) [ITEM 1A. RISK FACTORS](index=44&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section updates the risk factors, emphasizing risks related to current and future debt obligations that could limit distributions and financial flexibility, and risks associated with renewable fuel projects and investments, including potential impairment charges - Risks related to current and future debt obligations may limit the Partnership's ability to make distributions to Unitholders and impact financial flexibility[247](index=247&type=chunk)[251](index=251&type=chunk) - The Green Bonds' debt service coverage ratio covenant was eliminated, and the Operating Partnership now guarantees all payments, mitigating a previous event of default[248](index=248&type=chunk)[249](index=249&type=chunk) - Renewable fuel projects and investments face risks including customer adoption, operational constraints, financing, and dependence on government incentives, leading to impairment charges of **$10.2 million** for Oberon and **$9.6 million** for IH in Q1 fiscal 2025[252](index=252&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=46&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section states that there are no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities or use of proceeds are reported[257](index=257&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=46&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section states that there are no defaults upon senior securities to report - No defaults upon senior securities are reported[258](index=258&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=46&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section states that mine safety disclosures are not applicable - Mine safety disclosures are not applicable to the Partnership[259](index=259&type=chunk) [ITEM 5. OTHER INFORMATION](index=46&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section reports that no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by supervisors and executive officers during the quarter - Supervisors and executive officers did not adopt or terminate any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 28, 2025[260](index=260&type=chunk) [ITEM 6. EXHIBITS](index=47&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed as part of the Quarterly Report, including the Equity Distribution Agreement and various certifications - Exhibits include the Equity Distribution Agreement (10.1) and certifications from the President and CEO, and CFO (31.1, 31.2, 32.1, 32.2)[264](index=264&type=chunk) [SIGNATURES](index=48&type=section&id=SIGNATURES) This section contains the authorized signatures for the Quarterly Report on Form 10-Q - The report was signed by Michael A. Kuglin, Chief Financial Officer, and Daniel S. Bloomstein, Vice President, Controller and Chief Accounting Officer, on August 7, 2025[266](index=266&type=chunk)

Financial Data and Key Metrics Changes - The net loss for Q3 was $10.8 million or $0.17 per common unit, compared to a net loss of $8 million or $0.12 per common unit in the prior year [11] - Adjusted EBITDA for Q3 was $27 million, consistent with the prior year [11] - Total gross margin for Q3 was $163.5 million, unchanged from the prior year [13] - The consolidated leverage ratio improved to 4.33 times compared to 4.54 times at the end of the second quarter [14] Business Line Data and Key Metrics Changes - Retail propane gallons sold in Q3 were 71.9 million gallons, in line with the prior year [12] - Average wholesale propane prices increased by 4.7% compared to the prior year [12] - Average daily RNG injection declined slightly compared to the prior year due to operational downtime [8] Market Data and Key Metrics Changes - Propane inventories at the end of Q3 were at 75.7 million barrels, flat compared to June 2024 and roughly 10% higher than historical averages [13] - California LCFS credit prices increased by 30% since the amendments were finalized in late June 2025, while average Federal D3 RIN prices were down 21% year over year [10] Company Strategy and Development Direction - The long-term strategic growth plan focuses on fostering the growth of the core propane business while investing in lower carbon renewable energy alternatives [18] - The company is advancing capital projects at RNG facilities in Columbus, Ohio, and Upstate New York, expected to increase overall RNG sales once operational [8] Management's Comments on Operating Environment and Future Outlook - Management noted strong cash flow generation in Q3 due to collections on receivables and highlighted the impact of warm temperatures on propane volumes [7][10] - The company remains focused on operational improvements and strategic growth initiatives, including potential M&A opportunities [18][29] Other Important Information - The quarterly distribution declared was $0.0325 per common unit, equating to an annualized rate of $1.3 per common unit, with a distribution coverage of 2.16 times [16] - The company is actively monitoring regulatory developments related to RNG tax credits and the OBVA bill [22][25] Q&A Session Summary Question: Update on RNG rulemaking and tax credits - Management indicated no credits recognized under 45Z until final regulations are released, expected by the end of the calendar year [22] Question: Timing of New York and Columbus projects - Columbus and Upstate New York projects are on track for late this calendar year into early next year, while Arizona improvements are ongoing with no major timeline [27] Question: Size of insurance payout benefit and O&M trends - The insurance payout benefit was less than $2 million, offsetting inflation impacts, with expected inflation around 3% going forward [28] Question: M&A activity - The company is seeing a typical pipeline of M&A opportunities and remains focused on strategic growth through acquisitions [29]

[Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) This section provides an overview of the company's recent financial performance and strategic initiatives [Announcement of Third Quarter Results](index=1&type=section&id=Announcement%20of%20Third%20Quarter%20Results) Suburban Propane Partners, L.P. announced its third-quarter fiscal 2025 results, reporting a net loss of $14.8 million, an improvement from the prior year's $17.2 million net loss, with Adjusted EBITDA remaining flat at $27.0 million Third Quarter Results Highlights | Metric | Q3 FY2025 | Q3 FY2024 | Change (YoY) | | :----------------------- | :-------- | :-------- | :----------- | | Net Loss | $(14.8) million | $(17.2) million | $(2.4) million | | Net Loss per Common Unit | $(0.23) | $(0.27) | $(0.04) | | Adjusted EBITDA | $27.0 million | $27.0 million | $0.0 million | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) President and CEO Michael A. Stivala highlighted a solid counter-seasonal quarter despite warm temperatures and commodity price volatility, focusing on customer needs, managing prices and expenses, executing growth initiatives, reducing debt, and advancing renewable natural gas (RNG) projects - The company delivered a solid counter-seasonal quarter despite unseasonably warm temperatures and commodity price volatility, attributed to effective management of selling prices and expenses, and execution of customer base growth and retention initiatives[4](index=4&type=chunk) - Excess cash flows and proceeds from the At-the-Market (ATM) sales program were used to fund growth capital projects and reduce debt by **$69 million**[4](index=4&type=chunk) - In RNG operations, average daily injection was slightly down, and revenues were negatively impacted by lower prices for environmental attributes, with the company remaining focused on operational enhancements at its Stanfield, Arizona facility and advancing capital projects in upstate New York and Columbus, Ohio[4](index=4&type=chunk) [Financial Performance Analysis](index=1&type=section&id=Financial%20Performance%20Analysis) This section details the consolidated financial results, gross margin, operating expenses, and non-GAAP measures for the reporting periods [Consolidated Financial Results (Q3 FY2025 vs Q3 FY2024)](index=5&type=section&id=Consolidated%20Financial%20Results) For the third quarter of fiscal 2025, total revenues increased slightly to $260.2 million, primarily driven by higher propane revenues, with the net loss improving to $14.8 million and diluted EPS improving to $(0.23), while nine-month figures showed significant increases Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Nine Months Ended June 28, 2025 | Nine Months Ended June 29, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | **Revenues** | | | | | | Propane | $226,890 | $220,045 | $1,082,429 | $970,967 | | Fuel oil & refined fuels | $9,721 | $10,954 | $60,746 | $66,447 | | Natural gas & electricity | $4,838 | $5,322 | $19,916 | $20,528 | | All other | $18,701 | $18,289 | $58,051 | $60,589 | | **Total Revenues** | **$260,150** | **$254,610** | **$1,221,142** | **$1,118,531** | | **Costs & Expenses** | | | | | | Cost of products sold | $99,559 | $94,400 | $489,083 | $437,573 | | Operating | $117,528 | $115,882 | $380,058 | $366,263 | | General & administrative | $18,737 | $19,759 | $75,501 | $71,400 | | Depreciation & amortization | $18,735 | $16,379 | $53,434 | $49,497 | | **Total Costs & Expenses** | **$254,559** | **$246,420** | **$998,076** | **$924,733** | | Operating Income | $5,591 | $8,190 | $223,066 | $193,798 | | Net (Loss) Income | $(14,835) | $(17,191) | $141,706 | $118,763 | | Net (Loss) Income per Common Unit - diluted | $(0.23) | $(0.27) | $2.17 | $1.83 | [Gross Margin and Operating Expenses](index=1&type=section&id=Gross%20Margin%20and%20Operating%20Expenses) Total gross margin for Q3 FY2025 remained unchanged at $160.6 million, as steady propane volumes and unit margins offset an unrealized loss from derivative instruments, while combined operating and general and administrative expenses increased slightly by 0.5% due to higher payroll and benefits, partially offset by an insurance recovery Gross Margin and Operating Expenses Highlights (in millions) | Metric | Q3 FY2025 | Q3 FY2024 | Change (YoY) | | :------------------- | :-------- | :-------- | :----------- | | Total Gross Margin | $160.6 | $160.6 | $0.0 | | Unrealized Loss (Derivatives) | $2.9 | $3.2 | $(0.3) | | Combined Operating & G&A Expenses | $136.3 | $135.7 | $0.6 (0.5%) | - Higher payroll and benefit-related costs were largely offset by a gain from an insurance recovery, contributing to the slight increase in operating and general and administrative expenses[6](index=6&type=chunk) [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) The report provides EBITDA and Adjusted EBITDA as supplemental measures of operating performance, reconciling them from net income, with Adjusted EBITDA for Q3 FY2025 flat at $27.0 million year-over-year, and increasing to $277.4 million from $249.3 million for the nine months EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Nine Months Ended June 28, 2025 | Nine Months Ended June 29, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net (loss) income | $(14,835) | $(17,191) | $141,706 | $118,763 | | Add: Provision for income taxes | $242 | $243 | $801 | $524 | | Add: Interest expense, net | $18,881 | $18,429 | $59,060 | $56,540 | | Add: Depreciation and amortization | $18,735 | $16,379 | $53,434 | $49,497 | | **EBITDA** | **$23,023** | **$17,860** | **$255,001** | **$225,324** | | Unrealized non-cash losses (gains) on changes in fair value of derivatives | $2,919 | $3,161 | $(1,459) | $8,079 | | Pension settlement charge | $450 | $550 | $450 | $550 | | Equity in losses and impairment charges for investments in unconsolidated affiliates | $627 | $5,464 | $23,372 | $15,121 | | Loss on debt extinguishment | — | — | — | $215 | | **Adjusted EBITDA** | **$27,019** | **$27,035** | **$277,364** | **$249,289** | - EBITDA and Adjusted EBITDA are non-GAAP measures used by management as supplemental indicators of operating performance, providing additional information for investors and industry analysts[17](index=17&type=chunk) [Operational Review](index=1&type=section&id=Operational%20Review) This section examines key operational metrics including propane sales, market conditions, and renewable natural gas activities [Propane Sales and Market Conditions](index=1&type=section&id=Propane%20Sales%20and%20Market%20Conditions) Retail propane gallons sold in Q3 FY2025 were consistent with the prior year, despite average temperatures being significantly warmer than normal but cooler than the prior year, while average propane prices increased by 4.7% year-over-year Propane Sales and Market Conditions | Metric | Q3 FY2025 | Q3 FY2024 | Change (YoY) | | :-------------------------- | :-------- | :-------- | :----------- | | Retail Propane Gallons Sold | 71.9 million | 71.7 million | 0.2 million (0.3%) | | Average Propane Prices (Mont Belvieu, TX) | **+4.7%** | N/A | +4.7% | - Average temperatures across service territories were **14% warmer than normal** but **5% cooler than the prior year** third quarter[4](index=4&type=chunk) [Renewable Natural Gas (RNG) Operations](index=1&type=section&id=Renewable%20Natural%20Gas%20(RNG)%20Operations) RNG injection for Q3 FY2025 was slightly down compared to the prior year, with revenues negatively impacted by lower prices for environmental attributes, as the company actively implements operational enhancements and advances capital projects to increase RNG production - Average daily RNG injection for the third quarter was down slightly compared to the prior year third quarter[4](index=4&type=chunk) - Revenues from RNG injection were negatively impacted by lower prices for environmental attributes under the Renewable Fuel Standard[4](index=4&type=chunk) - The company is focused on implementing operational enhancements at its Stanfield, Arizona production facility and advancing capital projects for an anaerobic digester system in upstate New York and gas upgrade equipment in Columbus, Ohio[4](index=4&type=chunk) [Capital Management & Shareholder Returns](index=3&type=section&id=Capital%20Management%20%26%20Shareholder%20Returns) This section outlines the company's debt management strategies, leverage position, and quarterly distribution to unitholders [Debt Management and Leverage](index=3&type=section&id=Debt%20Management%20and%20Leverage) During Q3 FY2025, the Partnership repaid $69.0 million in borrowings under its revolving credit facility, utilizing cash flows from operating activities and $8.1 million from its ATM program, resulting in an improved Consolidated Leverage Ratio of 4.33x Debt Management Highlights | Metric | Value | | :-------------------------- | :---------- | | Debt Repayment (Q3 FY2025) | **$69.0 million** | | ATM Program Proceeds (Q3 FY2025) | **$8.1 million** | | Consolidated Leverage Ratio (as of June 28, 2025) | **4.33x** | [Quarterly Distribution](index=3&type=section&id=Quarterly%20Distribution) The Board of Supervisors declared a quarterly distribution of $0.325 per Common Unit for the three months ended June 28, 2025, equating to an annualized rate of $1.30 per Common Unit Quarterly Distribution | Metric | Value | | :-------------------------- | :------ | | Quarterly Distribution per Common Unit | **$0.325** | | Annualized Distribution Rate | **$1.30** | [Company Profile](index=3&type=section&id=Company%20Profile) This section describes Suburban Propane's business, market reach, and strategic pillars focused on customer service, community, and green energy [Business Description](index=3&type=section&id=Business%20Description) Suburban Propane Partners, L.P. is a publicly traded master limited partnership, a nationwide distributor of various energy products and services, including propane, renewable propane, RNG, fuel oil, natural gas, and electricity, serving approximately 1 million customers across 42 states - Suburban Propane is a nationwide distributor of propane, renewable propane, renewable natural gas ("RNG"), fuel oil and related products and services, as well as a marketer of natural gas and electricity and producer of and investor in low carbon fuel alternatives[9](index=9&type=chunk) - The company services approximately **1 million residential, commercial, governmental, industrial and agricultural customers** through approximately **700 locations across 42 states**[9](index=9&type=chunk) [Core Pillars and Strategic Focus](index=3&type=section&id=Core%20Pillars%20and%20Strategic%20Focus) Suburban Propane operates under three core pillars: Suburban Commitment (customer service excellence), SuburbanCares (community giving), and Go Green with Suburban Propane (promoting clean energy and investing in renewable alternatives) - **Suburban Commitment**: Showcasing almost 100-year legacy and ongoing commitment to dependability, flexibility, and reliability in customer service[10](index=10&type=chunk) - **SuburbanCares**: Highlighting dedication to giving back to local communities across its national footprint[10](index=10&type=chunk) - **Go Green with Suburban Propane**: Promoting propane and renewable propane as a bridge to a green energy future and investing in innovative, renewable energy alternatives[10](index=10&type=chunk) [Risk Factors and Forward-Looking Statements](index=3&type=section&id=Risk%20Factors%20and%20Forward-Looking%20Statements) This section identifies potential risks and uncertainties that could materially impact future financial results and operations [Forward-Looking Statements and Risks](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risks) This section contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially, including weather conditions, commodity price volatility, competition, economic instability, regulatory changes, and risks associated with renewable fuel projects - Risks include the impact of weather conditions on demand for energy products, volatility in unit costs of fuels, and the ability to compete with other energy suppliers[12](index=12&type=chunk) - Economic volatility, geopolitical instability, and the ability to attract and retain employees and customers are also significant risks[12](index=12&type=chunk)[14](index=14&type=chunk) - Specific risks related to renewable fuel projects include customer willingness to purchase, permitting, financing, operational challenges, dependence on third-party partners, and changes in government incentives and environmental attribute markets[14](index=14&type=chunk) [Supplemental Information](index=6&type=section&id=Supplemental%20Information) This section directs readers to the comprehensive financial statements and disclosures available in the official SEC filing [Reference to Form 10-Q](index=6&type=section&id=Reference%20to%20Form%2010-Q) The unaudited financial information provided is a summary and should be read in conjunction with the complete consolidated financial statements, including notes, in the Partnership's Quarterly Report on Form 10-Q to be filed with the SEC

Core Insights - Suburban Propane Partners, L.P. reported a net loss of $14.8 million for the third quarter of fiscal 2025, an improvement from a net loss of $17.2 million in the same quarter of fiscal 2024 [2][16] - Adjusted EBITDA for the third quarter of fiscal 2025 was $27.0 million, remaining flat compared to the prior year [2][16] - The company experienced a solid counter-seasonal quarter despite unseasonably warm temperatures and commodity price volatility [3] Financial Performance - Retail propane gallons sold in the third quarter of fiscal 2025 were 71.9 million gallons, consistent with the prior year [4][16] - Average propane prices increased by 4.7% compared to the prior year [4] - Total gross margin for the third quarter was $160.6 million, unchanged from the prior year [4] Operational Highlights - The company utilized excess cash flows and proceeds from the issuance of Common Units to fund growth capital projects and reduce debt by $69 million [3][6] - Average daily renewable natural gas (RNG) injection was slightly down compared to the prior year, with revenues negatively impacted by lower prices for environmental attributes [3] - The Consolidated Leverage Ratio improved to 4.33x for the twelve-month period ended June 28, 2025 [6] Distribution Information - The Board of Supervisors declared a quarterly distribution of $0.325 per Common Unit for the three months ended June 28, 2025, equating to an annualized rate of $1.30 per Common Unit [7]

Core Viewpoint - Suburban Propane Partners, L.P. is set to announce its Fiscal 2025 Third Quarter results on August 7, 2025, with a conference call for analysts and investors to discuss the results and business outlook [1]. Company Overview - Suburban Propane Partners, L.P. is a publicly traded master limited partnership listed on the NYSE, headquartered in Whippany, New Jersey, and has been in the customer service business since 1928 [3]. - The company distributes propane, renewable propane, renewable natural gas, fuel oil, and related products and services, serving approximately 1 million customers across 42 states through around 700 locations [3]. Core Pillars - The company is supported by three core pillars: 1. **Suburban Commitment** - Emphasizing a legacy of nearly 100 years and a commitment to high standards in customer service [4]. 2. **SuburbanCares** - Focusing on community engagement and giving back to local communities [4]. 3. **Go Green with Suburban Propane** - Promoting propane and renewable propane as clean energy alternatives and investing in innovative renewable energy solutions [4].

Company Overview - Suburban Propane Partners, L.P. is a publicly traded master limited partnership listed on the NYSE, headquartered in Whippany, New Jersey, and has been in the customer service business since 1928 [5] - The company distributes propane, renewable propane, renewable natural gas, fuel oil, and related products and services, and also markets natural gas and electricity, servicing approximately 1 million customers across 700 locations in 42 states [5] Community Engagement - Suburban Propane is the main sponsor of the Track to Table event, which merges NASCAR with fine dining and charitable giving, benefiting Speedway Children's Charities Sonoma [1][2] - The company emphasizes its commitment to community-focused initiatives through its SuburbanCares platform, aiming to support local organizations and programs that impact children and families in need [3][6] Event Highlights - The Track to Table event features a culinary experience with wine pairings from local wineries and an acoustic performance by country music artist Tim Dugger, along with a live charity auction [4] - The event is designed to celebrate the food and wine of Sonoma while supporting vulnerable children and families [4] Corporate Values - Suburban Propane operates under three core pillars: Suburban Commitment, SuburbanCares, and Go Green with Suburban Propane, focusing on customer service excellence, community support, and promoting renewable energy alternatives [6]

Core Insights - Suburban Propane (NYSE: SPH) has experienced a mixed performance over the past year, with a loss of approximately 2% in share value while providing a dividend yield of over 6% [1] Financial Performance - The company has struggled with excess debt and limited demand growth, impacting its overall financial health [1]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents the unaudited condensed consolidated financial statements for Suburban Propane Partners, L.P., including balance sheets, statements of operations, cash flows, and partners' capital, along with detailed accounting notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$2.40 billion** as of March 29, 2025, driven by accounts receivable and property, plant, and equipment, while total liabilities remained stable and partners' capital grew to **$671.8 million** Condensed Consolidated Balance Sheets (in thousands) | | March 29, 2025 | September 28, 2024 | | :--- | :--- | :--- | | **Total current assets** | $250,093 | $157,544 | | **Total assets** | $2,399,899 | $2,272,761 | | **Total current liabilities** | $235,661 | $306,122 | | **Long-term borrowings** | $1,293,529 | $1,210,326 | | **Total liabilities** | $1,728,090 | $1,725,701 | | **Total partners' capital** | $671,809 | $547,060 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income for the three months ended March 29, 2025, increased to **$137.1 million**, and for the six-month period, it rose to **$156.5 million**, primarily due to higher revenues in the propane segment Three Months Ended Financial Highlights (in thousands, except per unit) | Metric | March 29, 2025 | March 30, 2024 | | :--- | :--- | :--- | | **Total Revenues** | $587,663 | $498,087 | | **Operating Income** | $158,413 | $136,860 | | **Net Income** | $137,121 | $111,500 | | **Net Income per Common Unit - basic** | $2.11 | $1.73 | Six Months Ended Financial Highlights (in thousands, except per unit) | Metric | March 29, 2025 | March 30, 2024 | | :--- | :--- | :--- | | **Total Revenues** | $960,992 | $863,921 | | **Operating Income** | $217,475 | $185,608 | | **Net Income** | $156,541 | $135,954 | | **Net Income per Common Unit - basic** | $2.42 | $2.12 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities decreased to **$48.9 million** for the six months ended March 29, 2025, while net cash used in investing activities significantly increased to **$97.1 million**, and financing activities provided **$45.1 million** Six Months Ended Cash Flow Summary (in thousands) | Cash Flow Activity | March 29, 2025 | March 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $48,884 | $62,374 | | **Net cash (used in) investing activities** | ($97,126) | ($30,734) | | **Net cash provided by (used in) financing activities** | $45,122 | ($26,538) | | **Net (decrease) increase in cash** | ($3,120) | $5,102 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including business organization, revenue recognition, and debt structure, highlighting impairment charges on investments, an at-the-market equity offering, and the resolution of a Green Bonds covenant issue - The Partnership's primary business involves the retail marketing and distribution of propane, renewable propane, fuel oil, and other fuels, alongside growing renewable energy investments[36](index=36&type=chunk)[38](index=38&type=chunk) - During the first quarter of fiscal 2025, the Partnership recorded other-than-temporary impairment charges of **$10.2 million** on its investment in Oberon and **$9.6 million** on its investment in Independence Hydrogen (IH)[65](index=65&type=chunk)[67](index=67&type=chunk) - On February 20, 2025, the Partnership initiated an at-the-market (ATM) public offering to sell up to **$100 million** of Common Units, issuing **442,425 units** for net proceeds of **$8.8 million** during the quarter[131](index=131&type=chunk)[133](index=133&type=chunk) - Subsequent to the quarter end, on May 2, 2025, the Operating Partnership guaranteed the Green Bonds, and the indenture was amended to eliminate the debt service coverage ratio covenant, resolving a prior non-compliance issue[143](index=143&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses key performance drivers, including product costs, seasonality, and inflation, reporting a **19.1% increase in Adjusted EBITDA** to **$175.0 million** for Q2 FY2025, driven by higher propane volumes, and an improved leverage ratio of **4.54x** - Key business drivers include product cost volatility, seasonality (with two-thirds of propane volume sold from October to March), weather conditions, and inflationary pressures on operating costs[146](index=146&type=chunk)[150](index=150&type=chunk)[154](index=154&type=chunk) Q2 FY2025 Performance Highlights | Metric | Q2 FY2025 | Change vs. Q2 FY2024 | | :--- | :--- | :--- | | **Net Income** | $137.1 million | +$25.6 million | | **Adjusted EBITDA** | $175.0 million | +19.1% | | **Retail Propane Gallons Sold** | 162.0 million | +15.5% | | **Average Temperatures** | 9% cooler | vs. prior year | - The Consolidated Leverage Ratio improved to **4.54x** as of March 29, 2025, down from **4.76x** at the end of fiscal 2024[162](index=162&type=chunk)[219](index=219&type=chunk) [Results of Operations - Three Months Ended March 29, 2025 vs. March 30, 2024](index=32&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended) Total revenues for Q2 FY2025 increased **18.0%** to **$587.7 million**, primarily due to a **20.0% rise in propane revenue** driven by a **15.5% increase in volumes** and higher selling prices, while operating and G&A expenses also rose Q2 Revenue and Volume Changes by Segment | Segment | Revenue Change | Volume Change | | :--- | :--- | :--- | | **Propane** | +20.0% | +15.5% | | **Fuel oil and refined fuels** | +5.6% | +11.0% | | **Natural gas and electricity** | +3.6% | N/A | | **All other** | -1.0% | N/A | - The increase in propane revenue was driven by a **21.8 million gallon (15.5%) increase** in retail volumes sold and a **2.7% increase** in average selling prices[168](index=168&type=chunk) - Cost of products sold increased **27.5%**, faster than revenue, partly due to a smaller unrealized gain from derivative mark-to-market adjustments (**$0.7 million** in Q2'25 vs. **$5.9 million** in Q2'24)[160](index=160&type=chunk)[172](index=172&type=chunk) [Results of Operations - Six Months Ended March 29, 2025 vs. March 30, 2024](index=36&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended) Total revenues for the first six months of fiscal 2025 grew **11.2%** to **$961.0 million**, with propane revenue up **13.9%** due to higher volumes and prices, though partially offset by a **7.0% decline** in 'All other' revenue and a significant increase in 'Other, net' expense due to impairment charges H1 Revenue and Volume Changes by Segment | Segment | Revenue Change | Volume Change | | :--- | :--- | :--- | | **Propane** | +13.9% | +8.5% | | **Fuel oil and refined fuels** | -8.1% | -1.0% | | **Natural gas and electricity** | -0.8% | N/A | | **All other** | -7.0% | N/A | - The net change in fair value of derivatives resulted in a **$4.4 million** unrealized gain in H1 FY2025, compared to a **$4.9 million** unrealized loss in H1 FY2024, a positive swing of **$9.3 million** for cost of products sold[197](index=197&type=chunk) - 'Other, net' expense increased by **$9.1 million**, primarily due to **$19.8 million** in combined impairment charges for investments in Oberon and IH recorded in the first quarter[207](index=207&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Net cash from operations for H1 FY2025 was **$48.9 million**, while investing activities used **$97.1 million** for capital expenditures and acquisitions, and financing activities provided **$45.1 million** from net borrowings and an ATM equity offering, with total debt at **$1.31 billion** - Cash from operations decreased to **$48.9 million** from **$62.4 million** in the prior year, mainly due to a larger increase in working capital[210](index=210&type=chunk) - Investing activities included **$50.0 million** for propane business acquisitions and **$30.5 million** for growth-related capital expenditures[211](index=211&type=chunk) - The Partnership announced a quarterly distribution of **$0.325 per Common Unit**, or **$1.30 annualized**[227](index=227&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The Partnership is exposed to market risks from commodity price fluctuations, interest rate changes, and counterparty credit, managing commodity risk through hedging with derivatives, and a sensitivity analysis indicates a hypothetical **10% adverse change** in commodity prices would result in a potential **$1.0 million net loss** on open derivative positions - The primary market risk is commodity price volatility for propane and fuel oil, managed through hedging with derivative instruments[231](index=231&type=chunk)[233](index=233&type=chunk) - Interest rate risk applies to borrowings under the revolving credit facility, which are based on SOFR plus a margin[236](index=236&type=chunk) - A sensitivity analysis showed that a hypothetical **10% adverse change** in market prices would lead to a potential **$1.0 million net loss** on open derivative positions[238](index=238&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the Partnership's disclosure controls and procedures were effective as of March 29, 2025, with no material changes in internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of the end of the period[240](index=240&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[241](index=241&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=44&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The Partnership reported no material legal proceedings during the period - None[244](index=244&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section updates risk factors, highlighting those associated with significant debt obligations and renewable fuel investments, including a resolved Green Bonds covenant issue and impairment charges on Oberon and IH investments - The company faces risks from its significant debt load (**$1.3 billion**), which could limit financial flexibility and distributions, with covenants in debt agreements restricting certain activities[245](index=245&type=chunk) - A previous event of default under the Green Bonds due to non-compliance with the debt service coverage ratio was cured through waivers and a subsequent amendment to the indenture that eliminated the covenant[246](index=246&type=chunk)[247](index=247&type=chunk) - Investments in renewable fuels (like rDME and hydrogen) are subject to significant risks, including market adoption, partner financial stability, and regulatory changes, underscored by the Q1 FY2025 impairment charges of **$10.2 million** for Oberon and **$9.6 million** for IH[250](index=250&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The Partnership reported no unregistered sales of equity securities during the period - None[255](index=255&type=chunk) [Item 5. Other Information](index=46&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No supervisors or executive officers adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the fiscal quarter ended March 29, 2025 - No new or terminated Rule 10b5-1 trading arrangements or other trading arrangements were reported for supervisors and executive officers during the quarter[258](index=258&type=chunk) [Item 6. Exhibits](index=47&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the quarterly report, including the Equity Distribution Agreement and certifications from the CEO and CFO as required by the Sarbanes-Oxley Act - Filed exhibits include the Equity Distribution Agreement (10.1), CEO and CFO certifications (31.1, 31.2, 32.1, 32.2), and XBRL data files[262](index=262&type=chunk)

Financial Data and Key Metrics Changes - The second quarter of fiscal 2025 saw a net income of $136.9 million or $2.11 per common unit, compared to $110.3 million or $1.71 per common unit in the prior year, marking a significant increase [12] - Adjusted EBITDA increased by $28 million or 19.1% to $175 million compared to the prior year [12][16] - Retail propane gallons sold were 162 million, a 15.5% increase from the previous year, driven by cooler temperatures and recent acquisitions [12][16] Business Line Data and Key Metrics Changes - Propane volumes increased by 15.5% year-over-year, with the highest volume delivered in January 2025 since 2018 [8][12] - Average daily renewable natural gas (RNG) injection improved from the first quarter but was slightly down compared to the previous year due to cold temperatures affecting production [9] - The company made significant progress in integrating a propane business acquired for approximately $53 million, exceeding performance expectations [10] Market Data and Key Metrics Changes - Average wholesale propane prices for the quarter were $0.90 per gallon, a 7.2% increase compared to the prior year [15] - U.S. propane inventories were 44.1 million barrels, 15% lower than March 2024 levels, indicating strong seasonal demand [14] Company Strategy and Development Direction - The long-term strategic growth plan focuses on growing the core propane business and investing in lower carbon renewable energy alternatives while maintaining balance sheet flexibility [11] - The company launched an At the Market (ATM) equity sales program to raise up to $100 million for opportunistic growth and debt repayment [10][11] - The partnership with NASCAR as the official propane partner highlights the company's commitment to sustainability and community engagement [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating commodity cycles and managing propane supply effectively [28] - The propane M&A landscape has changed, with fewer buyers, presenting opportunities for Suburban Propane to acquire quality businesses [31][33] - Regulatory developments regarding renewable natural gas production tax credits are being monitored, with expectations for improved credit values in the future [18][36] Other Important Information - The quarterly distribution was declared at $0.325 per common unit, with a strong coverage ratio of 2.17 times [20] - The company is well-positioned to meet energy needs and innovate in lower carbon renewable energy markets [25][37] Q&A Session Summary Question: How is Suburban positioning itself for the non-heating season and next heating season? - Management indicated strong supply management capabilities and relationships with suppliers, expecting higher propane inventory levels to influence pricing [28][29] Question: What is Suburban's view on the propane M&A landscape? - The company sees a promising future for propane and is well-positioned to acquire quality businesses due to fewer buyers in the market [31][33] Question: What are the expectations regarding federal and state regulations for renewable energy? - Management anticipates regulatory changes that will positively impact credit values for renewable natural gas, with a focus on operational excellence [34][36]

Financial Data and Key Metrics Changes - The second quarter of fiscal 2025 saw a net income of $136.9 million or $2.11 per common unit, compared to $110.3 million or $1.71 per common unit in the prior year, marking a significant increase [12] - Adjusted EBITDA for the quarter was $175 million, an increase of $28 million or 19.1% compared to the prior year [12][14] - Retail propane gallons sold increased by 15.5% to 162 million gallons, primarily due to cooler temperatures and contributions from recent acquisitions [12][14] Business Line Data and Key Metrics Changes - Propane volumes increased by 15.5% compared to the prior year's second quarter, with the highest volume delivered in January 2025 since 2018 [7][12] - Renewable natural gas (RNG) operations saw average daily injection improve from the first quarter, although it was slightly down from the prior year's second quarter due to cold temperatures affecting production [8][9] Market Data and Key Metrics Changes - Average wholesale propane prices for the quarter were $0.90 per gallon, a 7.2% increase compared to the prior year [14] - U.S. propane inventories were 15% lower than March 2024 levels, contributing to price volatility in the market [14][23] Company Strategy and Development Direction - The long-term strategic growth plan focuses on growing the core propane business and investing in lower carbon renewable energy alternatives while maintaining balance sheet flexibility [11][25] - The company is actively pursuing opportunistic growth through acquisitions, with a strong pipeline of opportunities emerging as the market stabilizes [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the propane market's volatility and highlighted the importance of strong supplier relationships [28][29] - The company is optimistic about the future of propane as a reliable energy source and is well-positioned to capitalize on new market opportunities [33][34] Other Important Information - The company launched an At the Market (ATM) equity sales program to raise up to $100 million, with net proceeds of $8.8 million used to repay debt [10][11] - A quarterly distribution of $0.325 per common unit was declared, with a coverage ratio of 2.17 times for the trailing twelve months [20] Q&A Session Summary Question: How is Suburban positioning itself ahead of the non-heating season? - Management indicated that they have strong supply management practices and expect higher propane inventory levels to influence pricing [28][29] Question: What is Suburban's view on the propane M&A landscape? - The company noted a reduced number of buyers in the market, presenting a favorable opportunity for Suburban to pursue quality acquisitions [31][34] Question: What are the expectations regarding renewable energy regulations? - Management discussed the potential for improved credit values in the environmental attribute markets and emphasized operational excellence in their RNG platform [35][36]