Suburban Propane Partners, L.P. Q3 FY2025 earnings call

• Following a strong second quarter, the third quarter had solid performance despite warm temps and commodity price volatility. - Benefited from the strategic propane acquisition in New Mexico closed in the first fiscal quarter. - RNG operations had downtime but were implementing improvements; Columbus, Ohio and Upstate New York RNG facilities' capital projects expected to increase RNG sales. - Cash flow strong in Q3, used excess cash and ATM proceeds to reduce debt by $69 million. - Declared quarterly distribution of $0.325 per common unit. - First 9 months of fiscal 2025 saw 6.6% volume increase due to warm start, cold winter, New Mexico acquisition, and hurricane impact. - Year-to-date adjusted EBITDA up 11.3% due to strong volumes, margin management, and expense controls. - Strategic growth plan focuses on core propane and RNG; 25% stake in Independence Hydrogen, which closed a new financing round with Sumitomo as investor.

Propane: Retail propane gallons sold in the third quarter of 2025 were 71.9 million gallons, in line with the prior year. Wholesale propane prices were somewhat volatile and trended higher compared to the prior year third quarter. Renewable Natural Gas (RNG): Average daily RNG injection for the third quarter declined slightly compared to the prior year third quarter due to downtime from operational improvement projects and power outages. Revenues at the Stanfield facility faced headwinds from lower prices for environmental attributes like California LCFS credits and federal D3 RINs, but LCFS credit prices increased 30% after amendments were finalized, while federal D3 RIN prices were down 21% year-over-year. Revenue contribution details weren't explicitly given for each segment.

• Declared quarterly distribution of $0.325 per common unit, annualized to $1.30 per common unit. - Year-to-date adjusted EBITDA increased by $28.1 million or 11.3% compared to the same period last year. - Expect inflation to moderate at roughly around 3% on a go-forward basis. - Columbus, Ohio and Upstate New York RNG facilities expected to be fully operational at the tail end of 2025 into the early part of 2026.

• Volatility in commodity prices affecting propane and RNG operations. - Unseasonably warm temperatures impacting heat-related demand for propane. - Downtime and power outages in Stanfield, Arizona affecting RNG production. - Uncertainty regarding RNG tax credit regulations as they await finalization of treasury regulations.

Q: Update on RNG rulemaking and OBBA Bill A: Similar to last quarter, RNG tax credits under 45Z not recognized until treasury regulations are out, expected by end of 2025. OBBA extends 45Z PTC for another 2 years through 2029 but doesn't address ambiguities in current regulations Q: Timing of New York and Columbus projects and Arizona enhancement projects A: Arizona work is ongoing small operational improvements. Columbus upgrade facility and Upstate New York digester expected to be operational at tail end of 2025 into early 2026 Q: O&M and SG&A trend A: Insurance recovery of a little less than $2 million offset payroll and benefit costs; expect inflation to be ~3% going forward Q: M&A front update A: Pipeline active with a handful of opportunities in different stages; M&A is part of strategy to foster propane growth and diversify the platform