SUBURBAN PROPANE PARTNERS LP
For the period ended Mar 30, 2024. Filed May 9, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 30, 2024 · Filed May 9, 2024
SPH$17.18-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-30; filed 2024-02-08.
0000950170-24-012617
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-03-30; filed 2024-05-09.
0000950170-24-056636
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 75 previous paragraphs and 104 current paragraphs.
41 unchanged; 31 reworded; 27 added; 3 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 8 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
On March 15, 2024, we entered into a Fourth Amended and Restated Credit Agreement (the “Credit Agreement”) that provides for a $500 million revolving credit facility (the “Revolving Credit Facility”), of which $154.5 million was outstanding as of March 30, 2024. The Revolving Credit Facility matures on the earlier of (i) the date that is ninety-one (91) days prior to maturity of the 2027 Senior Notes, as defined in Item 1, Note 10 of this Quarterly Report (unless the notes have been refinanced prior to such date) and (ii) March 15, 2029. At the time of the execution of the Credit Agreement, $187.9 million was outstanding under the revolving credit facility of the previous credit agreement, which was rolled into the Revolving Credit Facility under the Credit Agreement. The Credit Agreement amends and restates the previous credit agreement dated March 5, 2020.
Current report
As discussed above, average temperatures (as measured in heating degree days) across all of our service territories were 8% warmer than normal and 4% cooler than the prior year second quarter. Following a short burst of extreme cold weather in the middle of January, February 2024 temperatures were on par for the warmest on record. The months of February and March collectively were 4% warmer than the comparable prior year period and negatively impacted customer demand for heating purposes.
Current report
Revenues from the distribution of propane and related activities of $437.6 million decreased $19.6 million, or 4.3%, compared to the prior year, primarily due to lower volumes sold and lower average retail selling prices. Retail propane gallons sold decreased 3.9 million gallons, or 2.7%, compared to the prior year, primarily due to lower heat-related demand as described above, resulting in a $12.2 million decrease in revenues. Average propane selling prices decreased 1.5% compared to the prior year, reflecting lower average wholesale costs coming into the quarter, resulting in a $6.7 million decrease in revenues. Included within the propane segment are revenues from risk management activities, which decreased $0.7 million primarily due to the impact of lower selling prices on commodity hedging contracts that were settled physically.
Current report
Operating expenses of $128.3 million for the second quarter of fiscal 2024 increased $0.9 million, or 0.7%, compared to the prior year second quarter, primarily due to higher payroll and benefit-related costs, as well as other inflationary effects on our operating costs, substantially offset by lower vehicle fuel costs and other volume-related variable operating costs.
Current report
Depreciation and amortization expense of $16.7 million for the second quarter of fiscal 2024 increased $0.7 million, or 4.1%, compared to the prior year second quarter, primarily as a result of accelerated depreciation for assets taken out of service coupled with additional investments made in our RNG production facilities.
Current report
Loss on Debt Extinguishment
Current report
In connection with the refinancing of our previous revolving credit facility during the second quarter of fiscal 2024, we recognized a non-cash charge of $0.2 million to write-off a portion of unamortized debt origination costs.
Current report
Six Months Ended March 30, 2024 Compared to Six Months Ended March 25, 2023
Current report
Revenues
Current report
Average temperatures (as measured in heating degree days) across all of our service territories for the first six months of fiscal 2024 were 9% warmer than normal and 1% warmer than the prior year first half. The fiscal 2024 heating season was characterized by an inconsistent weather pattern and unseasonably warm temperatures throughout much of our service territories, particularly during the most critical months for heat-related demand, with only a brief burst of cooler weather in mid-January. For the critical heating month of December, average temperatures were 10% warmer than normal and prior year, while for the critical month of February, average temperatures were 12% warmer than normal and 1% warmer than the prior year. Average temperatures for the month of January were 4% warmer than normal and 17% cooler than the prior year, but the increase in heating degree days compared to the prior year were influenced by extreme cold temperatures for a two-week period mid-month. The unseasonably warm and inconsistent weather pattern during the first half of fiscal 2024 adversely impacted heat-related demand.
Current report
Revenues from the distribution of fuel oil and refined fuels of $55.5 million decreased $12.8 million, or 18.7%, compared to the prior year first half, primarily due to lower average selling prices, coupled with lower volumes sold. Average selling prices for fuel oil and refined fuels decreased 12.5%, resulting in a $7.4 million decrease in revenues. Fuel oil and refined fuels volumes sold decreased 1.1 million gallons, or 7.9%, resulting in a $5.4 million decrease in revenues.
Current report
Revenues in our natural gas and electricity segment of $15.2 million were $5.3 million, or 26.0%, lower than the prior year first half, resulting from lower selling prices, lower volumes sold (primarily due to the impact of warmer temperatures on customer demand) and a lower customer base.
Current report
Cost of Products Sold
Current report
Cost of products sold associated with the distribution of propane and related activities of $289.0 million decreased $55.7 million, or 16.2%, compared to the prior year first half. Lower average wholesale costs contributed to a $32.4 million decrease in cost of products sold, and lower volumes sold contributed to a $7.6 million decrease. Included within the propane segment are costs from other propane activities which decreased $2.4 million compared to the prior year due to a decrease in propane costs for the physical settlement of hedging agreements, coupled with the net decrease in cost of products sold of $13.3 million resulting from the mark-to-market adjustments on derivative instruments in both periods discussed above.
Current report
Cost of products sold associated with our fuel oil and refined fuels segment of $37.2 million decreased $11.2 million, or 23.2%, compared to the prior year first half. Lower average wholesale costs and lower volumes sold contributed to decreases in cost of products sold of $7.4 million and $3.8 million, respectively.
Current report
Cost of products sold in our natural gas and electricity segment of $8.3 million decreased $4.8 million, or 36.9%, compared to the prior year, due to lower average wholesale costs, as well as lower usage from warmer weather.
Current report
Operating Expenses
Current report
General and Administrative Expenses
Current report
General and administrative expenses of $51.6 million for the first half of fiscal 2024 increased $2.9 million, or 6.0%, compared to the prior year period, primarily due to increases in payroll and benefit-related costs and other inflationary increases. Included in the prior year were $3.4 million in professional fees and expenses related to our RNG Acquisition.
Current report
Depreciation and Amortization
Current report
Depreciation and amortization expense of $33.1 million in the first half of fiscal 2024 increased $3.3 million, or 11.0%, primarily from the impact of our RNG Acquisition at the beginning of our second quarter of the prior year period.
Current report
Interest Expense, net
Current report
Loss on Debt Extinguishment
Current report
In connection with the refinancing of our previous revolving credit facility during the second quarter of fiscal 2024, we recognized a non-cash charge of $0.2 million to write-off a portion of unamortized debt origination costs.
Current report
EBITDA and Adjusted EBITDA
Current report
Operating Activities. Net cash provided by operating activities for the first half of fiscal 2024 was $62.4 million compared to $105.4 million in the first half of the prior year. The change was primarily due to lower operating income, and an increase in working capital, which stemmed from a smaller decline in the wholesale cost of propane compared to the sharp decline in the prior year period.
Current report
Effective with the amendment to the Credit Agreement on March 15, 2024, total debt for the Total Consolidated Leverage Ratio covenant is net of unrestricted cash and cash equivalents in an amount not to exceed $25.0 million.
Removed paragraphs (3)
Previous report
Our fiscal 2024 heating season started off with favorable weather and active crop drying demand, but was followed by unseasonably warm weather that persisted across the country during the last six weeks of the quarter which negatively impacted customer demand for heating purposes. Average temperatures (as measured by heating degree days) across all of our service territories during the first quarter of fiscal 2024 were 9% and 6% warmer than normal and the prior year first quarter, respectively. Average temperatures for the month of December, which is the most critical month of the first quarter for heat-related demand, were 10% warmer than both normal and December 2022.
Previous report
Depreciation and amortization expense of $16.4 million for the first quarter of fiscal 2024 increased $2.6 million, or 19.0%, compared to the prior year first quarter, primarily as a result of depreciation and amortization from the tangible and intangible assets from the RNG Acquisition.
Previous report
Operating Activities. Net cash used in operating activities for the first quarter of fiscal 2024 was $12.8 million compared to $6.3 million provided by operating activities in the corresponding prior year period. The change was primarily due to lower earnings including higher interest expense on outstanding borrowings.
Reworded paragraphs (31)
Previous wording
The following is a discussion and analysis of the financial condition and results of operations of the Partnership as of and for the three months ended December 30, 2023, seen from our perspective. The discussion and analysis should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the historical consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2023.
Current wording
The following is a discussion and analysis of the financial condition and results of operations of the Partnership as of and for the three and six months ended March 30, 2024, seen from our perspective. The discussion and analysis should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the historical consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended September 30, 2023.
Previous wording
According to the Energy Information Administration, U.S. propane inventory levels at the end of December 2023 were 82.6 million barrels, which was 2.4% higher than December 2022 levels and 7.6% higher than the five-year average for December. These higher inventory levels contributed to declines in average posted propane prices (basis Mont Belvieu, Texas) of 16.7% compared to the prior year first quarter.
Current wording
According to the Energy Information Administration, U.S. propane inventory levels at the end of March 2024 were 51.8 million barrels, which was 7.0% lower than March 2023 levels, albeit 7.8% higher than the five-year average for March. These lower inventory levels in comparison to March 2023 contributed to an increase in average posted propane prices (basis Mont Belvieu, Texas) of 2.8% compared to the prior year second quarter.
Previous wording
We are experiencing inflationary pressures in the costs of various goods and services we use to operate our business, including volatile wholesale costs for the products we distribute. Although we have not experienced significant disruptions with securing the products we sell, inflationary factors and competition for resources across the supply chain has resulted in increased costs in a wide variety of areas, including labor, transportation costs, operating costs and the cost of tanks and other equipment. These and other factors may continue to impact our product costs, expenses, and capital expenditures, and could continue to have an impact on consumer demand as consumers manage the impact of inflation on their resources.
Current wording
We are experiencing inflationary pressures in the costs of various goods and services we use to operate our business, including volatile wholesale costs for the products we distribute. Although we have not experienced significant disruptions with securing the products we sell, inflationary factors and competition for resources across the supply chain has resulted in increased costs in a wide variety of areas; including labor, transportation costs, operating costs and the cost of capital expansion projects, tanks and other equipment. These and other factors may continue to impact our product costs, expenses, and capital expenditures, and could continue to have an impact on consumer demand as consumers manage the impact of inflation on their resources.
Previous wording
Net income for the first quarter of fiscal 2024 was $24.5 million, or $0.38 per Common Unit, compared to net income of $45.4 million, or $0.71 per Common Unit, in the fiscal 2023 first quarter. Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA, as defined and reconciled below) for the first quarter of fiscal 2024 was $75.2 million, compared to $90.0 million in the prior year first quarter.
Current wording
Net income for the second quarter of fiscal 2024 was $111.5 million, or $1.73 per Common Unit, compared to net income of $104.5 million, or $1.63 per Common Unit, in the second quarter of fiscal 2023. Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA, as defined and reconciled below) for the second quarter of fiscal 2024 was $147.0 million, compared to $149.0 million in the prior year second quarter.
Previous wording
Retail propane gallons sold in the first quarter of fiscal 2024 of 106.5 million gallons decreased 2.0% compared to the prior year, primarily due to an inconsistent and warmer weather pattern that adversely impacted heat-related demand. Average temperatures (as measured by heating degree days) across all of our service territories during the first quarter were 9% warmer than normal and 6% warmer than the prior year first quarter. Average temperatures for the month of December, which is the most critical month of the first quarter for heat-related demand, were 10% warmer than both normal and December 2022.
Current wording
Retail propane gallons sold in the second quarter of fiscal 2024 of 140.2 million gallons decreased 2.7% compared to the prior year, primarily due to widespread warm weather throughout much of the second quarter, aside from a two-week period of extreme cold temperatures in mid-January 2024. Average temperatures (as measured by heating degree days) across all of our service territories during the second quarter were 8% warmer than normal and 4% cooler than the prior year second quarter (which was heavily influenced by mid-January heating degree days that were 33% colder than the prior year). Average temperatures for the month of February were 1% warmer than the prior year and on par for the warmest February on record; followed by March which was 7% warmer than the prior year.
Previous wording
Average propane prices (basis Mont Belvieu, Texas) for the first quarter of fiscal 2024 decreased 16.7% compared to the prior year first quarter. Total gross margin of $212.8 million for the fiscal 2024 first quarter decreased $2.0 million, or 0.9%, compared to the prior year first quarter. Gross margin for the first quarter of fiscal 2024 included a $10.8 million unrealized loss attributable to the mark-to-market adjustment for derivative instruments used in risk management activities, compared to a $13.7 million unrealized loss in the prior year first quarter. These non-cash adjustments, which were reported in cost of products sold, were excluded from Adjusted EBITDA for both periods. Excluding the impact of the mark-to-market adjustments, total gross margin decreased $4.9 million, or 2.2%, compared to the prior year first quarter, primarily due to lower propane volumes sold and lower propane unit margins, offset to an extent by margin contribution from the RNG assets acquired in December 2022. Excluding the impact of the unrealized mark-to-market adjustments, propane unit margins for the first quarter of fiscal 2024 decreased $0.05 per gallon, or 2.8%, compared to the prior year first quarter, primarily due to higher demand from our commercial and industrial customer base that tend to be less weather sensitive.
Current wording
Average propane prices (basis Mont Belvieu, Texas) for the second quarter of fiscal 2024 increased 2.8% compared to the prior year second quarter. Total gross margin of $308.0 million for the second quarter increased $13.1 million, or 4.4%, compared to the prior year second quarter. Gross margin for the second quarter of fiscal 2024 included a $5.9 million unrealized gain attributable to the mark-to-market adjustment for derivative instruments used in risk management activities, compared to a $4.5 million unrealized loss in the prior year second quarter. These non-cash adjustments, which were reported in cost of products sold, were excluded from Adjusted EBITDA for both periods. Excluding the impact of the mark-to-market adjustments, total gross margin increased $2.7 million, or 0.9%, compared to the prior year second quarter, primarily due to higher unit margins, which increased $0.08 per gallon, more than offsetting the lower volumes sold.
Previous wording
Combined operating and general and administrative expenses of $147.6 million for the first quarter of fiscal 2024 increased 6.4% compared to the prior year first quarter, primarily due to higher payroll and benefit-related expenses, and operating costs associated with the RNG production facilities. In addition, included within general and administrative expenses in the first quarter of the prior year were fees and expenses of $0.9 million associated with the acquisition of the RNG assets. These acquisition-related costs were excluded from Adjusted EBITDA.
Current wording
Combined operating and general and administrative expenses of $154.4 million for the second quarter of fiscal 2024 increased $1.2 million, or 0.8%, compared to the prior year second quarter, primarily due to higher payroll and benefit-related expenses, offset to an extent by lower volume-related variable operating costs. In addition, included within general and administrative expenses in the second quarter of the prior year were acquisition-related fees and expenses of $3.4 million, which were excluded from Adjusted EBITDA for the second quarter of fiscal 2023.
Previous wording
Total debt outstanding as of December 2023 increased $54.8 million compared to September 2023, due to seasonal borrowings under our Revolving Credit Facility (as defined below) to help fund working capital needs. Our Consolidated Leverage Ratio, as defined in our credit agreement, for the twelve-month period ending December 30, 2023 was 4.72x.
Current wording
Total debt outstanding as of March 30, 2024 increased $22.5 million compared to September 30, 2023, primarily due to seasonal borrowings under our Revolving Credit Facility to help fund working capital needs. During the second quarter of fiscal 2024, we utilized cash flows from operating activities to repay $32.3 million in outstanding borrowings under the Revolving Credit Facility. As a result of this debt repayment, the Total Consolidated Leverage Ratio, as defined in our Credit Agreement, for the twelve-month period ending March 30, 2024 improved to 4.61x compared to 4.72x at the end of the fiscal 2024 first quarter.
Previous wording
Our anticipated cash requirements for the remainder of fiscal 2024 include: (i) maintenance and growth capital expenditures of approximately $14.9 million and $42.0 million, respectively; (ii) interest and income tax payments of approximately $55.2 million; and (iii) cash distributions of approximately $62.4 million to our Common Unitholders based on the quarterly distribution rate of $0.325 per Common Unit. Based on our liquidity position, which includes cash on hand, availability of funds under our Revolving Credit Facility and expected cash flow from operating activities, we expect to have sufficient funds to meet our current and future obligations.
Current wording
Our anticipated cash requirements for the remainder of fiscal 2024 include: (i) maintenance and growth capital expenditures of approximately $9.3 million and $27.5 million, respectively; (ii) interest and income tax payments of approximately $35.0 million; and (iii) cash distributions of approximately $41.6 million to our Common Unitholders based on the quarterly distribution rate of $0.325 per Common Unit. Based on our liquidity position, which includes cash on hand, availability of funds under our Revolving Credit Facility and expected cash flow from operating activities, we expect to have sufficient funds to meet our current and future obligations.
Previous wording
Revenues from the distribution of fuel oil and refined fuels of $23.9 million were $6.2 million, or 20.7%, lower than the prior year, primarily due to lower average retail selling prices and lower volumes sold. Average fuel oil and refined fuels selling prices decreased 18.0% compared to the prior year, reflecting lower average wholesale costs, resulting in a $4.6 million decrease in revenues. Fuel oil and refined fuels gallons sold decreased 0.3 million gallons, or 5.5%, resulting in a $1.6 million decrease in revenues.
Current wording
Revenues from the distribution of fuel oil and refined fuels of $31.6 million were $6.5 million, or 17.1%, lower than the prior year, primarily due to lower volumes sold and lower average retail selling prices. Fuel oil and refined fuels gallons sold decreased 0.7 million gallons, or 9.7%, resulting in a $3.7 million decrease in revenues. Average fuel oil and refined fuels selling prices decreased 8.1% compared to the prior year, reflecting lower average wholesale costs, resulting in a $2.8 million decrease in revenues.
Previous wording
Revenues in our natural gas and electricity segment of $6.5 million were $2.2 million, or 25.3%, lower than the prior year, primarily due to lower natural gas average selling prices, reflecting lower average wholesale costs, and to a lesser extent, lower volumes sold, primarily due to warmer temperatures in our operating territories and a lower customer base.
Current wording
Revenues in our natural gas and electricity segment of $8.7 million were $3.1 million, or 26.5%, lower than the prior year, primarily due to lower natural gas average selling prices, reflecting lower average wholesale costs, and to a lesser extent, lower volumes sold, primarily due to warmer temperatures in our operating territories and a lower customer base.
Previous wording
From a commodity perspective, as discussed above, wholesale prices trended lower during the first quarter of fiscal 2024. Average posted propane prices (basis Mont Belvieu, Texas) and fuel oil prices were 16.7% and 25.0% lower than the prior year first quarter, respectively. The net change in the fair value of derivative instruments resulted in a $10.8 million unrealized non-cash loss in the first quarter of fiscal 2024, compared to a $13.7 million unrealized non-cash loss in the prior year first quarter, resulting in a net decrease of $2.9 million in cost of products sold year-over-year, all of which was reported within the propane segment. These unrealized mark-to-market adjustments are excluded from Adjusted EBITDA for both periods.
Current wording
From a commodity perspective, wholesale propane prices trended lower than the prior year coming into the second quarter of fiscal 2024. During the second quarter, wholesale propane prices continued to trend lower than the prior year during January 2024, and then rose modestly for the remainder of the second quarter. Overall, average posted propane prices (basis Mont Belvieu, Texas) and fuel oil prices were 2.8% higher and 7.6% lower than the prior year second quarter, respectively. The net change in the fair value of derivative instruments resulted in a $5.9 million unrealized non-cash gain in the second quarter of fiscal 2024, compared to a $4.5 million unrealized non-cash loss in the prior year second quarter, resulting in a net decrease of $10.4 million in cost of products sold year-over-year, all of which was reported within the propane segment. These unrealized mark-to-market adjustments are excluded from Adjusted EBITDA for both periods.
Previous wording
Cost of products sold associated with the distribution of propane and related activities of $127.8 million decreased $22.1 million, or 14.7%, compared to the prior year first quarter. Lower average wholesale costs contributed to a decrease in cost of products sold of $15.8 million, while lower volumes sold contributed a $2.8 million decrease. Included within the propane segment are costs from other propane activities, which decreased $0.6 million compared to the prior year, as well as the net decrease of $2.9 million resulting from the mark-to-market adjustments on derivative instruments in both periods discussed above.
Current wording
Cost of products sold associated with the distribution of propane and related activities of $161.2 million decreased $33.7 million, or 17.3%, compared to the prior year second quarter. Lower average wholesale costs contributed to a decrease in cost of products sold of $14.1 million, while lower volumes sold contributed a $4.8 million decrease. Included within the propane segment are costs from other propane activities, which decreased $4.4 million compared to the prior year due to a decrease in costs for hedging contracts used in risk management activities that were settled physically, as well as the net decrease of $10.4 million resulting from the mark-to-market adjustments on derivative instruments in both periods discussed above.
Previous wording
Cost of products sold associated with our fuel oil and refined fuels segment of $16.7 million decreased $5.7 million, or 25.3%, compared to the prior year first quarter. Lower average wholesale costs and lower volumes sold contributed to decreases of $4.4 million and $1.3 million, respectively.
Current wording
Cost of products sold associated with our fuel oil and refined fuels segment of $20.5 million decreased $5.6 million, or 21.4%, compared to the prior year second quarter. Lower average wholesale costs and lower volumes sold contributed to decreases of $3.1 million and $2.5 million, respectively.
Previous wording
Cost of products sold in our natural gas and electricity segment of $3.5 million decreased $2.4 million, or 40.8%, compared to the prior year primarily due to lower average wholesale costs, and to a lesser extent, lower usage.
Current wording
Cost of products sold in our natural gas and electricity segment of $4.8 million decreased $2.4 million, or 33.8%, compared to the prior year primarily due to lower average wholesale costs, and to a lesser extent, lower usage.
Previous wording
General and administrative expenses of $25.6 million for the first quarter of fiscal 2024 increased $2.6 million, or 11.1%, compared to the prior year first quarter, primarily due to higher payroll and benefit-related costs and other inflationary factors. During the prior year first quarter, we incurred $0.9 million in fees and expenses associated with our RNG Acquisition.
Current wording
General and administrative expenses of $26.1 million for the second quarter of fiscal 2024 increased $0.4 million, or 1.4%, compared to the prior year second quarter, primarily due to higher payroll and benefit-related costs and other inflationary factors. Included in the prior year second quarter were $3.4 million in professional fees and expenses associated with our RNG Acquisition.
Previous wording
Revenues from the distribution of propane and related activities of $313.4 million decreased $29.0 million, or 8.5%, compared to the prior year, primarily due to lower average retail selling prices and lower volumes sold. Average propane selling prices decreased 7.2% compared to the prior year, reflecting lower average wholesale costs, resulting in a $24.0 million decrease in revenues. Retail propane gallons sold decreased 2.2 million gallons, or 2.0%, compared to the prior year, primarily due to lower heat-related demand as described above, resulting in a $6.9 million decrease in revenues. Included within the propane segment are revenues from risk management activities, which increased $1.9 million primarily due to a higher notional amount of hedging contracts used in risk management activities that were settled physically.
Current wording
Revenues from the distribution of propane and related activities of $750.9 million decreased $48.6 million, or 6.1%, compared to the prior year first half, primarily due to lower average selling prices and lower volumes sold. Average propane selling prices decreased 4.0% compared to the prior year period, reflecting lower average wholesale costs, resulting in a $30.7 million decrease in revenues. Retail propane gallons sold decreased 6.1 million gallons, or 2.4%, compared to the prior year, resulting in a $19.2 million decrease in revenues. Included within the propane segment are revenues from other propane activities, which increased $1.3 million primarily due to a higher notional amount of hedging contracts used in risk management activities that were settled physically.
Previous wording
Revenues in our all other segment of $22.1 million were $5.8 million, or 35.6%, higher than the prior year, primarily due to the impact of the RNG Acquisition, which closed at the beginning of our fiscal 2023 second quarter. Revenue from the RNG production assets primarily consist of sales of RNG and the associated environmental attributes, and tipping fees charged to third parties for various waste feedstocks.
Current wording
Revenues in our all other segment of $42.3 million were $6.6 million, or 18.6%, higher than the prior year first half, primarily due to the impact of the RNG Acquisition, which closed at the beginning of our fiscal 2023 second quarter. Revenue from the RNG production assets primarily consist of sales of RNG and the associated environmental attributes, and tipping fees charged to third parties for various waste feedstocks.
Previous wording
Operating expenses of $122.1 million for the first quarter of fiscal 2024 increased $6.4 million, or 5.5%, compared to the prior year first quarter, primarily due to higher payroll and benefit-related costs, as well as the operating costs associated with our RNG production facilities and other inflationary effects on our operating costs, offset to an extent by lower fleet vehicle fuel costs.
Current wording
Operating expenses of $250.4 million for the first half of fiscal 2024 increased $7.2 million, or 3.0%, compared to the prior year first half, primarily due to higher payroll and benefit-related costs, as well as the operating costs associated with our RNG production facilities and other inflationary effects on our operating costs, offset to an extent by lower volume-related variable operating costs.
Previous wording
Net interest expense of $18.2 million for the first quarter of fiscal 2024 increased $2.2 million, or 13.7%, compared to the prior year first quarter, due to a higher level of average outstanding borrowings under our Revolving Credit Facility to fund the RNG Acquisition, coupled with higher benchmark interest rates for borrowings under that facility, as well as the impact of the $80.6 million in Green Bonds assumed in the RNG Acquisition. See Liquidity and Capital Resources below for additional discussion.
Current wording
Net interest expense of $38.1 million in the first half of fiscal 2024 increased $2.2 million compared to the prior year first half, primarily due to the impact of higher benchmark interest rates for borrowings under our Revolving Credit Facility and a higher average level of outstanding borrowings under that facility to fund the RNG Acquisition, as well as the impact of $80.6 million in Green Bonds assumed in the RNG Acquisition. See Liquidity and Capital Resources below for additional discussion.
Previous wording
Investing Activities. Net cash used in investing activities of $13.9 million for the first quarter of fiscal 2024 consisted of capital expenditures of $11.2 million (including approximately $6.1 million to support the growth of operations and $5.1 million for maintenance expenditures), $3.2 million used to fund an additional investment in a privately held start-up entity and an additional investment in Oberon, partially offset by approximately $0.5 million in proceeds from the sale of property, plant and equipment. See Item 1, Note 4 of this Quarterly Report.
Current wording
Investing Activities. Net cash used in investing activities of $30.7 million for the first six months of fiscal 2024 consisted of capital expenditures of $25.7 million (including approximately $15.0 million to support the growth of operations and $10.7 million for maintenance expenditures), $6.0 million used to fund an additional investment in a privately held start-up entity and additional investments in Oberon, partially offset by $1.0 million in proceeds from the sale of property, plant and equipment. See Item 1, Note 4 of this Quarterly Report.
Previous wording
Net cash used in investing activities of $14.4 million for the first quarter of fiscal 2023 consisted of capital expenditures of $10.8 million (including approximately $5.1 million to support the growth of operations and $5.7 million for maintenance expenditures), a $3.0 million investment in a privately held start-up entity (plus direct transactions costs) and an additional investment in Oberon, partially offset by approximately $0.7 million in proceeds from the sale of property, plant and equipment.
Current wording
Net cash used in investing activities of $137.5 million for the first half of fiscal 2023 consisted of the RNG Acquisition (net of cash acquired) of $108.8 million, capital expenditures of $24.0 million (including approximately $12.3 million to support the growth of operations and $11.7 million for maintenance expenditures), a $3.0 million investment in a privately held start-up entity (plus direct transactions costs) and additional investments in Oberon, partially offset by approximately $1.5 million in proceeds from the sale of property, plant and equipment.
Previous wording
Financing Activities. Net cash provided by financing activities of $30.6 million for the first quarter of fiscal 2024 reflected $54.8 million in net borrowings under our Revolving Credit Facility, which were used to fund a portion of our seasonal working capital needs and the capital expenditures and investments noted above, offset to an extent by $20.6 million paid for the quarterly distributions to Common Unitholders at a rate of $0.325 per Common Unit paid in respect of the fourth quarter of fiscal 2023 and other financing activities of $3.6 million.
Current wording
Financing Activities. Net cash used in financing activities of $26.5 million for the first half of fiscal 2024 reflected $22.5 million in net borrowings under our Revolving Credit Facility, which were used to fund a portion of our seasonal working capital needs and the capital expenditures and investments noted above, $41.5 million paid for the quarterly distributions to Common Unitholders at a rate of $0.325 per Common Unit paid in respect of the fourth quarter of fiscal 2023 and first quarter of fiscal 2024, $3.5 million in debt origination costs related to the refinancing of our Credit Agreement in March 2024 and other financing activities of $4.0 million.
Previous wording
Net cash provided by financing activities of $10.1 million for the first quarter of fiscal 2023 reflected $33.9 million in net borrowings under our Revolving Credit Facility which were used to fund a portion of our seasonal working capital needs and the capital expenditures and investments noted above, offset to an extent by $20.5 million paid for the quarterly distributions to Common Unitholders at a rate of $0.325 per Common Unit paid in respect of the fourth quarter of fiscal 2022 and other financing activities of $3.3 million.
Current wording
Net cash provided by financing activities of $46.0 million for the first six months of fiscal 2023 reflected $90.9 million in net borrowings under our Revolving Credit Facility, which were used to fund the acquisition and investments noted above, and $41.1 million paid for the quarterly distributions to Common Unitholders at a rate of $0.325 per Common Unit paid in respect of the fourth quarter of fiscal 2022 and first quarter of fiscal 2023 and other financing activities of $3.8 million.
Previous wording
As of December 30, 2023, our long-term debt consisted of $350.0 million in aggregate principal amount of 5.875% Senior Notes due March 1, 2027, $650.0 million in aggregate principal amount of 5.0% Senior Notes due June 1, 2031, $80.6 million in aggregate principal amount of 5.5% Green Bonds due October 1, 2028 through October 1, 2033 and $186.8 million outstanding under our $500.0 million senior secured revolving credit facility (“Revolving Credit Facility”) provided by our credit agreement. Total long-term borrowings as of December 30, 2023 and December 24, 2022 was $1,267.4 million and $1,123.5 million, respectively. See Item 1, Note 10 of this Quarterly Report.
Current wording
As of March 30, 2024, our long-term debt consisted of $350.0 million in aggregate principal amount of 5.875% Senior Notes due March 1, 2027, $650.0 million in aggregate principal amount of 5.0% Senior Notes due June 1, 2031, $80.6 million in aggregate principal amount of 5.5% Green Bonds due October 1, 2028 through October 1, 2033 and $154.5 million outstanding under our Revolving Credit Facility provided by our Credit Agreement. Total long-term borrowings as of March 30, 2024 and March 25, 2023 was $1,235.1 million and $1,261.1, million, respectively. See Item 1, Note 10 of this Quarterly Report.
Previous wording
The aggregate amounts of long-term debt maturities subsequent to December 30, 2023 are as follows: fiscal 2024: $-0-; fiscal 2025: $186.8 million; fiscal 2026: $-0-; fiscal 2027: $350.0 million; fiscal 2028: $-0- million; and thereafter: $730.6 million.
Current wording
The aggregate amounts of long-term debt maturities subsequent to March 30, 2024 are as follows: fiscal 2024: $-0-; fiscal 2025: $-0-; fiscal 2026: $-0-; fiscal 2027: $504.5 million; fiscal 2028: $-0-; and thereafter: $730.6 million.
Previous wording
Total Consolidated Leverage Ratio. Total Consolidated Leverage Ratio, as defined by our credit agreement, represents total indebtedness as of the balance sheet date divided by Adjusted EBITDA calculated on a trailing twelve-month basis plus non-cash compensation costs recognized under our Restricted Unit Plans for the same period and other items. The measurement of the Total Consolidated Leverage Ratio for the trailing twelve-month periods ended December 30, 2023 and September 30, 2023 was as follows:
Current wording
Total Consolidated Leverage Ratio. Total Consolidated Leverage Ratio, as defined by our Credit Agreement, represents total indebtedness as of the balance sheet date minus unrestricted cash and cash equivalents in an amount not to exceed $25.0 million, divided by Adjusted EBITDA calculated on a trailing twelve-month basis plus non-cash compensation costs recognized under our Restricted Unit Plans for the same period and other items. The measurement of the Total Consolidated Leverage Ratio for the trailing twelve-month periods ended March 30, 2024 and September 30, 2023 was as follows:
Previous wording
On January 25, 2024, we announced a quarterly distribution of $0.325 per Common Unit, or $1.30 on an annualized basis, in respect of the first quarter of fiscal 2024, payable on February 13, 2024 to holders of record on February 6, 2024.
Current wording
On April 25, 2024, we announced a quarterly distribution of $0.325 per Common Unit, or $1.30 on an annualized basis, in respect of the second quarter of fiscal 2024, payable on May 14, 2024 to holders of record on May 7, 2024.
Previous wording
We have a noncontributory, cash balance format, defined benefit pension plan which was frozen to new participants effective January 1, 2000. Effective January 1, 2003, the defined benefit pension plan was amended such that future service credits ceased and eligible employees would receive interest credits only toward their ultimate retirement benefit. We also provide postretirement health care and life insurance benefits for certain retired employees under a plan that was frozen to new participants effective March 31, 1998. At December 30, 2023, we had a liability for the defined benefit pension plan and accrued retiree health and life benefits of $18.5 million and $4.6 million, respectively.
Current wording
We have a noncontributory, cash balance format, defined benefit pension plan which was frozen to new participants effective January 1, 2000. Effective January 1, 2003, the defined benefit pension plan was amended such that future service credits ceased and eligible employees would receive interest credits only toward their ultimate retirement benefit. We also provide postretirement health care and life insurance benefits for certain retired employees under a plan that was frozen to new participants effective March 31, 1998. At March 30, 2024, we had a liability for the defined benefit pension plan and accrued retiree health and life benefits of $17.0 million and $4.5 million, respectively.
Previous wording
We are self-insured for general and product, workers’ compensation and automobile liabilities up to predetermined thresholds above which third party insurance applies. At December 30, 2023, we had accrued insurance liabilities of $61.0 million, and a receivable of $15.4 million related to the amount of the liability expected to be covered by insurance.
Current wording
We are self-insured for general and product, workers’ compensation and automobile liabilities up to predetermined thresholds above which third party insurance applies. At March 30, 2024, we had accrued insurance liabilities of $60.3 million, and a receivable of $16.2 million related to the amount of the liability expected to be covered by insurance.
Previous wording
See Item 1, Note 13, “Commitments and Contingencies,” Legal Matters subsection of this Quarterly Report.
Current wording
We are currently evaluating the impact of recently adopted changes to the New York General Business Law, as well as proposed changes to the New York Public Service Commission’s Uniform Business Practices, on our natural gas and electricity business operated through our 100%-owned subsidiary, Agway Energy Services, LLC (“AES”), and we are in the process of reviewing strategic alternatives for the AES business. See Item 1, Note 13, “Commitments and Contingencies,” Legal Matters subsection of this Quarterly Report.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Revenues in our all other segment of $20.2 million were $0.8 million, or 4.3%, higher than the prior year, primarily due to an increase in the volume of pipeline injected renewable natural gas (“RNG”) and higher prices for certain environmental attributes. Revenue from the RNG production assets primarily consist of sales of RNG and the associated environmental attributes, and tipping fees charged to third parties for various waste feedstocks.
Current report — wording carried from elsewhere
Net interest expense of $19.9 million for the second quarter of fiscal 2024 was essentially flat to the prior year second quarter. Lower average outstanding borrowings under our Revolving Credit Facility were offset by higher benchmark interest rates for borrowings under that facility. See Liquidity and Capital Resources below for additional discussion.
Current report — wording carried from elsewhere
In the commodities markets, average posted propane prices (basis Mont Belvieu, Texas) and fuel oil prices were 6.9% and 14.3% lower than the prior year first half, respectively. The net change in the fair value of derivative instruments resulted in unrealized non-cash losses of $4.9 million and $18.2 million in the first six months of fiscal 2024 and 2023, respectively, resulting in a decrease of $13.3 million in cost of products sold year-over-year, all of which was reported within the propane segment. These unrealized mark-to-market adjustments are excluded from Adjusted EBITDA for both periods.
Current report — wording carried from elsewhere
The following table sets forth our calculations of EBITDA and Adjusted EBITDA:
Current report — wording carried from elsewhere
We also reference gross margins, computed as revenues less cost of products sold as those amounts are reported on the condensed consolidated financial statements. Our management uses gross margin as a supplemental measure of operating performance and we are including it as we believe that it provides our investors and industry analysts with additional information that we determined is useful to evaluate our operating results. As cost of products sold does not include depreciation and amortization expense, the gross margin we reference is considered a non-GAAP financial measure.