SUBURBAN PROPANE PARTNERS LP
For the period ended Dec 28, 2024. Filed Feb 6, 2025.
View on SEC.govAbout this filing
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.
Dec 28, 2024 · Filed Feb 6, 2025
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 2024-06-29; filed 2024-08-08.
0000950170-24-093578
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-12-28; filed 2025-02-06.
0000950170-25-015135
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 104 previous paragraphs and 84 current paragraphs.
43 unchanged; 27 reworded; 14 added; 32 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 9 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 (14)
Current report
Retail propane gallons sold in the first quarter of fiscal 2025 of 105.7 million gallons decreased 0.8% compared to the prior year, primarily due to lower heat-related demand from widespread unseasonably warm temperatures and lower agricultural demand for crop drying, offset to an extent by an increase in demand in the Southeast following Hurricanes Helene and Milton, and contributions from our customer base growth and retention initiatives. Average temperatures (as measured by heating degree days) across all of our service territories during the first quarter of 2025 were 7% warmer than normal and flat to the prior year first quarter. In the month of November 2024, average temperatures were 15% warmer than normal and 17% warmer than November 2023, and represented one of the top five warmest on record for November.
Current report
During the first quarter of fiscal 2025, we recognized $3.0 million of income for contingent consideration from Equilibrium Capital Group (“Equilibrium”), which was reported within “Other, net” on the condensed consolidated statements of operations. According to the purchase agreement for the RNG production assets that we acquired from Equilibrium in December 2022, expenditures for the gas upgrade equipment project at the Columbus, Ohio facility that exceeded a certain threshold would be funded by Equilibrium, up to a total of $3.0 million, if we incurred those costs prior to December 31, 2024.
Current report
During the first quarter of fiscal 2025, we acquired a well-run propane business in strategic markets in New Mexico and Arizona for total consideration of $53.0 million, inclusive of non-compete payments. The acquisition, along with seasonal working capital and growth capital expenditures for the RNG facilities, were funded with net borrowings of $91.7 million under the Revolving Credit Facility. The Consolidated Leverage Ratio, as defined in our credit agreement, for the twelve-month period ended December 28, 2024 was 4.99x.
Current report
Adjusted EBITDA for the first quarter of fiscal 2025 excludes other-than-temporary impairment charges for our investments in Independence Hydrogen, Inc. (“IH”) and Oberon Fuels, Inc. (“Oberon”) of $9.6 million and $10.2 million, respectively, reported within “Other, net” on the condensed consolidated statements of operations, in order to write-down the carrying values of these investments to their estimated fair values.
Current report
The fiscal 2025 heating season got off to a slow start with widespread unseasonably warm weather during much of the first quarter, particularly during the month of November. Overall, average temperatures (as measured by heating degree days) across all of our service territories during the first quarter of fiscal 2025 were 7% warmer than normal and flat to the prior year first quarter. In the month of November 2024, average temperatures were 15% warmer than normal and 17% warmer than November 2023, and represented one of the top five warmest on record for November.
Current report
Revenues in our all other segment of $19.3 million were $2.8 million, or 12.5%, lower than the prior year, primarily due to a decrease in injection of renewable natural gas (“RNG”), due to a planned shut-down at our facility in Stanfield, Arizona for routine maintenance activities and regulatory compliance upgrades.
Current report
Cost of products sold in our natural gas and electricity segment of $2.6 million decreased $1.0 million, or 27.3%, compared to the prior year primarily due to lower usage and lower natural gas prices, coupled with the net decrease of $0.4 million resulting from the mark-to-market adjustments on derivative instruments used in both periods discussed above.
Current report
General and administrative expenses of $26.9 million for the first quarter of fiscal 2025 increased $1.3 million, or 5.0%, compared to the prior year first quarter, primarily due to higher payroll and benefit-related costs, coupled with the costs for settling a legal matter.
Current report
Other, net
Current report
Three months ended December 28, 2024 includes an other-than-temporary impairment charge of $10,213 (see Item 1, Note 4 of this Quarterly Report).
Current report
Three months ended December 28, 2024 includes an other-than-temporary impairment charge of $9,595 (see Item 1, Note 4 of this Quarterly Report).
Current report
Represents net periodic benefits costs for our pension and other postretirement benefit plans (see Item 1, Note 15 of this Quarterly Report).
Current report
The Green Bonds contain various restrictive and affirmative covenants requiring SuburbanRNG – Stanfield’s debt service coverage ratio, as defined therein, to be not less than 1.00 to 1.00 for three consecutive fiscal quarters. SuburbanRNG – Stanfield did not comply with this ratio for the period ended December 28, 2024, September 28, 2024 and the interim periods during fiscal 2024 which, if not waived, would constitute an event of default under the terms of the Green Bonds. SuburbanRNG – Stanfield and the Partnership have obtained a waiver of this non-compliance from the holders of a majority of the outstanding Green Bonds which cured the impact of any events of default. Under the terms of the Credit Agreement, certain events of default under the terms of the Green Bonds constitute an event of default under the Credit Agreement. The Partnership obtained a waiver from the lenders and the administrative agent under the Credit Agreement for the corresponding event of default under the Credit Agreement resulting from the event of default under the Green Bonds.
Current report
Represents pro forma adjustments for acquisitions completed during the reporting period, as required under the Credit Agreement.
Removed paragraphs (32)
Previous report
EBITDA, as defined and reconciled below) for the third quarter of fiscal 2024 was $27.0 million, compared to $33.0 million in the prior year third quarter.
Previous report
Retail propane gallons sold in the third quarter of fiscal 2024 of 71.7 million gallons decreased 8.6% compared to the prior year, primarily due to warmer weather across most of our operating territories. Average temperatures (as measured by heating degree days) across all of our service territories during the third quarter were 14% warmer than normal and 10% warmer than the prior year third quarter.
Previous report
During the third quarter, we closed on two acquisitions. On April 12, 2024, we acquired the propane assets and operations of a propane retailer headquartered in Florida for $4.3 million. On May 2, 2024, we acquired the propane assets and operations of a propane retailer headquartered in Nevada for $9.0 million. These acquisitions were consummated pursuant to our strategic growth initiatives to foster the growth of our core propane business.
Previous 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”). 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.
Previous report
During the third quarter of fiscal 2024, we utilized cash flows from operating activities to acquire the two retail propane businesses referenced above as well as to make additional investments in Oberon Fuels and Independence Hydrogen, in support of our long-term strategic goals, and to repay $10.5 million in outstanding borrowings under the Revolving Credit Facility. The Total Consolidated Leverage Ratio, as defined in our Credit Agreement, for the twelve-month period ended June 29, 2024 was 4.68x.
Previous report
Following a winter with inconsistent weather patterns and a lack of sustained cool temperatures, unseasonably warm weather continued into the third quarter of fiscal 2024. By contrast, the prior year third quarter benefited from colder average temperatures that generated a late burst of heat-related customer demand from our residential customer base. As discussed above, average temperatures (as measured in heating degree days) across all of our service territories were 14% warmer than normal and 10% warmer than the prior year third quarter.
Previous report
Revenues from the distribution of propane and related activities of $220.0 million decreased $21.4 million, or 8.9%, compared to the prior year, due to lower volumes sold. Retail propane gallons sold decreased 6.7 million gallons, or 8.6%, compared to the prior year, primarily due to lower heat-related demand as described above, resulting in a $20.7 million decrease in revenues. Average propane selling prices were essentially flat compared to the prior year. Included within the propane segment are revenues from risk management activities, which decreased $0.7 million primarily due to a lower notional amount of hedging contracts used in risk management activities that were settled physically.
Previous report
Revenues in our all other segment of $18.3 million were $0.2 million, or 0.9%, higher than the prior year, primarily due to higher tipping fees in our renewable natural gas (“RNG”) business attributable to an increase in feedstock in-take, substantially offset by lower prices for environmental attributes. Revenues from the RNG business primarily consist of sales of RNG and the associated environmental attributes, tipping fees charged to third parties for various waste feedstocks and sales of digestate which is a byproduct of the anaerobic digestion process.
Previous report
From a commodities perspective, during the first half of fiscal 2024, wholesale propane and fuel oil prices trended lower than the prior year and contributed to lower priced inventory at the beginning of the third quarter compared to the beginning of the fiscal 2023 third quarter. Although wholesale prices continued to generally trend lower during the third quarter of fiscal 2024, the pace of the decline trailed the sharp decline in the prior year, and resulted in average posted propane prices (basis Mont Belvieu, Texas) and fuel oil prices increasing 11.5% and 2.5% compared to the prior year third quarter, respectively. The net change in the fair value of derivative instruments resulted in a $3.2 million unrealized non-cash loss in the third quarter of fiscal 2024, of which a $3.5 million unrealized loss was reported within the propane segment and a $0.3 million unrealized gain was reported in the natural gas and electricity segment. In the third quarter of the prior year, there was a $3.0 million unrealized non-cash loss, all of which was reported within the propane segment, resulting in a net increase of $0.2 million in cost of products sold year-over-year. These unrealized mark-to-market adjustments are excluded from Adjusted EBITDA for both periods.
Previous report
Cost of products sold in our natural gas and electricity segment of $2.4 million were essentially flat to the third quarter of fiscal 2023, as lower usage and gains from mark-to-market adjustments on derivative instruments were essentially offset by higher average wholesale costs.
Previous report
Operating expenses of $115.9 million for the third quarter of fiscal 2024 decreased $0.8 million, or 0.6%, compared to the prior year third quarter, primarily due to lower volume-related variable operating costs, lower variable compensation costs given lower earnings, cost savings and efficiencies realized in our RNG operations, offset to an extent by an increase in accruals for self-insurance.
Previous report
General and administrative expenses of $19.8 million for the third quarter of fiscal 2024 decreased $1.4 million, or 6.5%, compared to the prior year third quarter, primarily due to lower variable compensation costs given lower earnings.
Previous report
Nine Months Ended June 29, 2024 Compared to Nine Months Ended June 24, 2023
Previous report
Revenues
Previous report
Average temperatures (as measured in heating degree days) across all of our service territories for the first nine months of fiscal 2024 were 9% warmer than normal and 1% warmer than the prior year period. 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 winter months (December through February) for heat-related demand, with only a brief burst of cooler weather in mid-January. For the month of December, average temperatures were 10% warmer than both normal and prior year, while for the 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 brief two-week period mid-month. Following these inconsistent weather patterns and a lack of sustained cool temperatures during the winter, unseasonably warm weather continued into the spring season. As discussed above, average temperatures across all of our service territories during the third quarter were 14% warmer than normal and 10% warmer than the prior year third quarter. The unseasonably warm and inconsistent weather pattern during the first nine months of fiscal 2024 adversely impacted heat-related demand.
Previous report
Revenues from the distribution of fuel oil and refined fuels of $66.4 million decreased $15.9 million, or 19.3%, compared to the prior year, primarily due to lower volumes sold and lower average selling prices. Fuel oil and refined fuels volumes sold decreased 1.8 million gallons, or 10.6%, resulting in an $8.6 million decrease in revenues. Average selling prices for fuel oil and refined fuels decreased 10.4% compared to the prior year period, reflecting lower average wholesale costs, resulting in a $7.3 million decrease in revenues.
Previous report
Revenues in our natural gas and electricity segment of $20.5 million were $4.9 million, or 19.4%, lower than the prior year, resulting from lower natural gas selling prices (reflective of lower average wholesale costs) and lower natural gas and electricity usage, primarily due to the impact of warmer weather and a lower customer base.
Previous report
Revenues in our all other segment of $60.6 million were $6.8 million, or 12.6%, higher than the prior year period, primarily due to the impact of the RNG Acquisition (see Item 1, Note 4 of this quarterly report), which closed at the beginning of our fiscal 2023 second quarter.
Previous report
Cost of Products Sold
Previous report
Cost of products sold associated with the distribution of propane and related activities of $370.3 million decreased $69.0 million, or 15.7%, compared to the prior year. Lower average wholesale costs contributed to a $36.6 million decrease in cost of products sold, and lower volumes sold contributed to a $15.7 million decrease. Included within the propane segment are costs from other propane activities which decreased $3.7 million compared to the prior year due to lower propane costs for the physical settlement of hedging agreements, coupled with the impact of mark-to-market adjustments on derivative instruments in both periods discussed above.
Previous report
Cost of products sold associated with our fuel oil and refined fuels segment of $44.6 million decreased $13.6 million, or 23.4%, compared to the prior year period. Lower average wholesale costs and lower volumes sold contributed to decreases in cost of products sold of $7.4 million and $6.2 million, respectively.
Previous report
Cost of products sold in our natural gas and electricity segment of $10.7 million decreased $4.9 million, or 31.2%, compared to the prior year, due to lower average wholesale costs, as well as lower usage from warmer weather and a lower customer base.
Previous report
Operating Expenses
Previous report
General and Administrative Expenses
Previous report
General and administrative expenses of $71.4 million for the first nine months of fiscal 2024 increased $1.5 million, or 2.2%, 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 $4.7 million in professional fees and expenses related to our RNG Acquisition.
Previous report
Depreciation and Amortization
Previous report
Depreciation and amortization expense of $49.5 million increased $4.1 million, or 9.1%, primarily from the impact of our RNG Acquisition at the beginning of our second quarter of the prior year period.
Previous report
Interest Expense, net
Previous report
Net interest expense of $56.5 million increased $1.9 million compared to the prior year period, 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 report
Loss on Debt Extinguishment
Previous 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.
Previous report
EBITDA and Adjusted EBITDA
Reworded paragraphs (27)
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 and nine months ended June 29, 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.
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 months ended December 28, 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 28, 2024.
Previous wording
According to the Energy Information Administration, U.S. propane inventory levels at the end of June 2024 were 75.8 million barrels, which was 6.5% lower than June 2023 levels, albeit 10.2% higher than the five-year average for June. The decline in inventory contributed to an increase in average posted propane prices (basis Mont Belvieu, Texas) of 11.5% compared to the prior year third quarter.
Current wording
According to the Energy Information Administration, U.S. propane inventory levels at the end of December 2024 were 85.0 million barrels, which was 2.9% higher than December 2023 levels and 9.0% higher than the five-year average for December. Despite these higher inventory levels, average posted propane prices (basis Mont Belvieu, Texas) increased 14.9% compared to the prior year first quarter.
Previous wording
Consistent with the seasonal nature of our business, we typically experience a net loss in the third quarter of our fiscal year. Net loss for the third quarter of fiscal 2024 was $17.2 million, or $0.27 per Common Unit, compared to a net loss of $5.3 million, or $0.08 per Common Unit, in the third quarter of fiscal 2023. Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted
Current wording
Net income for the first quarter of fiscal 2025 was $19.4 million, or $0.30 per Common Unit, compared to net income of $24.5 million, or $0.38 per Common Unit, for the first quarter of fiscal 2024. Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA, as defined and reconciled below) for the first quarter of fiscal 2025 was $75.3 million, essentially flat compared to the first quarter of fiscal 2024.
Previous wording
Average propane prices (basis Mont Belvieu, Texas) for the third quarter of fiscal 2024 increased 11.5% compared to the prior year third quarter. Total gross margin of $160.2 million for the third quarter decreased $8.0 million, or 4.7%, compared to the prior year third quarter. Gross margin for the third quarter of fiscal 2024 included a $3.2 million unrealized loss attributable to the mark-to-market adjustment for derivative instruments used in risk management activities, compared to a $3.0 million unrealized loss in the prior year third 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, propane unit margins increased $0.07 per gallon, or 3.8%, compared to the prior year third quarter.
Current wording
Average propane prices (basis Mont Belvieu, Texas) for the first quarter of fiscal 2025 increased 14.9% compared to the prior year first quarter. Total gross margin of $226.2 million for the fiscal 2025 first quarter increased $13.4 million, or 6.3%, compared to the prior year first quarter. Gross margin for the first quarter of fiscal 2025 included a $3.6 million unrealized gain attributable to the mark-to-market adjustment for derivative instruments used in risk management activities, compared to a $10.8 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 $1.0 million, or 0.5%, compared to the prior year first quarter, primarily due to slightly lower propane volumes sold, partially offset by an increase in propane unit margins of $0.02 per gallon, or 1.3%.
Previous wording
Combined operating and general and administrative expenses of $135.6 million for the third quarter of fiscal 2024 decreased $2.1 million, or 1.6%, compared to the prior year third quarter, primarily due to lower volume-related variable operating costs, lower variable compensation, and cost savings and efficiencies realized in our RNG operations, offset to an extent by an increase in self-insurance accruals.
Current wording
Combined operating and general and administrative expenses of $150.0 million for the first quarter of fiscal 2025 increased $2.4 million, or 1.6%, compared to the prior year first quarter, primarily due to higher payroll and benefit-related expenses and accruals for settling certain legal matters, offset to an extent by lower vehicle fuel costs.
Previous wording
Our anticipated cash requirements for the remainder of fiscal 2024 include: (i) maintenance and growth capital expenditures of approximately $4.0 million and $16.1 million, respectively; (ii) interest and income tax payments of approximately $13.4 million; and (iii) cash distributions of approximately $20.8 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 2025 include: (i) maintenance and growth capital expenditures of approximately $29.8 million for the propane segment; (ii) capital expenditures of approximately $28.6 million to support the construction and development efforts for our renewable energy platform; (iii) interest and income tax payments of approximately $58.0 million; and (iv) cash distributions of approximately $62.9 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 propane and related activities of $971.0 million decreased $70.0 million, or 6.7%, compared to the prior year period, primarily due to lower volumes sold and lower average selling prices. Retail propane gallons sold decreased 12.9 million gallons, or 3.9%, compared to the prior year, resulting in a $40.0 million decrease in revenues. Average propane selling prices decreased 3.1% compared to the prior year period, reflecting lower average wholesale costs, resulting in a $30.6 million decrease in revenues. Included within the propane segment are revenues from other propane activities, which increased $0.6 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 $330.3 million increased $16.9 million, or 5.4%, compared to the prior year, due to higher average retail selling prices, partially offset by slightly lower volumes sold. Average propane selling prices increased 4.0% compared to the prior year first quarter, reflecting higher average wholesale costs, resulting in a $12.3 million increase in revenues. Retail propane gallons sold decreased 0.8 million gallons, or 0.8%, compared to the prior year, resulting in a $2.4 million decrease in revenues. The slight decrease in propane gallons sold was primarily due to lower heat-related demand from widespread unseasonably warm temperatures and lower agricultural demand for crop drying, offset to an extent by an increase in demand in the Southeast following Hurricanes Helene and Milton, and the impact of our customer base growth and retention initiatives. Included within the propane segment are revenues from risk management activities, which increased $7.0 million, primarily due to a higher notional amount of hedging contracts used in risk management activities that were settled physically.
Previous wording
Revenues from the distribution of fuel oil and refined fuels of $11.0 million were $3.1 million, or 22.2%, lower than the prior year, primarily due to lower volumes sold, and to a lesser extent, lower average retail selling prices. Fuel oil and refined fuels gallons sold decreased 0.7 million gallons, or 21.1%, resulting in a $2.9 million decrease in revenues. Average fuel oil and refined fuels selling prices decreased 1.3% compared to the prior year, reflecting lower average wholesale costs, resulting in a $0.2 million decrease in revenues.
Current wording
Revenues from the distribution of fuel oil and refined fuels of $17.7 million were $6.2 million, or 26.1%, lower than the prior year first quarter, primarily due to lower volumes sold, and to a lesser extent, lower average retail selling prices. Fuel oil and refined fuels gallons sold decreased 0.9 million gallons, or 16.9%, resulting in a $3.9 million decrease in revenues. Average fuel oil and refined fuels selling prices decreased 9.0% compared to the prior year, reflecting lower average wholesale costs, resulting in a $2.3 million decrease in revenues.
Previous wording
Revenues in our natural gas and electricity segment of $5.3 million were $0.4 million, or 8.0%, higher than the prior year, primarily due to higher electricity and natural gas average selling prices, offset to an extent by lower usage and a lower customer base.
Current wording
Revenues in our natural gas and electricity segment of $6.1 million were $0.4 million, or 6.8%, lower than the prior year, primarily due to the impact of a lower customer base.
Previous wording
In the commodities markets, average posted propane prices (basis Mont Belvieu, Texas) and fuel oil prices were 1.4% and 9.7% lower than the prior year period, respectively. The net change in the fair value of derivative instruments resulted in unrealized non-cash losses of $8.1 million and $21.2 million in the first nine months of fiscal 2024 and 2023, respectively. This resulted in a decrease of $13.1 million in cost of products sold year-over-year, of which $13.0 million was reported within the propane segment and $0.1 million was reported within the natural gas and electricity segment. These unrealized mark-to-market adjustments are excluded from Adjusted EBITDA for both periods.
Current wording
In the commodities markets, average posted propane prices (basis Mont Belvieu, Texas) were 14.9% higher than the prior year first quarter, and average fuel oil prices 21.6% lower than the prior year first quarter. The net change in the fair value of derivative instruments resulted in a $3.6 million unrealized non-cash gain in the first quarter of fiscal 2025, compared to a $10.8 million unrealized non-cash loss in the prior year first quarter, resulting in a net decrease of $14.4 million in cost of products sold year-over-year, of which $14.0 million was reported within the propane segment and $0.4 million was reported within the natural gas and electricity 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 $81.3 million decreased $13.3 million, or 14.0%, compared to the prior year third quarter. Lower volumes sold and lower average wholesale costs resulted in a decrease in cost of products sold by $7.5 million and $4.9 million, respectively. Included within the propane segment are costs from other propane activities, which decreased $1.4 million compared to the prior year primarily due to a lower notional amount of hedging contracts used in risk management activities that were settled physically, as well as the net increase of $0.5 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 $129.7 million increased $2.0 million, or 1.5%, compared to the prior year first quarter. Higher average wholesale costs contributed to a $10.1 million increase in cost of products sold, while lower volumes sold contributed to a $0.8 million decrease. Included within the propane segment are costs from other propane activities, which increased $6.7 million compared to the prior year primarily due to a higher notional amount of hedging contracts used in risk management activities that were settled physically, as well as the net decrease of $14.0 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 $7.4 million decreased $2.4 million, or 24.6%, compared to the prior year third quarter. Lower volumes sold and lower average wholesale costs contributed to decreases of $2.1 million and $0.3 million, respectively.
Current wording
Cost of products sold associated with our fuel oil and refined fuels segment of $10.6 million decreased $6.2 million, or 36.9%, compared to the prior year first quarter. Lower average wholesale costs and lower volumes sold contributed to decreases of $3.4 million and $2.8 million, respectively.
Previous wording
Operating expenses of $366.3 million for the first nine months of fiscal 2024 increased $6.5 million, or 1.8%, compared to the prior year period, primarily due to higher payroll and benefit-related costs, higher self-insurance costs and the operating costs associated with our RNG production facilities, offset to an extent by lower volume-related variable operating costs.
Current wording
Operating expenses of $123.2 million for the first quarter of fiscal 2025 increased $1.1 million, or 0.9%, compared to the prior year first quarter, primarily due to higher payroll and benefit-related costs, offset to an extent by lower fleet vehicle fuel costs.
Previous wording
Depreciation and amortization expense of $16.4 million for the third quarter of fiscal 2024 increased $0.8 million, or 5.4%, compared to the prior year third 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 wording
Depreciation and amortization expense of $17.1 million for the first quarter of fiscal 2025 increased $0.7 million, or 4.3%, compared to the prior year first quarter, primarily as a result of additional investments made in our RNG production facilities, and the impact of a propane acquisition that closed in November 2024.
Previous wording
Net interest expense of $18.4 million for the third quarter of fiscal 2024 decreased $0.3 million from the prior year third quarter, primarily due to lower average outstanding borrowings under our Revolving Credit Facility, partially offset by higher benchmark interest rates for borrowings under that facility. See Liquidity and Capital Resources below for additional discussion.
Current wording
Net interest expense of $19.6 million for the first quarter of fiscal 2025 increased $1.4 million from the prior year first quarter, primarily due to a higher level of average outstanding borrowings under our Revolving Credit Facility. See Liquidity and Capital Resources below for additional discussion.
Previous wording
Operating Activities. Net cash provided by operating activities for the first nine months of fiscal 2024 was $123.8 million compared to $167.4 million in the corresponding prior year period. 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 wording
Operating Activities. Net cash provided by operating activities for the first quarter of fiscal 2025 was $8.8 million compared to net cash used in operating activities of $12.8 million in the corresponding prior year period. The increase was primarily due to higher operating income, a lower level of variable-based compensation paid for awards earned in the respective prior year and the timing of payments on certain other operating activities.
Previous wording
Investing Activities. Net cash used in investing activities of $60.0 million for the first nine months of fiscal 2024 consisted of capital expenditures of $40.4 million (including approximately $24.4 million to support the growth of operations and $16.0 million for maintenance expenditures), $12.2 million used to fund the acquisitions of certain assets of two retail propane businesses, and $9.8 million used to fund additional investments in Oberon, IH and another privately held start-up entity. This was partially offset by $2.4 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 $74.5 million for the first quarter of fiscal 2025 consisted of capital expenditures of $23.8 million (including approximately $19.2 million to support the growth of operations and $4.6 million for maintenance expenditures), $46.8 million used to fund the acquisitions of propane businesses, and $4.3 million used to fund additional investments in Oberon and IH. This was partially offset by $0.4 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 $157.1 million for the first nine months of fiscal 2023 consisted of the cash funding portion for the RNG Acquisition (net of cash acquired and debt assumed) of $108.3 million, capital expenditures of $33.4 million (including approximately $17.3 million to support the growth of operations and $16.1 million for maintenance expenditures), $7.5 million used to fund the acquisition of certain assets of a retail propane business, 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 $3.2 million in proceeds from the sale of property, plant and equipment.
Current wording
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.
Previous wording
Financing Activities. Net cash used in financing activities of $58.3 million for the first nine months of fiscal 2024 reflected $12.0 million in net borrowings under our Revolving Credit Facility, $62.3 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 and second quarters of fiscal 2024, $3.7 million in debt origination costs related to the refinancing of our Credit Agreement in March 2024, and other financing activities of $4.3 million.
Current wording
Financing Activities. Net cash provided by financing activities of $67.6 million for the first quarter of fiscal 2025 reflected $91.7 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, acquisitions and investments noted above, offset to an extent by $20.8 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 2024 and other financing activities of $3.3 million.
Previous wording
Net cash provided by financing activities of $4.3 million for the first nine months of fiscal 2023 reflected $70.4 million in net borrowings under our Revolving Credit Facility, which were used to fund the acquisition and investments noted above, and $61.7 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 and second quarters of fiscal 2023, and other financing activities of $4.4 million.
Current wording
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.
Previous wording
As of June 29, 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 $144.0 million outstanding under our Revolving Credit Facility provided by our Credit Agreement. Total long-term borrowings as of June 29, 2024 and June 24, 2023 was $1,224.6 million and $1,240.6, million, respectively. See Item 1, Note 10 of this Quarterly Report.
Current wording
As of December 28, 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 $242.7 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 28, 2024 and December 30, 2023 was $1,323.3 million and $1,267.4 million, respectively. See Item 1, Note 10 of this Quarterly Report.
Previous wording
The aggregate amounts of long-term debt maturities subsequent to June 29, 2024 are as follows: fiscal 2024: $-0-; fiscal 2025: $-0-; fiscal 2026: $-0-; fiscal 2027: $494.0 million; fiscal 2028: $-0-; and thereafter: $730.6 million.
Current wording
The aggregate amounts of long-term debt maturities subsequent to December 28, 2024 are as follows: fiscal 2025: $-0-; fiscal 2026: $-0-; fiscal 2027: $592.7 million; fiscal 2028: $-0-; fiscal 2029: $11.7 million; and thereafter: $718.9 million.
Previous wording
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.
Current wording
Effective with the execution of 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.
Previous wording
On July 25, 2024, we announced a quarterly distribution of $0.325 per Common Unit, or $1.30 on an annualized basis, in respect of the third quarter of fiscal 2024, payable on August 13, 2024 to holders of record on August 6, 2024.
Current wording
On January 23, 2025, 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 2025, payable on February 11, 2025 to holders of record on February 4, 2025.
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 June 29, 2024, we had a liability for the defined benefit pension plan and accrued retiree health and life benefits of $16.5 million and $4.5 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 December 28, 2024, we had a liability for the defined benefit pension plan and accrued retiree health and life benefits of $13.0 million and $4.3 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 June 29, 2024, we had accrued insurance liabilities of $61.4 million, and a receivable of $16.2 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 December 28, 2024, we had accrued insurance liabilities of $58.1 million, and a receivable of $14.3 million related to the amount of the liability expected to be covered by insurance.
Previous 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”). See Item 1, Note 13, “Commitments and Contingencies,” Legal Matters subsection of this Quarterly Report.
Current wording
See Item 1, Note 13, “Commitments and Contingencies,” Legal Matters subsection of this Quarterly Report.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The following table sets forth our calculations of EBITDA and Adjusted EBITDA:
Previous report — wording carried 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.