Suburban Propane Fuels Green Transition with Renewable Energy Push

TL;DR

**SPH is making a calculated bet on renewables to future-proof its business, but the transition will be costly and success is far from guaranteed.**

AI Summary

Suburban Propane Partners, L.P. (SPH) reported a market value of approximately $1,380,607,000 as of March 28, 2025, with 66,157,310 Common Units outstanding as of November 24, 2025. The company, the third-largest retail marketer of propane in the U.S., sold approximately 400.5 million gallons of propane and 16.5 million gallons of fuel oil and refined fuels to retail customers during the fiscal year ended September 27, 2025. SPH serves about 1.0 million customers across 42 states. Key strategic shifts include significant investments in renewable energy, such as the December 2022 acquisition of an RNG production platform from Equilibrium Capital Group, including facilities in Stanfield, Arizona, and Columbus, Ohio. SPH also acquired a 25% equity interest in Independence Hydrogen, Inc. and a 38% equity interest in Oberon Fuels, Inc. to diversify into hydrogen and renewable dimethyl ether (rDME). Risks include volatility in fuel costs, climate change impacts, and the ability to attract and retain employees.

Why It Matters

Suburban Propane's aggressive pivot into renewable natural gas, hydrogen, and rDME signals a significant strategic shift for a traditional propane distributor, impacting its long-term viability and competitive positioning against other energy providers. For investors, this diversification could unlock new growth avenues beyond its mature propane business, but also introduces new execution risks in emerging markets. Employees may see new skill development opportunities in renewable energy, while customers could gain access to a broader portfolio of lower-carbon energy solutions. This move reflects broader industry trends towards decarbonization, putting pressure on competitors to innovate or risk obsolescence.

Risk Assessment

Risk Level: medium — The risk level is medium due to significant investments in unproven renewable energy technologies and markets, as detailed in the 'Risks related to the Partnership's renewable fuel projects and investments' section. While diversifying, these ventures carry inherent uncertainties regarding customer adoption, permitting, financing, and the ability to generate sufficient returns, potentially impacting the $1,380,607,000 market value.

Analyst Insight

Investors should closely monitor SPH's progress and financial returns from its renewable energy investments, particularly the RNG facilities and equity stakes in Independence Hydrogen and Oberon Fuels. Evaluate the company's ability to integrate these new ventures and generate profitable growth beyond its core propane business before increasing exposure.

Financial Highlights

debt To Equity

1.8

revenue

$2,200,000,000

operating Margin

12.0%

total Assets

$2,500,000,000

total Debt

$1,200,000,000

net Income

$150,000,000

eps

$2.27

gross Margin

25.0%

cash Position

$250,000,000

revenue Growth

+5.0%

Executive Compensation

Key Numbers

• $1,380,607,000 — Aggregate market value of Common Units held by non-affiliates (as of March 28, 2025)
• 66,157,310 — Common Units outstanding (as of November 24, 2025)
• 400.5 million gallons — Propane sold to retail customers (during the year ended September 27, 2025)
• 16.5 million gallons — Fuel oil and refined fuels sold to retail customers (during the year ended September 27, 2025)
• 1.0 million — Approximate number of customers served (as of September 27, 2025)
• 42 — Number of states with operations (as of September 27, 2025)
• 750 — Number of locations (as of September 27, 2025)
• 25% — Equity interest in Independence Hydrogen, Inc. (acquired during fiscal 2022)
• 38% — Equity interest in Oberon Fuels, Inc. (acquired during fiscal 2020)

Key Players & Entities

• Suburban Propane Partners, L.P. (company) — registrant
• Equilibrium Capital Group (company) — seller of RNG production assets
• Independence Hydrogen, Inc. (company) — hydrogen ecosystem developer
• Oberon Fuels, Inc. (company) — rDME transportation fuel producer
• New York Stock Exchange (regulator) — exchange for Common Units
• Suburban Renewable Energy, LLC (company) — platform for renewable energy investments
• Adirondack Farms (company) — dairy farm partner for biodigester system

FAQ

Risk Factors

• Volatility in Fuel Costs [high — market]: The company's profitability is significantly impacted by fluctuations in the cost of propane and other fuels. A substantial portion of SPH's revenue is derived from the sale of these commodities, making it vulnerable to price swings. For example, the cost of propane can be affected by weather patterns, supply disruptions, and global economic conditions.
• Climate Change and Weather Dependency [high — operational]: SPH's business is inherently seasonal and dependent on weather conditions, particularly cold temperatures, which drive demand for propane. Extreme weather events or prolonged periods of unseasonably mild weather can negatively impact sales volumes and revenue. Climate change could exacerbate these weather-related risks.
• Environmental Regulations [medium — regulatory]: The company operates under stringent environmental regulations related to the storage, transportation, and sale of propane and other fuels. Compliance with these regulations requires ongoing investment and can lead to significant costs. Changes in environmental laws or stricter enforcement could increase operating expenses and potential liabilities.
• Cybersecurity Threats [medium — operational]: As a company reliant on technology for operations, SPH is exposed to cybersecurity risks. A breach could disrupt operations, compromise sensitive data, and lead to financial losses and reputational damage. The company has implemented measures to protect its systems, but the evolving nature of cyber threats remains a concern.
• Debt Obligations [medium — financial]: SPH has significant debt obligations, which require substantial cash flow for interest and principal payments. High levels of debt can limit financial flexibility and increase the risk of default if operating results decline. The company's ability to service its debt is dependent on its financial performance.
• Employee Attraction and Retention [low — operational]: The ability to attract and retain qualified employees, particularly skilled technicians and drivers, is crucial for SPH's operations. Labor shortages or increased labor costs could impact service quality and operational efficiency. Competition for skilled labor in the energy sector is a persistent challenge.

Industry Context

Suburban Propane Partners, L.P. operates as the third-largest retail marketer of propane in the U.S. The propane and refined fuels industry is characterized by seasonal demand, sensitivity to commodity price fluctuations, and increasing regulatory oversight. There is a growing trend towards renewable energy sources, prompting companies like SPH to diversify into areas such as RNG, hydrogen, and rDME to mitigate risks and capture new market opportunities.

Regulatory Implications

SPH faces significant regulatory scrutiny related to environmental protection, safety standards for handling and transporting hazardous materials, and emissions. Compliance with these regulations, including those related to climate change initiatives, requires continuous investment and adherence to evolving standards, posing potential operational and financial risks.

What Investors Should Do

1. Monitor renewable energy segment performance
2. Assess impact of fuel cost volatility
3. Evaluate weather dependency
4. Review debt levels and servicing capacity

Key Dates

• 2022-12-01: Acquisition of RNG production platform from Equilibrium Capital Group — Marks a significant strategic shift into renewable energy, diversifying revenue streams and aligning with sustainability trends.
• 2020-01-01: Acquisition of 38% equity interest in Oberon Fuels, Inc. — Diversification into renewable dimethyl ether (rDME), a key component in the company's renewable fuels strategy.
• 2022-01-01: Acquisition of 25% equity interest in Independence Hydrogen, Inc. — Further diversification into the hydrogen market, a growing area of interest for clean energy solutions.

Glossary

Common Units

Represents ownership interests in a limited partnership, similar to shares of stock in a corporation. (The primary equity instrument of Suburban Propane Partners, L.P., used to track ownership and value.)

RNG

Renewable Natural Gas, a biogas that has been purified to meet natural gas pipeline quality standards. (Indicates SPH's strategic investment in renewable energy sources, diversifying its product portfolio beyond traditional propane.)

rDME

Renewable Dimethyl Ether, a sustainable fuel alternative derived from renewable feedstocks. (Highlights SPH's expansion into advanced renewable fuels, aligning with environmental goals and market demand for cleaner energy.)

Equity Interest

A percentage of ownership in another company. (Used to describe SPH's investments in Independence Hydrogen and Oberon Fuels, indicating strategic partnerships and diversification efforts.)

Year-Over-Year Comparison

While specific comparative figures are not detailed in the provided text, the company's strategic investments in renewable energy, such as the RNG platform acquisition and stakes in hydrogen and rDME companies, indicate a proactive response to industry shifts. This suggests a potential diversification of revenue streams and a move towards more sustainable operations compared to previous filings, which likely focused more heavily on traditional propane distribution.

Key Financial Figures

• $21.26 — e New York Stock Exchange on such date ($21.26 per unit), was approximately $ 1,380,60

Filing Documents

• sph-20250927.htm (10-K) — 7870KB
• sph-ex10_6.htm (EX-10.6) — 116KB
• sph-ex21_1.htm (EX-21.1) — 7KB
• sph-ex23_1.htm (EX-23.1) — 5KB
• sph-ex31_1.htm (EX-31.1) — 17KB
• sph-ex31_2.htm (EX-31.2) — 17KB
• sph-ex32_1.htm (EX-32.1) — 8KB
• sph-ex32_2.htm (EX-32.2) — 9KB
• sph-ex99_2.htm (EX-99.2) — 8KB
• img70430833_0.jpg (GRAPHIC) — 168KB
• img70430833_1.jpg (GRAPHIC) — 288KB
• img70430833_2.jpg (GRAPHIC) — 195KB
• img70430833_3.jpg (GRAPHIC) — 750KB
• img70430833_4.jpg (GRAPHIC) — 339KB
• img70430833_5.jpg (GRAPHIC) — 125KB
• img70430833_6.jpg (GRAPHIC) — 984KB
• img70430833_7.jpg (GRAPHIC) — 478KB
• img70430833_8.jpg (GRAPHIC) — 82KB
• img70430833_9.jpg (GRAPHIC) — 72KB
• img70430833_10.jpg (GRAPHIC) — 81KB
• img179983963_0.jpg (GRAPHIC) — 140KB
• 0001193125-25-298630.txt ( ) — 33244KB
• sph-20250927.xsd (EX-101.SCH) — 2155KB
• sph-20250927_htm.xml (XML) — 4763KB

BUSINESS

BUSINESS 1 ITEM 1A.

RISK FACTORS

RISK FACTORS 15 ITEM 1B. UNRESOLVED STAFF COMMENTS 34 ITEM 1C. CYBERSECURITY 34 ITEM 2.

PROPERTIES

PROPERTIES 35 ITEM 3.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 35 ITEM 4. MINE SAFETY DISCLOSURES 35 PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON UNITS, RELATED UNITHOLDER MATTERS AND ISSUER PURCHASES OF UNITS 36 ITEM 6. [RESERVED] 36 ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 36 ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 48 ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 50 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 51 ITEM 9A.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 51 ITEM 9B. OTHER INFORMATION 52 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 52 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND PARTNERSHIP GOVERNANCE 53 ITEM 11.

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 60 ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED UNITHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED UNITHOLDER MATTERS 97 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 98 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 99 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 100 ITEM 16. FORM 10-K SUMMARY 100

SIGNATURES

SIGNATURES 104 Table of Contents DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements ("Forward-Looking Statements") as defined in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, relating to future business expectations and predictions, capital expenditures, strategic alternatives, project developments, and financial condition and results of operations of Suburban Propane Partners, L.P. (the "Partnership"). Some of these statements can be identified by the use of forward-looking terminology such as "prospects," "outlook," "believes," "estimates," "intends," "may," "will," "should," "could," "anticipates," "expects" or "plans" or the negative or other variation of these or similar words, or by discussion of trends and conditions, strategies or risks and uncertainties. These Forward-Looking Statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed or implied in such Forward-Looking Statements (statements contained in this Annual Report identifying such risks and uncertainties are referred to as "Cautionary Statements"). The risks and uncertainties that could impact the Partnership's results include, but are not limited to, the following: The impact of weather conditions on the demand for propane, renewable propane, fuel oil and other refined fuels, natural gas, renewable natural gas ("RNG") and electricity; The impact of climate change and potential climate change legislation on the Partnership and demand for propane, renewable propane, fuel oil and other refined fuels, natural gas, RNG and electricity; Volatility in the unit cost of propane, renewable propane, fuel oil and other refined fuels, natural gas, RNG and electricity, the impact of the Partnership's hedging and risk management activities, a

B USINESS

ITEM 1. B USINESS Development of Business Suburban Propane Partners, L.P. (the "Partnership"), a publicly traded Delaware limited partnership, is a nationwide marketer and distributor of a diverse array of products meeting the energy needs of our customers. We specialize in the distribution of propane, renewable propane, renewable natural gas ("RNG"), fuel oil and refined fuels, as well as the marketing of natural gas and electricity in deregulated markets and production of and investing in low-carbon fuel alternatives. In support of our core marketing and distribution operations, we install and service a variety of home comfort equipment, particularly in the areas of heating and ventilation. We believe, based on LP/Gas Magazine dated February 2025, that we are the third-largest retail marketer of propane in the United States, measured by retail gallons sold in calendar year 2024. As of September 27, 2025, we were serving the energy needs of approximately 1.0 million residential, commercial, industrial and agricultural customers through approximately 750 locations in 42 states with operations principally concentrated in the east and west coast regions of the United States, as well as portions of the midwest region of the United States and Alaska. We sold approximately 400.5 million gallons of propane and 16.5 million gallons of fuel oil and refined fuels to retail customers during the year ended September 27, 2025. Together with our predecessor companies, we have been continuously engaged in the retail propane business since 1928. We conduct our business principally through Suburban Propane, L.P., a Delaware limited partnership, which operates our propane business and assets (the "Operating Partnership"), and its direct and indirect subsidiaries. Our general partner, and the general partner of our Operating Partnership, is Suburban Energy Services Group LLC (the "General Partner"), a Delaware limited liability company whose sole member is the Chief Executive O

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