Suburban Propane Raises Annual Distribution Rate 7.7% to $1.40 per Unit
Key Facts
Suburban Propane announced in a statement dated 22 October 2026 that it was raising its annual cash distribution rate to $1.40 per common unit, up 7.7% from the previous rate. The board of supervisors approved an increase in the quarterly distribution to $0.35 per unit from $0.325, according to the company's statement. The announced annual rate is based on the new quarterly distribution. Management linked the increased returns to unitholders to a stronger financial position and improved leverage. It also cited positive momentum in its propane operations and renewable energy platform as factors supporting the decision.
Chief Executive Michael Stivala said capital spending on the renewable natural gas facilities in Columbus, Ohio, and upstate New York was "substantially complete." He said the decline in that spending gave the partnership greater flexibility to return capital to unitholders. He added that this flexibility also allowed it to retain funds to invest in growth. In its third-quarter earnings disclosure, management had expected to enter fiscal 2027 with its 3 renewable natural gas facilities operating. That disclosure identified opportunities for growth through improvements in the facilities' production capacity. It also pointed to increased feedstock inputs as another avenue for expanding renewable natural gas operations.
On performance, adjusted earnings before interest, taxes, depreciation and amortization rose to $278.0 million in fiscal 2025 from $250.0 million in the previous year. The annual increase was 11.2%, according to the company's fiscal-year earnings statement. In its latest reported quarterly results, however, adjusted earnings before interest, taxes, depreciation and amortization fell to $18.0 million. Comparable earnings in the same quarter a year earlier were $27.0 million, according to the company's filing with the U.S. Securities and Exchange Commission. Retail propane sales volume fell to 70.6 million gallons in the latest reported fiscal quarter. That represented a decline of 1.8% from the corresponding quarter a year earlier. The company attributed the decline in sales volume primarily to warmer spring weather and lower heating-related demand.
On debt, Suburban Propane repaid $36.2 million in revolving credit facility borrowings during the latest reported quarter, according to its earnings disclosure. It used operating cash flow and proceeds from units issued through its at-the-market program to fund the repayment. This followed the use of cash flow from operating activities to reduce borrowings under the same facility during the second quarter of fiscal 2026. Repayments in that quarter totaled $64.3 million, according to the second-quarter earnings statement. Its consolidated leverage ratio was 4.35 times for the annual period ended 27 June 2026, according to its quarterly report filed with the U.S. Securities and Exchange Commission.
Suburban Propane operates as a master limited partnership listed on the New York Stock Exchange, according to the company's disclosure. For foreign investors holding its units, the distribution notice states that their distributions are subject to federal income tax withholding. Withholding is applied at the highest applicable effective rate, according to the notice. Brokers and agents carry out the withholding on behalf of foreign investors. The company set 3 November 2026 as the record date for unitholders eligible for the distribution, with payment scheduled for 10 November 2026. This will be followed by a conference call to discuss fiscal 2026 and fourth-quarter results on 12 November 2026, according to a separate company announcement. The call begins at 9:00 a.m. U.S. Eastern Time and will cover the business outlook as well as results.