Suburban Propane Partners LP (SPH) 2025 Q1 法說會逐字稿

Good morning. Ladies and gentlemen. I'm welcome to the suburban propane partners first quarter earnings conference call at this time (Operator Instructions)

早安.女士們，先生們。歡迎參加郊區丙烷合作夥伴第一季財報電話會議（操作員指令）

This call is being recorded on February 6th, 2025.

該通話於 2025 年 2 月 6 日錄製。

I would now like to turn the conference over to A. Davin D'Ambrosio Vice President and treasurer. Please go ahead.

現在，我想將會議交給副總裁兼財務主管 A. Davin D'Ambrosio。請繼續。

Thank you, Jenny. Good morning, everyone. Thank you for joining us this morning for our fiscal 2025 1st quarter earnings conference call.

謝謝你，珍妮。大家早安。感謝您今天上午參加我們的 2025 財年第一季財報電話會議。

Joining me this morning are Mike Stala, our President and Chief Executive Officer, Mike Kuglin, our Chief Financial Officer and Alex Santen of Senior Vice President operations this morning, we will review our first quarter financial results along with our current outlook for business.

今天早上與我一起參加的有我們的總裁兼執行長 Mike Stala、我們的財務長 Mike Kuglin 和高級副總裁營運 Alex Santen，我們將回顧我們第一季的財務業績以及我們目前的業務前景。

Once we concluded our prepared remarks, we will open the session to questions.

當我們結束準備好的發言後，我們將開始回答問題。

Our conference call contains forward-looking statements within the meaning of section 21 E of the Securities Exchange Act of 1934 as amended relating to the partnership's future business expectations and predictions and financial condition and results of operations.

我們的電話會議包含《1934 年證券交易法》（經修訂）第 21E 條所定義範圍內的前瞻性陳述，涉及合夥企業的未來業務預期和預測以及財務狀況和經營業績。

These forward-looking statements involve certain risks and uncertainties. We have listed some of the important factors that could cause actual results to differ materially from those discussed in such forward-looking statements which are referred to as cautionary statements in our earnings press release, which can be viewed on our website at suburban propane.com. all subsequent written and oral forward-looking statements attributable to the partnership or persons acting on its behalf expressly qualified in their entirety by such cautionary statements.

這些前瞻性陳述涉及一定的風險和不確定性。我們列出了一些可能導致實際結果與此類前瞻性陳述中討論的結果存在重大差異的重要因素，這些因素在我們的收益新聞稿中被稱為警告聲明，您可以在我們的網站 urban propane.com 上查看。所有後續書面和口頭的前瞻性陳述均歸屬於合夥企業或代表其行事的人員，且均完全符合此類警示性聲明的規定。

Our annual report on form 10-K for the fiscal year ended September 28th, 2024 and form 10-Q for the period ended December 28th, 2024 which will be filed by the end of business today contain additional disclosure regarding forward-looking statements and risk factors. Copies may be obtained by contacting the partnership or the SCC third non-GAAP measures will be discussed on this call.

我們將於今天下班前提交截至 2024 年 9 月 28 日的財政年度的 10-K 表年度報告和截至 2024 年 12 月 28 日的 10-Q 表，其中包含有關前瞻性陳述和風險因素的額外披露。可透過聯絡合夥企業或 SCC 取得副本，本次電話會議將討論第三個非 GAAP 指標。

We have provided a description of those measures as well as a discussion of why we believe this information to be useful in our form 8-K which was furnished to the SEC this morning. The form 8-K will be available through a link in the investor relations section of our website.

我們在今天早上提交給美國證券交易委員會的 8-K 表中描述了這些措施，並討論了我們認為這些資訊有用的原因。您可以透過我們網站投資者關係部分的連結取得 8-K 表格。

At this time, I will turn the call over to Michale stivala for some open area marks Mike.

現在，我將把電話轉給 Michale stivala，讓他對一些開放區域進行標記，Mike。

Thanks Davin and good morning. Thank you all for joining us today.

謝謝戴文，早安。感謝大家今天的參與。

We're pleased to report another solid quarter despite several challenging conditions adjusted EBITDA for our first quarter of fiscal 2025 was $75.3 million. Essentially flat to the prior year. First quarter, propane revenues for the quarter were marginally lower than the prior year. First quarter.

儘管面臨諸多挑戰，但我們仍很高興地報告本季業績穩健，2025 財年第一季的調整後 EBITDA 為 7,530 萬美元。與上年基本持平。第一季度，丙烷收入略低於去年同期。第一季。

As strong demand in our Southeast operations in the aftermath of hurricanes, Helene and Milton combined with the benefit of incremental volumes from our acquisition of a well run propane business in the southwest territory which we closed in November 2024. We're able to substantially offset the impacts of widespread unseasonably warm weather, especially in the month of November and a less active crop drying season.

由於颶風海倫和米爾頓過後我們東南業務的需求強勁，加上我們收購了西南部一家運營良好的丙烷業務，銷量增加，我們於 2024 年 11 月關閉了該業務。我們能夠大幅抵消大面積異常溫暖天氣的影響，尤其是在 11 月和農作物乾燥季節不太活躍的時候。

Our field operations have done an excellent job managing selling prices in a higher commodity price environment and are leveraging our efficient operating model to help manage costs.

我們的現場營運在商品價格上漲的環境下出色地管理了銷售價格，並利用我們高效的營運模式來幫助管理成本。

As I will comment further in my closing remarks, colder temperatures arrived toward the end of December and carried into January 2025 creating strong momentum into the heart of the heating season.

我在結束語中將進一步評論，寒冷的氣溫在 12 月底到來，並持續到 2025 年 1 月，為供暖季節的中心創造了強勁勢頭。

Our operations personnel are very well prepared to serve the increased demand from our customers during a period of sustained colder temperatures that have gripped much of the country in the early part of our fiscal second quarter.

在第二財政季度初期，全國大部分地區持續遭遇寒冷天氣，我們的營運人員已做好充分準備來滿足客戶日益增長的需求。

In our renewable natural gas operations, we completed an extended and planned shutdown of our anaerobic digester facility in Stanfield Arizona for routine maintenance and regulatory compliance upgrades. And as a result R&G injection for the quarter was lower than the prior year.

在我們的再生天然氣業務中，我們完成了位於亞利桑那州斯坦菲爾德的厭氧消化設施的延長和計劃關閉，以進行日常維護和法規遵從性升級。因此，本季的 R&G 注入低於去年同期。

First quarter. The upgrades and enhancements completed during the planned shutdown will improve the operating performance and resiliency of the facility enhance the quality of feedstock coming into the facility and is expected to result in increased R&G production moving forward.

第一季。計劃停工期間完成的升級和改進將提高設施的運作性能和彈性，提高進入設施的原料質量，並有望提高未來的 R&G 產量。

Since the restart of the facility in mid November, we have continued to experience enhanced conversion of feedstock intake to R&G injection as we continue to instill the best in class operating model that we are known for within our core propane business.

自 11 月中旬工廠重啟以來，我們不斷體驗到原料攝取量向 R&G 注入量的轉換率不斷提高，同時我們繼續在核心丙烷業務中灌輸我們所熟知的一流營運模式。

We also continue to advance our capital projects to construct our Anaerobic digester facility in upstate New York and the gas upgrade equipment at our Anaerobic digester facility in Columbus, Ohio, which are both expected to be completed toward the end of this calendar year.

我們也繼續推進我們的資本項目，在紐約州北部建設我們的厭氧消化設施，並在俄亥俄州哥倫布市建設我們的厭氧消化設施的氣體升級設備，預計這兩個項目都將在今年年底完工。

And we have taken the necessary steps to earn report and prepare to monetize production tax credits from our Stanfield facility which became effective January 2025 and we expect to be able to monetize ptcs at both the New York and Ohio facilities once we start R&G production and sales activities.

我們已採取必要措施賺取報告並準備將斯坦菲爾德工廠的生產稅收抵免貨幣化，該措施於 2025 年 1 月生效，我們預計一旦開始 R&G 生產和銷售活動，就能夠在紐約和俄亥俄工廠將 ptcs 貨幣化。

So while warm weather weighed on customer demand and our propane operations during the first quarter, we continue to manage the things we can control and remain steadfast in our commitment to our strategic growth objectives, there's still a lot of heating season ahead and we are very well prepared to handle increased demand from colder weather in a moment.

因此，雖然第一季溫暖的天氣對客戶需求和我們的丙烷業務造成了壓力，但我們仍會繼續管理我們能夠控制的事情，堅定不移地致力於我們的戰略增長目標，未來還有很長的供暖季節，我們已經做好了充分的準備來應對寒冷天氣帶來的需求增長。

I will come back for some closing remarks and provide added color on our strategic initiatives. However, at this point, let me turn it over to Michael Kuglin to discuss our first quarter results in more detail. Mike.

我將回來做一些結束語並對我們的策略舉措提供進一步的解釋。不過，現在，讓我把話題轉到 Michael Kuglin 身上，讓他更詳細地討論一下我們的第一季業績。麥克風。

Thanks Mike and good morning everyone to be consistent with previous reporting. As I discuss our first quarter results, I'm excluding the impact of unrealized mark to market adjustments on our commodity hedges, which resulted in an unrealized gain of $3.6 million for the first quarter of fiscal 2025.

謝謝麥克，大家早安，與之前的報道保持一致。當我討論我們的第一季業績時，我排除了未實現的市價調整對我們的商品對沖的影響，這導致 2025 財年第一季的未實現收益為 360 萬美元。

Compare it to an unrealized loss of $10.8 million in the prior year. First quarter, excluding these non cash items, as well as non cash equity and losses and impairment charges related to our unconsolidated subsidiaries accounted for under the equity method. Net income for the first quarter was $38 million or $0.59 per common unit compared to net income of $40.4 million or $0.63 per common unit in the prior year.

相比之下，上一年同期的未實現損失為 1,080 萬美元。第一季度，不包括這些非現金項目，以及以權益法計算的非現金權益和與我們的非合併子公司相關的損失和減損費用。第一季淨收入為 3,800 萬美元，即每股 0.59 美元，而去年同期淨收入為 4,040 萬美元，即每股 0.63 美元。

Adjust EBITA for the first quarter with $75.3 million essentially flat to the prior year.

調整第一季的 EBITA 為 7,530 萬美元，與上年基本持平。

Retail propane gallons sold of $105.7 million gallons were 0.8% lower than the prior year. Primarily due to lower heat related demand from widespread unseasonably warm temperatures, especially during the month of November and lower agricultural demand for crop drying, which is almost entirely offset by an increase in demand in our Southeast region following hurricane Helene and Milton.

零售丙烷銷售量為 1.057 億加侖，較上年下降 0.8%。主要是由於大範圍反常高溫天氣（尤其是在 11 月）導致的高溫相關需求下降，以及農作物乾燥的農業需求下降，但這幾乎完全被颶風海倫和米爾頓過後我們東南地區的需求增加所抵消。

And the positive contributions from our customer base growth and retention initiatives including the strategic propane acquisition in the southwest that was completed in November 2024.

我們客戶群成長和保留措施做出了積極貢獻，包括 2024 年 11 月完成的西南地區策略性丙烷收購。

With respect to the weather, average temperatures during the first quarter of fiscal 2025 were 7% warmer than normal and flat to the prior year. First quarter.

就天氣而言，2025財年第一季的平均氣溫比正常水平高出7%，與前一年持平。第一季。

In the month of November 2024 average temperatures were 15% warmer than normal and 17% warmer than November 2023 making one of the top five warmest Novembers on record.

2024 年 11 月的平均氣溫比正常高 15%，比 2023 年 11 月高 17%，是有記錄以來最溫暖的五個 11 月之一。

Right. Commodity perspective, average wholesale propane prices for fiscal 2025 1st quarter of $0.77 per gallon basis. Mont value increased 15% compared to the prior year, first quarter since the end of December. And with the burst of cold weather in January, propane prices have increased from the average prices

正確的。商品角度，2025 財年第一季平均批發丙烷價格為每加侖 0.77 美元。與去年 12 月底以來的第一季相比，Mont 的價值增加了 15%。隨著 1 月寒冷天氣的到來，丙烷價格已從平均價格上漲

During the first quarter with posted prices rising to $0.95 gallon and are now trending in the range of $85 to $0.90 per gallon excluding the impact of the mark to market adjustments on our commodity hedges that I mentioned earlier total gross margin of $222.5 million for the first quarter decreased $1 million or 0.5% compared to the prior year.

第一季度，公佈的價格上漲至每加侖 0.95 美元，目前趨勢價格在每加侖 85 美元至 0.90 美元之間，不包括我之前提到的按市價調整對我們的商品對沖的影響，第一季度的總毛利率為 2.225 億美元，與去年同期相比減少了 100 萬美元，即 0.5%。

First quarter. Primarily due to slightly lower propane volumes sold and lower margin contribution from the R&G operations partial set by an increase in propane unit margins of $0.02 per gallon or 1.3% with respect to expenses.

第一季。主要是由於丙烷銷售量略有下降以及 R&G 業務利潤貢獻下降，部分原因是丙烷單位利潤率增加 0.02 美元/加侖或費用增加 1.3%。

Combined operating and G&A expenses of $150 million increased $2.4 million or 1.6% compared to the prior year. First quarter. Primarily due to higher payroll and benefit related costs. Approvals for settling certain legal matters offset to an extent by lower vehicle fuel costs.

綜合營運及一般行政費用為 1.5 億美元，較上年增加 240 萬美元，增幅為 1.6%。第一季。主要是由於工資和福利相關成本增加。解決某些法律問題的批准在一定程度上被車輛燃料成本的降低所抵消。

Net interest expense of $19.6 million for the first quarter increased $1.4 million or 7.8% compared to the prior year. First quarter due to a higher level of average outstanding borrowings under our revolving credit facility.

第一季淨利息支出為 1,960 萬美元，較上年增加 140 萬美元，增幅 7.8%。第一季的原因是我們的循環信貸安排下的平均未償還借款水準較高。

During the quarter, we recognized $3 million of income representing the fair value of contingent consideration due from equilibrium capital group which was reported with other net on the statement of operations in accordance with the purchase agreement that we entered into with equilibrium in December 2022

在本季度，我們確認了 300 萬美元的收入，代表應收 Equilibrium Capital Group 或有對價的公允價值，該收入根據我們於 2022 年 12 月與 Equilibrium 簽訂的購買協議，在損益表中與其他淨額一起報告

For the acquisition of the anaerobic digestive facilities in Stanford, Arizona and Columbus, Ohio expenditures for the gas upgrade equipment project at the Columbus facility that exceeded a certain threshold would be funded by equilibrium up to a total of $3 million if the partnership incurred those costs prior to December 31,2024 based on the status of the capital project at Columbus. We have triggered that cost reimbursement from equilibrium excluded from adjusted EBITA for the first quarter of fiscal 2025. Our impairment charges for our investments in independence, hydrogen and Ron fuels of $9.6 million and $10.2 million respectively. In order to write down the carrying values of these investments to their estimated fair values.

對於收購位於亞利桑那州史丹佛和俄亥俄州哥倫布的厭氧消化設施，如果合夥企業根據哥倫布資本項目的狀況在 2024 年 12 月 31 日之前發生這些費用，那麼哥倫布設施的氣體升級設備項目超過一定門檻的支出將由平衡資金資助，總額最高可達 300 萬美元。我們已從 2025 財年第一季調整後 EBITA 中排除的平衡中觸發了該成本補償。我們對獨立、氫能和 Ron 燃料的投資的減損費用分別為 960 萬美元和 1,020 萬美元。為了將這些投資的帳面價值減記為其估計的公允價值。

These non cash charges were reported with other net on a statement of operations, I can provide some additional commentary on these investments in a few moments.

這些非現金費用在損益表中與其他淨額一起報告，我可以在幾分鐘內對這些投資提供一些額外的評論。

Total capital spending for the quarter of $23.8 million was $12.7 million higher than the prior year. First quarter. Primarily due to higher growth CapEx associated with construction of the gas upgraded equipment at our Columbus Ohio facility and ongoing construction of the Anaerobic digester facility in New York.

本季總資本支出為 2,380 萬美元，比上年高出 1,270 萬美元。第一季。主要是由於我們位於俄亥俄州哥倫布市的工廠的天然氣升級設備建設以及位於紐約的厭氧消化器設施的持續建設導致資本支出增長較高。

As I mentioned on our last call, capital spending for fiscal 2025 is expected to range between $40 and $45 million for our propane operations and between 35 to $45 million for R&G projects during the quarter. We also closed on the acquisition of a propane business with operations in New Mexico and Arizona for total consideration of $53 million inclusive future knocke payments, turning our balance sheet given the seasonal nature of our business, we typically borrow under our revolving credit facility during the first quarter to help fund a portion of our seasonal working capital needs.

正如我在上次電話會議上提到的，預計 2025 財年資本支出將在 4,000 萬至 4,500 萬美元之間（用於丙烷業務），3,500 萬至 4,500 萬美元（用於 R&G 專案）。我們還完成了對一家在新墨西哥州和亞利桑那州開展業務的丙烷業務的收購，總對價為 5,300 萬美元，其中包括未來的 knocke 付款，這改變了我們的資產負債表，考慮到我們業務的季節性，我們通常在第一季度根據循環信貸安排借款，以幫助滿足我們部分季節性營運資金需求。

During the first quarter, we borrowed $91.7 million under our revolver to fund the propane acquisition as well as to fund seasonal working capital and growth capital expenditures.

第一季度，我們透過循環信貸借入了 9,170 萬美元，用於資助丙烷收購以及季節性營運資金和成長資本支出。

Our consolidated leverage ratio for a trillion 12 month period ended December 2024 was 4.99 times.

我們截至 2024 年 12 月的 12 個月的綜合槓桿率為 4.99 倍。

Although the leverage metric is elevated relative to our historical levels, we remained well within our debt covenant requirement of 5.75 times.

儘管槓桿率指標相對於我們的歷史水準有所上升，但我們仍然嚴格遵守 5.75 倍的債務契約要求。

We expect our leverage metric to benefit from increased earnings as we complete our growth projects. As the R&D platform reaches runway capacity with the monetization of production tax credits under the IRA given the seasonality of our business working capital needs typically peak towards the end of the heating season, late February or early March time frame. After which we expect to generate excess cash flows, we will continue to remain focused on utilizing excess cash flows to strengthen the balance sheet as opportunities arise to fund strategic growth.

我們預計，隨著我們完成成長項目，我們的槓桿指標將受益於收益的增加。隨著研發平台達到跑道容量，隨著 IRA 下生產稅收抵免的貨幣化，鑑於我們業務的季節性，營運資金需求通常在供暖季節結束時（二月底或三月初）達到高峰。此後，我們預計將產生超額現金流，我們將繼續專注於利用超額現金流來加強資產負債表，因為有機會為策略成長提供資金。

We have more than ample borrowing capacity under our revolver to fund our remaining working capital needs for the heating season as well as to support our capital expansion plans and ongoing strategic growth initiatives.

我們的循環信貸額度綽綽有餘，足以滿足供暖季節剩餘的營運資金需求，並支持我們的資本擴張計劃和持續的戰略成長計劃。

Thank you, Mike.

謝謝你，麥克。

Thanks Mike.

謝謝邁克。

As announced on January 23rd, our board of supervisors declared our quarterly distribution of 32.$0.05 per common unit in respect of our first quarter of fiscal 2025 and that equates to an annualized rate of a $30 per common unit.

正如 1 月 23 日宣布的那樣，我們的監事會宣布，2025 財年第一季的季度分配為每股普通股 32.05 美元，相當於每股普通股 30 美元的年化利率。

The quarterly distribution will be paid on February 11th to unit holders of record as of February the fourth, our distribution coverage continues to remain strong at 1.87 times for the trailing 12 month period ended December 2024.

季度分配將於 2 月 11 日支付給截至 2 月 4 日登記在冊的單位持有人，截至 2024 年 12 月的過去 12 個月，我們的分配覆蓋率持續保持強勁，為 1.87 倍。

I'd like to comment next on our long term strategic growth plans.

接下來我想評論一下我們的長期策略成長計劃。

Our long term strategic growth initiatives continue to focus on fostering the growth of our core propane business and growing our renewable energy platform through strategic investments in renewable energy businesses and assets that will help position our business for the long term as the country continues to evolve to a low carbon economy.

我們的長期策略成長計畫繼續致力於促進我們的核心丙烷業務的成長，並透過對再生能源業務和資產的策略性投資來發展我們的再生能源平台，這將有助於我們的業務在國家繼續向低碳經濟轉型的過程中保持長期定位。

All while maintaining balance sheet flexibility over the past five years, the strong free cash flow that our business generates supplemented by borrowings as needed has allowed us to fund strategic acquisitions in support of our core propane business which resulted in the successful acquisition and integration of nine propane businesses in strategic markets, investing more than $125 million in those efforts, as well as our continued execution of our organic growth plans by providing exceptional customer service, driving our growth and retention initiatives and fostering new market expansions in propane.

在過去五年保持資產負債表靈活性的同時，我們業務產生的強勁自由現金流加上必要的借款使我們能夠為支持核心丙烷業務的戰略收購提供資金，從而成功收購和整合戰略市場的九家丙烷企業，在這些工作中投資超過1.25億美元，同時我們繼續執行有機增長計劃，提供卓越的客戶服務，推動我們的增長和保留計劃，促進我們的增長和保留計劃，促進我們的新市場的擴張。

We've made investments in renewable fuels, hydrogen and renewable natural gas helping to pave the way for us to have a scaled presence in the evolving low carbon renewable energy landscape with diversified revenue streams, investing approximately $320 million in support of those efforts over the past five years and over that same span of years, we returned a total of $475 million to unit holders in the form of strong and steady cash distributions.

我們對再生燃料、氫氣和再生天然氣進行了投資，為我們在不斷發展的低碳可再生能源領域大規模存在和多元化收入來源鋪平了道路，過去五年來我們為支持這些努力投資了約 3.2 億美元，在同一時期，我們以強勁而穩定的現金分配形式向單位持有人返還了總計 4.75 億美元。

Therefore, striking a good balance of returning capital to unit holders while investing in long term growth.

因此，在投資長期成長的同時，向單位持有人返還資本，需要取得良好的平衡。

Now, let me just comment on the accounting charges reflected in our first quarter results.

現在，我只想評論一下我們第一季業績中反映的會計費用。

As Mike mentioned during the first quarter, we took an accounting charge in the amount of $19.8 million to write down the value of our investments in Overon fuels and Independence Hydrogen.

正如麥克在第一季提到的那樣，我們提列了 1,980 萬美元的會計費用，以減記我們在 Overon 燃料和 Independence Hydrogen 的投資價值。

As part of our long term strategic growth initiatives, we have been committed to investing in innovative renewable energy businesses and technologies.

作為我們長期策略成長計畫的一部分，我們一直致力於投資創新的再生能源業務和技術。

In line with that strategy, we made our initial investments in these early stage companies in September 2020 for Oberon and in March 2022 for Independence Hydrogen, we maintain a minority stake of 38% in Overon fuels and 25% in Independence Hydrogen.

按照這個策略，我們在 2020 年 9 月對 Oberon 公司進行了初始投資，並於 2022 年 3 月對 Independence Hydrogen 公司進行了初始投資，我們持有 Overon Fuels 38% 的少數股權和 Independence Hydrogen 25% 的少數股權。

And since our initial investments, we have worked closely with the entrepreneurial leaders of both companies to support and advance their respective business models and technological development. Inclusive of regulatory support, engineering and logistics, commercial development. Pr and marketing back office assistance and readiness for scale both Oberon fuels and Independence Hydrogen have made great progress. Over the past few years, advancing their respective business models and products which in the case of Oberon is the production of renewable DME. And for independence, hydrogen is small scale distributed clean hydrogen.

自最初投資以來，我們一直與兩家公司的創業領袖密切合作，支持和推動他們各自的商業模式和技術發展。包括監管支援、工程和物流、商業發展。公關和行銷後台協助以及規模化準備，Oberon 燃料和 Independence Hydrogen 都取得了巨大進展。在過去幾年中，Oberon 不斷推進各自的商業模式和產品，其中 Oberon 的業務是生產可再生 DME。而對於獨立性來說，氫是小規模分佈式清潔氫。

They're each operating pilot plants that are producing RDME and clean hydrogen respectively and generating real revenues from the sale of their products to customers.

他們各自經營生產 RDME 和清潔氫氣的試驗工廠，並透過向客戶銷售產品來獲得實際收入。

Each have identified locations for their first commercial scale production facilities including securing feedstock agreements, advancing engineering work and developing commercial demand and both are engaging with several potential new investors, strategic and financial to raise the necessary capital to scale their platforms which will require significantly more capital. Beyond the commitment of capital from suburban propane to further fund their early stage innovations, we continue to believe strongly in the business models and the impact that both companies and their respective low carbon fuels can have as contributors to a low carbon renewable energy future, especially as localized distributed energy sources through our ownership and engagement with these innovative early stage companies, suburban propane has gained significant knowledge and exposure to the development of new disruptive technologies, insights into market sentiment and built relationships throughout the supply chain for renewable fuels and hydrogen.

兩家公司都已確定了首個商業規模生產設施的選址，包括確保原料協議、推進工程工作和開發商業需求，並且都在與幾家潛在的新戰略和金融投資者接洽，以籌集必要的資金來擴大其平台規模，而這將需要更多的資金。除了郊區丙烷承諾投入資金進一步資助其早期創新之外，我們仍然堅信這兩家公司及其各自的低碳燃料作為低碳可再生能源未來的貢獻者所能產生的商業模式和影響，尤其是作為本地分佈式能源，透過我們的所有權和與這些創新型早期公司的合作，郊區丙烷獲得了重要的知識和對新燃料鏈技術開發的經驗、對市場發展的經驗並在整個市場的經驗上建立了支持性燃料和對市場的經驗性傳播性。

The accounting write down is more a function of the challenges that have impacted the broader clean energy start up landscape over the past several years, including challenges related to raising new capital and uncertainty over government policy support. Then it is a reflection the actual performance of either company or the potential impact that they can have on the future of clean energy.

會計減記更多是由於過去幾年影響更廣泛的清潔能源新創企業格局的挑戰，包括籌集新資本的挑戰和政府政策支持的不確定性。那麼它就反映了兩家公司的實際表現或對清潔能源未來的潛在影響。

We continue to believe in and supportive of both companies as they advance their respective renewable energy technologies.

我們將繼續相信並支持兩家公司推進各自的再生能源技術。

And through the execution of our long term strategic growth plans, suburban propane remains committed to leveraging our core competencies as trusted local distributors of energy to grow the markets for renewable fuels and clean hydrogen. Well into the future, our vision for the future hasn't changed. We are committed to continuing to advance solutions in the form of reliable, versatile, cost effective and clean propane that support decarbonation, decarboniation efforts. While pioneering new energy sources to power local communities for generations to come.

透過執行我們的長期策略成長計劃，郊區丙烷將繼續致力於利用我們作為值得信賴的本地能源分銷商的核心競爭力來擴大再生燃料和清潔氫的市場。展望未來，我們對未來的願景沒有改變。我們致力於持續以可靠、多功能、經濟高效和清潔的丙烷形式推進解決方案，以支持脫碳和脫碳努力。同時開拓新能源，為子孫後代提供當地社區的能源。

Finally looking ahead to the rest of the fiscal 2025. As I stated earlier, there's still a significant amount of the heating season ahead and we are very well positioned both operationally and financially to adapt to as demand dictates. In fact, we experienced a widespread cold weather pattern across much of our operating footprint during the month of January with sustained cold temperatures. The likes of which we haven't seen since 2014.

最後展望 2025 財年的剩餘時間。正如我之前所說，未來供暖季節仍然很長，我們在營運和財務上都已做好充分準備來適應需求。事實上，一月份，我們大部分營運區域都經歷了大面積寒冷天氣，氣溫持續較低。自 2014 年以來我們還沒有見過這樣的情況。

The foundation of our ongoing success continues to be rooted in our more than 3,200 dedicated employees at suburban propane and their hard work and unwavering focus on the safety and comfort of our customers and the communities we serve.

我們持續成功的基礎仍然植根於郊區丙烷公司 3,200 多名敬業的員工，他們的辛勤工作和對客戶和我們服務的社區的安全和舒適的堅定關注。

I want to take a moment to thank them for all of their efforts in supporting our customers during some of the more challenging weather conditions that we have seen over the past few years. And during a time when our customers needed us most to help them manage a sustained period of cold weather that most of the country experienced throughout much of January.

我想花點時間感謝他們在過去幾年遇到的一些較惡劣的天氣條件下為我們的客戶提供支援所做的一切努力。在客戶最需要我們幫助他們應對 1 月大部分地區所經歷的持續寒冷天氣的時候。

And as always, we appreciate your support and attention this morning. And now I would like to open it up for questions. And Jenny, could you help us out with that, please?

和往常一樣，我們感謝您今天上午的支持和關注。現在我想開始回答大家的提問。珍妮，你能幫我們解決這個問題嗎？

Yes, thank you. Ladies and gentlemen, we will now begin the question and answer session. (Operator Instructions)

是的，謝謝。女士們、先生們，我們現在開始問答環節。（操作員指令）

Christopher Jeffrey, [Securities Airline]

克里斯多福·傑弗裡[證券航空]

Hi, good morning. Thanks for taking my question. Maybe Mike just to start off on that colder weather. We've been seeing that you talked about at the end.

嗨，早安。感謝您回答我的問題。也許麥克只是想開始適應寒冷的天氣。我們一直在關注您最後談到的內容。

Just kind of curious how the system is handling it operationally, reaching all the inbounds. And then maybe you also talked about the kind of quicker appreciation and propane prices we've seen over the last month So just how how the pricing aspect of that is and the mar the unit margins. Thanks.

只是有點好奇系統在操作上如何處理它，並到達所有的入站。然後您可能還談到了我們在過去一個月看到的丙烷價格快速上漲的情況，那麼它的定價方面如何以及對單位利潤率的影響如何。謝謝。

Sure, great. Thanks, Chris. Thanks for the interest. Look, our platform is built for this kind of weather. We've been so ready for this. We haven't had sustained periods of cold weather where you have weeks upon weeks, upon weeks of good solid, what I would call normal if not slightly colder than normal in certain parts of the country weather.

當然，太好了。謝謝，克里斯。謝謝您的關注。你看，我們的平台就是為這種天氣建造的。我們已經為此做好了準備。我們還沒有經歷過持續的寒冷天氣，那種連續數週的良好天氣，我稱之為正常的天氣，在全國某些地區，甚至比正常天氣還要冷一點。

You know, we've always had for the past decade. Frankly, we've had lots of fits and starts. And, you know, this kind of weather is certainly what, what suburban propane is built for. And I'm really proud of, the people at suburban propane for how they're stepping up in some challenging conditions. You know, we get this morning is a perfect example.

你知道，過去十年我們一直都是如此。坦白說，我們經歷過很多挫折。你知道，郊區丙烷就是為應對這種天氣而建造的。我為郊區丙烷公司的員工在充滿挑戰的條件下奮起直追感到無比自豪。你知道，我們今天早上得到的資訊就是一個很好的例子。

There's a lot of sleet and ice on the road and, we're out there taking care of our customers and, all I can, ask of our people is to continue to be safe, which is something we stress at all times. So, this is the kind of weather that we've been built for our customers can rely on us. And, and we're doing a heck of a job with the increased demand.

路上有很多雨夾雪和冰，我們正在外面照顧我們的客戶，我能要求我們的員工做的就是繼續注意安全，這是我們一直強調的事情。所以，這就是我們為客戶打造的可以信賴的天氣環境。而且，我們正在做著艱苦的工作來滿足不斷增長的需求。

As far as pricing goes, we, with weather comes higher prices, right? You're going to see that, you see it in the natural gas market, you also see it in the propane market. And, so, that's something that, we have to continue to stay ahead of, is, to make sure that as pricing moves as dramatically as the 10 at times, our, field has to do a good job of making sure that we're, we're managing our selling prices accordingly. And I'm very pleased to say that we are doing a heck of a job with that.

就定價而言，天氣會導致價格上漲，對嗎？你會看到這一點，你會在天然氣市場看到它，你也會在丙烷市場看到它。因此，我們必須繼續保持領先地位，以確保當價格有時像 10 一樣劇烈波動時，我們的領域必須做好相應的銷售價格管理工作。我很高興地說，我們在這方面做得非常出色。

And, and, you know, we've had some volatility over the past couple of weeks, sort of range bound in the 8,5$0.90 basis, Bellevue range right now. But, you know, we could certainly expect to see, prices move one way or the other depending on both weather and, you know, what sort of what happens in broader commodity markets.

而且，您知道，過去幾週我們經歷了一些波動，目前區間波動在 8.5 美元 0.90 之間，貝爾維尤區間。但是，你知道，我們當然可以預見到，價格會根據天氣以及更廣泛的商品市場的情況而波動。

Great. Thank you. And then maybe just coming back to the conversation around leverage. You know, as you kind of mentioned, a little bit elevated for this quarter in the last few. And I think Mike spoke about some of the drivers on the growth. And so maybe just if you, if you could expand on those in terms of like timing when you see the credits kind of coming through and then also just if there's any, additional thoughts on maybe the debt side of it as far as, addressing that or doing something more, with the rest of the capital stack.

偉大的。謝謝。然後也許我們再回到關於槓桿的討論上。你知道，正如你所提到的，過去幾年本季的數據略有上升。我認為麥克談到了一些推動成長的因素。因此，如果您可以就這些方面進行擴展，例如您看到信貸到位的時間，然後，如果您對債務方面還有任何其他想法，可以解決這個問題，或者利用剩餘的資本堆疊做更多的事情。

Yeah. So, first of all, we have plenty of liquidity. That, that's not at all an issue. Second of all, we, when you look at our, leverage metric at the end of December, it's a, it's a rolling 12, metric. So it's got some of last year's challenging heating season, and the lower earnings that we experienced in the, in the second quarter of last year, built into that into that metric.

是的。所以，首先，我們有充足的流動性。那，那根本不是問題。其次，當您查看 12 月底的槓桿指標時，我們會發現它是一個滾動的 12 指標。所以，去年暖氣季的艱難時期，以及去年第二季我們經歷的較低的收入，都已經影響了這個指標。

And, obviously, we've been deploying capital on growing the renewable natural gas business, particularly the assets in upstate New York and Columbus, which are not yet, generating real earnings. So as those, as those come online towards the tail end of this year, you know, those will start to, to naturally bring leverage down.

顯然，我們一直在投入資金發展再生天然氣業務，特別是紐約州北部和哥倫布的資產，這些資產尚未產生實際收益。所以隨著這些措施在今年年底前實施，你知道，這些措施將開始自然地降低槓桿率。

And, as far as the production tax credits, we're already earning them in our Stanfield locations effective January 1st, the guidance came out very, very late, in the. calendar 2024 and into, early part of January. But. we've been studying and, and paying very close attention to that, that law since it came since it was put out there. The facility in Stanfield, Arizona produces R&G at a very deep negative C I score. And as a result, it will generate, you know, the sort of the high, the high end of production tax credits and, and they'll be earned there.

至於生產稅收抵免，我們從 1 月 1 日起就在斯坦菲爾德各家工廠開始賺取這些抵免，這個指導方針發布得非常非常晚。 2024 年曆，1 月初。但。自從這項法律頒布以來，我們就一直在研究並密切關注它。位於亞利桑那州斯坦菲爾德的工廠生產的 R&G 的 C I 評分極低，為負值。因此，它將產生某種高額的生產稅收抵免，而且他們將在那裡獲得稅收抵免。

We're already earning them from January 1 forward. So, that'll be a good contributor both in the second quarter, as well as throughout the rest of the year. We're also working towards you know, the efforts to monetize those to, to bring in real, real cash to, as we monetize those PT CS. So that will bring, help us bring in incremental cash flow to the company as well.

從 1 月 1 日起我們就已經開始賺取這些獎金了。因此，這將對第二季以及今年剩餘時間產生良好的貢獻。我們也正在努力將這些 PT CS 貨幣化，以帶來真金白銀的收益。這也會幫助我們為公司帶來增量現金流。

So, it's a lot of, noise Chris to be, to be H1st, but it's we have, we have we've, done a lot to invest in the growth of the business. And we are moving forward and a lot and we will start to see the benefit of that growth capital come to fruition. And the other thing is as, we're, very much balance sheet focused.

所以，對 Chris 來說，成為 H1st 有很多噪音，但我們已經，我們已經，為業務成長做了很多投資。我們正在取得很大進步，並將開始看到成長資本帶來的好處得以實現。另一件事是，我們非常關注資產負債表。

So, as opportunities arise, we will continue to look to, strengthen the balance sheet. We view that as the backbone that helps us to, be strategic and to, be growth oriented. So, to the extent that the balance sheet, you know, we needs to repair. We'll, we'll continue to look for opportunities to do that whether that be in free cash flow or otherwise.

因此，當機會出現時，我們將繼續尋求加強資產負債表。我們認為這是幫助我們制定策略並以成長為導向的支柱。所以，就資產負債表而言，我們需要修復。我們將繼續尋找機會來實現這一點，無論是自由現金流還是其他方式。

And so, you know, I think, we've gotten pretty good reputation of being good balance sheet hawks and, I think we'll continue to do that because again, it is, given us the opportunity to be very, very strategic over the course of, the past several years. You know, I made comments in our, in my opening remarks about the balanced approach towards capital deployment. You know, that's real and a lot of that's been done on our free cash flow generation and a little bit of leverage. So we're very proud of, the investments we're making and they are going to pay off in the long run.

所以，你知道，我認為，我們在資產負債表方面享有良好的聲譽，而且我認為我們會繼續這樣做，因為這再次給了我們機會，讓我們在過去幾年中採取非常、非常有策略性的政策。你知道，我在開場白中對平衡資本配置方法發表了評論。你知道，這是真實的，其中很大一部分是依靠我們的自由現金流產生和一點槓桿來實現的。因此，我們對所做的投資感到非常自豪，從長遠來看，這些投資將帶來回報。

Great. Thank you, Mike. I appreciate the time today.

偉大的。謝謝你，麥克。我很感激今天抽出的時間。

All right, Chris, thanks.

好的，克里斯，謝謝。

Thank you. Once again, ladies and gentlemen, that is star one. Should you wish to ask a question?

謝謝。女士們、先生們，再一次，這是明星一號。您想問問題嗎？

Well, great, Jenny looks like we're all set. I appreciate your help today. Again, appreciate everybody's attention and support. We look forward to talking to you at the end of our second quarter earnings in the May time frame. And as always as I say to the employees of suburban propane, as in front of them, please be safe out there.

好吧，太好了，珍妮，看起來我們都準備好了。我感謝您今天的幫助。再次感謝大家的關注與支持。我們期待在五月第二季財報結束時與您交談。正如我總是對郊區丙烷員工說的那樣，請注意安全。

Thank you, ladies and gentlemen, the conference has now ended. Thank you all for joining. You may always connect your lines.

謝謝各位女士、先生們，會議現已結束。感謝大家的加入。您可以隨時連接您的線路。