Suburban Propane FY2026 Net Income $109M, Raises Payout 7.7%

Suburban Propane Partners, L.P. reported fiscal 2026 net income of $109.0 million, or $1.63 per Common Unit, and raised its annualized distribution rate 7.7% to $1.40 per Common Unit, the company announced on 12 November 2026. Adjusted EBITDA rose $6.0 million, or 2.2%, to $284.0 million. The partnership sold 402.9 million retail propane gallons, up roughly 1% year over year, and lifted RNG volumes to 369,410 MMBtu from 325,702 MMBtu. Total Consolidated use improved to 4.13x from 4.29x.

Context — why the RNG tax credits matter more than the propane volumes

The headline net income figure barely moved: $109.0 million versus $106.6 million a year earlier. Per-unit earnings actually slipped, to $1.63 from $1.64, because the weighted average unit count rose to 66.7 million from 65.1 million as the partnership issued units through its at-the-market program.

What changed underneath is the mix. The partnership said it recognized $12.4 million of production tax credits tied to RNG injections covering January 2025 through September 2026, and generated $11.3 million of investment tax credits on qualifying construction at its Upstate New York facility. It monetized roughly $3.0 million of the PTCs during fiscal 2026.

That is a new revenue line for a business historically priced as a seasonal propane distributor. Management said the remaining PTCs and the ITCs are expected to be monetized in fiscal 2027, which pushes a chunk of the cash benefit into the next fiscal year rather than the one just closed.

The weather backdrop was mixed. Heating degree days across all service territories ran 8% warmer than normal and 1% cooler than the prior year. The East was 4% warmer than normal but 6% cooler than fiscal 2025, while the West was 23% warmer than normal and 14% warmer than the prior year. Average Mont Belvieu propane prices fell 7.1%.

Data — what the numbers show

The full-year gross margin of $893.4 million rose $34.7 million, or 4.0%. Stripping out a $4.5 million unrealized mark-to-market gain on derivatives, the increase was $32.7 million, or 3.8%, driven by a propane unit margin gain of $0.05 per gallon, or 2.5%, higher volumes, and the $12.4 million of PTCs.

Metric	Fiscal 2026	Fiscal 2025
Net income	$109.0M	$106.6M
Adjusted EBITDA	$284.0M	$278.0M
Gross margin	$893.4M	$858.7M
Retail propane gallons	402.9M	400.5M
RNG (MMBtu)	369,410	325,702
Leverage ratio	4.13x	4.29x

Combined operating and general and administrative expenses rose $22.8 million, or 3.9%, to $603.1 million, on higher payroll, fuel, vehicle maintenance and self-insurance accruals, partly offset by an insurance recovery tied to the December 2022 RNG asset acquisition.

The fiscal fourth quarter, seasonally the weakest, produced a net loss of $56.8 million, or $0.85 per unit, against a $35.1 million loss a year earlier. Fourth-quarter Adjusted EBITDA still improved to $7.3 million from $0.7 million, helped by $7.8 million of PTCs. A $7.9 million goodwill impairment on the natural gas and electricity business weighed on the quarter.

Segment reporting changed. The partnership now reports two segments, Propane and Renewable Natural Gas, replacing the prior structure. Propane Adjusted EBITDA was $365.9 million for the year; RNG was $13.5 million, up from $0.2 million.

Analysis — what it means for MLP and RNG investors

The use improvement is the quiet story. Refinancing $350.0 million of March 2027 notes with $350.0 million of 6.5% senior notes due December 2035 pushed maturities out nearly nine years and, combined with more than $25.0 million of debt reduction, moved the credit metric to 4.13x. For a partnership whose distribution is the primary reason investors hold it, that headroom is what makes a 7.7% payout increase defensible.

The RNG segment is where the growth optionality sits. RNG Adjusted EBITDA swung from $0.2 million to $13.5 million, and the Upstate New York digester entered service in July. Average daily RNG injection rose 13% for the year. The Columbus, Ohio facility has gas upgrading equipment installed but is awaiting final utility commissioning, which the company flagged as an open item.

The counter-argument is that PTCs are a policy-dependent earnings stream, not an operating one. A meaningful slice of the year's improvement traces to credits the partnership is still monetizing, and the fourth-quarter profit beat came almost entirely from that $7.8 million benefit. Strip credits out and the underlying propane business grew modestly, with Propane segment Adjusted EBITDA actually down slightly to $365.9 million from $366.4 million.

Sector exposure runs through other propane and fuels distributors, plus the broader midstream MLP complex where distribution coverage and use are the metrics that move unit prices. Investors positioned for yield have been the marginal buyer of this name; the question the fiscal 2027 numbers will answer is whether RNG cash generation can stand without the credit tailwind.

Outlook — what to watch next

Three items carry the fiscal 2027 story. First, the timing of the remaining PTC and ITC monetization, which management placed in fiscal 2027 without a specific date. Second, final commissioning of the Columbus injection site by the local utility, still pending.

Third, whether the Upstate New York facility sustains the reliability gains seen at Stanfield, Arizona. The company said capacity optimization and higher feedstock intake are the routes to more production.

On the propane side, the next read comes with the winter heating season. Fiscal 2026 volumes were helped by colder East temperatures and hurt by a West that ran 23% warmer than normal, so the geographic split matters as much as the national average.

The distribution itself is now $0.35 per quarter, paid 10 November 2026 to holders of record 3 November. The company did not disclose unit coverage of the new rate.

Frequently Asked Questions

What does the Suburban Propane distribution increase mean for income investors?

The quarterly payout moved from $0.325 to $0.35 per Common Unit, an annualized $1.40, up 7.7% from the prior annualized rate. The partnership funded the increase while cutting total debt by more than $25.0 million and lowering its leverage ratio to 4.13x from 4.29x, so the higher distribution was not financed by additional borrowing.

Why did Suburban Propane's net loss widen in the fourth quarter?

The fiscal fourth quarter is seasonally weak for propane, and the loss widened to $56.8 million from $35.1 million. Two non-operating items drove the swing: a $7.9 million goodwill impairment on the natural gas and electricity business, and $23.1 million of equity in losses and impairment charges for unconsolidated affiliates, versus $6.5 million a year earlier.

How much of Suburban Propane's fiscal 2026 earnings came from tax credits?

The company recognized $12.4 million of production tax credits on RNG injections from January 2025 through September 2026 and generated $11.3 million of investment tax credits on Upstate New York construction. It monetized about $3.0 million of the PTCs during the year, leaving the remainder of both credit pools for fiscal 2027.

Bottom Line

Suburban Propane's use cut and 7.7% distribution increase are solid, but the earnings beat leans on RNG tax credits still being monetized.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.