##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended December 26, 2009
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission File Number: 1-14222
 SUBURBAN PROPANE PARTNERS, L.P.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    22-3410353
(I.R.S. Employer
Identification No.)
 
 Yes þ No o
 Yes o No o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
(do not check if a smaller reporting company)
    
    Smaller reporting company o
 Yes o No þ




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##### 



SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
 INDEX TO FORM 10-Q
 PagePART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS (UNAUDITED)Condensed Consolidated Balance Sheets as of December 26, 2009
and September 26, 2009
    
    
    1Condensed Consolidated Statements of Operations for the three months ended
December 26, 2009 and December 27, 2008
    
    
    2Condensed Consolidated Statements of Cash Flows for the three months ended
December 26, 2009 and December 27, 2008
    
    
    4Condensed Consolidated Statement of Partners Capital for the three
months ended
December 26, 2009
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    18ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
    
    
    28ITEM 4. CONTROLS AND PROCEDURES
    
    
    30PART II. OTHER INFORMATIONITEM 6. EXHIBITS
    
    
    31SIGNATURES
    
    
    32Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
  
    
    The impact of weather conditions on the demand for propane, fuel oil and other refined
fuels, natural gas and electricity;
 
    
    Volatility in the unit cost of propane, fuel oil and other refined fuels and natural gas,
the impact of the Partnerships hedging and risk management activities, and the adverse impact
of price increases on volumes as a result of customer conservation;
 
    
    The ability of the Partnership to compete with other suppliers of propane, fuel oil and
other energy sources;
 
    
    The impact on the price and supply of propane, fuel oil and other refined fuels from the
political, military or economic instability of the oil producing nations, global terrorism and
other general economic conditions;
 
    
    The ability of the Partnership to acquire and maintain reliable transportation for its
propane, fuel oil and other refined fuels;
 
    
    The ability of the Partnership to retain customers;
 
    
    The impact of customer conservation, energy efficiency and technology advances on the
demand for propane and fuel oil;
 
    
    The ability of management to continue to control expenses;
 
    
    The impact of changes in applicable statutes and government regulations, or their
interpretations, including those relating to the environment and global warming and other
regulatory developments on the Partnerships business;
 
    
    The impact of changes in tax regulations that could adversely affect the tax treatment of
the Partnership for federal income tax purposes;
 
    
    The impact of legal proceedings on the Partnerships business;
 
    
    The impact of operating hazards that could adversely affect the Partnerships operating
results to the extent not covered by insurance;
 
    
    The Partnerships ability to make strategic acquisitions and successfully integrate them;
 
    
    The impact of current conditions in the global capital and credit markets, and general
economic pressures; and
 
    
    Other risks referenced from time to time in filings with the Securities and Exchange
Commission (SEC) and those factors listed or incorporated by reference into the
Partnerships Annual Report under Risk Factors.




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SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
 December 26,
    
    
    September 26,2009
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    115,496
    
    
    $
    163,173Accounts receivable, less allowance for doubtful accounts
of $5,912 and $4,374, respectively
    
    
    106,522
    
    
    
    52,035Inventories
    
    
    86,027
    
    
    
    70,158Other current assets
    
    
    20,579
    
    
    
    22,190Total current assets
    
    
    328,624
    
    
    
    307,556Property, plant and equipment, net
    
    
    354,744
    
    
    
    357,187Goodwill
    
    
    274,897
    
    
    
    274,897Other intangible assets, net
    
    
    13,247
    
    
    
    13,798Other assets
    
    
    23,133
    
    
    
    24,076Total assets
    
    $
    994,645
    
    
    $
    977,514LIABILITIES AND PARTNERS CAPITALCurrent liabilities:Accounts payable
    
    $
    60,349
    
    
    $
    35,677Accrued employment and benefit costs
    
    
    22,335
    
    
    
    40,875Accrued insurance
    
    
    8,210
    
    
    
    10,410Customer deposits and advances
    
    
    63,367
    
    
    
    69,789Accrued interest
    
    
    3,164
    
    
    
    7,294Other current liabilities
    
    
    15,808
    
    
    
    16,014Total current liabilities
    
    
    173,233
    
    
    
    180,059Long-term borrowings
    
    
    349,449
    
    
    
    349,415Accrued insurance
    
    
    44,807
    
    
    
    41,838Other liabilities
    
    
    45,532
    
    
    
    46,485Total liabilities
    
    
    613,021
    
    
    
    617,797Commitments and contingenciesPartners capital:Common Unitholders (35,287 and 35,228 units issued and outstanding at
December 26, 2009 and September 26, 2009, respectively)
    
    
    441,084
    
    
    
    421,005Accumulated other comprehensive loss
    
    
    (59,460
    )
    
    
    (61,288
    )Total partners capital
    
    
    381,624
    
    
    
    359,717Total liabilities and partners capital
    
    $
    994,645
    
    
    $
    977,514
   1




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SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit amounts)
(unaudited)
 Three Months EndedDecember 26,
    
    
    December 27,2009
    
    
    2008RevenuesPropane
    
    $
    233,531
    
    
    $
    273,908Fuel oil and refined fuels
    
    
    39,247
    
    
    
    54,191Natural gas and electricity
    
    
    16,862
    
    
    
    22,281All other
    
    
    11,792
    
    
    
    12,935301,432
    
    
    
    363,315Costs and expensesCost of products sold
    
    
    150,366
    
    
    
    174,230Operating
    
    
    74,487
    
    
    
    77,063General and administrative
    
    
    13,738
    
    
    
    14,770Depreciation and amortization
    
    
    7,084
    
    
    
    7,023245,675
    
    
    
    273,086Income before interest expense and provision for income taxes
    
    
    55,757
    
    
    
    90,229Interest expense, net
    
    
    7,183
    
    
    
    9,403Income before provision for income taxes
    
    
    48,574
    
    
    
    80,826Provision for income taxes
    
    
    199
    
    
    
    138Net income
    
    $
    48,375
    
    
    $
    80,688Income per Common Unit  basic
    
    $
    1.37
    
    
    $
    2.46Weighted average number of Common Units outstanding  basic
    
    
    35,321
    
    
    
    32,816Income per Common Unit  diluted
    
    $
    1.36
    
    
    $
    2.45Weighted average number of Common Units outstanding  diluted
    
    
    35,538
    
    
    
    32,939
   2




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SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Three Months EndedDecember 26,
    
    
    December 27,2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    48,375
    
    
    $
    80,688Adjustments to reconcile net income to net cash (used in) provided by operations:Depreciation and amortization
    
    
    7,084
    
    
    
    7,023Amortization of debt origination costs and discount on long-term borrowings
    
    
    495
    
    
    
    390Compensation cost recognized under Restricted Unit Plan
    
    
    992
    
    
    
    569Gain on disposal of property, plant and equipment, net
    
    
    (427
    )
    
    
    (230
    )Changes in assets and liabilities:(Increase) in accounts receivable
    
    
    (54,487
    )
    
    
    (29,716
    )(Increase) in inventories
    
    
    (15,869
    )
    
    
    (3,994
    )Decrease in other current and noncurrent assets
    
    
    2,093
    
    
    
    9,263Increase in accounts payable
    
    
    24,672
    
    
    
    2,321(Decrease) in accrued employment and benefit costs
    
    
    (18,540
    )
    
    
    (4,314
    )Increase (decrease) in accrued insurance
    
    
    769
    
    
    
    (23,930
    )(Decrease) in customer deposits and advances
    
    
    (6,422
    )
    
    
    (2,989
    )(Decrease) in accrued interest
    
    
    (4,130
    )
    
    
    (7,888
    )Increase (decrease) in other current and noncurrent liabilities
    
    
    669
    
    
    
    (2,189
    )Net cash (used in) provided by operating activities
    
    
    (14,726
    )
    
    
    25,004Cash flows from investing activities:Capital expenditures
    
    
    (4,492
    )
    
    
    (4,445
    )Proceeds from sale of property, plant and equipment
    
    
    829
    
    
    
    721Net cash (used in) investing activities
    
    
    (3,663
    )
    
    
    (3,724
    )Cash flows from financing activities:Repayments of short-term borrowings
    
    
    
    
    
    
    (2,000
    )Partnership distributions
    
    
    (29,288
    )
    
    
    (26,390
    )Net cash (used in) financing activities
    
    
    (29,288
    )
    
    
    (28,390
    )Net decrease in cash and cash equivalents
    
    
    (47,677
    )
    
    
    (7,110
    )Cash and cash equivalents at beginning of period
    
    
    163,173
    
    
    
    137,698Cash and cash equivalents at end of period
    
    $
    115,496
    
    
    $
    130,588
   3




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SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENT OF PARTNERS CAPITAL
(in thousands)
(unaudited)
 AccumulatedOther
    
    
    TotalNumber of
    
    
    Common
    
    
    Comprehensive
    
    
    Partners
    
    
    ComprehensiveCommon Units
    
    
    Unitholders
    
    
    (Loss)
    
    
    Capital
    
    
    IncomeBalance at September 26, 2009
    
    
    35,228
    
    
    $
    421,005
    
    
    $
    (61,288
    )
    
    $
    359,717Net income
    
    
    
    
    
    
    48,375
    
    
    
    
    
    
    
    48,375
    
    
    $
    48,375Other comprehensive income:Net unrealized gains on cash flow hedges
    
    
    
    
    
    
    
    
    
    
    623
    
    
    
    623
    
    
    
    623Amortization
of net actuarial losses and prior service credits into earnings
    
    
    
    
    
    
    
    
    
    
    1,205
    
    
    
    1,205
    
    
    
    1,205Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    50,203Partnership distributions
    
    
    
    
    
    
    (29,288
    )
    
    
    
    
    
    
    (29,288
    )Common Units issued underRestricted Unit Plan
    
    
    59Compensation cost recognized underRestricted Unit Plan, net of forfeitures
    
    
    
    
    
    
    992
    
    
    
    
    
    
    
    992Balance at December 26, 2009
    
    
    35,287
    
    
    $
    441,084
    
    
    $
    (59,460
    )
    
    $
    381,624
   4




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SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per unit amounts)
(unaudited)
 1. Partnership Organization and Formation
       5




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##### Table of Contents



2. Basis of Presentation
 Principles of Consolidation.
  Fiscal Period.
 Revenue Recognition.
 Fair Value Measurements.
  
    
    Level 1: Quoted prices in active markets for identical assets or liabilities.
 
    
    Level 2: Quoted prices in active markets for similar assets or liabilities; quoted prices
for identical or similar instruments in markets that are not active; and model-derived
valuations in which all significant inputs are observable in active markets.
 
    
    Level 3: Valuations derived from valuation techniques in which one or more significant
inputs are unobservable.
  Use of Estimates.
  6




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Reclassifications.
 3. Financial Instruments
 Cash and Cash Equivalents.
 Derivative Instruments and Hedging Activities.
 Commodity Price Risk.
  Interest Rate Risk. 1 2
  7




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##### Table of Contents



As ofDecember 26,
    
    
    September 26,Transaction Type
    
    2009
    
    
    2009Commodity Options
    
    
    14,347
    
    
    
    6,467Commodity Futures
    
    
    16,170
    
    
    
    15,330
  As of December 26, 2009
    
    
    As of September 26, 2009Asset Derivatives
    
    Location
    
    Fair Value
    
    
    Location
    
    Fair ValueDerivatives not designated as
hedging instruments:Commodity options
    
    Other current assets
    
    $
    7,315
    
    
    Other current assets
    
    $
    6,398Other assets
    
    
    12
    
    
    Other assets
    
    
    241Commodity futures
    
    Other current assets
    
    
    
    
    
    Other current assets
    
    
    2,845Other assets
    
    
    
    
    
    Other assets
    
    
    248$
    7,327
    
    
    
    
    $
    9,732
 Liability Derivatives
    
    Location
    
    Fair Value
    
    
    Location
    
    Fair ValueDerivatives designated as hedging
instruments:Interest rate swaps
    
    Other current liabilities
    
    $
    3,024
    
    
    Other current liabilities
    
    $
    3,351Other liabilities
    
    
    544
    
    
    Other liabilities
    
    
    840$
    3,568
    
    
    
    
    $
    4,191Derivatives not designated as
hedging instruments:Commodity options
    
    Other current liabilities
    
    $
    1,520
    
    
    Other current liabilities
    
    $
    4,060Other liabilities
    
    
    
    
    
    Other liabilities
    
    
    175Commodity futures
    
    Other current liabilities
    
    
    1,595
    
    
    Other current liabilities
    
    
    784Other liabilities
    
    
    1,045
    
    
    Other liabilities
    
    
    $
    4,160
    
    
    
    
    $
    5,019
   8




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##### Table of Contents



Three months ended December 26, 2009
    
    
    Three months ended December 27, 2008Derivatives in
    
    Amount of Gains
    
    
    Gains (Losses) Reclassified
    
    
    Amount of Gains
    
    
    Gains (Losses) ReclassifiedCash Flow
    
    (Losses) Recognized
    
    
    from Accumulated OCI into
    
    
    (Losses) Recognized
    
    
    from Accumulated OCI intoHedging
    
    in OCI (Effective
    
    
    Income (Effective Portion)
    
    
    in OCI (Effective
    
    
    Income (Effective Portion)Relationships
    
    Portion)
    
    
    Location
    
    
    Amount
    
    
    Portion)
    
    
    Location
    
    
    AmountInterest rate swap
    
    $
    623
    
    
    Interest expense
    
    $
    
    
    
    $
    (1,288
    )
    
    Interest expense
    
    $
    $
    623
    
    
    
    
    
    
    $
    
    
    
    $
    (1,288
    )
    
    
    
    
    
    $
    
 Amount of
    
    
    
    
    
    
    Amount ofDerivatives Not
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedDesignated as
    
    Location of Gains
    
    
    Gains(Losses)
    
    
    Location of Gains
    
    
    Gains (Losses)Hedging
    
    (Losses) Recognized
    
    
    Recognized in
    
    
    (Losses) Recognized
    
    
    Recognized inInstruments
    
    in Income
    
    
    Income
    
    
    in Income
    
    
    IncomeOptions
    
    Cost of products sold
    
    $
    1,540
    
    
    Cost of products sold
    
    $
    5,926Futures
    
    Cost of products sold
    
    
    (4,948
    )
    
    Cost of products sold
    
    
    9,080$
    (3,408
    )
    
    
    
    
    
    $
    15,006
 Bank Debt and Senior Notes.
 4. Inventories
  As ofDecember 26,
    
    
    September 26,2009
    
    
    2009Propane, fuel oil and refined fuels
    
    $
    82,736
    
    
    $
    67,293Natural gas
    
    
    1,046
    
    
    
    219Appliances and related parts
    
    
    2,245
    
    
    
    2,646$
    86,027
    
    
    $
    70,158
 5. Goodwill and Other Intangible Assets
   9




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As ofDecember 26,
    
    
    September 26,2009
    
    
    2009Propane
    
    $
    262,559
    
    
    $
    262,559Fuel oil and refined fuels
    
    
    4,438
    
    
    
    4,438Natural gas and electricity
    
    
    7,900
    
    
    
    7,900$
    274,897
    
    
    $
    274,897
  As ofDecember 26,
    
    
    September 26,2009
    
    
    2009Customer lists
    
    $
    22,316
    
    
    $
    22,316Tradenames
    
    
    1,499
    
    
    
    1,499Other
    
    
    1,967
    
    
    
    1,967$
    25,782
    
    
    $
    25,782Less: accumulated amortizationCustomer lists
    
    $
    (11,087
    )
    
    $
    (10,596
    )Tradenames
    
    
    (899
    )
    
    
    (862
    )Other
    
    
    (549
    )
    
    
    (526
    )(12,535
    )
    
    
    (11,984
    )$
    13,247
    
    
    $
    13,798
   6. Net Income Per Common Unit
   10




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7. Long-Term Borrowings
  As ofDecember 26,
    
    
    September 26,2009
    
    
    2009Senior Notes, 6.875%, due December 15, 2013, net of
unamortized discount of $551 and $585, respectively
    
    $
    249,449
    
    
    $
    249,415Revolving Credit Facility, due June 25, 2013
    
    
    100,000
    
    
    
    100,000$
    349,449
    
    
    $
    349,415
   1 2
   11




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2012 
$-0-;
 8. Distributions of Available Cash
    12




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9. Unit-Based Compensation Arrangements
  Restricted Unit Plans.
  WeightedAverage GrantDate Fair ValueUnits
    
    
    Per UnitOutstanding September 26, 2009
    
    
    415,295
    
    
    $
    28.89Awarded
    
    
    142,771
    
    
    
    31.72Forfeited
    
    
    
    
    
    
    Issued
    
    
    (59,328
    )
    
    
    (27.17
    )Outstanding December 26, 2009
    
    
    498,738
    
    
    $
    29.90
  Long-Term Incentive Plan.
  13




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10. Commitments and Contingencies
 Self-Insurance.
  11. Guarantees
  12. Pension Plans and Other Postretirement Benefits
  Pension Benefits
    
    
    Postretirement BenefitsThree Months Ended
    
    
    Three Months EndedDecember 26,
    
    
    December 27,
    
    
    December 26,
    
    
    December 27,2009
    
    
    2008
    
    
    2009
    
    
    2008Service Cost
    
    $
    
    
    
    $
    
    
    
    $
    2
    
    
    $
    1Interest cost
    
    
    1,876
    
    
    
    2,372
    
    
    
    253
    
    
    
    345Expected return on plan assets
    
    
    (2,020
    )
    
    
    (2,301
    )
    
    
    
    
    
    
    Amortization of prior service
costs
    
    
    
    
    
    
    
    
    
    
    (122
    )
    
    
    (122
    )Recognized net actuarial loss
    
    
    1,343
    
    
    
    1,012
    
    
    
    (16
    )
    
    
    (78
    )Net periodic benefit cost
    
    $
    1,199
    
    
    $
    1,083
    
    
    $
    117
    
    
    $
    146
  14




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##### Table of Contents



13. Income taxes
    14. Segment Information
   15




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16




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Three Months EndedDecember 26,
    
    
    December 27,2009
    
    
    2008Revenues:Propane
    
    $
    233,531
    
    
    $
    273,908Fuel oil and refined fuels
    
    
    39,247
    
    
    
    54,191Natural gas and electricity
    
    
    16,862
    
    
    
    22,281All other
    
    
    11,792
    
    
    
    12,935Total revenues
    
    $
    301,432
    
    
    $
    363,315Income before interest expense and income taxes:Propane
    
    $
    73,898
    
    
    $
    97,669Fuel oil and refined fuels
    
    
    150
    
    
    
    8,476Natural gas and electricity
    
    
    2,545
    
    
    
    3,170All other
    
    
    (4,074
    )
    
    
    (2,944
    )Corporate
    
    
    (16,762
    )
    
    
    (16,142
    )Total income before interest expense
and income taxes
    
    
    55,757
    
    
    
    90,229Reconciliation to income from continuing operations:Interest expense, net
    
    
    7,183
    
    
    
    9,403Provision for income taxes
    
    
    199
    
    
    
    138Income from continuing operations
    
    $
    48,375
    
    
    $
    80,688Depreciation and amortization:Propane
    
    $
    3,650
    
    
    $
    3,810Fuel oil and refined fuels
    
    
    766
    
    
    
    815Natural gas and electricity
    
    
    253
    
    
    
    252All other
    
    
    83
    
    
    
    93Corporate
    
    
    2,332
    
    
    
    2,053Total depreciation and amortization
    
    $
    7,084
    
    
    $
    7,023
 As ofDecember 26,
    
    
    September 26,2009
    
    
    2009Assets:Propane
    
    $
    736,367
    
    
    $
    681,809Fuel oil and refined fuels
    
    
    86,207
    
    
    
    83,416Natural gas and electricity
    
    
    21,837
    
    
    
    17,540All other
    
    
    5,702
    
    
    
    2,876Corporate
    
    
    232,513
    
    
    
    279,854Eliminations
    
    
    (87,981
    )
    
    
    (87,981
    )Total assets
    
    $
    994,645
    
    
    $
    977,514
 15. Recently Issued Accounting Pronouncements
  16. Subsequent Events
   17




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  Executive Overview
  Product Costs and Supply
    Seasonality
   18




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Weather
  Hedging and Risk Management Activities
  Critical Accounting Policies and Estimates
    19




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Results of Operations and Financial Condition
         20




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Three Months Ended December 26, 2009 Compared to Three Months Ended December 27, 2008
 Revenues
 Three Months EndedDecember 26,
    
    
    December 27,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Decrease
    
    
    DecreaseRevenuesPropane
    
    $
    233,531
    
    
    $
    273,908
    
    
    $
    (40,377
    )
    
    
    (14.7
    %)Fuel oil and refined fuels
    
    
    39,247
    
    
    
    54,191
    
    
    
    (14,944
    )
    
    
    (27.6
    %)Natural gas and electricity
    
    
    16,862
    
    
    
    22,281
    
    
    
    (5,419
    )
    
    
    (24.3
    %)All other
    
    
    11,792
    
    
    
    12,935
    
    
    
    (1,143
    )
    
    
    (8.8
    %)Total revenues
    
    $
    301,432
    
    
    $
    363,315
    
    
    $
    (61,883
    )
    
    
    (17.0
    %)
     21




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##### Table of Contents



Cost of Products Sold
 Three Months Ended
    
    
    
    
    
    
    PercentDecember 26,
    
    
    December 27,
    
    
    (Decrease)
    
    
    (Decrease)(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Increase
    
    
    IncreaseCost of products soldPropane
    
    $
    104,617
    
    
    $
    117,885
    
    
    $
    (13,268
    )
    
    
    (11.3
    %)Fuel oil and refined fuels
    
    
    29,922
    
    
    
    35,605
    
    
    
    (5,683
    )
    
    
    (16.0
    %)Natural gas and electricity
    
    
    12,453
    
    
    
    17,683
    
    
    
    (5,230
    )
    
    
    (29.6
    %)All other
    
    
    3,374
    
    
    
    3,057
    
    
    
    317
    
    
    
    10.4
    %Total cost of products sold
    
    $
    150,366
    
    
    $
    174,230
    
    
    $
    (23,864
    )
    
    
    (13.7
    %)As a percent of total revenues
    
    
    49.9
    %
    
    
    48.0
    %
     22




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Operating Expenses
 Three Months EndedDecember 26,
    
    
    December 27,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Decrease
    
    
    DecreaseOperating expenses
    
    $
    74,487
    
    
    $
    77,063
    
    
    $
    (2,576
    )
    
    
    (3.3
    %)As a percent of total revenues
    
    
    24.7
    %
    
    
    21.2
    %
    23




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##### Table of Contents



General and Administrative Expenses
 Three Months EndedDecember 26,
    
    
    December 27,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Decrease
    
    
    DecreaseGeneral and administrative
expenses
    
    $
    13,738
    
    
    $
    14,770
    
    
    $
    (1,032
    )
    
    
    (7.0
    %)As a percent of total revenues
    
    
    4.6
    %
    
    
    4.1
    %
   Depreciation and Amortization
 Three Months EndedDecember 26,
    
    
    December 27,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Increase
    
    
    IncreaseDepreciation and amortization
    
    $
    7,084
    
    
    $
    7,023
    
    
    $
    61
    
    
    
    0.9
    %As a percent of total revenues
    
    
    2.4
    %
    
    
    1.9
    %
  Interest Expense, net
 Three Months EndedDecember 26,
    
    
    December 27,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Decrease
    
    
    DecreaseInterest expense, net
    
    $
    7,183
    
    
    $
    9,403
    
    
    $
    (2,220
    )
    
    
    (23.6
    %)As a percent of total revenues
    
    
    2.4
    %
    
    
    2.6
    %
  Net Income and EBITDA
   24




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Three Months EndedDecember 26,
    
    
    December 27,(Dollars in thousands)
    
    2009
    
    
    2008Net income
    
    $
    48,375
    
    
    $
    80,688Add:Provision for income taxes
    
    
    199
    
    
    
    138Interest expense, net
    
    
    7,183
    
    
    
    9,403Depreciation and amortization
    
    
    7,084
    
    
    
    7,023EBITDA
    
    
    62,841
    
    
    
    97,252Unrealized (non-cash) losses (gains) on changes
in fair value of derivatives
    
    
    3,408
    
    
    
    (15,006
    )Adjusted EBITDA
    
    
    66,249
    
    
    
    82,246Add (subtract):Provision for income taxes  current
    
    
    (199
    )
    
    
    (138
    )Interest expense, net
    
    
    (7,183
    )
    
    
    (9,403
    )Unrealized (non-cash) (losses) gains on changes
in fair value of derivatives
    
    
    (3,408
    )
    
    
    15,006Compensation cost recognized under Restricted Unit Plan
    
    
    992
    
    
    
    569Gain on disposal of property, plant and equipment, net
    
    
    (427
    )
    
    
    (230
    )Changes in working capital and other assets and liabilities
    
    
    (70,750
    )
    
    
    (63,046
    )Net cash (used in) provided by operating activities
    
    $
    (14,726
    )
    
    $
    25,004
 Liquidity and Capital Resources
 Analysis of Cash Flows
 Operating Activities.
  25




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Investing Activities.
 Financing Activities.
 Summary of Long-Term Debt Obligations and Revolving Credit Lines
   1 2
   26




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Partnership Distributions
   Other Commitments
    27




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Off-Balance Sheet Arrangements
 Guarantees
  Recently Issued Accounting Standards
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Commodity Price Risk
     28




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Market Risk
  Credit Risk
  Interest Rate Risk
 1 2
 Derivative Instruments and Hedging Activities
    29




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Sensitivity Analysis
  A.
    
    The fair value of open positions as of December 26, 2009.B.
    
    The estimated forward market prices as of December 26, 2009 as derived from
the NYMEX for traded commodities.C.
    
    The market prices determined in B. above were adjusted adversely by a
hypothetical 10% change in the forward prices and compared to the fair value amounts
in A. above to project the potential negative impact on earnings that would be
recognized for the respective scenario.
  
 ITEM 4. CONTROLS AND PROCEDURES
     30




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PART II
 
 ITEM 6. EXHIBITS
  31.1
    
    
    Certification of the President and Chief Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith).31.2
    
    
    Certification of the Chief Financial Officer Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002. (Filed herewith).32.1
    
    
    Certification of the President and Chief Executive Officer Pursuant
to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. (Filed herewith).32.2
    
    
    Certification of the Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. (Filed herewith).
  31




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SIGNATURES
  SUBURBAN PROPANE PARTNERS, L.P.February 4, 2010
    By:
    /s/ MICHAEL A. STIVALADate
    
    Michael A. StivalaChief Financial OfficerFebruary 4, 2010
    By:
    /s/ MICHAEL A. KUGLINDate
    
    Michael A. KuglinController and Chief Accounting Officer  32