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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 March 27, 2010
 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
    
    22-3410353(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 
 þ o
 Yes o No o
 *
    
    The registrant has not yet been phased into the interactive data requirements.  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(do not check if a smaller reporting company)
 o 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 March 27, 2010
and September 26, 2009
    
    
    1Condensed Consolidated Statements of Operations for the three months ended
March 27, 2010 and March 28, 2009
    
    
    2Condensed Consolidated Statements of Operations for the six months ended
March 27, 2010 and March 28, 2009
    
    
    3Condensed Consolidated Statements of Cash Flows for the six months ended
March 27, 2010 and March 28, 2009
    
    
    4Condensed Consolidated Statement of Partners Capital for the six months
ended March 27, 2010
    
    
    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
    
    
    33ITEM 4. CONTROLS AND PROCEDURES
    
    
    35PART II. OTHER INFORMATIONITEM 6. EXHIBITS
    
    
    36SIGNATURES
    
    
    37Exhibit 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, derivative
instruments 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)
 March 27,
    
    
    September 26,2010
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    140,912
    
    
    $
    163,173Accounts receivable, less allowance for doubtful accounts
of $7,624 and $4,374, respectively
    
    
    136,496
    
    
    
    52,035Inventories
    
    
    66,384
    
    
    
    70,158Other current assets
    
    
    18,268
    
    
    
    22,190Total current assets
    
    
    362,060
    
    
    
    307,556Property, plant and equipment, net
    
    
    351,348
    
    
    
    357,187Goodwill
    
    
    274,897
    
    
    
    274,897Other assets
    
    
    41,907
    
    
    
    37,874Total assets
    
    $
    1,030,212
    
    
    $
    977,514LIABILITIES AND PARTNERS CAPITALCurrent liabilities:Accounts payable
    
    $
    46,186
    
    
    $
    35,677Accrued employment and benefit costs
    
    
    26,782
    
    
    
    40,875Customer deposits and advances
    
    
    36,710
    
    
    
    69,789Other current liabilities
    
    
    25,587
    
    
    
    33,718Total current liabilities
    
    
    135,265
    
    
    
    180,059Long-term borrowings
    
    
    347,845
    
    
    
    349,415Accrued insurance
    
    
    48,864
    
    
    
    41,838Other liabilities
    
    
    45,894
    
    
    
    46,485Total liabilities
    
    
    577,868
    
    
    
    617,797Commitments and contingenciesPartners capital:Common Unitholders (35,290 and 35,228 units issued and outstanding at
March 27, 2010 and September 26, 2009, respectively)
    
    
    511,031
    
    
    
    421,005Accumulated other comprehensive loss
    
    
    (58,687
    )
    
    
    (61,288
    )Total partners capital
    
    
    452,344
    
    
    
    359,717Total liabilities and partners capital
    
    $
    1,030,212
    
    
    $
    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 EndedMarch 27,
    
    
    March 28,2010
    
    
    2009RevenuesPropane
    
    $
    369,341
    
    
    $
    336,913Fuel oil and refined fuels
    
    
    61,311
    
    
    
    65,138Natural gas and electricity
    
    
    28,841
    
    
    
    32,093All other
    
    
    9,670
    
    
    
    11,081469,163
    
    
    
    445,225Costs and expensesCost of products sold
    
    
    248,459
    
    
    
    208,259Operating
    
    
    78,508
    
    
    
    86,848General and administrative
    
    
    20,257
    
    
    
    17,793Depreciation and amortization
    
    
    7,142
    
    
    
    7,131354,366
    
    
    
    320,031Income before loss on debt extinguishment, interest expense
and provision for income taxes
    
    
    114,797
    
    
    
    125,194Loss on debt extinguishment
    
    
    9,473
    
    
    
    Interest expense, net
    
    
    6,608
    
    
    
    9,442Income before provision for income taxes
    
    
    98,716
    
    
    
    115,752Provision for income taxes
    
    
    328
    
    
    
    886Net income
    
    $
    98,388
    
    
    $
    114,866Income per Common Unit  basic
    
    $
    2.78
    
    
    $
    3.50Weighted average number of Common Units outstanding  basic
    
    
    35,343
    
    
    
    32,847Income per Common Unit  diluted
    
    $
    2.76
    
    
    $
    3.48Weighted average number of Common Units outstanding  diluted
    
    
    35,622
    
    
    
    33,051
   2




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SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per unit amounts)
(unaudited)
 Six Months EndedMarch 27,
    
    
    March 28,2010
    
    
    2009RevenuesPropane
    
    $
    602,872
    
    
    $
    610,821Fuel oil and refined fuels
    
    
    100,558
    
    
    
    119,329Natural gas and electricity
    
    
    45,703
    
    
    
    54,374All other
    
    
    21,462
    
    
    
    24,016770,595
    
    
    
    808,540Costs and expensesCost of products sold
    
    
    398,825
    
    
    
    382,489Operating
    
    
    152,995
    
    
    
    163,911General and administrative
    
    
    33,995
    
    
    
    32,563Depreciation and amortization
    
    
    14,226
    
    
    
    14,154600,041
    
    
    
    593,117Income before loss on debt extinguishment, interest expense
and provision for income taxes
    
    
    170,554
    
    
    
    215,423Loss on debt extinguishment
    
    
    9,473
    
    
    
    Interest expense, net
    
    
    13,791
    
    
    
    18,845Income before provision for income taxes
    
    
    147,290
    
    
    
    196,578Provision for income taxes
    
    
    527
    
    
    
    1,024Net income
    
    $
    146,763
    
    
    $
    195,554Income per Common Unit  basic
    
    $
    4.15
    
    
    $
    5.96Weighted average number of Common Units outstanding  basic
    
    
    35,332
    
    
    
    32,832Income per Common Unit  diluted
    
    $
    4.12
    
    
    $
    5.93Weighted average number of Common Units outstanding  diluted
    
    
    35,581
    
    
    
    32,996
   3




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SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Six Months EndedMarch 27,
    
    
    March 28,2010
    
    
    2009Cash flows from operating activities:Net income
    
    $
    146,763
    
    
    $
    195,554Adjustments to reconcile net income to net cash provided by operations:Depreciation and amortization
    
    
    14,226
    
    
    
    14,154Amortization of debt origination costs and discount on long-term borrowings
    
    
    994
    
    
    
    781Compensation cost recognized under Restricted Unit Plan
    
    
    2,017
    
    
    
    1,241Gain on disposal of property, plant and equipment, net
    
    
    (134
    )
    
    
    (623
    )Loss on debt extinguishment
    
    
    9,473
    
    
    
    Deferred tax provision
    
    
    
    
    
    
    460Changes in assets and liabilities:(Increase) in accounts receivable
    
    
    (84,461
    )
    
    
    (29,307
    )Decrease in inventories
    
    
    3,774
    
    
    
    17,641Decrease in other current and noncurrent assets
    
    
    1,159
    
    
    
    10,540Increase (decrease) in accounts payable
    
    
    10,509
    
    
    
    (12,426
    )(Decrease) increase in accrued employment and benefit costs
    
    
    (14,093
    )
    
    
    9,742(Decrease) in customer deposits and advances
    
    
    (33,079
    )
    
    
    (26,796
    )Increase in accrued insurance
    
    
    7,026
    
    
    
    3,906(Decrease) in other current and noncurrent liabilities
    
    
    (6,843
    )
    
    
    (25,915
    )Net cash provided by operating activities
    
    
    57,331
    
    
    
    158,952Cash flows from investing activities:Capital expenditures
    
    
    (9,450
    )
    
    
    (8,323
    )Proceeds from sale of property, plant and equipment
    
    
    2,300
    
    
    
    2,084Net cash (used in) investing activities
    
    
    (7,150
    )
    
    
    (6,239
    )Cash flows from financing activities:Repayments of long-term borrowings, including premium and fees
    
    
    (256,510
    )
    
    
    (2,000
    )Proceeds from long-term borrowings
    
    
    247,840
    
    
    
    Issuance costs associated with long-term borrowings
    
    
    (5,018
    )
    
    
    Partnership distributions
    
    
    (58,754
    )
    
    
    (52,954
    )Net cash (used in) financing activities
    
    
    (72,442
    )
    
    
    (54,954
    )Net (decrease) increase in cash and cash equivalents
    
    
    (22,261
    )
    
    
    97,759Cash and cash equivalents at beginning of period
    
    
    163,173
    
    
    
    137,698Cash and cash equivalents at end of period
    
    $
    140,912
    
    
    $
    235,457
   4




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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
    
    
    
    
    
    
    146,763
    
    
    
    
    
    
    
    146,763
    
    
    $
    146,763Other comprehensive income:Net unrealized gains on cash flow
hedges
    
    
    
    
    
    
    
    
    
    
    192
    
    
    
    192
    
    
    
    192Amortization of net actuarial losses
and prior service credits into earnings
    
    
    
    
    
    
    
    
    
    
    2,409
    
    
    
    2,409
    
    
    
    2,409Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    149,364Partnership distributions
    
    
    
    
    
    
    (58,754
    )
    
    
    
    
    
    
    (58,754
    )Common Units issued under
Restricted Unit Plan
    
    
    62Compensation cost recognized under
Restricted Unit Plan, net of
forfeitures
    
    
    
    
    
    
    2,017
    
    
    
    
    
    
    
    2,017Balance at March 27, 2010
    
    
    35,290
    
    
    $
    511,031
    
    
    $
    (58,687
    )
    
    $
    452,344
   5




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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
      2. Basis of Presentation
 Principles of Consolidation.
  6




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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.
 Reclassifications.
  7




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3. Financial Instruments
 Cash and Cash Equivalents.
 Derivative Instruments and Hedging Activities.
 Commodity Price Risk.
  Interest Rate Risk. 1 2
  8




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As ofTransaction Type
    
    March 27, 2010
    
    
    September 26, 2009Commodity Options
    
    
    661
    
    
    
    6,467Commodity Futures
    
    
    13,020
    
    
    
    15,330
  As of March 27, 2010
    
    
    As of September 26, 2009Asset Derivatives
    
    Location
    
    Fair Value
    
    
    Location

    
    Fair ValueDerivatives not designated as
hedging instruments:Commodity options
    
    Other current assets
    
    $
    1,044
    
    
    Other current assets
    
    $
    6,398Other assets
    
    
    
    
    
    Other assets
    
    
    241Commodity futures
    
    Other current assets
    
    
    9
    
    
    Other current assets
    
    
    2,845Other assets
    
    
    
    
    
    Other assets
    
    
    248$
    1,053
    
    
    
    
    
    
    $
    9,732Liability Derivatives
    
    Location

    
    Fair Value
    
    
    Location

    
    Fair ValueDerivatives designated as hedging
instruments:Interest rate swaps
    
    Other current liabilities
    
    $
    2,644
    
    
    Other current liabilities
    
    $
    3,351Other liabilities
    
    
    1,355
    
    
    Other liabilities
    
    
    840$
    3,999
    
    
    
    
    
    
    $
    4,191Derivatives not designated as
hedging instruments:Commodity options
    
    Other current liabilities
    
    $
    118
    
    
    Other current liabilities
    
    $
    4,060Other liabilities
    
    
    
    
    
    Other liabilities
    
    
    175Commodity futures
    
    Other current liabilities
    
    
    1,354
    
    
    Other current liabilities
    
    
    784Other liabilities
    
    
    208
    
    
    Other liabilities
    
    
    $
    1,680
    
    
    
    
    
    
    $
    5,019
   9




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Three months ended March 27, 2010
    
    
    Three months ended March 28, 2009Derivatives 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
    
    $
    (431
    )
    
    Interest expense
    
    $
    
    
    
    $
    704
    
    
    Interest expense
    
    $
    $
    (431
    )
    
    
    
    
    
    $
    
    
    
    $
    704
    
    
    
    
    
    
    $
    
 Amount of
    
    
    
    
    
    
    Amount ofDerivatives Not
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedDesignated as
    
    Location of Gains
    
    Gains (Losses)
    
    
    Location of Gains
    
    Gains (Losses)Hedging
    
    (Losses) Recognized
    
    Recognized
    
    
    (Losses) Recognized
    
    RecognizedInstruments
    
    in Income
    
    in Income
    
    
    in Income
    
    in IncomeOptions
    
    Cost of products sold
    
    $
    (2,820
    )
    
    Cost of products sold
    
    $
    (4,380
    )Futures
    
    Cost of products sold
    
    
    1,087
    
    
    Cost of products sold
    
    
    (5,310
    )$
    (1,733
    )
    
    
    
    
    
    $
    (9,690
    )
 Six months ended March 27, 2010
    
    
    Six months ended March 28, 2009Derivatives 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
    
    $
    192
    
    
    Interest expense
    
    $
    
    
    
    $
    (584
    )
    
    Interest expense
    
    $
    $
    192
    
    
    
    
    
    
    $
    
    
    
    $
    (584
    )
    
    
    
    
    
    $
    
 Amount of
    
    
    
    
    
    
    Amount ofDerivatives Not
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedDesignated as
    
    Location of Gains
    
    
    Gains (Losses)
    
    
    Location of Gains
    
    
    Gains (Losses)Hedging
    
    (Losses) Recognized
    
    
    Recognized
    
    
    (Losses) Recognized
    
    
    RecognizedInstruments
    
    in Income
    
    
    in Income
    
    
    in Income
    
    
    in IncomeOptions
    
    Cost of goods sold
    
    $
    (1,279
    )
    
    Cost of goods sold
    
    $
    1,546Futures
    
    Cost of goods sold
    
    
    (3,861
    )
    
    Cost of goods sold
    
    
    3,770$
    (5,140
    )
    
    
    
    
    
    $
    5,316
 Bank Debt and Senior Notes.
  10




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4. Inventories
  As ofMarch 27,
    
    
    September 26,2010
    
    
    2009Propane, fuel oil and refined
fuels and natural gas
    
    $
    64,579
    
    
    $
    67,512Appliances and related parts
    
    
    1,805
    
    
    
    2,646$
    66,384
    
    
    $
    70,158
 5. Net Income Per Common Unit
  6. Long-Term Borrowings
  As ofMarch 27,
    
    
    September 26,2010
    
    
    20097.375% senior notes, due March 15, 2020, net of
unamortized discount of $2,155 and $-0-, respectively
    
    $
    247,845
    
    
    $
    6.875% senior notes, due December 15, 2013, net of
unamortized discount of $-0- and $585, respectively
    
    
    
    
    
    
    249,415Revolving credit facility, due June 25, 2013
    
    
    100,000
    
    
    
    100,000$
    347,845
    
    
    $
    349,415
    11




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1 2
     12




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7. Distributions of Available Cash
   8. Unit-Based Compensation Arrangements
  Restricted Unit Plans.
  13




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WeightedAverage GrantDate Fair ValueUnits
    
    
    Per UnitOutstanding September 26, 2009
    
    
    415,295
    
    
    $
    28.89Awarded
    
    
    142,771
    
    
    
    31.72Forfeited
    
    
    (1,975
    )
    
    
    (30.40
    )Issued
    
    
    (62,380
    )
    
    
    (27.18
    )Outstanding March 27, 2010
    
    
    493,711
    
    
    $
    29.92
  Long-Term Incentive Plan.
 9. Commitments and Contingencies
 Self-Insurance.
 10. Guarantees
   14




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11. Pension Plans and Other Postretirement Benefits
  Pension BenefitsThree Months Ended
    
    
    Six Months EndedMarch 27,
    
    
    March 28,
    
    
    March 27,
    
    
    March 28,2010
    
    
    2009
    
    
    2010
    
    
    2009Interest cost
    
    $
    1,876
    
    
    $
    2,372
    
    
    $
    3,752
    
    
    $
    4,744Expected return on plan assets
    
    
    (2,020
    )
    
    
    (2,301
    )
    
    
    (4,040
    )
    
    
    (4,602
    )Recognized net actuarial loss
    
    
    1,343
    
    
    
    1,012
    
    
    
    2,686
    
    
    
    2,024Net periodic benefit cost
    
    $
    1,199
    
    
    $
    1,083
    
    
    $
    2,398
    
    
    $
    2,166
 Postretirement BenefitsThree Months Ended
    
    
    Six Months EndedMarch 27,
    
    
    March 28,
    
    
    March 27,
    
    
    March 28,2010
    
    
    2009
    
    
    2010
    
    
    2009Service Cost
    
    $
    2
    
    
    $
    1
    
    
    $
    4
    
    
    $
    2Interest cost
    
    
    253
    
    
    
    345
    
    
    
    506
    
    
    
    690Amortization of prior
service costs
    
    
    (123
    )
    
    
    (122
    )
    
    
    (245
    )
    
    
    (244
    )Recognized net actuarial loss
    
    
    (16
    )
    
    
    (78
    )
    
    
    (32
    )
    
    
    (156
    )Net periodic benefit cost
    
    $
    116
    
    
    $
    146
    
    
    $
    233
    
    
    $
    292
  12. Income Taxes
    15




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13. Segment Information
       16




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Three Months Ended
    
    
    Six Months EndedMarch 27,
    
    
    March 28,
    
    
    March 27,
    
    
    March 28,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Propane
    
    $
    369,341
    
    
    $
    336,913
    
    
    $
    602,872
    
    
    $
    610,821Fuel oil and refined fuels
    
    
    61,311
    
    
    
    65,138
    
    
    
    100,558
    
    
    
    119,329Natural gas and electricity
    
    
    28,841
    
    
    
    32,093
    
    
    
    45,703
    
    
    
    54,374All other
    
    
    9,670
    
    
    
    11,081
    
    
    
    21,462
    
    
    
    24,016Total revenues
    
    $
    469,163
    
    
    $
    445,225
    
    
    $
    770,595
    
    
    $
    808,540Income
before loss on debt extinguishment, interest expense and income taxes:Propane
    
    $
    124,780
    
    
    $
    129,492
    
    
    $
    198,678
    
    
    $
    227,161Fuel oil and refined fuels
    
    
    14,694
    
    
    
    15,383
    
    
    
    14,844
    
    
    
    23,859Natural gas and electricity
    
    
    4,674
    
    
    
    5,852
    
    
    
    7,219
    
    
    
    9,022All other
    
    
    (4,139
    )
    
    
    (3,808
    )
    
    
    (8,213
    )
    
    
    (6,752
    )Corporate
    
    
    (25,212
    )
    
    
    (21,725
    )
    
    
    (41,974
    )
    
    
    (37,867
    )Total income before loss on debt extinguishment, interest expense
and income taxes
    
    
    114,797
    
    
    
    125,194
    
    
    
    170,554
    
    
    
    215,423Reconciliation to income from continuing operations:Loss on debt extinguishment
    
    
    9,473
    
    
    
    
    
    
    
    9,473
    
    
    
    Interest expense, net
    
    
    6,608
    
    
    
    9,442
    
    
    
    13,791
    
    
    
    18,845Provision for income taxes
    
    
    328
    
    
    
    886
    
    
    
    527
    
    
    
    1,024Income from continuing operations
    
    $
    98,388
    
    
    $
    114,866
    
    
    $
    146,763
    
    
    $
    195,554Depreciation and amortization:Propane
    
    $
    3,711
    
    
    $
    3,822
    
    
    $
    7,361
    
    
    $
    7,632Fuel oil and refined fuels
    
    
    778
    
    
    
    825
    
    
    
    1,544
    
    
    
    1,640Natural gas and electricity
    
    
    253
    
    
    
    252
    
    
    
    506
    
    
    
    504All other
    
    
    42
    
    
    
    92
    
    
    
    125
    
    
    
    185Corporate
    
    
    2,358
    
    
    
    2,140
    
    
    
    4,690
    
    
    
    4,193Total depreciation and amortization
    
    $
    7,142
    
    
    $
    7,131
    
    
    $
    14,226
    
    
    $
    14,154
 As ofMarch 27,
    
    
    September 26,2010
    
    
    2009Assets:Propane
    
    $
    750,947
    
    
    $
    681,809Fuel oil and refined fuels
    
    
    73,025
    
    
    
    83,416Natural gas and electricity
    
    
    22,968
    
    
    
    17,540All other
    
    
    3,656
    
    
    
    2,876Corporate
    
    
    267,597
    
    
    
    279,854Eliminations
    
    
    (87,981
    )
    
    
    (87,981
    )Total assets
    
    $
    1,030,212
    
    
    $
    977,514
 14. Recently Issued Accounting Pronouncements
  15. Subsequent Events
   17




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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 March 27, 2010 Compared to Three Months Ended March 28, 2009
 Revenues
 Three Months Ended
    
    
    
    
    
    
    PercentMarch 27,
    
    
    March 28,
    
    
    Increase/
    
    
    Increase/(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    (Decrease)
    
    
    (Decrease)RevenuesPropane
    
    $
    369,341
    
    
    $
    336,913
    
    
    $
    32,428
    
    
    
    9.6
    %Fuel oil and refined fuels
    
    
    61,311
    
    
    
    65,138
    
    
    
    (3,827
    )
    
    
    (5.9
    %)Natural gas and electricity
    
    
    28,841
    
    
    
    32,093
    
    
    
    (3,252
    )
    
    
    (10.1
    %)All other
    
    
    9,670
    
    
    
    11,081
    
    
    
    (1,411
    )
    
    
    (12.7
    %)Total revenues
    
    $
    469,163
    
    
    $
    445,225
    
    
    $
    23,938
    
    
    
    5.4
    %
    21




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Cost of Products Sold
 Three Months Ended
    
    
    
    
    
    
    PercentMarch 27,
    
    
    March 28,
    
    
    Increase
    
    
    Increase(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    (Decrease)
    
    
    (Decrease)Cost of products soldPropane
    
    $
    186,709
    
    
    $
    141,201
    
    
    $
    45,508
    
    
    
    32.2
    %Fuel oil and refined fuels
    
    
    37,284
    
    
    
    39,912
    
    
    
    (2,628
    )
    
    
    (6.6
    %)Natural gas and electricity
    
    
    21,721
    
    
    
    24,165
    
    
    
    (2,444
    )
    
    
    (10.1
    %)All other
    
    
    2,745
    
    
    
    2,981
    
    
    
    (236
    )
    
    
    (7.9
    %)Total cost of products sold
    
    $
    248,459
    
    
    $
    208,259
    
    
    $
    40,200
    
    
    
    19.3
    %As a percent of total revenues
    
    
    53.0
    %
    
    
    46.8
    %
    22




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Operating Expenses
 Three Months EndedMarch 27,
    
    
    March 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    Decrease
    
    
    DecreaseOperating expenses
    
    $
    78,508
    
    
    $
    86,848
    
    
    $
    (8,340
    )
    
    
    (9.6
    %)As a percent of total revenues
    
    
    16.7
    %
    
    
    19.5
    %
  23




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General and Administrative Expenses
 Three Months EndedMarch 27,
    
    
    March 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    Increase
    
    
    IncreaseGeneral and administrative
expenses
    
    $
    20,257
    
    
    $
    17,793
    
    
    $
    2,464
    
    
    
    13.8
    %As a percent of total revenues
    
    
    4.3
    %
    
    
    4.0
    %
   Depreciation and Amortization
 Three Months EndedMarch 27,
    
    
    March 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    Increase
    
    
    IncreaseDepreciation and amortization
    
    $
    7,142
    
    
    $
    7,131
    
    
    $
    11
    
    
    
    0.2
    %As a percent of total revenues
    
    
    1.5
    %
    
    
    1.6
    %
  Interest Expense, net
 Three Months EndedMarch 27,
    
    
    March 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    Decrease
    
    
    DecreaseInterest expense, net
    
    $
    6,608
    
    
    $
    9,442
    
    
    $
    (2,834
    )
    
    
    (30.0
    %)As a percent of total revenues
    
    
    1.4
    %
    
    
    2.1
    %
  24




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Net Income and EBITDA
    Three Months EndedMarch 27,
    
    
    March 28,(Dollars in thousands)
    
    2010
    
    
    2009Net income
    
    $
    98,388
    
    
    $
    114,866Add:Provision for income taxes
    
    
    328
    
    
    
    886Interest expense, net
    
    
    6,608
    
    
    
    9,442Depreciation and amortization
    
    
    7,142
    
    
    
    7,131EBITDA
    
    
    112,466
    
    
    
    132,325Unrealized (non-cash) losses on changes
in fair value of derivatives
    
    
    1,732
    
    
    
    9,690Loss on debt extinguishment
    
    
    9,473
    
    
    
    Adjusted EBITDA
    
    
    123,671
    
    
    
    142,015Add (subtract):Provision for income taxes  current
    
    
    (328
    )
    
    
    (426
    )Interest expense, net
    
    
    (6,608
    )
    
    
    (9,442
    )Unrealized (non-cash) (losses) on changes
in fair value of derivatives
    
    
    (1,732
    )
    
    
    (9,690
    )Compensation cost recognized under Restricted Unit Plan
    
    
    1,025
    
    
    
    672Gain on disposal of property, plant and equipment, net
    
    
    293
    
    
    
    (393
    )Changes in working capital and other assets and liabilities
    
    
    (44,264
    )
    
    
    11,212Net cash provided by operating activities
    
    $
    72,057
    
    
    $
    133,948
  25




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Six Months Ended March 27, 2010 Compared to Six Months Ended March 28, 2009
 Revenues
 Six Months EndedMarch 27,
    
    
    March 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    Decrease
    
    
    DecreaseRevenuesPropane
    
    $
    602,872
    
    
    $
    610,821
    
    
    $
    (7,949
    )
    
    
    (1.3
    %)Fuel oil and refined fuels
    
    
    100,558
    
    
    
    119,329
    
    
    
    (18,771
    )
    
    
    (15.7
    %)Natural gas and electricity
    
    
    45,703
    
    
    
    54,374
    
    
    
    (8,671
    )
    
    
    (15.9
    %)All other
    
    
    21,462
    
    
    
    24,016
    
    
    
    (2,554
    )
    
    
    (10.6
    %)Total revenues
    
    $
    770,595
    
    
    $
    808,540
    
    
    $
    (37,945
    )
    
    
    (4.7
    %)
      26




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Cost of Products Sold
 Six Months Ended
    
    
    
    
    
    
    PercentMarch 27,
    
    
    March 28,
    
    
    Increase
    
    
    Increase(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    (Decrease)
    
    
    (Decrease)Cost of products soldPropane
    
    $
    291,326
    
    
    $
    259,086
    
    
    $
    32,240
    
    
    
    12.4
    %Fuel oil and refined fuels
    
    
    67,206
    
    
    
    75,517
    
    
    
    (8,311
    )
    
    
    (11.0
    %)Natural gas and electricity
    
    
    34,174
    
    
    
    41,848
    
    
    
    (7,674
    )
    
    
    (18.3
    %)All other
    
    
    6,119
    
    
    
    6,038
    
    
    
    81
    
    
    
    1.3
    %Total cost of products sold
    
    $
    398,825
    
    
    $
    382,489
    
    
    $
    16,336
    
    
    
    4.3
    %As a percent of total revenues
    
    
    51.8
    %
    
    
    47.3
    %
       27




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Operating Expenses
 Six Months EndedMarch 27,
    
    
    March 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    Decrease
    
    
    DecreaseOperating expenses
    
    $
    152,995
    
    
    $
    163,911
    
    
    $
    (10,916
    )
    
    
    (6.7
    %)As a percent of total revenues
    
    
    19.9
    %
    
    
    20.3
    %
  General and Administrative Expenses
 Six Months EndedMarch 27,
    
    
    March 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    Increase
    
    
    IncreaseGeneral and administrative
expenses
    
    $
    33,995
    
    
    $
    32,563
    
    
    $
    1,432
    
    
    
    4.4
    %As a percent of total revenues
    
    
    4.4
    %
    
    
    4.0
    %
  Depreciation and Amortization
 Six Months EndedMarch 27,
    
    
    March 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    Increase
    
    
    IncreaseDepreciation and amortization
    
    $
    14,226
    
    
    $
    14,154
    
    
    $
    72
    
    
    
    0.5
    %As a percent of total revenues
    
    
    1.8
    %
    
    
    1.8
    %
   28




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Interest Expense, net
 Six Months EndedMarch 27,
    
    
    March 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    Decrease
    
    
    DecreaseInterest expense, net
    
    $
    13,791
    
    
    $
    18,845
    
    
    $
    (5,054
    )
    
    
    (26.8
    %)As a percent of total revenues
    
    
    1.8
    %
    
    
    2.3
    %
  Net Income and EBITDA
   Six Months EndedMarch 27,
    
    
    March 28,(Dollars in thousands)
    
    2010
    
    
    2009Net income
    
    $
    146,763
    
    
    $
    195,554Add:Provision for income taxes
    
    
    527
    
    
    
    1,024Interest expense, net
    
    
    13,791
    
    
    
    18,845Depreciation and amortization
    
    
    14,226
    
    
    
    14,154EBITDA
    
    
    175,307
    
    
    
    229,577Unrealized (non-cash) losses (gains) on changes
in fair value of derivatives
    
    
    (5,140
    )
    
    
    5,316Loss on debt extinguishment
    
    
    9,473
    
    
    
    Adjusted EBITDA
    
    
    179,640
    
    
    
    234,893Add (subtract):Provision for income taxes  current
    
    
    (527
    )
    
    
    (564
    )Interest expense, net
    
    
    (13,791
    )
    
    
    (18,845
    )Unrealized (non-cash) (losses) gains on changes
in fair value of derivatives
    
    
    5,140
    
    
    
    (5,316
    )Compensation cost recognized under Restricted Unit Plan
    
    
    2,017
    
    
    
    1,241Gain on disposal of property, plant and equipment, net
    
    
    (134
    )
    
    
    (623
    )Changes in working capital and other assets and liabilities
    
    
    (115,014
    )
    
    
    (51,834
    )Net cash provided by operating activities
    
    $
    57,331
    
    
    $
    158,952
  29




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Liquidity and Capital Resources
 Analysis of Cash Flows
 Operating Activities.
 Investing Activities.
 Financing Activities.
  Summary of Long-Term Debt Obligations and Revolving Credit Lines
    30




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1 2
   Partnership Distributions
   31




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Other Commitments
   Off-Balance Sheet Arrangements
 Guarantees
  Recently Issued Accounting Standards
   32




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##### Table of Contents



ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Commodity Price Risk
    Market Risk
   33




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##### Table of Contents



Credit Risk
  Interest Rate Risk
 1 2
 Derivative Instruments and Hedging Activities
   Sensitivity Analysis
  A.
    
    The fair value of open positions as of March 27, 2010.
 B.
    
    The estimated forward market prices as of March 27, 2010 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.
  34




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ITEM 4.
    
    CONTROLS AND PROCEDURES
     35




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##### Table of Contents



PART II
 
 ITEM 6.
    
    EXHIBITS
  4.1
    
    
    First Supplemental Indenture, dated as of March 19, 2010, relating to
the 6.875% Senior Notes due 2013, among Suburban Propane Partners,
L.P., Suburban Energy Finance Corporation and The Bank of New York
Mellon, as Trustee. (Incorporated by reference to Exhibit 4.1 to the
Partnerships Current Report on Form 8-K filed on March 19, 2010).4.2
    
    
    Indenture, dated as of March 23, 2010, relating to the 7.375% Senior
Notes due 2020, among Suburban Propane Partners, L.P., Suburban
Energy Finance Corporation and The Bank of New York Mellon, as
Trustee, including the form of 7.375% Senior Notes due 2020.
(Incorporated by reference to Exhibit 4.1 to the Partnerships
Current Report on Form 8-K filed on March 23, 2010).4.3
    
    
    First Supplemental Indenture, dated as of March 23, 2010, relating to
the 7.375% Senior Notes due 2020, among Suburban Propane Partners,
L.P., Suburban Energy Finance Corporation and The Bank of New York
Mellon, as Trustee. (Incorporated by reference to Exhibit 4.2 to the
Partnerships Current Report on Form 8-K filed on March 23, 2010).10.1
    
    
    First Amendment to Credit Agreement, dated March 9, 2010, by and
among Suburban Propane, L.P., Suburban Propane Partners, L.P., each
lender signatory thereto and Bank of America, N.A., as the
administrative agent for the lenders therein. (Incorporated by
reference to Exhibit 10.1 in the Partnerships Current Report on Form
8-K dated March 9, 2010).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).
  36




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SIGNATURES
  SUBURBAN PROPANE PARTNERS, L.P.May 6, 2010
    By:
    /s/ MICHAEL A. STIVALADate
    
    Michael A. StivalaChief Financial OfficerMay 6, 2010
    By:
    /s/ MICHAEL A. KUGLINDate
    
    Michael A. KuglinController and Chief Accounting Officer  37