##### 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 June 27, 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.)
 
 þ o
 Yes oNo 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 June 27, 2009
and September 27, 2008
    
    
    1Condensed Consolidated Statements of Operations for the three months ended
June 27, 2009 and 
June 28, 2008
    
    
    2Condensed Consolidated Statements of Operations for the nine months ended
June 27, 2009 and 
June 28, 2008
    
    
    3Condensed Consolidated Statements of Cash Flows for the nine months ended
June 27, 2009 and 
June 28, 2008
    
    
    4Condensed Consolidated Statement of Partners Capital for the nine months
ended
June 27, 2009
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    20ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
    
    
    36ITEM 4. CONTROLS AND PROCEDURES
    
    
    39PART II. OTHER INFORMATIONITEM
1A. RISK FACTORS
    
    
    40
    

ITEM 6. EXHIBITS
    
    
    41SIGNATURES
    
    
    42Exhibit 3.2Exhibit 3.3Exhibit 10.1Exhibit 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 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;
and
 
    
    The impact of current conditions in the global capital and credit markets, and general
economic pressures.




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SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands)
 (unaudited)
 June 27,
    
    
    September 27,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    256,099
    
    
    $
    137,698Accounts receivable, less allowance for doubtful accounts
of $5,891 and $6,578, respectively
    
    
    60,948
    
    
    
    94,933Inventories
    
    
    57,734
    
    
    
    79,822Other current assets
    
    
    25,705
    
    
    
    47,098Total current assets
    
    
    400,486
    
    
    
    359,551Property, plant and equipment, net
    
    
    358,247
    
    
    
    367,808Goodwill
    
    
    274,902
    
    
    
    276,282Other intangible assets, net
    
    
    14,353
    
    
    
    16,018Other assets
    
    
    27,317
    
    
    
    16,054Total assets
    
    $
    1,075,305
    
    
    $
    1,035,713LIABILITIES AND PARTNERS CAPITALCurrent liabilities:Accounts payable
    
    $
    31,547
    
    
    $
    58,079Accrued employment and benefit costs
    
    
    36,556
    
    
    
    27,053Accrued insurance
    
    
    10,530
    
    
    
    41,120Customer deposits and advances
    
    
    48,359
    
    
    
    71,206Accrued interest
    
    
    2,465
    
    
    
    11,030Other current liabilities
    
    
    17,069
    
    
    
    15,127Total current liabilities
    
    
    146,526
    
    
    
    223,615Long-term borrowings
    
    
    523,947
    
    
    
    531,772Postretirement benefits obligation
    
    
    16,868
    
    
    
    17,153Accrued insurance
    
    
    42,214
    
    
    
    31,913Other liabilities
    
    
    12,685
    
    
    
    11,184Total liabilities
    
    
    742,240
    
    
    
    815,637Commitments and contingenciesPartners capital:Common Unitholders (32,797 and 32,725 units issued and outstanding at
June 27, 2009 and September 27, 2008, respectively)
    
    
    374,552
    
    
    
    264,231Accumulated other comprehensive loss
    
    
    (41,487
    )
    
    
    (44,155
    )Total partners capital
    
    
    333,065
    
    
    
    220,076Total liabilities and partners capital
    
    $
    1,075,305
    
    
    $
    1,035,713
   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 EndedJune 27,
    
    
    June 28,2009
    
    
    2008RevenuesPropane
    
    $
    139,571
    
    
    $
    216,999Fuel oil and refined fuels
    
    
    23,091
    
    
    
    55,262Natural gas and electricity
    
    
    12,147
    
    
    
    22,507Services
    
    
    8,321
    
    
    
    9,184All other
    
    
    1,242
    
    
    
    1,524184,372
    
    
    
    305,476Costs and expensesCost of products sold
    
    
    87,463
    
    
    
    212,974Operating
    
    
    72,295
    
    
    
    76,455General and administrative
    
    
    13,108
    
    
    
    13,268Depreciation and amortization
    
    
    7,713
    
    
    
    7,159180,579
    
    
    
    309,856Income (loss) before interest expense and provision for (benefit from) income taxes
    
    
    3,793
    
    
    
    (4,380
    )Interest expense, net
    
    
    10,068
    
    
    
    9,524Loss before provision for (benefit from) taxes
    
    
    (6,275
    )
    
    
    (13,904
    )Provision for (benefit from) income taxes
    
    
    1,160
    
    
    
    (157
    )Net loss
    
    $
    (7,435
    )
    
    $
    (13,747
    )Loss per Common Unit  basic
    
    $
    (0.23
    )
    
    $
    (0.42
    )Weighted average number of Common Units outstanding  basic
    
    
    32,859
    
    
    
    32,725Loss per Common Unit  diluted
    
    $
    (0.23
    )
    
    $
    (0.42
    )Weighted average number of Common Units outstanding  diluted
    
    
    32,859
    
    
    
    32,725
   2




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SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per unit amounts)
 (unaudited)
 Nine Months EndedJune 27,
    
    
    June 28,2009
    
    
    2008RevenuesPropane
    
    $
    750,392
    
    
    $
    946,700Fuel oil and refined fuels
    
    
    142,420
    
    
    
    247,609Natural gas and electricity
    
    
    66,521
    
    
    
    84,693Services
    
    
    30,574
    
    
    
    34,752All other
    
    
    3,005
    
    
    
    3,928992,912
    
    
    
    1,317,682Costs and expensesCost of products sold
    
    
    469,952
    
    
    
    871,446Operating
    
    
    236,206
    
    
    
    235,495General and administrative
    
    
    45,671
    
    
    
    37,632Depreciation and amortization
    
    
    21,867
    
    
    
    21,325773,696
    
    
    
    1,165,898Income before interest expense and provision for income taxes
    
    
    219,216
    
    
    
    151,784Interest expense, net
    
    
    28,913
    
    
    
    27,330Income before provision for taxes
    
    
    190,303
    
    
    
    124,454Provision for income taxes
    
    
    2,184
    
    
    
    1,956Income from continuing operations
    
    
    188,119
    
    
    
    122,498Discontinued operations:Gain on sale of discontinued operations
    
    
    
    
    
    
    43,707Net income
    
    $
    188,119
    
    
    $
    166,205Income per Common Unit  basicIncome from continuing operations
    
    $
    5.73
    
    
    $
    3.74Discontinued operations
    
    
    
    
    
    
    1.34Net income
    
    $
    5.73
    
    
    $
    5.08Weighted average number of Common Units outstanding  basic
    
    
    32,849
    
    
    
    32,719Income per Common Unit  dilutedIncome from continuing operations
    
    $
    5.70
    
    
    $
    3.72Discontinued operations
    
    
    
    
    
    
    1.33Net income
    
    $
    5.70
    
    
    $
    5.05Weighted average number of Common Units outstanding  diluted
    
    
    33,026
    
    
    
    32,941
   3




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SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 (unaudited)
 Nine Months EndedJune 27,
    
    
    June 28,2009
    
    
    2008Cash flows from operating activities:Net income
    
    $
    188,119
    
    
    $
    166,205Adjustments to reconcile net income to net cash provided by operations:Depreciation and amortization
    
    
    21,867
    
    
    
    21,325Amortization of debt origination costs
    
    
    1,410
    
    
    
    996Compensation cost recognized under Restricted Unit Plan
    
    
    1,885
    
    
    
    1,503Amortization of discount on long-term borrowings
    
    
    175
    
    
    
    175Gain on disposal of discontinued operations
    
    
    
    
    
    
    (43,707
    )Gain on disposal of property, plant and equipment, net
    
    
    (770
    )
    
    
    (1,821
    )Deferred tax provision
    
    
    1,380
    
    
    
    1,277Changes in assets and liabilities:Decrease (increase) in accounts receivable
    
    
    33,985
    
    
    
    (28,375
    )Decrease in inventories
    
    
    22,088
    
    
    
    2,541Decrease in other current assets
    
    
    21,393
    
    
    
    3,656(Decrease) in accounts payable
    
    
    (26,532
    )
    
    
    (7,469
    )Increase (decrease) in accrued employment and benefit costs
    
    
    9,503
    
    
    
    (13,921
    )(Decrease) in accrued insurance
    
    
    (20,289
    )
    
    
    (7,844
    )(Decrease) in customer deposits and advances
    
    
    (22,847
    )
    
    
    (34,477
    )(Decrease) in accrued interest
    
    
    (8,565
    )
    
    
    (5,124
    )Increase in other current liabilities
    
    
    3,942
    
    
    
    2,077(Increase) decrease in other noncurrent assets
    
    
    (4,092
    )
    
    
    2,048Increase (decrease) in other noncurrent liabilities
    
    
    846
    
    
    
    (2,077
    )Net cash provided by operating activities
    
    
    223,498
    
    
    
    56,988Cash flows from investing activities:Capital expenditures
    
    
    (13,836
    )
    
    
    (17,301
    )Proceeds from sale of property, plant and equipment
    
    
    3,965
    
    
    
    3,489Proceeds from sale of discontinued operations
    
    
    
    
    
    
    53,715Net cash (used in) provided by investing activities
    
    
    (9,871
    )
    
    
    39,903Cash flows from financing activities:Repayments of short-term borrowings
    
    
    (110,000
    )
    
    
    Proceeds from long-term borrowings
    
    
    100,000
    
    
    
    Issuance costs associated with long-term borrowings
    
    
    (5,543
    )
    
    
    Partnership distributions
    
    
    (79,683
    )
    
    
    (74,854
    )Net cash (used in) financing activities
    
    
    (95,226
    )
    
    
    (74,854
    )Net increase in cash and cash equivalents
    
    
    118,401
    
    
    
    22,037Cash and cash equivalents at beginning of period
    
    
    137,698
    
    
    
    96,586Cash and cash equivalents at end of period
    
    $
    256,099
    
    
    $
    118,623
   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 27, 2008
    
    
    32,725
    
    
    $
    264,231
    
    
    $
    (44,155
    )
    
    $
    220,076Net income
    
    
    
    
    
    
    188,119
    
    
    
    
    
    
    
    188,119
    
    
    $
    188,119Other comprehensive income:Net unrealized gains on cash flow hedges
    
    
    
    
    
    
    
    
    
    
    231
    
    
    
    231
    
    
    
    231Amortization of net actuarial losses and
prior service credits into earnings
    
    
    
    
    
    
    
    
    
    
    2,437
    
    
    
    2,437
    
    
    
    2,437Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    190,787Partnership distributions
    
    
    
    
    
    
    (79,683
    )
    
    
    
    
    
    
    (79,683
    )Common Units issued under
Restricted Unit Plan
    
    
    72Compensation cost recognized under
Restricted Unit Plan, net of forfeitures
    
    
    
    
    
    
    1,885
    
    
    
    
    
    
    
    1,885Balance at June 27, 2009
    
    
    32,797
    
    
    $
    374,552
    
    
    $
    (41,487
    )
    
    $
    333,065
   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
      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.
  Credit Risk.
  8




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Interest Rate Risk. 1 2
  Transaction Type
    
    (gallons in thousands)Options
    
    
    5,056Futures
    
    
    17,220
  Asset Derivatives
    
    
    Liability DerivativesLocation
    
    Fair Value
    
    
    Location
    
    Fair ValueDerivatives designated as hedging
instruments under SFAS 133:Interest rate swap
    
    
    
    
    
    
    
    Other liabilities
    
    $
    2,969$
    2,969Derivatives not designated as
hedging instruments under SFAS
133:Options
    
    Other current assets
    
    $
    6,216
    
    
    Other current liabilities
    
    $
    3,507Other assets
    
    
    504
    
    
    Other liabilities
    
    
    328Futures
    
    Other current assets
    
    
    350
    
    
    Other current liabilities
    
    
    1,503$
    7,070
    
    
    
    
    $
    5,338
  9




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Three months ended June 27, 2009
    
    
    Three months ended June 28, 2008Derivatives in
    
    
    
    
    
    Gains (Losses) Reclassified
    
    
    
    
    
    
    Gains (Losses) ReclassifiedSFAS 133 Cash
    
    Amount of Gains
    
    
    from Accumulated OCI into
    
    
    Amount of Gains
    
    
    from Accumulated OCI intoFlow Hedging
    
    (Losses) Recognized
    
    
    Income (Effective Portion)
    
    
    (Losses) Recognized
    
    
    Income (Effective Portion)Relationships
    
    in OCI (Effective Portion)
    
    
    Location
    
    Amount
    
    
    in OCI (Effective Portion)
    
    
    Location
    
    
    AmountInterest rate swap
    
    $
    816
    
    
    Interest expense
    
    $
    
    
    
    $
    2,650
    
    
    Interest expense
    
    $
    $
    816
    
    
    
    
    $
    
    
    
    $
    2,650
    
    
    
    
    
    
    $
    
 Derivatives Not
    
    
    
    Amount of
    
    
    
    
    
    
    Amount ofDesignated as
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedHedging
    
    Location of Gains
    
    Gains (Losses)
    
    
    Location of Gains
    
    
    Gains (Losses)Instruments under
    
    (Losses) Recognized
    
    Recognized in
    
    
    (Losses) Recognized in
    
    
    Recognized inSFAS 133
    
    in Income
    
    Income
    
    
    Income
    
    
    IncomeOptions
    
    Cost of goods sold
    
    $
    (1,220
    )
    
    Cost of goods sold
    
    $
    (737
    )Futures
    
    Cost of goods sold
    
    
    (4,928
    )
    
    Cost of goods sold
    
    
    5,432$
    (6,148
    )
    
    
    
    
    
    $
    4,695
 Nine months ended June 27, 2009
    
    
    Nine months ended June 28, 2008Derivatives in
    
    
    
    
    
    Gains (Losses) Reclassified
    
    
    
    
    
    Gains (Losses) ReclassifiedSFAS 133 Cash
    
    Amount of Gains
    
    
    from Accumulated OCI into
    
    
    Amount of Gains
    
    
    from Accumulated OCI intoFlow Hedging
    
    (Losses) Recognized
    
    
    Income (Effective Portion)
    
    
    (Losses) Recognized
    
    
    Income (Effective Portion)Relationships
    
    in OCI (Effective Portion)
    
    
    Location
    
    Amount
    
    
    in OCI (Effective Portion)
    
    
    Location
    
    
    AmountInterest rate swap
    
    $
    231
    
    
    Interest expense
    
    $
    
    
    
    $
    (2,473
    )
    
    Interest expense
    
    $
    $
    231
    
    
    
    
    $
    
    
    
    $
    (2,473
    )
    
    
    
    
    
    $
    
 Derivatives Not
    
    
    
    Amount of
    
    
    
    
    
    
    Amount ofDesignated as
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedHedging
    
    Location of Gains
    
    Gains (Losses)
    
    
    Location of Gains
    
    
    Gains (Losses)Instruments under
    
    (Losses) Recognized
    
    Recognized in
    
    
    (Losses) Recognized
    
    
    Recognized inSFAS 133
    
    in Income
    
    Income
    
    
    in Income
    
    
    IncomeOptions
    
    Cost of goods sold
    
    $
    327
    
    
    Cost of goods sold
    
    $
    (69
    )Futures
    
    Cost of goods sold
    
    
    (1,159
    )
    
    Cost of goods sold
    
    
    (254
    )$
    (832
    )
    
    
    
    
    
    $
    (323
    )
 Bank Debt and Senior Notes.
 4. Discontinued Operations
   10




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5. Inventories
  As ofJune 27,
    
    
    September 27,2009
    
    
    2008Propane, fuel oil and refined fuels
    
    $
    54,552
    
    
    $
    76,036Natural gas
    
    
    
    
    
    
    283Appliances and related parts
    
    
    3,182
    
    
    
    3,503$
    57,734
    
    
    $
    79,822
 6. Goodwill and Other Intangible Assets
    As ofJune 27,
    
    
    September 27,2009
    
    
    2008Customer lists
    
    $
    22,316
    
    
    $
    22,316Tradenames
    
    
    1,499
    
    
    
    1,499Other
    
    
    2,117
    
    
    
    2,117$
    25,932
    
    
    $
    25,932Less: accumulated amortizationCustomer lists
    
    $
    (10,105
    )
    
    $
    (8,632
    )Tradenames
    
    
    (825
    )
    
    
    (712
    )Other
    
    
    (649
    )
    
    
    (570
    )(11,579
    )
    
    
    (9,914
    )$
    14,353
    
    
    $
    16,018
  11




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7. Income Per Common Unit
   8. Long-Term Borrowings
  As ofJune 27,
    
    
    September 27,2009
    
    
    2008Senior Notes, 6.875%, due December 15, 2013, net of
unamortized discount of $1,053 and $1,228, respectively
    
    $
    423,947
    
    
    $
    423,772Term Loan, 6.29% to 7.16%, redeemed June 26, 2009
    
    
    
    
    
    
    110,000Revolving Credit Facility, due June 25, 2013
    
    
    100,000
    
    
    
    523,947
    
    
    
    533,772Less: current portion of Term Loan
    
    
    
    
    
    
    2,000$
    523,947
    
    
    $
    531,772
   12




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1 2
       13




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9. Distributions of Available Cash
   10. Unit-Based Compensation Arrangements
  2000 Restricted Unit Plan.
  14




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WeightedAverage GrantDate Fair ValueUnits
    
    
    Per UnitOutstanding September 27, 2008
    
    
    446,515
    
    
    $
    30.57Awarded
    
    
    68,799
    
    
    
    18.09Forfeited
    
    
    (16,046
    )
    
    
    35.40Issued
    
    
    (71,637
    )
    
    
    27.81Outstanding June 27, 2009
    
    
    427,631
    
    
    $
    28.85
  Long-Term Incentive Plan.
 11. Commitments and Contingencies
 Self-Insurance.
   15




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##### Table of Contents



12. Guarantees
  13. Pension Plans and Other Postretirement Benefits
  Pension BenefitsThree Months Ended
    
    
    Nine Months EndedJune 27,
    
    
    June 28,
    
    
    June 27,
    
    
    June 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Service Cost
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Interest cost
    
    
    2,372
    
    
    
    2,187
    
    
    
    7,116
    
    
    
    6,562Expected return on plan assets
    
    
    (2,301
    )
    
    
    (2,270
    )
    
    
    (6,904
    )
    
    
    (6,811
    )Amortization of prior service costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Recognized net actuarial loss
    
    
    1,012
    
    
    
    844
    
    
    
    3,037
    
    
    
    2,531Net periodic benefit cost
    
    $
    1,083
    
    
    $
    761
    
    
    $
    3,249
    
    
    $
    2,282
 Postretirement BenefitsThree Months Ended
    
    
    Nine Months EndedJune 27,
    
    
    June 28,
    
    
    June 27,
    
    
    June 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Service Cost
    
    $
    1
    
    
    $
    2
    
    
    $
    3
    
    
    $
    6Interest cost
    
    
    345
    
    
    
    350
    
    
    
    1,036
    
    
    
    1,049Expected return on plan assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service costs
    
    
    (122
    )
    
    
    (122
    )
    
    
    (367
    )
    
    
    (367
    )Recognized net actuarial loss
    
    
    (78
    )
    
    
    
    
    
    
    (233
    )
    
    
    Net periodic benefit cost
    
    $
    146
    
    
    $
    230
    
    
    $
    439
    
    
    $
    688
   16




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14. Income taxes
    15. Segment Information
     17




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedJune 27,
    
    
    June 28,
    
    
    June 27,
    
    
    June 28,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:Propane
    
    $
    139,571
    
    
    $
    216,999
    
    
    $
    750,392
    
    
    $
    946,700Fuel oil and refined fuels
    
    
    23,091
    
    
    
    55,262
    
    
    
    142,420
    
    
    
    247,609Natural gas and electricity
    
    
    12,147
    
    
    
    22,507
    
    
    
    66,521
    
    
    
    84,693Services
    
    
    8,321
    
    
    
    9,184
    
    
    
    30,574
    
    
    
    34,752All other
    
    
    1,242
    
    
    
    1,524
    
    
    
    3,005
    
    
    
    3,928Total revenues
    
    $
    184,372
    
    
    $
    305,476
    
    
    $
    992,912
    
    
    $
    1,317,682Income (loss) before interest expense and income taxes:Propane
    
    $
    28,090
    
    
    $
    26,148
    
    
    $
    255,251
    
    
    $
    198,634Fuel oil and refined fuels
    
    
    (4,781
    )
    
    
    (9,644
    )
    
    
    19,078
    
    
    
    1,161Natural gas and electricity
    
    
    2,530
    
    
    
    1,108
    
    
    
    11,552
    
    
    
    8,546Services
    
    
    (3,636
    )
    
    
    (4,546
    )
    
    
    (9,521
    )
    
    
    (10,901
    )All other
    
    
    (517
    )
    
    
    20
    
    
    
    (1,384
    )
    
    
    (403
    )Corporate
    
    
    (17,893
    )
    
    
    (17,466
    )
    
    
    (55,760
    )
    
    
    (45,253
    )Total income (loss) before interest expense
and income taxes
    
    
    3,793
    
    
    
    (4,380
    )
    
    
    219,216
    
    
    
    151,784Reconciliation to (loss) income from continuing operations:Interest expense, net
    
    
    10,068
    
    
    
    9,524
    
    
    
    28,913
    
    
    
    27,330Provision for (benefit from) income taxes
    
    
    1,160
    
    
    
    (157
    )
    
    
    2,184
    
    
    
    1,956(Loss) income from continuing operations
    
    $
    (7,435
    )
    
    $
    (13,747
    )
    
    $
    188,119
    
    
    $
    122,498Depreciation and amortization:Propane
    
    $
    4,072
    
    
    $
    3,910
    
    
    $
    11,704
    
    
    $
    11,692Fuel oil and refined fuels
    
    
    1,485
    
    
    
    839
    
    
    
    3,125
    
    
    
    2,548Natural gas and electricity
    
    
    252
    
    
    
    252
    
    
    
    756
    
    
    
    756Services
    
    
    71
    
    
    
    78
    
    
    
    223
    
    
    
    233All other
    
    
    75
    
    
    
    16
    
    
    
    108
    
    
    
    63Corporate
    
    
    1,758
    
    
    
    2,064
    
    
    
    5,951
    
    
    
    6,033Total depreciation and amortization
    
    $
    7,713
    
    
    $
    7,159
    
    
    $
    21,867
    
    
    $
    21,325
 As ofJune 27,
    
    
    September 27,2009
    
    
    2008Assets:Propane
    
    $
    682,337
    
    
    $
    746,281Fuel oil and refined fuels
    
    
    81,566
    
    
    
    70,548Natural gas and electricity
    
    
    17,766
    
    
    
    23,658Services
    
    
    2,254
    
    
    
    2,841All other
    
    
    965
    
    
    
    1,234Corporate
    
    
    378,398
    
    
    
    279,132Eliminations
    
    
    (87,981
    )
    
    
    (87,981
    )Total assets
    
    $
    1,075,305
    
    
    $
    1,035,713
  18




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16. Recently Issued Accounting Pronouncements
   17. Subsequent Events
     19




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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
   20




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Weather
  Hedging and Risk Management Activities
  Critical Accounting Policies and Estimates
   Results of Operations and Financial Condition
   21




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22




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Three Months Ended June 27, 2009 Compared to Three Months Ended June 28, 2008
 Revenues
 Three Months EndedJune 27,
    
    
    June 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Decrease
    
    
    DecreaseRevenuesPropane
    
    $
    139,571
    
    
    $
    216,999
    
    
    $
    (77,428
    )
    
    
    (35.7
    %)Fuel oil and refined fuels
    
    
    23,091
    
    
    
    55,262
    
    
    
    (32,171
    )
    
    
    (58.2
    %)Natural gas and electricity
    
    
    12,147
    
    
    
    22,507
    
    
    
    (10,360
    )
    
    
    (46.0
    %)Services
    
    
    8,321
    
    
    
    9,184
    
    
    
    (863
    )
    
    
    (9.4
    %)All other
    
    
    1,242
    
    
    
    1,524
    
    
    
    (282
    )
    
    
    (18.5
    %)Total revenues
    
    $
    184,372
    
    
    $
    305,476
    
    
    $
    (121,104
    )
    
    
    (39.6
    %)
     23




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Cost of Products Sold
   Three Months Ended
    
    
    
    
    
    
    PercentJune 27,
    
    
    June 28,
    
    
    (Decrease)
    
    
    (Decrease)(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Increase
    
    
    IncreaseCost of products soldPropane
    
    $
    57,819
    
    
    $
    135,545
    
    
    $
    (77,726
    )
    
    
    (57.3
    %)Fuel oil and refined fuels
    
    
    19,255
    
    
    
    54,518
    
    
    
    (35,263
    )
    
    
    (64.7
    %)Natural gas and electricity
    
    
    7,859
    
    
    
    19,780
    
    
    
    (11,921
    )
    
    
    (60.3
    %)Services
    
    
    1,696
    
    
    
    2,437
    
    
    
    (741
    )
    
    
    (30.4
    %)All other
    
    
    834
    
    
    
    694
    
    
    
    140
    
    
    
    20.2
    %Total cost of products sold
    
    $
    87,463
    
    
    $
    212,974
    
    
    $
    (125,511
    )
    
    
    (58.9
    %)As a percent of total revenues
    
    
    47.4
    %
    
    
    69.7
    %
   24




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##### Table of Contents



Operating Expenses
 Three Months EndedJune 27,
    
    
    June 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Decrease
    
    
    DecreaseOperating expenses
    
    $
    72,295
    
    
    $
    76,455
    
    
    $
    (4,160
    )
    
    
    (5.4
    %)As a percent of total revenues
    
    
    39.2
    %
    
    
    25.0
    %
    25




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General and Administrative Expenses
 Three Months EndedJune 27,
    
    
    June 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Decrease
    
    
    DecreaseGeneral and administrative
expenses
    
    $
    13,108
    
    
    $
    13,268
    
    
    $
    (160
    )
    
    
    (1.2
    %)As a percent of total revenues
    
    
    7.1
    %
    
    
    4.3
    %
   Depreciation and Amortization
 Three Months EndedJune 27,
    
    
    June 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Increase
    
    
    IncreaseDepreciation and amortization
    
    $
    7,713
    
    
    $
    7,159
    
    
    $
    554
    
    
    
    7.7
    %As a percent of total revenues
    
    
    4.2
    %
    
    
    2.3
    %
  Interest Expense, net
 Three Months EndedJune 27,
    
    
    June 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Increase
    
    
    IncreaseInterest expense, net
    
    $
    10,068
    
    
    $
    9,524
    
    
    $
    544
    
    
    
    5.7
    %As a percent of total revenues
    
    
    5.5
    %
    
    
    3.1
    %
   26




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##### Table of Contents



Net Loss and EBITDA
    Three Months EndedJune 27,
    
    
    June 28,(Dollars in thousands)
    
    2009
    
    
    2008Net (loss)
    
    $
    (7,435
    )
    
    $
    (13,747
    )Add:Provision for (benefit from) income taxes
    
    
    1,160
    
    
    
    (157
    )Interest expense, net
    
    
    10,068
    
    
    
    9,524Depreciation and amortization
    
    
    7,713
    
    
    
    7,159EBITDA
    
    
    11,506
    
    
    
    2,779Unrealized (non-cash) losses (gains) on changes
in fair value of derivatives
    
    
    6,148
    
    
    
    (4,695
    )Adjusted EBITDA
    
    
    17,654
    
    
    
    (1,916
    )Add (subtract):Provision for income taxes  current
    
    
    (240
    )
    
    
    (87
    )Interest expense, net
    
    
    (10,068
    )
    
    
    (9,524
    )Unrealized (non-cash) (losses) gains on changes
in fair value of derivatives
    
    
    (6,148
    )
    
    
    4,695Compensation cost recognized under Restricted Unit Plan
    
    
    644
    
    
    
    817Gain on disposal of property, plant and equipment, net
    
    
    (147
    )
    
    
    (109
    )Changes in working capital and other assets and liabilities
    
    
    62,851
    
    
    
    54,725Net cash provided by operating activities
    
    $
    64,546
    
    
    $
    48,601
  27




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Nine months Ended June 27, 2009 Compared to Nine months Ended June 28, 2008
  Revenues
 Nine Months EndedJune 27,
    
    
    June 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Decrease
    
    
    DecreaseRevenuesPropane
    
    $
    750,392
    
    
    $
    946,700
    
    
    $
    (196,308
    )
    
    
    (20.7
    %)Fuel oil and refined fuels
    
    
    142,420
    
    
    
    247,609
    
    
    
    (105,189
    )
    
    
    (42.5
    %)Natural gas and electricity
    
    
    66,521
    
    
    
    84,693
    
    
    
    (18,172
    )
    
    
    (21.5
    %)Services
    
    
    30,574
    
    
    
    34,752
    
    
    
    (4,178
    )
    
    
    (12.0
    %)All other
    
    
    3,005
    
    
    
    3,928
    
    
    
    (923
    )
    
    
    (23.5
    %)Total revenues
    
    $
    992,912
    
    
    $
    1,317,682
    
    
    $
    (324,770
    )
    
    
    (24.6
    %)
     28




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Cost of Products Sold
 Nine Months EndedJune 27,
    
    
    June 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Decrease
    
    
    DecreaseCost of products soldPropane
    
    $
    316,905
    
    
    $
    575,678
    
    
    $
    (258,773
    )
    
    
    (45.0
    %)Fuel oil and refined fuels
    
    
    94,772
    
    
    
    213,194
    
    
    
    (118,422
    )
    
    
    (55.5
    %)Natural gas and electricity
    
    
    49,707
    
    
    
    71,271
    
    
    
    (21,564
    )
    
    
    (30.3
    %)Services
    
    
    7,070
    
    
    
    9,614
    
    
    
    (2,544
    )
    
    
    (26.5
    %)All other
    
    
    1,498
    
    
    
    1,689
    
    
    
    (191
    )
    
    
    (11.3
    %)Total cost of products sold
    
    $
    469,952
    
    
    $
    871,446
    
    
    $
    (401,494
    )
    
    
    (46.1
    %)As a percent of total revenues
    
    
    47.3
    %
    
    
    66.1
    %
      29




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Operating Expenses
 Nine Months EndedJune 27,
    
    
    June 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Increase
    
    
    IncreaseOperating expenses
    
    $
    236,206
    
    
    $
    235,495
    
    
    $
    711
    
    
    
    0.3
    %As a percent of total revenues
    
    
    23.8
    %
    
    
    17.9
    %
  General and Administrative Expenses
 Nine Months EndedJune 27,
    
    
    June 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Increase
    
    
    IncreaseGeneral and administrative
expenses
    
    $
    45,671
    
    
    $
    37,632
    
    
    $
    8,039
    
    
    
    21.4
    %As a percent of total revenues
    
    
    4.6
    %
    
    
    2.9
    %
  Depreciation and Amortization
 Nine Months EndedJune 27,
    
    
    June 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Increase
    
    
    IncreaseDepreciation and amortization
    
    $
    21,867
    
    
    $
    21,325
    
    
    $
    542
    
    
    
    2.5
    %As a percent of total revenues
    
    
    2.2
    %
    
    
    1.6
    %
  30




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##### Table of Contents



Interest Expense, net
 Nine Months EndedJune 27,
    
    
    June 28,
    
    
    
    
    
    
    Percent(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    Increase
    
    
    IncreaseInterest expense, net
    
    $
    28,913
    
    
    $
    27,330
    
    
    $
    1,583
    
    
    
    5.8
    %As a percent of total revenues
    
    
    2.9
    %
    
    
    2.1
    %
  Discontinued Operations
  Net Income and EBITDA
   31




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Nine Months EndedJune 27,
    
    
    June 28,(Dollars in thousands)
    
    2009
    
    
    2008Net income
    
    $
    188,119
    
    
    $
    166,205Add:Provision for income taxes
    
    
    2,184
    
    
    
    1,956Interest expense, net
    
    
    28,913
    
    
    
    27,330Depreciation and amortization
    
    
    21,867
    
    
    
    21,325EBITDA
    
    
    241,083
    
    
    
    216,816Unrealized (non-cash) losses on changes in
fair value of derivatives
    
    
    832
    
    
    
    323Adjusted EBITDA
    
    
    241,915
    
    
    
    217,139Add (subtract):Provision for income taxes  current
    
    
    (804
    )
    
    
    (679
    )Interest expense, net
    
    
    (28,913
    )
    
    
    (27,330
    )Unrealized (non-cash) losses on changes in
fair value of derivatives
    
    
    (832
    )
    
    
    (323
    )Compensation cost recognized under Restricted Unit Plan
    
    
    1,885
    
    
    
    1,503Gain on disposal of property, plant and equipment, net
    
    
    (770
    )
    
    
    (1,821
    )Gain on disposal of discontinued operations
    
    
    
    
    
    
    (43,707
    )Changes in working capital and other assets and liabilities
    
    
    11,017
    
    
    
    (87,794
    )Net cash provided by operating activities
    
    $
    223,498
    
    
    $
    56,988
 Liquidity and Capital Resources
 Analysis of Cash Flows
 Operating Activities.
 Investing Activities.
  32




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Financing Activities.
 Summary of Long-Term Debt Obligations and Revolving Credit Lines
  1 2
    33




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##### Table of Contents



Partnership Distributions
   Other Commitments
   Off-Balance Sheet Arrangements
 Guarantees
   34




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##### Table of Contents



Recently Issued Accounting Standards
    35




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##### Table of Contents



ITEM 3.

    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Commodity Price Risk
    Market Risk
   36




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##### Table of Contents



Credit Risk
  Interest Rate Risk
 1 2
 Derivative Instruments and Hedging Activities
    37




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##### Table of Contents



Sensitivity Analysis
  A.
    
    The fair value of open positions as of June 27, 2009 for each of the future
periods.
 B.
    
    The estimated forward market prices as of June 27, 2009 as derived from the
NYMEX for traded commodities for each of the future periods.
 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.
   38




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ITEM 4. CONTROLS AND PROCEDURES
     39




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ITEM 1A. RISK FACTORS The following are additional risk factors to those previously disclosed in the Partnerships Form 10-K for the fiscal
year ended September 27, 2008. The adoption of Climate Change legislation by Congress could result in increased operating costs and reduced demand for
the products and services we provide. On June 26, 2009, the U.S. House of Representatives approved adoption of the American Clean Energy and Security
Act of 2009, also known as the Waxman-Markey cap-and-trade legislation or ACESA. The purpose of ACESA is to
control and reduce emissions of greenhouse gases (GHGs) in the United States. GHGs are certain gases, including
carbon dioxide and methane, that may contribute to the warming of the Earths atmosphere and other climatic changes.
ACESA would establish an economy-wide cap on emissions of GHGs in the United States and would require certain regulated
entities to obtain GHG emission allowances corresponding to the annual emission of GHGs attributable to their
products or operations. Regulated entities under ACESA include producers of natural gas liquids (NGLs), local
natural gas distribution companies, and certain industrial facilities. Under ACESA, the number of authorized emission
allowances would decline each year, resulting in an expected and progressive increase in the cost or value of the
allowances. The net effect of maintaining emission allowances under ACESA would be to increase the costs associated
with the combusting of carbon-based fuels such as natural gas, NGLs (including propane), and refined petroleum
products. The U.S. Senate has begun work on its own legislation for controlling and reducing domestic GHG emissions, and
President Obama has indicated his support of legislation to reduce GHG emissions through an emission allowance system.
Although it is not possible at this time to predict if or when the Senate may act on climate change legislation or how
any Senate bill would be reconciled with ACESA, any adopted laws or regulations that restrict or reduce GHG emissions
could require us to incur increased operating costs and could adversely affect demand for the products and services we
provide. The adoption of derivatives legislation by Congress could have an adverse impact on our ability to hedge risks
associated with our business. Congress is currently considering legislation to impose restrictions on certain transactions involving
derivatives, which could affect the use of derivatives in hedging transactions. ACESA contains provisions that would
prohibit private energy commodity derivative and hedging transactions. ACESA would expand the power of the Commodity
Futures Trading Commission (CFTC), to regulate derivative transactions related to energy commodities, including oil
and natural gas, and to mandate clearance of such derivative contracts through registered derivative clearing
organizations. Under ACESA, the CFTCs expanded authority over energy derivatives would terminate upon the adoption of
general legislation covering derivative regulatory reform. The Chairman of the CFTC has announced that the CFTC intends
to conduct hearings to determine whether to set limits on trading and positions in commodities with finite supply,
particularly energy commodities, such as crude oil, natural gas and other energy products. The CFTC also is evaluating
whether position limits should be applied consistently across all markets and participants. In addition, the Treasury
Department recently has indicated that it intends to propose legislation to subject all OTC derivative dealers and all
other major OTC derivative market participants to substantial supervision and regulation, including by imposing
conservative capital and margin requirements and strong business conduct standards. Derivative contracts that are not
cleared through central clearinghouses and exchanges may be subject to substantially higher capital and margin
requirements. Although it is not possible at this time to predict whether or when Congress may act on derivatives
legislation or how any climate change bill approved by the Senate would be reconciled with ACESA, any laws or
regulations that may be adopted that subject us to additional capital or margin requirements relating to, or to
additional restrictions on, our trading and commodity positions could have an adverse effect on our ability to hedge
risks associated with our business or on the cost of our hedging activity. 40




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##### Table of Contents



PART II
 
 ITEM 6. EXHIBITS
  3.1
    
    
    Third Amended and Restated Agreement of Limited Partnership of the
Operating Partnership dated as of June 24, 2009. (Incorporated by
reference to Exhibit 10.2 to the Partnerships Current Report on Form
8-K filed on June 30, 2009).3.2
    
    
    Amended and Restated Certificate of Limited Partnership of Suburban
Propane Partners, L.P. dated May 26, 1999 (filed herewith).3.3
    
    
    Amended and Restated Certificate of Limited Partnership of Suburban
Partners, L.P. dated May 26, 1999 (filed herewith).10.1
    
    
    Agreement between Mark A. Alexander and Suburban Propane Partners,
L.P., dated April 22, 2009 (corrected version filed herewith).10.2
    
    
    Credit Agreement dated June 26, 2009. (Incorporated by reference to
Exhibit 10.1 to the Partnerships Current Report on Form 8-K filed on
June 30, 2009).10.4
    
    
    Suburban Propane Partners, L.P. 2009 Restricted Unit Plan, effective
August 1, 2009. (Incorporated by reference to Exhibit 99.1 to the
Partnerships Registration Statement on Form S-8 filed on July 24,
2009).31.1
    
    

Certification of the Chief Executive Officer Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002. (Filed herewith).31.2
    
    
    Certification of the Chief Financial Officer and Chief Accounting
Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(Filed herewith).32.1
    
    
    Certification of the 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 and Chief Accounting
Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith).
  41




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##### Table of Contents



SIGNATURES
  SUBURBAN PROPANE PARTNERS, L.P.August 6, 2009
    By:
    /s/ MICHAEL A. STIVALADate
    
    Michael A. StivalaChief Financial Officer and Chief Accounting OfficerAugust 6, 2009
    By:
    /s/ MICHAEL A. KUGLINDate
    
    Michael A. KuglinController  42




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description3.2
    
    
    Amended and Restated Certificate of Limited Partnership of
Suburban Propane Partners, L.P. dated May 26, 1999 (filed
herewith).3.3
    
    
    Amended and Restated Certificate of Limited Partnership of
Suburban Partners, L.P. dated May 26, 1999 (filed herewith).10.1
    
    
    Agreement between Mark A. Alexander and Suburban Propane
Partners, L.P., dated April 22, 2009 (corrected version
filed herewith).31.1
    
    
    Certification of the Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002. (Filed
herewith).31.2
    
    
    Certification of the Chief Financial Officer and Chief
Accounting Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. (Filed herewith).32.1
    
    
    Certification of the 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 and Chief
Accounting Officer Pursuant to 18 U.S.C. Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. (Filed herewith).
  43