10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the quarterly period ended December 29, 2007

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.

(Exact name of registrant as specified in its charter)

Delaware	22-3410353
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

240 Route 10 West

Whippany, NJ 07981

(973) 887-5300

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x Accelerated filer o Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES

INDEX TO FORM 10-Q

		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)
	Condensed Consolidated Balance Sheets as of December 29, 2007 and September 29, 2007	1
	Condensed Consolidated Statements of Operations for the three months ended December 29, 2007 and December 30, 2006	2
	Condensed Consolidated Statements of Cash Flows for the three months ended December 29, 2007 and December 30, 2006	3
	Condensed Consolidated Statement of Partners’ Capital for the three months ended December 29, 2007	4
	Notes to Condensed Consolidated Financial Statements	5
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30
ITEM 4.	CONTROLS AND PROCEDURES	33
PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	34
ITEM 6.	EXHIBITS	34
SIGNATURES		35

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements (“Forward-Looking Statements”) as defined in the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended, relating to future business expectations and predictions and financial condition and results of operations of Suburban Propane Partners, L.P. (the “Partnership”). Some of these statements can be identified by the use of forward-looking terminology such as “prospects,” “outlook,” “believes,” “estimates,” “intends,” “may,” “will,” “should,” “anticipates,” “expects” or “plans” or the negative or other variation of these or similar words, or by discussion of trends and conditions, strategies or risks and uncertainties. These Forward-Looking Statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed or implied in such Forward-Looking Statements (statements contained in this Quarterly Report identifying such risks and uncertainties are referred to as “Cautionary Statements”). The risks and uncertainties and their impact on the Partnership’s results include, but are not limited to, the following risks:

• The impact of weather conditions on the demand for propane, fuel oil and other refined fuels, natural gas and electricity;

• Fluctuations in the unit cost of propane, fuel oil and other refined fuels and natural gas, and the impact of price increases on 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; and

• The Partnership’s ability to make strategic acquisitions and successfully integrate them.

Some of these Forward-Looking Statements are discussed in more detail in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report. Reference is also made to the risk factors discussed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 29, 2007. On different occasions, the Partnership or its representatives have made or may make Forward-Looking Statements in other filings with the Securities and Exchange Commission (“SEC”), press releases or oral statements made by or with the approval of one of the Partnership’s authorized executive officers. Readers are cautioned not to place undue reliance on Forward-Looking Statements, which reflect management’s view only as of the date made. The Partnership undertakes no obligation to update any Forward-Looking Stateme nt or Cautionary Statement. All subsequent written and oral Forward-Looking Statements attributable to the Partnership or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements in this Quarterly Report and in future SEC reports.

SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

	December 29, 2007			September 29, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	78,969		$	96,586
Accounts receivable, less allowance for doubtful accounts of $5,042 and $5,041, respectively		145,548			71,607
Inventories		102,348			81,246
Assets held for sale		—			11,221
Prepaid expenses and other current assets		33,088			21,551
Total current assets		359,953			282,211
Property, plant and equipment, net		374,409			374,641
Goodwill		276,282			277,559
Other intangible assets, net		17,684			18,242
Pension asset		5,630			5,547
Other assets		16,685			17,018
Total assets	$	1,050,643		$	975,218
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable	$	101,291		$	56,999
Accrued employment and benefit costs		25,239			41,702
Accrued insurance		8,950			13,880
Customer deposits and advances		50,754			61,731
Accrued interest		1,230			8,546
Liabilities associated with assets held for sale		—			1,291
Other current liabilities		17,747			12,261
Total current liabilities		205,211			196,410
Long-term borrowings		548,596			548,538
Postretirement benefits obligation		22,092			22,193
Accrued insurance		39,112			36,428
Other liabilities		7,151			5,372
Total liabilities		822,162			808,941
Commitments and contingencies
Partners’ capital:
Common Unitholders (32,725 and 32,674 units issued and outstanding at December 29, 2007 and September 29, 2007, respectively)		269,053			208,230
Deferred compensation		(5,660	)		(5,660	)
Common Units held in trust, at cost		5,660			5,660
Accumulated other comprehensive loss		(40,572	)		(41,953	)
Total partners’ capital		228,481			166,277
Total liabilities and partners’ capital	$	1,050,643		$	975,218

The accompanying notes are an integral part of these condensed consolidated financial statements.

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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 Ended
	December 29, 2007		December 30, 2006
Revenues
Propane	$	307,325	$	285,800
Fuel oil and refined fuels		78,035		68,870
Natural gas and electricity		23,983		22,745
Services		14,472		18,459
All other		1,294		2,034
		425,109		397,908
Costs and expenses
Cost of products sold		277,715		230,874
Operating		79,343		83,675
General and administrative		9,203		12,902
Restructuring charges and severance costs		—		385
Depreciation and amortization		7,059		7,010
		373,320		334,846
Income before interest expense and provision for income taxes		51,789		63,062
Interest expense, net		8,388		9,216
Income before provision for income taxes		43,401		53,846
Provision for income taxes
Current		402		762
Deferred		1,277		—
Income from continuing operations		41,722		53,084
Discontinued operations:
Gain on disposal of discontinued operations		43,707		1,002
Income from discontinued operations		—		568
Net income	$	85,429	$	54,654
Income per Common Unit - basic
Income from continuing operations	$	1.27	$	1.65
Discontinued operations		1.34		0.05
Net income	$	2.61	$	1.70
Weighted average number of Common Units outstanding - basic		32,707		32,193
Income per Common Unit - diluted
Income from continuing operations	$	1.27	$	1.64
Discontinued operations		1.33		0.05
Net income	$	2.60	$	1.69
Weighted average number of Common Units outstanding - diluted		32,908		32,376

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Three months ended
	December29, 2007			December30, 2006
Cash flows from operating activities:
Net income	$	85,429		$	54,654
Adjustments to reconcile net income to net cash used in operations:
Depreciation expense - continuing operations		6,501			6,474
Depreciation expense - discontinued operations		—			126
Amortization of intangible assets		558			536
Amortization of debt origination costs		332			332
Compensation cost recognized under Restricted Unit Plan		(67	)		1,297
Amortization of discount on long-term borrowings		58			58
Gain on disposal of discontinued operations		(43,707	)		(1,002	)
Gain on disposal of property, plant and equipment, net		(1,429	)		(247	)
Deferred tax provision		1,277			—
Changes in assets and liabilities:
(Increase) in accounts receivable		(73,941	)		(49,361	)
(Increase) in inventories		(21,102	)		(9,962	)
(Increase) in prepaid expenses and other current assets		(8,812	)		(16,095	)
Increase in accounts payable		44,292			23,203
(Decrease) in accrued employment and benefit costs		(16,463	)		(10,731	)
(Decrease) in accrued interest		(7,316	)		(7,306	)
(Decrease) increase in other accrued liabilities		(10,421	)		173
Decrease (increase) in other noncurrent assets		639			(4	)
Increase in other noncurrent liabilities		2,219			1,962
Net cash used in operating activities		(41,953	)		(5,893	)
Cash flows from investing activities:
Capital expenditures		(6,586	)		(8,152	)
Proceeds from sale of property, plant and equipment		1,746			1,489
Proceeds from sale of discontinued operations		53,715			—
Net cash provided by (used in) investing activities		48,875			(6,663	)
Cash flows from financing activities:
Partnership distributions		(24,539	)		(21,637	)
Net cash used in financing activities		(24,539	)		(21,637	)
Net decrease in cash and cash equivalents		(17,617	)		(34,193	)
Cash and cash equivalents at beginning of period		96,586			60,571
Cash and cash equivalents at end of period	$	78,969		$	26,378

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SUBURBAN PROPANE PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL

(in thousands)

(unaudited)

	Number of Common Units	Common Unitholders			Deferred Compensation			Common Units Held in Trust		Accumulated Other Comprehensive (Loss)			Total Partners’ Capital			Comprehensive Income
Balance at September 29, 2007	32,674	$	208,230		$	(5,660	)	$	5,660	$	(41,953	)	$	166,277
Net income			85,429											85,429		$	85,429
Other comprehensive income:
Net unrealized gains on cash flow hedges											916			916			916
Reclassification of realized gains on cash flow hedges into earnings											(257	)		(257	)		(257	)
Amortization of net actuarial losses and prior service credits into earnings											722			722			722
Comprehensive income																$	86,810
Partnership distributions			(24,539	)										(24,539	)
Common Units issued under Restricted Unit Plan	51													—
Common Units issued in exchange
Compensation cost recognized under Restricted Unit Plan, net of forfeitures			(67	)										(67	)
Balance at December 29, 2007	32,725	$	269,053		$	(5,660	)	$	5,660	$	(40,572	)	$	228,481

The accompanying notes are an integral part of these condensed consolidated financial statements.

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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

Suburban Propane Partners, L.P. (the “Partnership”) is a publicly traded Delaware limited partnership principally engaged, through its operating partnership and subsidiaries, in the retail marketing and distribution of propane, fuel oil and refined fuels, as well as the marketing of natural gas and electricity in deregulated markets. In addition, to complement its core marketing and distribution businesses, the Partnership services a wide variety of home comfort equipment, particularly for heating and ventilation. The publicly traded limited partner interests in the Partnership are evidenced by common units traded on the New York Stock Exchange (“Common Units”), with 32,725,383 Common Units outstanding at December 29, 2007. The holders of Common Units are entitled to participate in distributions and exercise the rights and privileges available to limited partners under the Third Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”), adopted on October 19, 2006 following approval by Common Unitholders at the Partnership’s Tri-Annual Meeting and as thereafter amended by the Board of Supervisors on July 31, 2007, pursuant to the authority granted to the Board in the Partnership Agreement. Rights and privileges under the Partnership Agreement include, among other things, the election of all members of the Board of Supervisors and voting on the removal of the general partner.

Suburban Propane, L.P. (the “Operating Partnership”), a Delaware limited partnership, is the Partnership’s operating subsidiary formed to operate the propane business and assets. In addition, Suburban Sales & Service, Inc. (the “Service Company”), a subsidiary of the Operating Partnership, was formed to operate the service work and appliance and parts businesses of the Partnership. The Operating Partnership, together with its direct and indirect subsidiaries, accounts for substantially all of the Partnership’s assets, revenues and earnings. The Partnership, the Operating Partnership and the Service Company commenced operations in March 1996 in connection with the Partnership’s initial public offering.

The general partner of both the Partnership and the Operating Partnership is Suburban Energy Services Group LLC (the “General Partner”), a Delaware limited liability company. On October 19, 2006, the Partnership consummated an agreement with its General Partner to exchange 2,300,000 newly issued Common Units for the General Partner’s incentive distribution rights (“IDRs”) and the economic interest in the Partnership and the Operating Partnership included in the general partner interests therein (the “GP Exchange Transaction”). Prior to the GP Exchange Transaction, the General Partner was majority-owned by senior management of the Partnership and owned 224,625 general partner units (an approximate 0.74% ownership interest) in the Partnership and a 1.0101% general partner interest in the Operating Partnership. The General Partner also held al l outstanding IDRs and appointed two of the five members of the Board of Supervisors. As a result of the GP Exchange Transaction, the General Partner no longer has any economic interest in either the Partnership or the Operating Partnership other than as a holder of 784 Common Units that will remain in the General Partner, no IDRs are outstanding and the sole member of the General Partner is the Partnership’s Chief Executive Officer.

The Operating Partnership also owns the membership interests in Gas Connection LLC (d/b/a HomeTown Hearth & Grill) and Suburban Franchising LLC. HomeTown Hearth & Grill sells and installs propane and natural gas grills, fireplaces and related accessories and supplies. Suburban Franchising creates and markets propane related franchising opportunities.

On December 23, 2003, the Partnership acquired substantially all of the assets and operations of Agway Energy Products, LLC, Agway Energy Services, Inc. and Agway Energy Services PA, Inc. (collectively referred to as “Agway Energy”) pursuant to an asset purchase agreement dated November 10, 2003 (the “Agway Acquisition”). Agway Energy was a leading regional marketer of propane, fuel oil, gasoline and diesel fuel primarily in New York, Pennsylvania, New Jersey and Vermont. To complement its core marketing and delivery business, Agway Energy also installed and serviced a wide variety of home comfort equipment, particularly in the areas of heating, ventilation and air conditioning (“HVAC”). The Agway Acquisition was consistent with the Partnership’s business strategy of

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prudently pursuing acquisitions of retail propane distributors and other energy-related businesses that can complement or supplement its core propane operations. The Agway Acquisition also expanded the Partnership’s presence in the northeast energy market.

On November 21, 2003, Suburban Heating Oil Partners, LLC, a subsidiary of HomeTown Hearth & Grill, was formed to acquire the assets of and operate the fuel oil and refined fuels and HVAC businesses of Agway Energy acquired on December 23, 2003. In addition, Agway Energy Services, LLC, also a subsidiary of HomeTown Hearth & Grill, was formed to acquire and operate the natural gas and electricity marketing business of Agway Energy.

Suburban Energy Finance Corporation, a direct wholly-owned subsidiary of the Partnership, was formed on November 26, 2003 to serve as co-issuer, jointly and severally, with the Partnership of the Partnership’s 6.875% senior notes due in 2013.

2. Basis of Presentation

Principles of Consolidation. The consolidated financial statements include the accounts of the Partnership, the Operating Partnership and all of its direct and indirect subsidiaries. All significant intercompany transactions and account balances have been eliminated. As a result of the GP Exchange Transaction, the General Partner no longer has any economic interest in the Partnership or the Operating Partnership apart from 784 Common Units held by it. The Partnership consolidates the results of operations, financial condition and cash flows of the Operating Partnership as a result of the Partnership’s 100% limited partner interest in the Operating Partnership.

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). They include all adjustments that the Partnership considers necessary for a fair statement of the results for the interim periods presented. Such adjustments consist only of normal recurring items, unless otherwise disclosed. These financial statements should be read in conjunction with the Partnership’s Annual Report on Form 10-K for the fiscal year ended September 29, 2007, including management’s discussion and analysis of financial condition and results of operations contained therein. Due to the seasonal nature of the Partnership’s operations, the results of operations for interim periods are not necessarily indicative of the results to be expected for a f ull year.

Fiscal Period. The Partnership’s fiscal periods typically end on the last Saturday of the quarter.

Derivative Instruments and Hedging Activities.

Commodity Price Risk. The Partnership enters into a combination of exchange-traded futures and option contracts, forward contracts and, in certain instances, over-the-counter options (collectively, “derivative instruments”) to manage the price risk associated with future purchases of the commodities used in its operations, principally propane and fuel oil, as well as to ensure supply during periods of high demand. All of the Partnership’s derivative instruments are reported on the consolidated balance sheet, within other current assets or other current liabilities, at their fair values pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended (“SFAS 133”). In the course of norm al operations, the Partnership routinely enters into contracts such as forward priced physical contracts for the purchase or sale of propane and fuel oil that, under SFAS 133, qualify for and are designated as normal purchase or normal sale contracts. Such contracts are exempted from the fair value accounting requirements of SFAS 133 and are accounted for at the time product is purchased or sold under the related contract. The Partnership does not use derivative instruments for speculative trading purposes. Market risks associated with futures, options and forward contracts are monitored daily for compliance with the Partnership’s Hedging and Risk Management Policy which includes volume limits for open positions. Priced on-hand inventory is also reviewed and managed daily as to exposures to changing market prices.

On the date that futures, forward and option contracts are entered into, other than those designated as normal purchases or normal sales, the Partnership makes a determination as to whether the derivative instrument qualifies for designation as a hedge. Changes in the fair value of derivative instruments are recorded each period in current period earnings or other comprehensive income (loss) (“OCI”), depending on whether a derivative instrument is

6

designated as a hedge and, if so, the type of hedge. For derivative instruments designated as cash flow hedges, the Partnership formally assesses, both at the hedge contract’s inception and on an ongoing basis, whether the hedge contract is highly effective in offsetting changes in cash flows of hedged items. Changes in the fair value of derivative instruments designated as cash flow hedges are reported in OCI to the extent effective and reclassified into cost of products sold during the same period in which the hedged item affects earnings. The mark-to-market gains or losses on ineffective portions of cash flow hedges used to hedge future purchases are recognized in cost of products sold immediately. Changes in the fair value of derivative instruments that are not designated as cash flow hedges, and that do not meet the normal purchase and normal sale exemption under S FAS 133, are recorded within cost of products sold as they occur.

At December 29, 2007, the fair value of derivative instruments described above resulted in derivative assets of $4,815 included within prepaid expenses and other current assets and derivative liabilities of $2,228 included within other current liabilities. Cost of products sold included unrealized (non-cash) losses of $2,683 and $987 for the three months ended December 29, 2007 and December 30, 2006, respectively, attributable to the change in fair value of derivative instruments not designated as cash flow hedges.

Interest Rate Risk. A portion of the Partnership’s long-term borrowings bear interest at a variable rate based upon LIBOR, plus an applicable margin depending on the level of the Partnership’s total leverage. Therefore, the Partnership is subject to interest rate risk on the variable component of the interest rate. The Partnership manages part of its variable interest rate risk by entering into interest rate swap agreements. On March 31, 2005, the Partnership entered into a $125,000 interest rate swap contract in conjunction with the Term Loan facility under the Revolving Credit Agreement. The interest rate swap is being accounted for under SFAS 133 and the Partnership has designated the interest rate swap as a cash flow hedge. Changes in the fair value of the interest rate swap are recognized in OCI until the hedged item is recognized in earnings. At December 29, 2007, the fair value of the interest rate swap amounted to an unrealized loss of ($2,427) and is included within other liabilities with a corresponding debit in accumulated OCI.

Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates have been made by management in the areas of depreciation and amortization of long-lived assets, insurance and litigation reserves, environmental reserves, pension and other postretirement benefit liabilities and costs, valuation of derivative instruments, asset valuation assessments, tax valuation allowances, as well as the allowance for doubtful accounts. Actual results could differ fro m those estimates, making it reasonably possible that a change in these estimates could occur in the near term.

3. Exchange of General Partner’s Interests and Incentive Distribution Rights

On October 19, 2006, following approval by the requisite vote of the Common Unitholders of the Partnership at its 2006 Tri-Annual Meeting held on October 17, 2006, the Partnership consummated the GP Exchange Transaction with its General Partner for the acquisition of the General Partner’s IDRs, as well as the economic interest contained in its general partner interests in both the Partnership and the Operating Partnership, in exchange for 2,300,000 newly issued Common Units. Pursuant to a Distribution, Release and Lockup Agreement by and among the Partnership, the Operating Partnership, the General Partner and the members of the General Partner, the Common Units were distributed to the members of the General Partner in exchange for their membership interests in the General Partner (other than 784 Common Units that will remain in the General Partner). The Common Units is sued in the GP Exchange Transaction represented approximately 7% of the total number of Common Units outstanding after consummation of the GP Exchange Transaction.

4. Discontinued Operations

The Partnership continuously evaluates its existing operations to identify opportunities to optimize the return on assets employed and selectively divests operations in slower growing or non-strategic markets and seeks to reinvest in markets that are considered to present more opportunities for growth. In line with that strategy, on October 2, 2007,

7

the Operating Partnership completed the sale of its Tirzah, South Carolina underground granite propane storage cavern, and associated 62-mile pipeline, for $53,715 in cash, after taking into account certain adjustments. The 57.5 million gallon underground storage cavern is connected to the Dixie Pipeline and provides propane storage for the eastern United States. As a result of this sale, a gain of $43,707 was reported as a gain from the disposal of discontinued operations in the Partnership’s results for the three months ended December 29, 2007. The results of operations from the Tirzah facilities in the comparative prior year period have been reclassified to discontinued operations on the consolidated statements of operations for the three months ended December 30, 2006, and the assets and liabilities were classified as held for sale on the consolidated balance sheet as of September 29, 2007.

During the first quarter of fiscal 2007, in a non-cash transaction, the Partnership completed a transaction in which it disposed of nine customer service centers considered to be non-strategic in exchange for three customer service centers of another company located in Alaska. The Partnership reported a $1,002 gain within discontinued operations in the first quarter of fiscal 2007 for the amount by which the fair value of assets relinquished exceeded the carrying value of the assets relinquished. Current and prior period results of operations attributable to these customer service centers were immaterial and, as such, have not been reclassified as discontinued operations.

5. Inventories

Inventories are stated at the lower of cost or market. Cost is determined using a weighted average method for propane, fuel oil and refined fuels and natural gas, and a standard cost basis for appliances, which approximates average cost. Inventories consist of the following:

	December 29, 2007		September 29, 2007
Propane, fuel oil and refined fuels	$	97,196	$	76,730
Natural gas		1,035		697
Appliances and related parts		4,117		3,819
	$	102,348	$	81,246

6. Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of net assets of businesses acquired. In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”), goodwill is not amortized. Rather, goodwill is subject to an impairment review at a reporting unit level, on an annual basis in August of each year, or when an event occurs or circumstances change that would indicate potential impairment. The Partnership assesses the carrying value of goodwill at a reporting unit level based on an estimate of the fair value of the respective reporting unit. Fair value of the reporting unit is estimated using discounted cash flow analyses taking into consideration estimated cash flows in a ten-year projection period and a terminal value calculation at the end of the projection period.

During the first quarter of fiscal 2008, the Partnership reversed $1,277 of the deferred tax asset valuation allowance, which was established through purchase accounting for the Agway Acquisition, as a reduction of goodwill. This adjustment resulted from the realization of a portion of the net operating losses established in purchase accounting for the Agway Acquisition.

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Other intangible assets consist of the following:

	December 29, 2007			September 29, 2007
Customer lists	$	22,316		$	22,316
Tradenames		1,499			1,499
Non-compete agreements		166			516
Other		1,967			1,967
		25,948			26,298
Less: accumulated amortization
Customer lists		(7,160	)		(6,669	)
Tradenames		(600	)		(562	)
Non-compete agreements		(138	)		(482	)
Other		(366	)		(343	)
		(8,264	)		(8,056	)
	$	17,684		$	18,242

Aggregate amortization expense related to other intangible assets for the three months ended December 29, 2007 and December 30, 2006 was $558 and $536, respectively.

Aggregate amortization expense related to other intangible assets for the remainder of fiscal 2008 and for each of the five succeeding fiscal years as of December 29, 2007 is as follows: 2008 - $1,666; 2009 - $2,220; 2010 - $2,205; 2011 - $2,205; 2012 - $1,730 and 2013 - $1,276.

7. Income Per Common Unit

Basic income per Common Unit for the three months ended December 29, 2007 is computed by dividing net income by the weighted average number of outstanding Common Units. Diluted income per Common Unit for the three months ended December 29, 2007 is computed by dividing net income by the weighted average number of outstanding Common Units and unvested Restricted Units granted under the 2000 Restricted Unit Plan.

In computing diluted income per Common Unit, weighted average units outstanding used to compute basic income per unit were increased by 200,543 and 182,637 units for the three months ended December 29, 2007 and December 30, 2006, respectively, to reflect the potential dilutive effect of the unvested Restricted Units outstanding using the treasury stock method.

Subsequent to the GP Exchange Transaction, computations of earnings per Common Unit are performed in accordance with SFAS No. 128 “Earnings per Share” (“SFAS 128”). Prior to the GP Exchange Transaction, when the General Partner owned IDRs in the Partnership, computations of earnings per Common Unit were performed in accordance with Emerging Issues Task Force (“EITF”) consensus 03-6 “Participating Securities and the Two-Class Method Under FAS 128” (“EITF 03-6”), when applicable. EITF 03-6 requires, among other things, the use of the two-class method of computing earnings per unit when participating securities exist. The two-class method is an earnings allocation formula that computes earnings per unit for each class of Common Unit and participating security according to distributions declared and the participating rights in un distributed earnings, as if all of the earnings were distributed to the limited partners and the general partner (inclusive of the IDRs of the General Partner which were considered participating securities for purposes of the two-class method). Net income was allocated to the Common Unitholders and the General Partner in accordance with their respective Partnership ownership interests, after giving effect to any priority income allocations for incentive distributions allocated to the General Partner. For purposes of the computation of income per Common Unit for the three months ended December 30, 2006, earnings that would have been allocated to the General Partner for the period prior to the GP Exchange Transaction were not significant.

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8. Long-Term Borrowings

Long-term borrowings consist of the following:

	December 29, 2007		September 29, 2007
Senior Notes, 6.875%, due December 15, 2013, net of unamortized discount of $1,404 and $1,462, respectively	$	423,596	$	423,538
Term Loan, 6.29% to 7.16%, due March 31, 2010		125,000		125,000
	$	548,596	$	548,538

The Partnership and its subsidiary, Suburban Energy Finance Corporation, have issued $425,000 aggregate principal amount of Senior Notes (the “2003 Senior Notes”) with an annual interest rate of 6.875%. The Partnership’s obligations under the 2003 Senior Notes are unsecured and rank senior in right of payment to any future subordinated indebtedness and equally in right of payment with any future senior indebtedness. The 2003 Senior Notes are structurally subordinated to, which means they rank effectively behind, any debt and other liabilities of the Operating Partnership. The 2003 Senior Notes mature on December 15, 2013 and require semi-annual interest payments in June and December. The Partnership is permitted to redeem some or all of the 2003 Senior Notes any time on or after December 15, 2008 at redemption prices specified in the indenture governing the 20 03 Senior Notes. In addition, in the event of a change of control of the Partnership, as defined in the 2003 Senior Notes, the Partnership must offer to repurchase the notes at 101% of the principal amount repurchased, if the holders of the notes exercise the right of repurchase.

The Operating Partnership has a revolving credit facility, the Third Amended and Restated Credit Agreement (the “Revolving Credit Agreement”), which expires on March 31, 2010. The Revolving Credit Agreement provides for a five-year $125,000 term loan facility (the “Term Loan”) and a separate working capital facility which provides available revolving borrowing capacity up to $175,000. In addition, under the Revolving Credit Agreement the Operating Partnership is authorized to incur additional indebtedness of up to $10,000 in connection with capital leases and up to $20,000 in short-term borrowings during the period from December 1 to April 1 in each fiscal year to provide additional working capital during periods of peak demand, if necessary.

Borrowings under the Revolving Credit Agreement, including the Term Loan, bear interest at a rate based upon LIBOR, plus an applicable margin or the Federal Funds rate plus 1/2 of 1%. An annual facility fee ranging from 0.375% to 0.50%, based upon certain financial tests, is payable quarterly whether or not borrowings occur. As of December 29, 2007 and September 29, 2007, there were no borrowings outstanding under the working capital facility of the Revolving Credit Agreement and there have been no borrowings since April 2006.

In connection with the Term Loan, the Operating Partnership also entered into an interest rate swap agreement with a notional amount of $125,000. Effective March 31, 2005 through March 31, 2010, the Operating Partnership will pay a fixed interest rate of 4.66% to the issuing lender on notional principal amount of $125,000, effectively fixing the LIBOR portion of the interest rate at 4.66%. In return, the issuing lender will pay to the Operating Partnership a floating rate, namely LIBOR, on the same notional principal amount. The applicable margin above LIBOR, as defined in the Revolving Credit Agreement, will be paid in addition to this fixed interest rate of 4.66%. The fair value of the interest rate swap amounted to an unrealized loss of ($2,427) and ($284) at December 29, 2007 and September 29, 2007, respectively, and is included in other liabilities with a corresponding amount included within accumulated OCI.

The Revolving Credit Agreement and the 2003 Senior Notes both contain various restrictive and affirmative covenants applicable to the Operating Partnership and the Partnership, respectively, including (i) restrictions on the incurrence of additional indebtedness, and (ii) restrictions on certain liens, investments, guarantees, loans, advances, payments, mergers, consolidations, distributions, sales of assets and other transactions. Under the Revolving Credit Agreement, the Operating Partnership is required to maintain a leverage ratio (the ratio of total debt to EBITDA) of less than 4.0 to 1. In addition, the Operating Partnership is required to maintain an interest coverage ratio (the ratio of EBITDA to interest expense) of greater than 2.5 to 1 at the Partnership level. The Partnership and the Operating

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Partnership were in compliance with all covenants and terms of the 2003 Senior Notes and the Revolving Credit Agreement as of December 29, 2007.

Debt origination costs representing the costs incurred in connection with the placement of, and the subsequent amendment to, the 2003 Senior Notes and the Revolving Credit Agreement were capitalized within other assets and are being amortized on a straight-line basis over the term of the respective debt agreements. Other assets at December 29, 2007 and September 29, 2007 include debt origination costs with a net carrying amount of $5,898 and $6,230, respectively. Aggregate amortization expense related to deferred debt origination costs included within interest expense for both the three months ended December 29, 2007 and December 30, 2006 was $332.

The aggregate amounts of long-term debt maturities subsequent to December 29, 2007 are as follows: fiscal 2008 - $0; fiscal 2009 - $0; fiscal 2010 - $125,000; fiscal 2011 - $0; and, thereafter - $425,000.

9. Distributions of Available Cash

The Partnership makes distributions to its partners no later than 45 days after the end of each fiscal quarter of the Partnership in an aggregate amount equal to its Available Cash for such quarter. Available Cash, as defined in the Partnership Agreement, generally means all cash on hand at the end of the respective fiscal quarter less the amount of cash reserves established by the Board of Supervisors in its reasonable discretion for future cash requirements. These reserves are retained for the proper conduct of the Partnership’s business, the payment of debt principal and interest and for distributions during the next four quarters.

Prior to October 19, 2006, the General Partner had IDRs which represented an incentive for the General Partner to increase distributions to Common Unitholders in excess of the target quarterly distribution of $0.55 per Common Unit. With regard to the first $0.55 of quarterly distributions paid in any given quarter, 98.26% of the Available Cash was distributed to the Common Unitholders and 1.74% was distributed to the General Partner. With regard to the balance of quarterly distributions in excess of the $0.55 per Common Unit target distribution, 85% of the Available Cash was distributed to the Common Unitholders and 15% was distributed to the General Partner. As a result of the GP Exchange Transaction, the IDRs were cancelled and the General Partner is no longer entitled to receive any cash distributions in respect of its general partner interests. Accordingly, beginning wit h the quarterly distribution paid on November 14, 2006 in respect of the fourth quarter of fiscal 2006, 100% of all cash distributions are paid to holders of Common Units.

On January 24, 2008, the Partnership announced a quarterly distribution of $0.7625 per Common Unit, or $3.05 on an annualized basis, in respect of the first quarter of fiscal 2008 payable on February 12, 2008 to holders of record on February 5, 2008. This quarterly distribution included an increase of $0.0125 per Common Unit, or $0.05 per Common Unit on an annualized basis, from the previous distribution rate.

10. Share-Based Compensation Arrangements

2000 Restricted Unit Plan. In November 2000, the Partnership adopted the Suburban Propane Partners, L.P. 2000 Restricted Unit Plan (the “2000 Restricted Unit Plan”) which authorizes the issuance of Common Units to executives, managers and other employees and members of the Board of Supervisors of the Partnership. On October 17, 2006, the Partnership adopted amendments to the 2000 Restricted Unit Plan which, among other things, increased the number of Common Units authorized for issuance under the plan by 230,000 for a total of 717,805. Restricted Units issued under the 2000 Restricted Unit Plan vest over time with 25% of the Common Units vesting on each of the third and fourth anniversaries of the grant date and the remaining 50% of the Common Units vesting on the fifth anniversary of the grant date. The 2000 Restricted Unit Plan participants are not eligible to receive quarterly distributions or vote their respective Restricted Units until vested. Restrictions also prohibit the sale or transfer of the units during the restricted periods. The fair value of the Restricted Unit is established by the market price of the Common Unit on the date of grant, less the present value of distributions expected to be paid on the underlying units during the requisite service period. Restricted Units are subject to forfeiture in certain circumstances as defined in the 2000 Restricted Unit Plan. Compensation expense for the awards is recognized ratably over the vesting periods, net of the value of estimated forfeitures.

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During the first quarter of fiscal 2008, the Partnership awarded 124,462 Restricted Units under the 2000 Restricted Unit Plan at an aggregate grant date fair value of $4,380. Following is a summary of activity in the 2000 Restricted Unit Plan:

	Units		Weighted Average Grant Date Fair Value Per Unit
Outstanding September 29, 2007	383,090		$	28.85
Awarded	124,462			35.19
Forfeited	(5,071	)		(20.67	)
Issued	(51,128	)		(29.79	)
Outstanding December 29, 2007	451,353		$	30.58

As of December 29, 2007, $8,978 of compensation cost related to unvested Restricted Units awarded under the 2000 Restricted Unit Plan remains to be recognized in future periods. Compensation cost associated with unvested awards is expected to be recognized over a weighted-average period of 2.1 years. Compensation expense recognized under the 2000 Restricted Unit Plan, net of forfeitures, for the three months ended December 29, 2007 and December 30, 2006 was ($67) and $1,297, respectively.

Long-Term Incentive Plan. The Partnership has a non-qualified, unfunded long-term incentive plan for officers and key employees (‘‘LTIP-2’’) which provides for payment, in the form of cash, of an award of equity-based compensation at the end of a three-year performance period. The level of compensation earned under LTIP-2 is based on the market performance of the Partnership’s Common Units on the basis of total return to Unitholders (‘‘TRU’’) compared to the TRU of a predetermined peer group composed primarily of other Master Limited Partnerships, approved by the Compensation Committee of the Board of Supervisors, over the same three-year performance period. As a result of the performance at the end of the first quarter of fiscal 2008, the Partnership recorded a reve rsal of compensation expense in the amount of ($112) for the three months ended December 29, 2007. As a result of the quarterly remeasurement of the liability for awards under LTIP-2, compensation expense for the three months ended December 30, 2006 was $1,490. As of December 29, 2007 and September 29, 2007, the Partnership had a liability included within accrued employment and benefit costs of $3,950 and $2,296, respectively, related to estimated future payments under LTIP-2.

11. Commitments and Contingencies

Self-Insurance. The Partnership is self-insured for general and product, workers’ compensation and automobile liabilities up to predetermined thresholds above which third party insurance applies. As of December 29, 2007 and September 29, 2007, the Partnership had accrued insurance liabilities of $48,062 and $50,308, respectively, representing the total estimated losses under these self-insurance programs. For the portion of the estimated self-insurance liability that exceeds insurance deductibles, the Partnership records an asset within prepaid expense and other current assets or other assets related to the amount of the liability expected to be covered by insurance which amounted to $9,258 and $13,858 as of December 29, 2007 and September 29, 2007, respectively. On October 23, 2007, the Partnership reached a settlement regarding an outstanding product liability claim. The settlement resulted in a reduction of the accrued insurance liability and the corresponding asset recorded within prepaid expenses and other current assets, which represented the amount of the liability paid by the insurance companies, of approximately $4,750 during the first quarter of fiscal 2008. The Partnership is also involved in various legal actions that have arisen in the normal course of business, including those relating to commercial transactions and product liability. Management believes, based on the advice of legal counsel, that the ultimate resolution of these matters will not have a material adverse effect on the Partnership’s financial position or future results of operations, after considering its self-insurance liability for known and unasserted self-insurance claims.

Environmental. The Partnership is subject to various federal, state and local environmental, health and safety laws and regulations. Generally, these laws impose limitations on the discharge of pollutants and establish

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standards for the handling of solid and hazardous wastes. These laws include the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), the Clean Air Act, the Occupational Safety and Health Act, the Emergency Planning and Community Right to Know Act, the Clean Water Act and comparable state statutes. CERCLA, also known as the “Superfund” law, imposes joint and several liability without regard to fault or the legality of the original conduct on certain classes of persons that are considered to have contributed to the release or threatened release of a “hazardous substance” into the environment. Propane is not a hazardous substance within the meaning of CERCLA. However, the Partnership owns real property where such hazardous substances may exist.

The Partnership is also subject to various laws and governmental regulations concerning environmental matters and expects that it will be required to expend funds to participate in the remediation of certain sites, including sites where it has been designated by the Environmental Protection Agency as a potentially responsible party under CERCLA and at sites with aboveground and underground fuel storage tanks. Additionally, the Partnership identified that certain active sites contain environmental conditions which may require further investigation, future remediation or ongoing monitoring activities. The environmental exposures include instances of soil and/or groundwater contamination associated with the handling and storage of fuel oil, gasoline and diesel fuel.

Estimating the extent of the Partnership’s responsibility at a particular site, and the method and ultimate cost of remediation of that site, requires making numerous assumptions. As a result, the ultimate cost to remediate any site may differ from current estimates, and will depend, in part, on whether there is additional contamination, not currently known to the Partnership, at that site. However, management believes that the Partnership’s past experience provides a reasonable basis for estimating these liabilities. As additional information becomes available, estimates are adjusted as necessary. While management does not anticipate that any such adjustment would be material to the Partnership’s financial statements, the result of ongoing or future environmental studies or other factors could alter this expectation and require recording additional liabilitie s. Management currently cannot determine whether the Partnership will incur additional liabilities or the extent or amount of any such liabilities. As of December 29, 2007 and September 29, 2007, the environmental reserve amounted to $2,090 and $2,578, respectively.

Future developments, such as stricter environmental, health or safety laws and regulations thereunder, could affect the Partnership’s operations. Management does not anticipate that the cost of the Partnership’s compliance with environmental, health and safety laws and regulations, including CERCLA, as currently in effect and applicable to known sites will have a material adverse effect on the Partnership’s financial condition or results of operations. To the extent there are any environmental liabilities presently unknown to the Partnership or environmental, health or safety laws or regulations are made more stringent, however, there can be no assurance that the Partnership’s financial condition or results of operations will not be materially and adversely affected.

Legal Matters. Following the Operating Partnership’s 1999 acquisition of the propane assets of SCANA Corporation (“SCANA”), Heritage Propane Partners, L.P. had brought an action against SCANA for breach of contract and fraud and against the Operating Partnership for tortious interference with contract and tortious interference with prospective contract. On October 21, 2004, the jury returned a unanimous verdict in favor of the Operating Partnership on all claims, but against SCANA. After the jury returned the verdict against SCANA, the Operating Partnership filed a cross-claim against SCANA for indemnification, seeking to recover defense costs. On November 2, 2006, SCANA and the Operating Partnership reached a settlement agreement wherein the Operating Partnership received $2,000 as a reim bursement of defense costs incurred as a result of the lawsuit. The $2,000 was recorded as a reduction to general and administrative expenses during the first quarter of fiscal 2007.

12. Guarantees

The Partnership has residual value guarantees associated with certain of its operating leases, related primarily to transportation equipment, with remaining lease periods scheduled to expire periodically through fiscal 2014. Upon completion of the lease period, the Partnership guarantees that the fair value of the equipment will equal or exceed the guaranteed amount, or the Partnership will pay the lessor the difference. Although the fair value of equipment at the end of its lease term has historically exceeded the guaranteed amounts, the maximum potential amount of aggregate future payments the Partnership could be required to make under these leasing arrangements, assuming

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the equipment is deemed worthless at the end of the lease term, is approximately $14,048. The fair value of residual value guarantees for outstanding operating leases was de minimis as of December 29, 2007 and September 29, 2007.

13. Pension Plans and Other Postretirement Benefits

The following table provides the components of net periodic benefit costs for the three months ended December 29, 2007 and December 30, 2006:

	Pension Benefits						Postretirement Benefits
	Three Months Ended						Three Months Ended
	December 29, 2007			December 30, 2006			December 29, 2007			December 30, 2006
Service cost	$	—		$	—		$	2		$	3
Interest cost		2,187			2,226			350			329
Expected return on plan assets		(2,270	)		(2,579	)		—			—
Amortization of prior service credits		—			—			(122	)		(149	)
Recognized net actuarial loss		844			1,329			—			—
Net periodic benefit cost	$	761		$	976		$	230		$	183

There are no projected minimum employer contribution requirements under Internal Revenue Service Regulations for fiscal 2008 under our defined benefit pension plan. The projected annual contribution requirements related to the Partnership’s postretirement health care and life insurance benefit plan for fiscal 2008 is $2,233, of which $453 has been contributed during the three months ended December 29, 2007.

14. Income taxes

For federal income tax purposes, as well as for state income tax purposes in the majority of the states in which the Partnership operates, the earnings attributable to the Partnership, as a separate legal entity, and the Operating Partnership are not subject to income tax at the Partnership level. Rather, the taxable income or loss attributable to the Partnership, as a separate legal entity, and to the Operating Partnership, which may vary substantially from the income before income taxes, reported by the Partnership in the consolidated statement of operations, are includable in the federal and state income tax returns of the individual partners. The aggregate difference in the basis of the Partnership’s net assets for financial and tax reporting purposes cannot be readily determined as the Partnership does not have access to information regarding each partner’s ba sis in the Partnership.

The earnings of the corporate entities that do not qualify under the Internal Revenue Code for partnership status are subject to federal and state income taxes. The Partnership’s fuel oil and refined fuels, natural gas and electricity and service business segments are structured as corporate entities and, as such, are subject to corporate level income tax. However, a number of those corporate entities have experienced operating losses in recent years and, as a result, a full valuation allowance has been provided against the deferred tax assets. As such, at present, many of those entities do not report a tax provision as a result of the full valuation allowance.

As a result of the profitability of the Partnership’s fuel oil and refined fuel business during the first quarter of fiscal 2008, the Partnership reported taxable income which enabled utilization of net operating losses to offset the current cash tax liability. Utilization of these net operating losses resulted in a reversal of a portion of the deferred tax asset valuation allowance established in purchase accounting for the Agway Acquisition, a corresponding reduction in goodwill and, in turn, a $1,277 deferred tax provision.

In July 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - An Interpretation of SFAS 109” (“FIN 48”). FIN 48 requires the use of a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return and disclosures regarding uncertainties in income tax positions. Only tax positions that meet the more likely than not recognition

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threshold at the effective date may be recognized on adoption of FIN 48. The Partnership has elected to include interest and penalties related to income tax liabilities, if any, in income tax expense.

The adoption of FIN 48 had no impact on the Partnership’s condensed consolidated balance sheet, statement of operations or cash flows. As of December 29, 2007, September 30, 2007, the date of adoption of FIN 48, and September 29, 2007, the end of the prior fiscal year, the Partnership reported no unrecognized tax benefits nor related interest and penalties in its condensed consolidated balance sheet or statement of operations.

Most of the Partnership’s corporate entities are subject to U.S. federal, state and local income tax audits by taxing authorities for years 2001 through 2006.

15. Segment Information

The Partnership manages and evaluates its operations in six segments, four of which are reportable segments: Propane, Fuel Oil and Refined Fuels, Natural Gas and Electricity and Services (formerly, HVAC). The chief operating decision maker evaluates performance of the operating segments using a number of performance measures, including gross margins and income before interest expense and provision for income taxes (operating profit). Costs excluded from these profit measures include corporate overhead expenses not allocated to the operating segments. Unallocated corporate overhead expenses include all costs of back office support functions that are reported as general and administrative expenses in the condensed consolidated statements of operations. In addition, certain costs associated with field operations support that are reported in operating expenses in the condensed consolidated statements of operations, including purchasing, training and safety, are not allocated to the individual operating segments. Thus, operating profit for each operating segment includes only the costs that are directly attributable to the operations of the individual segment. The accounting policies of the operating segments are otherwise the same as those described in the summary of significant accounting policies Note in the Partnership’s Annual Report on Form 10-K for the fiscal year ended September 29, 2007.

The propane segment is primarily engaged in the retail distribution of propane to residential, commercial, industrial and agricultural customers and, to a lesser extent, wholesale distribution to large industrial end users. In the residential and commercial markets, propane is used primarily for space heating, water heating, cooking and clothes drying. Industrial customers use propane generally as a motor fuel burned in internal combustion engines that power over-the-road vehicles, forklifts and stationary engines, to fire furnaces and as a cutting gas. In the agricultural markets, propane is primarily used for tobacco curing, crop drying, poultry brooding and weed control.

The fuel oil and refined fuels segment is primarily engaged in the retail distribution of fuel oil, diesel, kerosene and gasoline to residential and commercial customers for use primarily as a source of heat in homes and buildings.

The natural gas and electricity segment is engaged in the marketing of natural gas and electricity to residential and commercial customers in the deregulated energy markets of New York and Pennsylvania. Under this operating segment, the Partnership owns the relationship with the end consumer and has agreements with the local distribution companies to deliver the natural gas or electricity from the Partnership’s suppliers to the customer.

The services segment is engaged in the sale, installation and servicing of a wide variety of home comfort equipment and parts, particularly in the areas of heating and ventilation. In furtherance of the Partnership’s efforts to restructure its field operations and to focus on its core operating segments, during fiscal 2006 the Partnership initiated plans to streamline the service offerings by significantly reducing installation activities and focusing on service offerings that support the Partnership’s existing customer base within its propane, refined fuels and natural gas and electricity segments.

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The following table presents certain data by reportable segment and provides a reconciliation of total operating segment information to the corresponding consolidated amounts for the periods presented:

	Three Months Ended
	December 29, 2007			December 30, 2006
Revenues:
Propane	$	307,325		$	285,800
Fuel oil and refined fuels		78,035			68,870
Natural gas and electricity		23,983			22,745
Services		14,472			18,459
All other		1,294			2,034
Total revenues	$	425,109		$	397,908
Income before interest expense and income taxes:
Propane	$	59,843		$	62,240
Fuel oil and refined fuels		2,290			10,806
Natural gas and electricity		2,928			3,279
Services		(2,217	)		1,044
All other		(206	)		(86	)
Corporate		(10,849	)		(14,221	)
Total income before interest expense and income taxes		51,789			63,062
Reconciliation to income from continuing operations:
Interest expense, net		8,388			9,216
Provision for income taxes - current and deferred		1,679			762
Income from continuing operations	$	41,722		$	53,084
Depreciation and amortization:
Propane	$	3,892		$	4,265
Fuel oil and refined fuels		865			881
Natural gas and electricity		252			222
Services		75			105
All other		31			32
Corporate		1,944			1,505
Total depreciation and amortization	$	7,059		$	7,010

	As of
	December 29, 2007			September 29, 2007
Assets:
Propane	$	805,994		$	737,090
Fuel oil and refined fuels		94,024			69,801
Natural gas and electricity		32,284			22,213
Services		2,670			1,486
All other		1,388			1,511
Corporate		202,264			231,098
Eliminations		(87,981	)		(87,981	)
Total assets	$	1,050,643		$	975,218

16. Recently Issued Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It also establishes a fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability. SFAS 157 will be effective for fiscal years beginning after November 15, 2007, which will be the Partnership’s 2009 fiscal year beginning September 28, 2008. The Partnership is currently in the process of

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evaluating the impact that SFAS 157 may have on its consolidated financial position, results of operations and cash flows.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). Under SFAS 159, entities may elect to measure specified financial instruments and warranty and insurance contracts at fair value on a contract-by-contract basis, with changes in fair value recognized in earnings each reporting period. SFAS 159 is effective for fiscal years beginning after November 15, 2007, which will be the Partnership’s 2009 fiscal year beginning September 28, 2008. The Partnership is currently in the process of evaluating the impact that SFAS 159 may have on its consolidated financial position, results of operations and cash flows.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51” (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for noncontrolling interests in an entity’s subsidiary and alters the way the consolidated income statement is presented. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008, which will be the Partnership’s 2010 fiscal year beginning September 27, 2009. As of December 29, 2007, the Partnership has no outstanding noncontrolling interests in any subsidiary; accordingly, the adoption of SFAS 160 should not have any impact on the Partnership’s consolidated financial position, results of operations and cash flows.

Also in December 2007, the FASB issued a revised SFAS No. 141 “Business Combinations” (“SFAS 141R”). Among other things, SFAS 141R requires an entity to recognize acquired assets, liabilities assumed and any noncontrolling interest at their respective fair values as of the acquisition date, as well as clarified how goodwill involved in a business combination is to be recognized and measured. SFAS 141R is effective for business combinations entered into in fiscal years beginning on or after December 15, 2008, which will be the Partnership’s 2010 fiscal year beginning September 27, 2009, with early adoption prohibited.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the financial condition and results of operations of the Partnership as of and for the three months ended December 29, 2007. The discussion should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the historical consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended September 29, 2007.

The following are factors that regularly affect our operating results and financial condition. In addition, our business is subject to the risks and uncertainties described in Item 1A included in the Annual Report on Form 10-K for the fiscal year ended September 29, 2007.

Product Costs and Supply

The level of profitability in the retail propane, fuel oil, natural gas and electricity businesses is largely dependent on the difference between retail sales price and product cost. The unit cost of our products, particularly propane, fuel oil and natural gas, is subject to volatility as a result of product supply or other market conditions, including, but not limited to, economic and political factors impacting crude oil and natural gas supply or pricing. We enter into product supply contracts that are generally one-year agreements subject to annual renewal, and also purchase product on the open market. We attempt to reduce price risk by pricing product on a short-term basis. Our propane supply contracts typically provide for pricing based upon index formulas using the posted prices established at major supply points such as Mont Belvieu, Texas, or Conway, Kansas (plus transportation costs) at the time of delivery. In certain instances, and when market conditions are favorable as was the case in the fuel oil market during the first half of fiscal 2007, we are able to purchase product under our supply arrangements at a discount to the spot market.

In addition, to supplement our annual purchase requirements, we may utilize forward fixed price purchase contracts to acquire a portion of the propane that we resell to our customers, which allows us to manage our exposure to unfavorable changes in commodity prices and to assure adequate physical supply. The percentage of contract purchases, and the amount of supply contracted for under forward contracts at fixed prices, will vary from year to year based on market conditions.

Product cost changes can occur rapidly over a short period of time and can impact profitability. There is no assurance that we will be able to pass on product cost increases fully or immediately, particularly when product costs increase rapidly. Therefore, average retail sales prices can vary significantly from year to year as product costs fluctuate with propane, fuel oil, crude oil and natural gas commodity market conditions. In addition, in periods of sustained higher commodity prices, as has been experienced over the past several fiscal years, retail sales volumes may be negatively impacted by customer conservation efforts.

Seasonality

The retail propane and fuel oil distribution businesses, as well as the natural gas marketing business, are seasonal because these fuels are primarily used for heating in residential and commercial buildings. Historically, approximately two-thirds of our retail propane volume is sold during the six-month peak heating season from October through March. The fuel oil business tends to experience greater seasonality given its more limited use for space heating and approximately three-fourths of our fuel oil volumes are sold between October and March. Consequently, sales and operating profits are concentrated in our first and second fiscal quarters. Cash flows from operations, therefore, are greatest during the second and third fiscal quarters when customers pay for product purchased during the winter heating season. We expect lower operating profits and either ne t losses or lower net income during the period from April through September (our third and fourth fiscal quarters). To the extent necessary, we will reserve cash from the second and third quarters for distribution to holders of our Common Units in the first and fourth fiscal quarters.

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Weather

Weather conditions have a significant impact on the demand for our products, in particular propane, fuel oil and natural gas, for both heating and agricultural purposes. Many of our customers rely heavily on propane, fuel oil or natural gas as a heating source. Accordingly, the volume sold is directly affected by the severity of the winter weather in our service areas, which can vary substantially from year to year. In any given area, sustained warmer than normal temperatures will tend to result in reduced propane, fuel oil and natural gas consumption, while sustained colder than normal temperatures will tend to result in greater use.

Hedging and Risk Management Activities

We engage in hedging and risk management activities to reduce the effect of price volatility on our product costs and to ensure the availability of product during periods of short supply. We enter into propane forward and option agreements with third parties, and use fuel oil futures and option contracts traded on the New York Mercantile Exchange (“NYMEX”), to purchase and sell propane and fuel oil at fixed prices in the future. The majority of the futures, forward and option agreements are used to hedge forecasted purchases of propane or fuel oil and are generally settled at expiration of the contract. Although we use derivative instruments to reduce the effect of price volatility associated with forecasted transactions, we do not use derivative instruments for speculative trading purposes. Risk management activities are monitored by an internal Co mmodity Risk Management Committee, made up of five members of management, through enforcement of our Hedging and Risk Management Policy and reported to our Audit Committee.

As a result of various market factors during the first half of fiscal 2007, particularly commodity price volatility during the first four months of the fiscal year, we experienced additional margin opportunities due to favorable pricing under certain supply arrangements and from our hedging and risk management activities. These market conditions generated additional operating profit of approximately $11.7 million during the three months ended December 30, 2006 compared to the three months ended December 29, 2007. Supply and risk management transactions may not always result in increased product margins and there can be no assurance that the favorable market conditions that contributed to incremental margin during the first quarter of fiscal 2007 will be present in the future in order to provide the additional margin opportunities. Such factors did not exist i n the fiscal 2008 first quarter.

Critical Accounting Policies and Estimates

Our significant accounting policies are summarized in Note 2, “Summary of Significant Accounting Policies,” included within the Notes to Consolidated Financial Statements section of our Annual Report on Form 10-K for the fiscal year ended September 29, 2007.

Certain amounts included in or affecting our consolidated financial statements and related disclosures must be estimated, requiring management to make certain assumptions with respect to values or conditions that cannot be known with certainty at the time the financial statements are prepared. The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We are also subject to risks and uncertainties that may cause actual results to differ from estimated results. Estimates are used when accounting for depreciation and amorti zation of long-lived assets, employee benefit plans, self-insurance and litigation reserves, environmental reserves, allowances for doubtful accounts, asset valuation assessments and valuation of derivative instruments. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any effects on our business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known to us. We believe that the following are our critical accounting estimates:

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Allowances for Doubtful Accounts. We maintain allowances for estimated losses resulting from the inability of our customers to make required payments. We estimate our allowances for doubtful accounts using a specific reserve for known or anticipated uncollectible accounts, as well as an estimated reserve for potential future uncollectible accounts taking into consideration our historical write-offs. If the financial condition of one or more of our customers were to deteriorate resulting in an impairment in their ability to make payments, additional allowances could be required.

Pension and Other Postretirement Benefits. We estimate the rate of return on plan assets, the rate to discount future benefit payments to present value and the rate of increase in the cost of future health care benefits in determining our annual pension and other postretirement benefit costs. In accordance with GAAP, actual results that differ from our assumptions are accumulated and amortized over future periods and, therefore, generally affect our recognized expense and recorded obligation in such future periods. While we believe that our assumptions are appropriate, significant differences in our actual experience or significant changes in market conditions may materially affect our pension and other postretirement benefit obligations and our future expense.

Self-Insurance Reserves. Our accrued insurance reserves represent the estimated costs of known and anticipated or unasserted claims for general and product, workers’ compensation and automobile risks. Accrued insurance provisions for unasserted claims arising from unreported incidents are based on an analysis of historical claims data. For each claim, we record a self-insurance provision up to the estimated amount of the probable claim utilizing actuarially determined loss development factors applied to actual claims data. Our self-insurance provisions are susceptible to change to the extent that actual claims development differs from historical claims development. We maintain insurance coverage such that our net exposure for insured claims is generally limited to the insurance deductible, cl aims above which are paid by or reimbursed by our insurance carriers. For the portion of our estimated self-insurance liability that exceeds our deductibles, we record an asset related to the amount of the liability expected to be paid by the insurance companies. Our self-insurance reserves are not discounted.

Goodwill Impairment Assessment. We assess the carrying value of goodwill at a reporting unit level, at least annually, based on an estimate of the fair value of each reporting unit. Fair value of the reporting unit is estimated using discounted cash flow analyses taking into consideration estimated cash flows in a ten-year projection period and a terminal value calculation at the end of the projection period.

Derivative Instruments and Hedging Activities. See Item 3 of this Quarterly Report for information about accounting for derivative instruments and hedging activities.

Executive Overview of Results of Operations and Financial Condition

Despite a challenging operating environment characterized by unprecedented high commodity prices, coupled with extreme market volatility, net income for the first quarter of fiscal 2008 amounted to $85.4 million, or $2.61 per Common Unit, an increase of $30.7 million compared to the prior year quarter of $54.7 million, or $1.70 per Common Unit. EBITDA (as defined and reconciled below) of $102.6 million for the three months ended December 29, 2007 increased $30.8 million compared to $71.8 million in the prior year first quarter. As previously reported, during the first quarter of fiscal 2008 we closed on the sale of our Tirzah, South Carolina underground propane storage cavern and associated 62-mile pipeline generating net proceeds of $53.7 million and a gain of $43.7 million (reported within discontinued operations).

In the commodities market, average posted prices for both propane and fuel oil rose steadily throughout the first quarter of fiscal 2008 and remained at unprecedented high levels. In addition, day-to-day volatility in these markets has presented a challenging pricing environment. Overall, average posted prices for propane and fuel oil during the first quarter increased 58.2% and 46.2%, respectively, compared to the prior year first quarter. As reported throughout much of fiscal 2007, favorable market conditions impacting the supply and pricing structure for propane and fuel oil provided additional margin opportunities during the first and second quarters of fiscal 2007, of which approximately $11.7 million of incremental margin opportunities were realized in the first quarter of the prior year. As a result of the steady rise in commodity prices and the market volatility throughout the first quarter of fiscal 2008,

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these favorable market conditions and resulting incremental margin opportunities were not present during the fiscal 2008 first quarter, thus having a negative effect on the year-over-year comparison of financial results.

From a weather perspective, while the average heating degree days in our service territories for the three months ended December 29, 2007 were 92% of normal compared to 87% of normal in the prior year first quarter, the pattern was such that temperatures started the quarter significantly warmer than normal and progressed into December with temperatures that were close to normal. Retail propane gallons sold in the first quarter of fiscal 2008 decreased 9.9 million gallons, or 8.1%, to 111.9 million gallons compared to 121.8 million gallons in the prior year quarter. Sales of fuel oil and refined fuels decreased 4.9 million gallons, or 17.2%, to 23.6 million gallons during the first quarter of fiscal 2008 compared to 28.5 million gallons in the prior year quarter. Lower volumes in both segments were attributable to ongoing customer conservation resulting from t he historically high commodity prices, the significantly warmer than normal temperatures at the beginning of the quarter, as well as, to a lesser extent, the affects of eliminating certain lower margin accounts which occurred throughout much of fiscal 2007.

While the high energy price environment has had a negative affect on sales volumes as a result of ongoing customer conservation, the proactive steps we have taken over the past two years to create a more efficient and cost effective operating structure continues to produce favorable results and has contributed to the overall strength of our cash flow and financial position. As a result, combined operating and general and administrative expenses of $88.5 million for the three months ended December 29, 2007 were $8.1 million, or 8.4%, lower than the first quarter of fiscal 2007.

From a cash flow perspective, despite the sustained period of high commodity prices, we continue to fund working capital requirements from cash on hand and have not borrowed under our working capital facility since April 2006. We ended the first quarter of fiscal 2008 with approximately $79.0 million in cash on hand and are well positioned as we advance into the second and third fiscal quarters in which cash flows from operations are typically the highest as customers pay for product purchased during the winter heating season. On the strength of these earnings and cash flows, our Board of Supervisors declared the sixteenth increase (since 1999) in our quarterly distribution from $0.75 to $0.7625 per Common Unit, or from $3.00 to $3.05 on an annualized basis. This increase, the seventh consecutive quarter in which we have increased the annualized rate by at le ast $0.05 per Common Unit, equates to an increase of 10.9% since the first quarter of fiscal 2007.

Looking ahead to the remainder of fiscal 2008, we expect that the high commodity price environment will continue to present challenges in each of our markets and will also continue to affect customer buying habits, thus having a possible negative impact on sales volumes. However, the shift to more seasonable temperatures in December 2007 and a sustained period of seasonable weather for the second quarter of fiscal 2008 would be expected to mitigate a portion of the negative affects from customer conservation. Nonetheless, we believe that our flexible cost structure, focus on operating efficiencies and financial strength are all factors that will help us effectively manage through the challenging operating environment, regardless of the weather.

Our anticipated cash requirements for the remainder of fiscal 2008 include: (i) maintenance and growth capital expenditures of approximately $18.4 million; (ii) interest payments of approximately $21.5 million; and (iii) cash distributions of approximately $74.9 million to our Common Unitholders based on the most recently increased quarterly distribution rate of $0.7625 per Common Unit. Based on our current estimates of cash flow from operations and our cash position at the end of the first quarter of fiscal 2008, we do not anticipate the need to borrow under the working capital facility of our Revolving Credit Agreement to meet our working capital requirements for the remainder of fiscal 2008. Our Revolving Credit Agreement provides a working capital facility with available revolving borrowing capacity up to $175.0 million (unused borrowing capacity of $124. 0 million after considering outstanding letters of credit of $51.0 million as of December 29, 2007).

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Results of Operations

Three Months Ended December 29, 2007 Compared to Three Months Ended December 30, 2006

Revenues

(Dollars in thousands)	Three Months Ended							Percent
	December 29, 2007		December 30, 2006		Increase / (Decrease)			Increase / (Decrease)
Revenues
Propane	$	307,325	$	285,800	$	21,525		7.5	%
Fuel oil and refined fuels		78,035		68,870		9,165		13.3	%
Natural gas and electricity		23,983		22,745		1,238		5.4	%
Services		14,472		18,459		(3,987	)	(21.6	%)
All other		1,294		2,034		(740	)	(36.4	%)
Total revenues	$	425,109	$	397,908	$	27,201		6.8	%

Total revenues increased $27.2 million, or 6.8%, to $425.1 million for the three months ended December 29, 2007 compared to $397.9 million for the three months ended December 30, 2006, as lower volumes were offset by higher average selling prices associated with higher product costs. Volumes were lower than the prior year first quarter due to ongoing customer conservation resulting from the historically high commodity prices, significantly warmer than normal temperatures at the start of the fiscal 2008 first quarter, as well as, to a lesser extent, the effects of eliminating certain lower margin accounts which occurred throughout much of the prior year.

Revenues from the distribution of propane and related activities of $307.3 million in the first quarter of fiscal 2008 increased $21.5 million, or 7.5%, compared to $285.8 million in the prior year quarter, primarily due to higher average selling prices, partially offset by lower volumes which were attributable to ongoing customer conservation. Retail propane gallons sold in the first quarter of fiscal 2008 decreased 9.9 million gallons, or 8.1%, to 111.9 million gallons from 121.8 million gallons in the prior year quarter. The average posted price of propane during the first quarter of fiscal 2008 increased approximately 58.2% compared to the average posted prices in the prior year quarter, while our average propane selling prices in the first quarter of fiscal 2008 increased approximately 22.5% compared to the prior year quarter. Additionally, included with in the propane segment are revenues from wholesale and risk management activities of $7.5 million for the three months ended December 29, 2007 which decreased $11.9 million compared to the prior year quarter.

Revenues from the distribution of fuel oil and refined fuels of $78.0 million in the first quarter of fiscal 2008 increased $9.2 million, or 13.3%, from $68.9 million in the prior year quarter, primarily due to higher average selling prices, partially offset by lower volumes. Fuel oil and refined fuels gallons sold in the first quarter of fiscal 2008 decreased 4.9 million gallons, or 17.2%, to 23.6 million gallons from 28.5 million gallons in the prior year quarter. Lower volumes in our fuel oil and refined fuels segment were attributable to the impact of ongoing customer conservation from continued high energy prices combined with our decision to exit certain lower margin diesel and gasoline businesses. Our decision to exit the majority of our low sulfur diesel and gasoline businesses resulted in a reduction in volumes in the fuel oil and refined fuels segme nt of approximately 2.3 million gallons, or 46.9% of the total volume decline, in the first quarter of fiscal 2008 compared to the prior year quarter. The average posted price of fuel oil during the first quarter of fiscal 2008 increased approximately 46.2% compared to the average posted prices in the prior year quarter, while our average selling prices in our fuel oil and refined fuels segment increased approximately 36.9% compared to the prior year quarter.

Revenues in our natural gas and electricity segment increased $1.2 million, or 5.4%, to $24.0 million for the three months ended December 29, 2007 compared to $22.7 million in the prior year quarter as a result of higher average selling prices for both electricity and natural gas, partially offset by lower electricity and natural gas volumes. Revenues in our services segment decreased 21.6% to $14.5 million in the first quarter of fiscal 2008 from

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$18.5 million in the prior year quarter as a result of the decision to reduce the level of certain installation activities. The focus of our ongoing service offerings are in support of our existing core commodity segments.

Cost of Products Sold

(Dollars in thousands)	Three Months Ended									Percent
	December 29, 2007			December 30, 2006			Increase / (Decrease)			Increase / (Decrease)
Cost of products sold
Propane	$	187,903		$	158,473		$	29,430		18.6	%
Fuel oil and refined fuels		65,634			47,457			18,177		38.3	%
Natural gas and electricity		19,751			18,304			1,447		7.9	%
Services		3,865			5,677			(1,812	)	(31.9	%)
All other		562			963			(401	)	(41.6	%)
Total cost of products sold	$	277,715		$	230,874		$	46,841		20.3	%
As a percent of total revenues		65.3	%		58.0	%

The cost of products sold reported in the consolidated statements of operations represents the weighted average unit cost of propane and fuel oil sold, including transportation costs to deliver product from our supply points to storage or to our customer service centers. Cost of products sold also includes the cost of natural gas and electricity, as well as the cost of appliances and related parts sold or installed by our customer service centers computed on a basis that approximates the average cost of the products. Unrealized (non-cash) gains or losses from changes in the fair value of derivative instruments that are not designated as cash flow hedges are recorded in each quarterly reporting period within cost of products sold. Cost of products sold is reported exclusive of any depreciation and amortization; these amounts are reported separately within the condensed consolidated statements of operations.

Cost of products sold increased $46.8 million, or 20.3%, to $277.7 million for the three months ended December 29, 2007 compared to $230.9 million in the prior year quarter. The increase was primarily attributable to the dramatic rise in product costs, and to a lesser extent, the aforementioned favorable market conditions that contributed $11.7 million of incremental margin opportunities in the prior year first quarter that were not present in the first quarter of fiscal 2008. Cost of products sold in the fiscal 2008 first quarter included a $2.7 million unrealized (non-cash) loss representing the net change in the fair value of derivative instruments during the period, compared to a $1.0 million unrealized (non-cash) loss in the prior year quarter resulting in an increase of $1.7 million in cost of products sold for the three months ended December 29, 2007 c ompared to the prior year quarter.

Cost of products sold associated with the distribution of propane and related activities of $187.9 million increased $29.4 million, or 18.6%, compared to the prior year quarter. Higher average propane costs resulted in an increase of $39.2 million in cost of products sold during the first quarter of fiscal 2008 compared to the prior year quarter. The impact of the sharp increase in commodity prices was partially offset by lower propane volumes which resulted in an $11.5 million decrease in cost of products sold during the first quarter of fiscal 2008 compared to the prior year quarter. The net change in the fair value of derivative instruments during the period resulted in a $1.7 million increase in cost of products sold compared to the prior year.

Cost of products sold associated with our fuel oil and refined fuels segment of $65.6 million increased $18.2 million, or 38.3%, compared to the prior year quarter. Higher average fuel oil costs resulted in an increase of $27.5 million in cost of products sold during the first quarter of fiscal 2008 compared to the prior year quarter. The year-over-year comparison of cost of products sold associated with our fuel oil and refined fuels segment was negatively affected by the favorable market conditions during the fiscal 2007 first quarter that resulted in incremental margin in the prior year that was not present during the first quarter of fiscal 2008, as described above. This increase was partially offset by lower fuel oil sales volumes, which resulted in a $9.3 million decrease in cost of products sold during the first quarter of fiscal 2008 compared to the p rior year quarter.

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Cost of products sold in our natural gas and electricity segment of $19.8 million increased $1.4 million, or 7.9%, compared to the prior year quarter primarily due to higher average electricity costs. Cost of products sold in our services segment of $3.9 million decreased $1.8 million, or 31.9%, compared to the prior year quarter primarily due to lower sales volumes.

For the quarter ended December 29, 2007, total cost of products sold represented 65.3% of revenues compared to 58.0% in the prior year quarter. This increase was primarily attributable to the significant increase in product costs, as well as the favorable market conditions discussed above that contributed $11.7 of incremental margin opportunities in the prior year first quarter that were not present in the first quarter of fiscal 2008.

Operating Expenses

(Dollars in thousands)	Three Months Ended
	December 29, 2007			December 30, 2006			Decrease			Percent Decrease
Operating expenses	$	79,343		$	83,675		$	(4,332	)	(5.2	%)
As a percent of total revenues		18.7	%		21.0	%

All costs of operating our retail distribution and appliance sales and service operations are reported within operating expenses in the condensed consolidated statements of operations. These operating expenses include the compensation and benefits of field and direct operating support personnel, costs of operating and maintaining our vehicle fleet, overhead and other costs of our purchasing, training and safety departments and other direct and indirect costs of operating our customer service centers.

Operating expenses of $79.3 million for the three months ended December 29, 2007 decreased $4.3 million, or 5.2%, compared to $83.7 million in the prior year quarter as a result of our continued efforts to drive operational efficiencies and reduce costs across all operating segments. Payroll and benefit related expenses declined $3.7 million due to lower headcount, as well as lower variable compensation associated with lower earnings in the first quarter of fiscal 2008 compared to the prior year. In addition, vehicle expenditures and other costs to operate our customer service centers decreased $0.6 million.

General and Administrative Expenses

(Dollars in thousands)	Three Months Ended
	December 29, 2007			December 30, 2006			Decrease			Percent Decrease
General and administrative expenses	$	9,203		$	12,902		$	(3,699	)	(28.7	%)
As a percent of total revenues		2.2	%		3.2	%

All costs of our back office support functions, including compensation and benefits for executives and other support functions, as well as other costs and expenses to maintain finance and accounting, treasury, legal, human resources, corporate development and the information systems functions are reported within general and administrative expenses in the condensed consolidated statements of operations.

General and administrative expenses of $9.2 million for the three months ended December 29, 2007 decreased $3.7 million, or 28.7%, compared to $12.9 million during the prior year quarter. The decrease was primarily attributable to a $1.2 million reduction in payroll and benefit related expenses associated with lower headcount, as well as a $2.5 million reduction in variable compensation resulting from lower earnings in the first quarter of fiscal 2008 compared to the prior year quarter and the reduction of compensation costs recognized under certain long-term incentive plans.

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Restructuring Charges and Severance Costs. We did not record any restructuring charges for the three months ended December 29, 2007. For the three months ended December 30, 2006, we recorded a charge of $0.4 million primarily related to employee termination costs incurred as a result of further refinements to our plan to restructure our services business segment.

Depreciation and Amortization

(Dollars in thousands)	Three Months Ended
	December 29, 2007			December 30, 2006			Increase		Percent Increase
Depreciation and amortization	$	7,059		$	7,010		$	49	0.7	%
As a percent of total revenues		1.7	%		1.8	%

Depreciation and amortization expense of $7.1 million for the three months ended December 29, 2007 was relatively unchanged compared to the prior year quarter.

Interest Expense, net

(Dollars in thousands)	Three Months Ended
	December 29, 2007			December 30, 2006			Decrease			Percent Decrease
Interest expense, net	$	8,388		$	9,216		$	(828	)	(9.0	%)
As a percent of total revenues		2.0	%		2.3	%

Net interest expense decreased $0.8 million, or 9.0%, to $8.4 million for the three months ended December 29, 2007, compared to $9.2 million in the prior year quarter as a result of additional interest earned on the higher level of invested cash. As has been the case since April 2006, there were no borrowings under our working capital facility as seasonal working capital needs have been funded through increased cash flow from operations. We ended the first quarter of fiscal 2008 in a strong cash position with approximately $79.0 million in cash on the condensed consolidated balance sheet.

Discontinued Operations. On October 2, 2007, the Operating Partnership completed the sale of its Tirzah, South Carolina underground granite propane storage cavern, and associated 62-mile pipeline, for approximately $53.7 million in cash, after taking into account certain adjustments. As a result of this sale, we reported a $43.7 gain on disposal of discontinued operations in the first quarter of fiscal 2008. The results of operations from the Tirzah facilities have been reported within discontinued operations on the condensed consolidated statements of operations for the first quarter of fiscal 2007 and the assets and liabilities have been classified as held for sale on the condensed consolidated balance sheet as of September 29, 2007.

We continuously evaluate our existing operations to identify opportunities to optimize the return on assets employed and selectively divest operations in slower growing or non-strategic markets and seek to reinvest in markets that are considered to present more opportunities for growth. In line with that strategy, during the first quarter of fiscal 2007, in a non-cash transaction, we disposed of nine customer service centers considered to be non-strategic in exchange for three customer service centers of another company located in Alaska. We reported a $1.0 million gain within discontinued operations in the first quarter of fiscal 2007 for the amount by which the fair value of assets relinquished exceeded the carrying value of the assets relinquished.

Net Income and EBITDA. Net income amounted to $85.4 million, or $2.61 per Common Unit, an increase of $30.7 million compared to the prior year quarter of $54.7 million, or $1.70 per Common Unit. EBITDA (as defined and reconciled below) for the first quarter of fiscal 2008 amounted to $102.6 million, an increase of $30.8 million compared to $71.8 million in the prior year quarter.

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EBITDA represents income before deducting interest expense, income taxes, depreciation and amortization. Our management uses EBITDA as a measure of liquidity and we disclose it because we believe that it provides our investors and industry analysts with additional information to evaluate our ability to meet our debt service obligations and to pay our quarterly distributions to holders of our Common Units. In addition, certain of our incentive compensation plans covering executives and other employees utilize EBITDA as the performance target. Moreover, our Revolving Credit Agreement requires us to use EBITDA as a component in calculating our leverage and interest coverage ratios. EBITDA is not a recognized term under GAAP and should not be considered as an alternative to net income or net cash used in operating activities determined in accordance with GAAP. Be cause EBITDA as determined by us excludes some, but not all, items that affect net income, it may not be comparable to EBITDA or similarly titled measures used by other companies.

The following table sets forth (i) our calculations of EBITDA and (ii) a reconciliation of EBITDA, as so calculated, to our net cash used in operating activities:

(Dollars in thousands)	Three Months Ended
	December 29, 2007			December 30, 2006
Net income	$	85,429		$	54,654
Add:
Provision for income taxes - current and deferred		1,679			762
Interest expense, net		8,388			9,216
Depreciation and amortization - continuing operations		7,059			7,010
Depreciation and amortization - discontinued operations		—			126
EBITDA		102,555			71,768
Add (subtract):
Provision for income taxes - current		(402	)		(762	)
Interest expense, net		(8,388	)		(9,216	)
Compensation cost recognized under Restricted Unit Plan		(67	)		1,297
Gain on disposal of property, plant and equipment, net		(1,429	)		(247	)
Gain on disposal of discontinued operations		(43,707	)		(1,002	)
Changes in working capital and other assets and liabilities		(90,515	)		(67,731	)
Net cash used in operating activities	$	(41,953	)	$	(5,893	)

Liquidity and Capital Resources

Analysis of Cash Flows

Operating Activities. Due to the seasonal nature of the propane and fuel oil businesses, cash flows from operating activities are greater during the winter and spring seasons (our second and third fiscal quarters) as customers pay for products purchased during the heating season. For the three months ended December 29, 2007, net cash used in operating activities was $42.0 million compared to net cash used in operating activities of $5.9 million for the first three months of the prior year. The increase in net cash used in operating activities was primarily attributable to the significant rise in propane and fuel oil commodity prices that resulted in a significantly larger investment in working capital in comparison to the first quarter of fiscal 2007. Despite the higher working capital requireme nts driven by the higher commodity price environment, we continue to fund working capital through operating cash flow without the need to access the working capital facility of our Revolving Credit Agreement. In addition, the increased investment in working capital was also attributable to the payment of variable compensation during the first quarter of fiscal 2008 in respect of fiscal 2007 earnings compared to lower variable compensation paid during the first quarter of the prior fiscal year in respect of fiscal 2006.

Investing Activities. Net cash provided by investing activities of $48.9 million for the three months ended December 29, 2007 consists of the net proceeds from the sale of discontinued operations of $53.7 million and the net

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proceeds from the sale of property, plant and equipment of $1.7 million, partially offset by capital expenditures of $6.5 million (including $2.1 million for maintenance expenditures and $4.4 million to support the growth of operations). Net cash used in investing activities of $6.7 million for the three months ended December 30, 2006 consists of capital expenditures of $8.2 million (including $2.2 million for maintenance expenditures and $6.0 million to support the growth of operations), partially offset by the net proceeds from the sale of property, plant and equipment of $1.5 million.

Financing Activities. Net cash used in financing activities for the three months ended December 29, 2007 of $24.5 million reflects quarterly distributions to Common Unitholders at a rate of $0.75 per Common Unit paid in respect of the fourth quarter of fiscal 2007. Net cash used in financing activities for the three months ended December 30, 2006 of $21.6 million reflects quarterly distributions to Common Unitholders at a rate of $0.6625 per Common Unit paid in respect of the fourth quarter of fiscal 2006.

Summary of Long-Term Debt Obligations and Revolving Credit Lines

Our long-term borrowings and revolving credit lines consist of $425.0 million in 6.875% senior notes due December 2013 (the “2003 Senior Notes”) and a Revolving Credit Agreement at the Operating Partnership level which provides a five-year $125.0 million term loan due March 31, 2010 (the “Term Loan”) and a separate working capital facility which provides available credit up to $175.0 million. There were no outstanding borrowings under the working capital facility as of September 29, 2007. There have been no borrowings under our working capital facility since April 2006. We have standby letters of credit issued under the working capital facility of the Revolving Credit Agreement in the aggregate amount of $51.0 million in support of retention levels under our self-insurance programs and certain lease obligations. Therefore, as of September 29, 2007 we had available borrowing capacity of $124.0 million under the working capital facility of the Revolving Credit Agreement. Additionally, under the Revolving Credit Agreement our Operating Partnership is authorized to incur additional indebtedness of up to $10.0 million in connection with capital leases and up to $20.0 million in short-term borrowings during the period from December 1 to April 1 in each fiscal year in order to meet working capital needs during periods of peak demand, if necessary. Because of our cash position, operating results and cash flow, we did not make any such short-term borrowings during the first quarter of fiscal 2008.

The 2003 Senior Notes mature on December 15, 2013 and require semi-annual interest payments. We are permitted to redeem some or all of the 2003 Senior Notes any time on or after December 15, 2008 at redemption prices specified in the indenture governing the 2003 Senior Notes. In addition, the 2003 Senior Notes have a change of control provision that would require us to offer to repurchase the notes at 101% of the principal amount repurchased, if the holders of the notes elected to exercise the right of repurchase. Borrowings under the Revolving Credit Agreement, including the Term Loan, bear interest at a rate based upon LIBOR plus an applicable margin. An annual facility fee ranging from 0.375% to 0.50%, based upon certain financial tests, is payable quarterly whether or not borrowings occur.

In connection with the Term Loan, our Operating Partnership also entered into an interest rate swap contract with a notional amount of $125.0 million with the issuing lender. Effective March 31, 2005 through March 31, 2010, our Operating Partnership will pay a fixed interest rate of 4.66% to the issuing lender on the notional principal amount of $125.0 million, effectively fixing the LIBOR portion of the interest rate at 4.66%. In return, the issuing lender will pay to our Operating Partnership a floating rate, namely LIBOR, on the same notional principal amount. The applicable margin above LIBOR, as defined in the Revolving Credit Agreement, will be paid in addition to this fixed interest rate of 4.66%.

Under the Revolving Credit Agreement, our Operating Partnership must maintain a leverage ratio (the ratio of total debt to EBITDA) of less than 4.0 to 1 and an interest coverage ratio (the ratio of EBITDA to interest expense) of greater than 2.5 to 1 at the Partnership level. The Revolving Credit Agreement and the 2003 Senior Notes both contain various restrictive and affirmative covenants applicable to our Operating Partnership and us, respectively. These covenants include (i) restrictions on the incurrence of additional indebtedness and (ii) restrictions on certain liens, investments, guarantees, loans, advances, payments, mergers, consolidations, distributions, sales of assets and other transactions. We were in compliance with all covenants and terms of all of our debt agreements as of December 29, 2007 and September 29, 2007.

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Partnership Distributions

We are required to make distributions in an amount equal to all of our Available Cash, as defined in the Third Amended and Restated Partnership Agreement, as amended, no more than 45 days after the end of each fiscal quarter to holders of record on the applicable record dates. Available Cash, as defined in the Partnership Agreement, generally means all cash on hand at the end of the respective fiscal quarter less the amount of cash reserves established by the Board of Supervisors in its reasonable discretion for future cash requirements. These reserves are retained for the proper conduct of our business, the payment of debt principal and interest and for distributions during the next four quarters. The Board of Supervisors reviews the level of Available Cash on a quarterly basis based upon information provided by management.

On January 24, 2008, we announced a quarterly distribution of $0.7625 per Common Unit, or $3.05 on an annualized basis, in respect of the first quarter of fiscal 2008 payable on February 12, 2008 to holders of record on February 5, 2008. This quarterly distribution included an increase of $0.0125 per Common Unit, or $0.05 per Common Unit on an annualized basis, representing the sixteenth increase since our recapitalization in 1999 and a 10.9% increase in the quarterly distribution rate since the first quarter of the prior year.

Debt Obligations and Other Commitments

The following table presents short-term and long-term debt obligations, cash interest and future minimum rental commitments due under noncancelable operating lease agreements as of December 29, 2007. For purposes of determining cash interest due under the Term Loan, a variable interest debt instrument, we have used the interest rate in effect as of December 29, 2007, taking into consideration the impact of the interest rate swap described above.

(Dollars in thousands)	Payments due by period
	Remainder of Fiscal 2008		Fiscal 2009		Fiscal 2010		Fiscal 2011		Fiscal 2012 and thereafter		Total
Short-term and long-term debt	$	—	$	—	$	125,000	$	—	$	425,000	$	550,000
Future interest payments		21,500		38,406		36,109		29,219		73,047		198,281
Operating leases		9,516		9,592		6,894		4,343		4,652		34,997
Total debt obligations, cash interest and lease commitments	$	31,016	$	47,998	$	168,003	$	33,562	$	502,699	$	783,278

Additionally, we have standby letters of credit in the aggregate amount of $51.0 million, in support of retention levels under our casualty insurance programs and certain lease obligations, which expire periodically through October 25, 2008.

We lease certain property, plant and equipment for various periods under noncancelable operating leases, including approximately 53% of our vehicle fleet, approximately 25% of our customer service centers and portions of our information systems equipment. Future minimum rental commitments under noncancelable operating lease agreements as of December 29, 2007 are presented in the table above.

We have a noncontributory, cash balance format, defined benefit pension plan which was frozen to new participants effective January 1, 2000. Effective January 1, 2003, the defined benefit pension plan was amended such that future service credits ceased and eligible employees would receive interest credits only toward their ultimate retirement benefit. At December 29, 2007, the fair value of the plan assets exceeded the accumulated benefit obligation of the plan by $5.6 million, which was recognized on the balance sheet as an asset. We also provide postretirement health care and life insurance benefits for certain retired employees under a plan that was also frozen to new participants effective January 1, 2000. At December 29, 2007, we had accrued retiree health and life benefits of $24.3 million.

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We are self-insured for general and product, workers’ compensation and automobile liabilities up to predetermined thresholds above which third party insurance applies. At December 29, 2007, we had accrued insurance liabilities of $38.8 million, net of a $9.3 million asset related to the amount of the liability expected to be covered by insurance carriers.

Off-Balance Sheet Arrangements

Guarantees

We have residual value guarantees associated with certain of our operating leases, related primarily to transportation equipment, with remaining lease periods scheduled to expire periodically through fiscal 2014. Upon completion of the lease period, we guarantee that the fair value of the equipment will equal or exceed the guaranteed amount, or we will pay the lessor the difference. Although the fair value of equipment at the end of its lease term has historically exceeded the guaranteed amounts, the maximum potential amount of aggregate future payments we could be required to make under these leasing arrangements, assuming the equipment is deemed worthless at the end of the lease term, is approximately $14.0 million as of December 29, 2007. The fair value of residual value guarantees for outstanding operating leases was de minimis as of December 29, 2007 and September 29, 2007.

Recently Issued Accounting Standards

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It also establishes a fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability. SFAS 157 will be effective for fiscal years beginning after November 15, 2007, which will be our 2009 fiscal year beginning September 28, 2008. We are currently in the process of evaluating the impact that SFAS 157 may have on its consolidated financial position, results of operations and cash flows.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). Under SFAS 159, entities may elect to measure specified financial instruments and warranty and insurance contracts at fair value on a contract-by-contract basis, with changes in fair value recognized in earnings each reporting period. SFAS 159 is effective for fiscal years beginning after November 15, 2007, which will be our 2009 fiscal year beginning September 28, 2008. We are currently in the process of evaluating the impact that SFAS 159 may have on its consolidated financial position, results of operations and cash flows.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51” (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for noncontrolling interests in an entity’s subsidiary and alters the way the consolidated income statement is presented. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008, which will be the Partnership’s 2010 fiscal year beginning September 27, 2009. As of December 29, 2007, the Partnership has no outstanding noncontrolling interests in any subsidiary; accordingly, the adoption of SFAS 160 should not have any impact on the Partnership’s consolidated financial position, results of operations and cash flows.

Also in December 2007, the FASB issued a revised SFAS No. 141 “Business Combinations” (“SFAS 141R”). Among other things, SFAS 141R requires an entity to recognize acquired assets, liabilities assumed and any noncontrolling interest at their respective fair values as of the acquisition date, as well as clarified how goodwill involved in a business combination is to be recognized and measured. SFAS 141R is effective for business combinations entered into in fiscal years beginning on or after December 15, 2008, which will be the Partnership’s 2010 fiscal year beginning September 27, 2009, with early adoption prohibited.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Price Risk

We enter into product supply contracts that are generally one-year agreements subject to annual renewal, and also purchase product on the open market. Our propane supply contracts typically provide for pricing based upon index formulas using the posted prices established at major supply points such as Mont Belvieu, Texas, or Conway, Kansas (plus transportation costs) at the time of delivery. In addition, to supplement our annual purchase requirements, we may utilize forward fixed price purchase contracts to acquire a portion of the propane that we resell to our customers, which allows us to manage our exposure to unfavorable changes in commodity prices and to ensure adequate physical supply. The percentage of contract purchases, and the amount of supply contracted for under forward contracts at fixed prices, will vary from year to year based on market conditi ons. In certain instances, and when market conditions are favorable as was the case in the fuel oil market during the first half of fiscal 2007, we are able to purchase product under our supply arrangements at a discount to the market.

Product cost changes can occur rapidly over a short period of time and can impact profitability. We attempt to reduce commodity price risk by pricing product on a short-term basis. The level of priced, physical product maintained in storage facilities and at our customer service centers for immediate sale to our customers will vary depending on several factors, including, but not limited to, price, availability of supply, and demand for a given time of the year. Typically, our on hand priced position does not exceed more than four weeks of our supply needs and, during the peak heating season, typically not more than two weeks of supply is maintained in inventory. In the course of normal operations, we routinely enter into contracts such as forward priced physical contracts for the purchase or sale of propane and fuel oil that, under SFAS No. 133, “A ccounting for Derivative Instruments and Hedging Activities,” as amended (“SFAS 133”) qualify for and are designated as a normal purchase or normal sale contracts. Such contracts are exempted from the fair value accounting requirements of SFAS 133 and are accounted for at the time product is purchased or sold under the related contract.

Under our hedging and risk management strategies, we enter into a combination of exchange-traded futures and option contracts, forward contracts and, in certain instances, over-the-counter options (collectively, “derivative instruments”) to manage the price risk associated with priced, physical product and with future purchases of the commodities used in our operations, principally propane and fuel oil, as well as to ensure the availability of product during periods of high demand. Futures and forward contracts require that we sell or acquire propane or fuel oil at a fixed price for delivery at fixed future dates. An option contract allows, but does not require, its holder to buy or sell propane or fuel oil at a specified price during a specified time period. However, the writer of an option contract must fulfill the obligation of the option contrac t, should the holder choose to exercise the option. At expiration, the contracts are settled by the delivery of the product to the respective party or are settled by the payment of a net amount equal to the difference between the then current price and the fixed contract price or options exercise price. To the extent that we utilize derivative instruments to manage exposure to commodity price risk and commodity prices move adversely in relation to the contracts, we could suffer losses on those derivative instruments when settled. Conversely, if prices move favorably, we could realize gains.

As a result of various market factors during the first half of fiscal 2007, particularly commodity price volatility during the first four months of the fiscal year, we experienced additional margin opportunities due to favorable pricing under certain supply arrangements and from our hedging and risk management activities. These market conditions generated additional operating profit of approximately $11.7 million during the three months ended December 30, 2006 compared to the first quarter of fiscal 2008. Supply and risk management transactions may not always result in increased product margins and there can be no assurance that the favorable market conditions that contributed to incremental margin during the first quarter of fiscal 2007 will be present in the future. These favorable market conditions and resulting incremental margin opportunities were not pr esent during the fiscal 2008 first quarter.

Market Risk

We are subject to commodity price risk to the extent that propane or fuel oil market prices deviate from fixed contract settlement amounts. Futures traded with brokers of the NYMEX require daily cash settlements in margin accounts. Forward and option contracts are generally settled at the expiration of the contract term either by physical

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delivery or through a net settlement mechanism. Market risks associated with futures, options and forward contracts are monitored daily for compliance with our Hedging and Risk Management Policy which includes volume limits for open positions. Open inventory positions are reviewed and managed daily as to exposures to changing market prices.

Credit Risk

Futures and fuel oil options are guaranteed by the NYMEX and, as a result, have minimal credit risk. We are subject to credit risk with over-the-counter, forward and propane option contracts to the extent the counterparties do not perform. We evaluate the financial condition of each counterparty with which we conduct business and establish credit limits to reduce exposure to the risk of non-performance by our counterparties.

Interest Rate Risk

A portion of our long-term borrowings bear interest at a variable rate based upon either LIBOR or Wachovia National Bank’s prime rate, plus an applicable margin depending on the level of our total leverage. Therefore, we are subject to interest rate risk on the variable component of the interest rate. We manage our interest rate risk by entering into interest rate swap agreements. On March 31, 2005, we entered into a $125.0 million interest rate swap contract in conjunction with the Term Loan facility under the Revolving Credit Agreement. The interest rate swap is being accounted for under SFAS 133 and has been designated as a cash flow hedge. Changes in the fair value of the interest rate swap are recognized in other comprehensive income until the hedged item is recognized in earnings. At December 29, 2007, the fair value of the interest rate swap was ( $2.4) million representing an unrealized loss and is included within other liabilities with a corresponding debit in OCI.

Accounting for Derivative Instruments and Hedging Activities

All of our derivative instruments are reported on the balance sheet, within other current assets or other current liabilities, at their fair values pursuant to SFAS 133. On the date that futures, forward and option contracts are entered into, we make a determination as to whether the derivative instrument qualifies for designation as a hedge. Changes in the fair value of derivative instruments are recorded each period in current period earnings or OCI, depending on whether a derivative instrument is designated as a hedge and, if so, the type of hedge. For derivative instruments designated as cash flow hedges, we formally assess, both at the hedge contract’s inception and on an ongoing basis, whether the hedge contract is highly effective in offsetting changes in cash flows of hedged items. Changes in the fair value of derivative instruments designated as cash flow hedges are reported in OCI to the extent effective and reclassified into cost of products sold during the same period in which the hedged item affects earnings. The mark-to-market gains or losses on ineffective portions of cash flow hedges used to hedge future purchases are immediately recognized in cost of products sold. Changes in the fair value of derivative instruments that are not designated as cash flow hedges, and that do not meet the normal purchase and normal sale exemption under SFAS 133, are recorded within cost of products sold as they occur.

At December 29, 2007, the fair value of derivative instruments described above resulted in derivative assets (unrealized gains) of $4.8 million included within prepaid expenses and other current assets and derivative liabilities (unrealized losses) of $2.2 million included within other current liabilities. Cost of products sold included unrealized (non-cash) losses of $2.7 million and $1.0 million for the three months ended December 29, 2007 and December 30, 2006, respectively, attributable to the change in fair value of derivative instruments not designated as cash flow hedges.

Sensitivity Analysis

In an effort to estimate our exposure to unfavorable market price changes in propane or fuel oil, a sensitivity analysis of open positions as of December 29, 2007 was performed. Based on this analysis, a hypothetical 10% adverse change in market prices for each of the future months for which a futures, forward and/or option contract exists indicates either a reduction in potential future gains or potential losses in future earnings of $5.8 million as of December 29, 2007. See also Item 7A of our Annual Report on Form 10-K for the fiscal year ended September 29, 2007.

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The above hypothetical change does not reflect the worst case scenario. Actual results may be significantly different depending on market conditions and the composition of the open position portfolio at any given point in time.

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ITEM 4. CONTROLS AND PROCEDURES

(a) The Partnership maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) that are designed to provide reasonable assurance that information required to be disclosed in the Partnership’s filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to the Partnership’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

The Partnership completed an evaluation under the supervision and with participation of the Partnership’s management, including the Partnership’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Partnership’s disclosure controls and procedures as of December 29, 2007. Based on this evaluation, the Partnership’s principal executive officer and principal financial officer have concluded that as of December 29, 2007, such disclosure controls and procedures were effective to provide the reasonable assurance described above.

(b) There have not been any changes in the Partnership’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934) during the quarter ended December 29, 2007 that have materially affected or are reasonably likely to materially affect its internal control over financial reporting.

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PART II

ITEM 1. LEGAL PROCEEDINGS

Reference is made to Part I, Item 1, Note 11 of this Quarterly Report for the three months ended December 29, 2007, concerning a settlement of an outstanding product liability claim.

ITEM 6. EXHIBITS

(a) Exhibits

10.1	Suburban Propane Partners, L.P. 2000 Restricted Unit Plan, as amended and restated effective October 17, 2006 and as further amended on July 31, 2007, October 31, 2007 and January 24, 2008.
10.2	Suburban Propane, L.P. 2003 Long Term Incentive Plan, as amended on October 17, 2006 and as further amended on July 31, 2007, October 31, 2007 and January 24, 2008.
10.3	Suburban Propane, L.P. Severance Protection Plan, as amended on January 24, 2008.
31.1	Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.
31.2	Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.
32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SUBURBAN PROPANE PARTNERS, L.P.
February 7, 2008	By:	/s/ MICHAEL A. STIVALA
Date		Michael A. Stivala Chief Financial Officer and Chief Accounting Officer

February 7, 2008	By:	/s/ MICHAEL A. KUGLIN
Date		Michael A. Kuglin Controller

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EX-10.1

EXHIBIT 10.1

SUBURBAN PROPANE PARTNERS, L.P.

2000 RESTRICTED UNIT PLAN

EFFECTIVE NOVEMBER 1, 2000

AMENDED AND RESTATED EFFECTIVE OCTOBER 17, 2006

FURTHER AMENDED ON JULY 31, 2007, OCTOBER 31, 2007 AND JANUARY 24, 2008

SUBURBAN PROPANE PARTNERS, L.P.
2000 RESTRICTED UNIT PLAN

EFFECTIVE NOVEMBER 1, 2000

AMENDED AND RESTATED EFFECTIVE OCTOBER 17, 2006

FURTHER AMENDED ON JULY 31, 2007, OCTOBER 31, 2007 AND JANUARY 24, 2008

ARTICLE I
PURPOSE AND APPROVAL

The purpose of this Plan is to strengthen Suburban Propane Partners, L.P., a Delaware limited partnership (the ‘‘Partnership’’), by providing an incentive to certain selected employees and Elected Supervisors of the Partnership and affiliated entities, and thereby encouraging them to devote their abilities and industry to the success of the Partnership’s business enterprise in such a manner as to maximize the Partnership’s value. It is intended that this purpose be achieved by extending to such individuals an added long-term incentive for continued service to the Partnership, and for high levels of performance and unusual efforts which enhance the Partnership’s value through the grant of rights to receive Common Units (as hereinafter defined) of the Partnership.

ARTICLE II
DEFINITIONS

For the purposes of this Plan, unless otherwise specified in an agreement, capitalized terms shall have the following meanings:

2.1    ‘‘Act’’ shall mean the Securities Act of 1933, as amended.

2.2    ‘‘Agreement’’ shall mean the written agreement between the Partnership and a Grantee evidencing the grant of an Award and setting forth the terms and conditions thereof.

2.3    ‘‘Award’’ shall mean a grant of restricted Common Units pursuant to the terms of this Plan.

2.4    ‘‘Beneficial Ownership’’ shall mean as that term is used within the meaning of Rule 13d-3 promulgated under the Exchange Act.

2.5    ‘‘Board’’ shall mean the Board of Supervisors of the Partnership.

2.6    ‘‘Cause’’ shall mean, unless otherwise provided in an Agreement, (a) the Grantee’s gross negligence or willful misconduct in the performance of his duties, (b) the Grantee’s willful or grossly negligent failure to perform his duties, (c) the breach by the Grantee of any written covenants to Suburban Propane, L.P. or any of the Partnership’s other affiliates, (d) dishonest, fraudulent or unlawful behavior by the Grantee (whether or not in conjunction with employment) or the Grantee being subject to a judgment, order or decree (by consent or otherwise) by any governmental or regulatory authority which restricts his ability to engage in the business conducted by Suburban Propane, L.P., the Partnership, or any of their affiliates, or (e) willful or reckless breach by the Grantee of any policy adopted by Suburban Propane, L.P., the Partnership, or any of their affiliates, concerning conflicts of int erest, standards of business conduct or fair employment practices or procedures with respect to compliance with applicable law.

2.7    ‘‘Change in Capitalization’’ shall mean any increase or reduction in the number of Common Units, or any change (including, but not limited to, a change in value) in the Common Units, or exchange of Common Units for a different number of kind of units or other securities of the Partnership, by reason of a reclassification, recapitalization, merger, consolidation, reorganization, spin-off, split-up, issuance of warrants or rights or other convertible securities, unit distribution, unit split or reverse unit split, cash dividend, property dividend, combination or exchange of units, repurchase of units, change in corporate structure or otherwise.

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2.8    ‘‘Change of Control’’ shall mean the occurrence of

(a)    the date on which any ‘‘Person,’’ or ‘‘More than One Person Acting as a Group,’’ acquires or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or ‘‘More than One Person Acting as a Group.’’ (other than an acquisition directly by the Partnership, Suburban Energy Service Group LLC or any of their affiliates) Common Units or voting equity interests of the Partnership (‘‘Voting Securities’’) immediately after which such Person or More than One Person Acting as a Group has Beneficial Ownership of more than thirty percent (30%) of the combined voting power of the Partnership’s then outstanding Common Units; provided, however, that in determin ing whether a Change of Control has occurred, Common Units which are acquired in a ‘‘Non-Control Acquisition’’ shall not constitute an acquisition which would cause a Change of Control. A ‘‘Non-Control Acquisition’’ shall mean an acquisition by (x) an employee benefit plan (or a trust forming a part there) maintained by (A) the Partnership or Suburban Propane, L.P. or (B) any corporation, partnership or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Partnership, (y) the Partnership or its Subsidiaries, or (z) any Person or More than One Person Acting as a Group in connection with a ‘‘Non-Control Transaction’’; or

(b)    approval by the partners of the Partnership, of (x) a merger, consolidation or reorganization involving the Partnership, unless (A) the holders of the Common Units immediately before such merger, consolidation or reorganization own, directly or indirectly immediately following such merger, consolidation or reorganization, at least fifty percent (50%) of the combined voting power of the outstanding Common Units of the entity resulting from such merger, consolidation or reorganization (the ‘‘Surviving Entity’’) in substantially the same proportion as their ownership of the Common Units immediately before such merger, consolidation or reorganization, and (B) no person or entity (other than the Partnership, any Subsidiary, any employee benefit plan (or any trust forming a part thereof) maintained by the Partnership, any Subsidiary, the Surviving Entity, or any Person who, immediately prior to such merger, consolidat ion or reorganization, had Beneficial Ownership of more than twenty five percent (25%) of then outstanding Common Units), has Beneficial Ownership of more than twenty five percent (25%) of the combined voting power of the Surviving Entity’s then outstanding voting securities; (y) a complete liquidation or dissolution of the Partnership; or (z) the sale or other disposition of forty percent (40%) of the total gross fair market value of all the assets of the Partnership to any Person or More than One Person Acting as a Group (other than a transfer to a Subsidiary). For this purpose, gross fair market value means the value of the assets of the Partnership, or the value of the assets being disposed of, determined without regard to any liability associated with such assets. A transaction described in clause (A) or (B) of subsection (x) hereof shall be referred to as a ‘‘Non-Control Transaction.’’

Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person (the ‘‘Subject Person’’) acquired Beneficial Ownership of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by the Partnership which, by reducing the number of Voting Securities outstanding, increases the proportional number of Common Units Beneficially Owned by the Subject Person, provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Partnership, and after such acquisition of Voting Securities by the Partnership, the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then a Change of Control shall occur.

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2.9    ‘‘Code’’ shall mean the Internal Revenue Code of 1986, as amended.

2.10    ‘‘Committee’’ shall mean the Compensation Committee of the Board.

2.11    ‘‘Common Units’’ shall mean the common units representing limited partnership interest of the Partnership.

2.12    ‘‘Cure Period’’ shall mean the thirty-day period, following notification by a Grantee that a Good Reason event has occurred, during which the Partnership has the option of rectifying the Good Reason event.

2.13    ‘‘Disability’’ shall have the same meaning that such term (or similar term) has under the Partnership’s long-term disability plan, or as otherwise determined by the Committee.

2.14    ‘‘Effective Date’’ shall mean November 1, 2000.

2.15    ‘‘Elected Supervisor’’ shall mean those members of the Board elected by a vote of holders of Common Units.

2.16    ‘‘Exchange Act’’ shall mean the Securities Exchange Act of 1934, as amended.

2.17    ‘‘Fair Market Value’’ per unit on any date shall mean the average of the high and low sale prices of the Common Units on such date on the principal national securities exchange on which such Common Units are listed or admitted to trading, or if such Common Units are not so listed or admitted to trading, the arithmetic mean of the per Common Unit closing bid price and per Common Unit closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such other market on which such prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Common Units on such date, the Fair Market Value shall be the value established by the Board in good faith.

2.18     ‘‘Good Reason’’ shall mean, unless otherwise provided in an Agreement, in the case of an employee of Suburban Propane, L.P. or any of the Partnership’s other affiliates, (a) any failure by Suburban Propane, L.P. or any of the Partnership’s other affiliates to comply in any material respect with the compensation provisions of a written employment agreement between the Grantee and Suburban Propane, L.P. or any of the Partnership’s other affiliates, (b) a material adverse change in the Grantee’s title without his consent, or (c) the assignment to the Grantee, without his consent, of duties and responsibilities materially inconsistent with his level of responsibility.

2.19    ‘‘Grantee’’ shall mean a person to whom an Award has been granted under the Plan.

2.20    ‘‘More than one Person Acting as a Group’’ has the same meaning as set forth in Treasury Regulation 1.409A-3(i)(5)(v)(B).

2.21     ‘‘Partnership’’ shall mean Suburban Propane Partners, L.P., a Delaware limited partnership, and its successors.

2.22    ‘‘Person’’ has the meaning used for purposes of Section 13(d) or 14(d) of the Exchange Act.

2.23     ‘‘Plan’’ shall mean the Suburban Propane Partners, L.P. 2000 Restricted Unit Plan.

2.24    ‘‘Retirement’’ shall mean voluntary termination of employment (or, if the Grantee is a non-employee Supervisor of the Partnership, voluntary termination of service as such a Supervisor) by a Grantee who has attained age 55 and who has completed 10 years of ‘‘eligible service’’ to the Partnership or its predecessors, in connection with a bona fide intent by the Grantee to no longer seek full time employment in the industries in which the Partnership then participates. Retirement shall not include voluntary termination of employment by a Grantee in response to, or anticipation of, a termination of employment for Cause by the Partnership or one of its affiliates. The term ‘‘eligible service’’ (a) for Grantees who are employees of the Partnership or one of its affiliates, shall have the same meaning as the term is used in the Pension Plan for

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Eligible Employees of Suburban Propane L.P. and Subsidiaries, and (b) for non-employee Supervisors of the Partnership, shall mean service on the Board.

2.25    ‘‘Subsidiary’’ means any corporation, partnership, or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Partnership.

2.26    ‘‘Recoupment Effective Date’’ means July 31, 2007.

ARTICLE III
ADMINISTRATION OF THE PLAN

3.1    The Plan shall be administered by the Committee, which shall hold meetings at such times as may be necessary for the proper administration of the Plan. The Committee shall keep minutes of its meetings. A quorum shall consist of not less than two members of the Committee and a majority of a quorum may authorize any action. Any decision or determination reduced to writing and signed by a majority of all of the members of the Committee shall be as fully effective as if made by a majority vote at a meeting duly called and held. Notwithstanding anything else herein to the contrary, the Committee may delegate to any individual or committee of individuals the responsibility to carry out any of its rights and duties with respect to the Plan. No member of the Committee or any individual to whom it has delegated any of its rights and duties shall be liable for any action, failure to act, determination or interpretation made in good faith with re spect to this Plan or any transaction hereunder, except for liability arising from his or her own willful misfeasance, gross negligence or reckless disregard of his or her duties. The Partnership hereby agrees to indemnify each member of the Committee and its delegates for all costs and expenses and, to the extent permitted by applicable law, any liability incurred in connection with defending against, responding to, negotiating for the settlement of or otherwise dealing with any claim, cause of action or dispute of any kind arising in connection with any actions in administering this Plan or in authorizing or denying authorization for any transaction hereunder.

3.2    Each member of the Committee shall be (i) a ‘‘disinterested person’’ within the meaning of Rule 16b-3 under the Exchange Act and (ii) an ‘‘independent director’’ within the meaning of the listing standards of the New York Stock Exchange.

3.3    Subject to the express terms and conditions set forth herein, the Committee shall have the power, consistent with Rule 16b-3 under the Exchange Act, from time to time to:

(a)    select those employees and members of the Board to whom Awards shall be granted and to determine the terms and conditions (which need not be identical) of each such Award;

(b)    make any amendment or modification to any Agreement consistent with the terms of the Plan;

(c)    construe and interpret the Plan and the Awards, and establish, amend and revoke rules and regulations for the administration of the Plan, including, but not limited to, correcting any defect or supplying any omission, or reconciling any inconsistency in the Plan or in any Agreement or between the Plan and any Agreement, in the manner and to the extent it shall deem necessary or advisable so that the Plan complies with applicable law, including Rule 16b-3 under the Exchange Act to the extent applicable, and otherwise to make the Plan fully effective. All decisions and determinations by the Committee or its delegates in the exercise of this power shall be final, binding and conclusive upon the Partnership, its subsidiaries, the Grantees and all other persons having any interest therein;

(d)    exercise its discretion with respect to the powers and rights granted to it as set forth in the Plan; and

(e)    generally, exercise such powers and perform such acts as it deems necessary or advisable to promote the best interests of the Partnership with respect to the Plan.

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3.4    Subject to adjustment as provided in Article 7, the total number of Common Units that may be made subject to Awards granted under the Plan shall be 717,805, consisting of 230,000 of which are newly authorized as of the date hereof (subject to the unitholder approval requirements set forth in Section 9.6), and 487,805 which were previously authorized as of the Effective Date. The Partnership shall reserve for purposes of the Plan, out of its authorized but unissued units, such newly authorized amount of Common Units.

3.5    Notwithstanding anything inconsistent contained in this Plan, the number of Common Units subject to, or which may become subject to, Awards at any time under the Plan shall be reduced to such lesser amount as may be required pursuant to the methods of calculation necessary so that the exemptions provided pursuant to Rule 16b-3 under the Exchange Act will continue to be available for transactions involving all current and future Awards. In addition, during the period that any Awards remain outstanding under the Plan, the Committee may make good faith adjustments with respect to the number of Common Units attributable to such Awards for purposes of calculating the maximum number of Common Units subject to the granting of future Awards under the Plan, provided that following such adjustments the exemptions provided pursuant to Rule 16b-3 under the Exchange Act will continue to be available for transactions involving all current and future Awards.

ARTICLE IV
COMMON UNIT GRANTS

4.1    Time Vesting Grants.    From time to time, the Committee may grant restricted Common Units to Grantees, in such amounts as it deems prudent and proper. Such rights shall be granted, and the Common Units underlying such rights shall be issued, in consideration of the performance of services and for no other consideration.

4.2    Forfeiture.    A Grantee’s rights with respect to the restricted Common Units shall remain forfeitable at all times prior to the date on which the restrictions thereon shall have lapsed in accordance with the terms of the Plan and the Award.

4.3    Vesting Schedule.    The restricted Common Unit grants made pursuant to Section 4.1 shall vest and become non-forfeitable, unless otherwise determined by the Committee (at the time of Award or otherwise), and the restrictions thereon shall lapse, at a rate of 25% on the third anniversary of the date of the applicable Award, a second 25% on the fourth anniversary, and a final 50% on the fifth anniversary of the date of the applicable Award, provided that the Grantee is employed on such date.

4.4    Other Grants.    Notwithstanding anything else herein to the contrary, the Committee may grant Common Units on such terms and conditions as it determines in its sole discretion, the terms and conditions of which shall be set forth in the applicable Award.

ARTICLE V
OTHER PROVISIONS APPLICABLE TO VESTING

5.1    Change of Control.    Notwithstanding anything in this Plan to the contrary, upon a Change of Control, all restrictions on Common Units shall lapse immediately (unless otherwise set forth in the terms of the applicable Award) and all such restricted Common Units shall become fully vested and non-forfeitable.

5.2    Forfeiture.    Unless otherwise provided in an Award, any and all restricted Common Units in respect of which the restrictions have not previously lapsed shall be forfeited (and automatically transferred to and reacquired by the Partnership at no cost to the Partnership and neither the Grantee nor any successors, heirs, assigns, or personal representatives of such Grantee shall thereafter have any further right or interest therein) upon the termination of the Grantee’s employment for any reason; provided, however, that in the event that a Grantee’s employment by the Partnership or one of its affiliates was terminated without Cause or by the Grantee for Good Reason, in either case, within six months prior to a Change of Control, no forfeiture of Common

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Units shall be treated as occurring by reason of such termination and the Common Units shall vest accordingly. As a condition precedent for such vesting to occur when the Grantee terminated employment for Good Reason within six months prior to a Change of Control, the Grantee must have both (a) notified the Partnership’s Vice President of Human Resources (or if there be no such person, the then highest ranking member of the Partnership’s Human Resources Department) of the Good Reason event by certified mail or overnight courier within ninety days following the date of such event. and (b) allowed a Cure Period following the date of such notice.

5.3    Disability.    Notwithstanding the provisions of Section 5.2, unless otherwise provided in an Agreement, if a Grantee’s employment terminates as a result of Disability, the restricted Common Units held by such Grantee for one year on the date of termination shall immediately vest and shall be distributed as soon as practical following the Grantee’s date of Disability but no later than the date two and one half months following the calendar year in which such Disability date occurred.

5.4    Retirement.    Notwithstanding the provisions of Section 5.2, unless otherwise provided in an Agreement, if a Grantee’s employment terminates as a result of Retirement, the restricted Common Units held by such Grantee which were awarded to Grantee more than six (6) months prior to the effective date of such Retirement shall vest six months after the effective date of such retirement and shall be distributed as soon as practical following the vesting date but no later than the date two and one half months following the calendar year in which such vesting date occurred.

5.5    Recycling of Forfeited Shares.    Subject to the restrictions set forth in Rule 16b-3 of the Exchange Act, any Common Units forfeited hereunder may be, after six months, the subject of an Award pursuant to this Plan.

5.6    409A Compliance.    In the event that any Common Units become vested solely on account of (i) a Grantee’s employment by the Partnership or one of its affiliates is terminated without Cause or by the Grantee for Good Reason, in either case, within six months prior to a Change of Control as set forth in Section 5.2, above; (ii) the Grantee’s service is terminated due to Disability as set forth in Section 5.3 above; or (iii) the Grantee’s service is terminated due to Retirement as set forth in Section 5.4 above and the Grantee is a ‘‘specified employee’’ as defined in Section 409A(a)(2)(B)(i) of the Code, then the distribution of any Award under the Plan that is treated as deferred compensation under Section 409A of the Code shall be delayed unti l the date that is six months after the date of separation from service.

5.7    Recoupment Policy.    Notwithstanding anything in this Plan to the contrary, awards of Common Units granted under the Plan on or after the Recoupment Effective Date shall be deemed ‘‘Incentive Compensation’’ covered by the terms of the Partnership’s Incentive Compensation Recoupment Policy (the ‘‘Policy’’) adopted by the Board on April 25, 2007, which is incorporated herein by reference. In accordance with the Policy, in the event of a significant restatement of the Partnership’s published financial results and the Committee determines that fraud or intentional misconduct by a Grantee was a contributing factor to such restatement, then, in addition to other disciplinary action, the Committee may require cancellation of any unvested restricted Common Units granted under the Plan to that Grantee after the Recoupment Effective Date. This Section 5.7 shall be interpreted and administered in accordance with the Policy as in effect from time to time. In the case of any inconsistency between the Policy and this Section 5.7, the Policy shall control.

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ARTICLE VI
DELIVERY OF UNITS, ETC.

6.1    Delivery of Common Units.    Subject to Section 16, upon the vesting of Common Units, the Partnership shall deliver to the Grantee a certificate representing such number of Common Units as are subject to such rights, to the extent of such vesting, free of all restrictions hereunder within 45 days of the date of vesting.

6.2    Transferability.    Until such time as restricted Common Units have vested and become non-forfeitable and certificates representing Common Units in respect thereof have been issued, a Grantee shall not be entitled to transfer such Common Units.

6.3    Rights of Grantees.    Until such time as restricted Common Units have vested and become non-forfeitable and certificates representing Common Units in respect thereof have been issued, a Grantee shall not be entitled to exercise any rights of a unitholder with respect thereto, including the right to vote such units and the right to receive allocations or distributions thereon.

ARTICLE VII
ADJUSTMENT UPON CHANGES IN CAPITALIZATION

7.1    In the event of a Change in Capitalization, the Committee shall conclusively determine the appropriate adjustments, if any, to (i) the maximum number and class of Common Units or other units or securities with respect to which Awards may be granted under the Plan, (ii) the number of Common Units or other units or securities which are subject to outstanding Awards granted under the Plan, and the purchase price thereof, if applicable.

7.2    If, by reason of a Change in Capitalization, a Grantee of an Award shall be entitled to new, additional or different rights to acquire units or other securities, such new, additional or different rights or securities shall thereupon be subject to all of the conditions, restrictions and performance criteria which were applicable to the units subject to the Award prior to such Change in Capitalization.

ARTICLE VIII
TERMINATION AND AMENDMENT OF THE PLAN

The Plan shall terminate on the day preceding the tenth anniversary of the Effective Date and no Award may be granted thereafter. The Board may sooner terminate the Plan and the Board may at any time and from time to time amend, terminate, modify or suspend the Plan or any Agreement provided, however, that no such amendment, modification, suspension or termination shall impair or adversely affect any Awards theretofore granted under the Plan, except with the consent of the Grantee, nor shall any amendment, modification, suspension or termination deprive any Grantee of any Common Units which he or she may have acquired through or as a result of the Plan. To the extent necessary under Section 16(b) of the Exchange Act and the rules and regulations promulgated thereunder or other applicable law, no amendment shall be effective unless approved by the unitholders of the Partnership in accordance with applicable law and regulations.

ARTICLE IX
MISCELLANEOUS

9.1    Non-Exclusivity of the Plan.    The adoption of the Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangement or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of options to acquire the Common Units, and such arrangements may be either applicable generally or only in specific cases.

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9.2    Limitation of Liability.    As illustrative of the limitations of liability of the Partnership, but not intended to be exhaustive thereof, nothing in the Plan shall be construed to:

(a)    give any person any right to be granted an Award other than at the sole discretion of the Committee;

(b)    give any person any rights whatsoever with respect to the Common Units except as specifically provided in the Plan or an Agreement;

(c)    limit in any way the right of the Partnership or any of its affiliates to terminate the employment of any person at any time; or

(d)    be evidence of any agreement or understanding, express or implied, that the Partnership will employ any person at any particular rate of compensation or for any particular period of time.

9.3    Regulations and Other Approvals; Governing Law.    Except as to matters of federal law, this Plan and the rights of all persons claiming hereunder shall be construed and determined in accordance with the laws of the State of New Jersey without giving effect to conflicts of law principles.

Notwithstanding any other provisions of this Plan, the obligation of the Partnership to deliver the Common Units in respect thereof under the Plan shall, in each case, be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee.

(a)    Except as provided in Article VIII hereof, the Board may make such changes to the Plan or an Agreement as may be necessary or appropriate to comply with the rules and regulations of any government authority.

(b)    Each Award is subject to the requirement that, if at any time the Committee determines, in its sole and absolute discretion, that the listing, registration or qualification of the Common Units issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Award of the issuance of the Common Units, no Awards shall be granted and no Common Units shall be issued, in whole or in part, unless such listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Committee.

(c)    Notwithstanding anything contained in the Plan or any Agreement to the contrary, in the event that the disposition of the Common Units or any other securities acquired pursuant to the Plan is not covered by a then current registration statement under the Act or is not otherwise exempt from such registration, such Common Units shall be restricted against transfer to the extent required by the Act and Rule 144 or other regulations thereunder. The Committee may require any person receiving Common Units pursuant to an award granted under the Plan, as a condition precedent to receipt of such Common Units, to represent and warrant to the Partnership in writing that the Common Units acquired by such individual are acquired without a view to any distribution thereof and will not be sold or transferred other than pursuant to an effective registration thereof under said Act or pursuant to an exemption applicable under the Act or the rules and re gulations promulgated thereunder. The certificates evidencing any of such Common Units shall be appropriately legended to reflect their status as restricted securities as aforesaid.

9.4    Withholding of Taxes.    At such times as a Grantee recognizes taxable income in connection with the rights to acquire Common Units granted hereunder (a ‘‘Taxable Event’’), the Grantee shall pay to the Partnership an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld by the Partnership in connection with the Taxable Event (the ‘‘Withholding Taxes’’) prior to the issuance of such units. The

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Partnership shall have the right to deduct from any payment of cash to a Grantee an amount equal to the Withholding Taxes in satisfaction of the obligation to pay Withholding Taxes. In satisfaction of the obligation to pay Withholding Taxes to the Partnership, the Grantee may make a written election (the ‘‘Tax Election’’), which may be accepted or rejected in the discretion of the Committee, to have withheld a portion of the Common Units then issuable to him or her having an aggregate Fair Market Value, on the date preceding the date of such issuance, equal to the Withholding Taxes, provided that in respect of a Grantee who may be subject to liability under Section 16(b) of the Exchange Act, such withholding is done in accordance with any applicable Rule under section 16(b) of the Exchange Act.

9.5    Interpretation.    The Plan is intended to comply with Rule 16b-3 promulgated under the Exchange Act, and the Committee shall interpret and administer the provisions of the Plan or any Agreement in a manner consistent therewith. Any provisions inconsistent with such rule shall be inoperative and shall not affect the validity of the Plan.

9.6    Effective Date.    The effective date of the Plan shall be the Effective Date. The effectiveness of the Plan is subject to approval of the Plan prior to the Effective Date by the partners of the Partnership. The effective date of the amendments to the Plan as set forth in this Amended and Restated Plan shall be as of the date such amendment is approved by the unitholders of the Partnership to the extent necessary under Section 16(b) of the Exchange Act and the rules and regulations promulgated thereunder and as required under the listing standards of the New York Stock Exchange or any other applicable law.

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EX-10.2

EXHIBIT 10.2

SUBURBAN PROPANE, L.P.

2003 LONG TERM INCENTIVE PLAN

(EFFECTIVE OCTOBER 1, 2002)

AS AMENDED ON OCTOBER 17, 2006, JULY 31, 2007, October 31, 2007 and January 24, 2008

ARTICLE I
PURPOSE AND APPROVAL

The purpose of this Plan is to strengthen Suburban Propane Partners, L.P., Suburban Propane, L.P., and their affiliates (collectively, the ‘‘Partnership’’), by providing an incentive to certain Participants (as hereinafter defined), and thereby encouraging them to devote their abilities and experience to the success of the Partnership’s business enterprise in such a manner as to maximize the total return to the Partnership’s Unitholders. It is intended that this purpose be achieved by extending to certain Participants added long-term incentive compensation for continued service to the Partnership and achieving certain Performance Measures (as hereinafter defined) which enhance the total return to the Partnership’s Unitholders. This Plan was adopted effective October 1, 2002.

ARTICLE II
DEFINITIONS

For purposes of this Plan, capitalized terms shall have the following meanings:

2.1    ‘‘Beneficial Ownership’’ shall have the same meaning as that term is used within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended.

2.2    ‘‘Beneficiary’’ means a Participant’s Beneficiary pursuant to Article VIII.

2.3    ‘‘Board’’ means the Board of Supervisors of Suburban Propane Partners, L.P.

2.4    ‘‘Cause’’ means (a) a Participant’s gross negligence or willful misconduct in the performance of his duties, (b) a Participant’s willful or grossly negligent failure to perform his duties, (c) the breach by a Participant of any written covenants to the Partnership, (d) dishonest, fraudulent or unlawful behavior by a Participant (whether or not in conjunction with employment) or a Participant being subject to a judgment, order or decree (by consent or otherwise) by any governmental or regulatory authority which restricts his ability to engage in the business conducted by the Partnership, or any of their affiliates, or (e) willful or reckless breach by a Participant of any policy adopted by the Partnership concerning conflicts of interest, standards of business conduct or fair employment practices or procedures with respect to compliance with applicable laws.

2.5    ‘‘Change in Capitalization’’ means any increase or reduction in the number of Common Units, or any change in the Common Units, change in the percentage ownership interest of the Partnership attributable to the Common Units or exchange of Common Units for a different number or kind of units or other securities of the Partnership by reason of a reclassification, recapitalization, merger, consolidation, reorganization, spin-off, split-up, issuance of warrants or rights or other convertible securities, unit distribution, unit split or reverse unit split, cash dividends, property dividend, combination or exchange of units, repurchase of units, change in corporate structure or otherwise.

2.6    ‘‘Change of Control’’ shall mean the occurrence of:

(a)    the date on which any one ‘‘Person,’’ or ‘‘More than One Person Acting as a Group,’’ acquires or has acquired during the 12-month period ending on the date of the most

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recent acquisition by such Person or More than One Person Acting as a Group (other than an acquisition directly by the Partnership, Suburban Energy Service Group LLC or any of their affiliates) Common Units or voting equity interests of the Partnership (‘‘Voting Securities’’) immediately after which such Person or More than one Person Acting as a Group has Beneficial Ownership of more than thirty percent (30%) of the combined voting power of the Partnership’s then outstanding Common Units; provided, however, that in determining whether a Change of Control has occurred, Common Units which are acquired in a ‘‘Non-Control Acquisition’’ shall not constitute an acquisition which would cause a Change of Control. A ‘‘Non-Control Acquisition’’ shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part there) maintained by (A) the Partnership or Suburban Propane, L.P. or (B) any corporation, partnership or other Pe rson of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Partnership, (ii) the Partnership or its Subsidiaries, or (iii) any Person or More than One Person Acting as a Group in connection with a ‘‘Non-Control Transaction’’; or

(b)    approval by the partners of the Partnership of (A) a merger, consolidation or reorganization involving the Partnership, unless (x) the holders of the Common Units immediately before such merger, consolidation or reorganization own, directly or indirectly, immediately following such merger, consolidation or reorganization, at least fifty percent (50%) of the combined voting power of the outstanding Common Units of the entity resulting from such merger, consolidation or reorganization (the ‘‘Surviving Entity’’) in substantially the same proportion as their ownership of the Common Units immediately before such merger, consolidation or reorganization, and (y) no person or entity (other than the Partnership, any Subsidiary, any employee benefit plan {or any trust forming a part thereof} maintained by the Partnership, any Subsidiary, the Surviving Entity, or any Person who, immediately prior to such merger, consolidat ion or reorganization, had Beneficial Ownership of more than twenty five percent (25%) of the then outstanding Common Units), has Beneficial Ownership of more than twenty five percent (25%) of the combined voting power of the Surviving Entity’s then outstanding voting securities; (B) a complete liquidation or dissolution of the Partnership; or (C) the sale or other disposition of forty percent (40%) of the total gross fair market value of all assets of the Partnership to any Person or More than one Person Acting as a Group (other than a transfer to a Subsidiary). For this purpose, gross fair market value means the value of the assets of the Partnership, or the value of the assets being disposed of, determined with out regard to any liability associated with such assets. A transaction described in clause (x) or (y) of subsection (A) hereof shall be referred to as a ‘‘Non-Control Transaction.’’

Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person (the ‘‘Subject Person’’) acquired Beneficial Ownership of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by the Partnership which, by reducing the number of Voting Securities outstanding, increases the proportional number of Common Units Beneficially Owned by the Subject Person, provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of the Voting Securities by the Partnership, and after such acquisition of Voting Securities by the Partnership, the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then a Change of Control shall occur.

2.7    ‘‘Committee’’ means the Compensation Committee of the Board.

2.8    ‘‘Common Unit’’ means the Common Units representing publicly traded limited partnership interests of the Partnership.

2.9    ‘‘Disability’’ shall have the same meaning that such term (or similar term) has under the long-term disability plan in which the Participant is eligible to be covered.

2.10    ‘‘Effective Date’’ shall mean October 1, 2002.

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2.11    ‘‘Fair Market Value of Partnership’s Common Units’’ The twenty-day average of the closing prices preceding a specific date.

2.12    ‘‘Fiscal Year’’ means the fiscal year adopted by the Partnership.

2.13    ‘‘General Partner’’ has the meaning set forth in the Partnership Agreement.

2.14    ‘‘Good Reason’’ means (a) any failure by the Partnership to comply in any material respect with the compensation provisions of a written employment agreement between a Participant and the Partnership, (b) a material adverse change in a Participant’s title without his or her consent, or (c) the assignment to a Participant, without his or her consent, of duties and responsibilities materially inconsistent with his or her level of responsibility as an executive officer.

2.15    ‘‘Measurement Period’’ has the same meaning as set forth in Article 5.2.

2.16    ‘‘More than one Person Acting as a Group’’ has the same meaning as set forth in Treasury Regulation 1.409A-3(i)(5)(v)(B).

2.17    ‘‘Participant’’ means an employee of Suburban Propane, L.P. designated by the Committee to participate in the Plan.

2.18    ‘‘Partnership’’ means Suburban Propane, L.P. and Suburban Propane Partners, L.P., Delaware limited partnerships, and their successors.

2.19    ‘‘Partnership Agreement’’ means the Second Amended and Restated Agreement of Limited Partnership of Suburban Propane Partners, L.P.

2.20    ‘‘Percentage of Three-Year Annualized Total Return to Unitholders’’ means a percentage representing the three-year annualized total return to Unitholders from the commencement of the Measurement Period to the culmination of the Measurement Period. This percentage shall be calculated by an independent, third-party provider as designated by the Committee.

2.21    ‘‘Performance Measures’’ has the same meaning as set forth in Article 5.3.

2.22    ‘‘Person’’ shall have the same meaning as that term is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended.

2.23    ‘‘Phantom Unit Distributions’’ shall have the same meaning as set forth in Article 5.4.

2.24    ‘‘Plan’’ means this Suburban Propane, L.P. 2003 Long Term Incentive Plan.

2.25    ‘‘Retirement’’ shall mean voluntary termination of employment by a Participant who has attained age 55 and who has completed 10 years of ‘‘eligible service’’ to the Partnership or its predecessors, in connection with a bona fide intent by the Participant to no longer seek full time employment in the industries in which the Partnership then participates. Retirement shall not include voluntary termination of employment by a Participant in response to, or anticipation of, a termination of employment for Cause by the Partnership or one of its affiliates. The term ‘‘eligible service’’ shall have the same meaning as the term is used in the Pension Plan for eligible Employees of Suburban Propane L.P. and Subsidiaries.

2.26    ‘‘Retirement Date’’ means the first day on which a retiring Participant is considered inactive. For purposes of determining the abbreviated Measurement Period described in Article 20, if this date occurs on a day on which the stock market is closed, for purposes of this Plan, the Participant’s Retirement Date shall be the next business day on which the stock market is open.

2.27    ‘‘Subsidiary’’ shall mean any corporation, partnership, or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Partnership.

2.28    ‘‘Target Grant’’ shall have the same meaning as set forth in Article 5.1.

2.29    ‘‘Unitholders’’ means the persons holding Common Units.

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2.30    ‘‘Unvested Phantom Units’’ means a hypothetical number of units arrived at by dividing the Target Grant established upon commencement of the Measurement Period by the Fair Market Value of Partnership Common Units on the first day of the Measurement Period. If the market is closed on the first day of the Measurement Period then the Fair Market Value on the next business day shall be used.

2.31    ‘‘Vested Phantom Units’’ means the quantity of a Participant’s Unvested Phantom Units which are earned upon culmination of the Measurement Period.

ARTICLE III
PARTICIPATION

Only those Participants designated from time to time by the Committee shall participate in the Plan and receive Target Grants hereunder.

ARTICLE IV
ADMINISTRATION

4.1    Administration by the Committee. The Plan shall be administered by the Committee, which shall hold meetings at such times as may be necessary for the proper administration of the Plan. The Committee shall keep minutes of its meetings. A quorum shall consist of not less than two members of the Committee and a majority of a quorum may authorize any action. Any decision or determination reduced to writing and signed by a majority of all of the members of the Committee shall be as fully effective as if made by a majority vote at a meeting duly called and held. No member of the Committee shall be liable for any action, failure to act, determination or interpretation made in good faith with respect to this Plan or any transaction hereunder, except for liability arising from his or her own willful misfeasance, gross negligence or reckless disregard of his or her duties. The Partnership hereby agrees to indemnify each member of the Committee f or all costs and expenses and, to the extent permitted by applicable law, any liability incurred in connection with defending against, responding to, negotiating for the settlement of or otherwise dealing with any claim, cause of action or dispute of any kind arising in connection with any actions in administering this Plan or in authorizing or denying authorization for any transaction hereunder.

4.2    Powers of the Committee. Subject to the express terms and conditions set forth herein, the Committee shall have the power, from time to time to:

(a)    select those Participants for whom Target Grants shall be established;

(b)    construe and interpret the Plan, the Target Grants, the Unvested and Vested Phantom Units and corresponding Phantom Unit Distributions, and establish, amend and revoke rules and regulations for the administration of the Plan, including, but not limited to, correcting any defect or supplying any omission, or reconciling any inconsistency in the Plan, in the manner and to the extent it shall deem necessary or advisable so that the Plan complies with applicable law and otherwise to make the Plan fully effective.

(c)    exercise its discretion with respect to the powers and rights granted to it as set forth in the Plan; and

(d)    generally, exercise such powers and perform such acts as it deems necessary or advisable to promote the best interests of the Partnership with respect to the Plan.

4.3    Decisions of the Committee are Final and Binding. The Committee’s decisions, actions, determinations and interpretations shall be final and binding upon the Partnership, all Participants, Beneficiaries, equity holders of the Partnership and any other person.

4.4    Change in Capitalization. In the event of any Change in Capitalization or in the event of any special distribution to the Common Unitholders, the Committee may, but shall not be obligated to, make such equitable adjustments in the Performance Measures, the Phantom Unit Distributions or other aspects of the Plan, as the Committee determines are necessary and appropriate.

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ARTICLE V
GRANTS

5.1    Target Grant. The Committee shall establish a Target Grant for each Participant at the beginning of each Fiscal Year equal to a designated percentage of such Participant’s base salary at the start of the Fiscal Year. Each participant’s designated percentage shall be recorded in the minutes of the Committee. In the event a Participant’s base salary for the respective Fiscal Year was adjusted within 120 days after the start of the Fiscal Year, the Target Grant will be computed using such adjusted base salary.

5.2    Measurement Period. This is a three-year period commencing on the first day of the fiscal year during which the Target Grant was established and ending on the last day of the second fiscal year following the fiscal year during which the Target Grant was established.

5.3    Performance Measures. The percentage of the Unvested Phantom Units that shall be earned and immediately converted to Vested Phantom Units at the end of the Measurement Period shall be determined based upon the ranking of the Partnership’s Percentage of Three-Year Annualized Total Return to Unitholders in a peer group of eleven other publicly traded partnerships selected by the Committee. If, at the end of the Measurement Period, it is determined that less than 100% of the Unvested Phantom Units have been earned, the unearned portion of said Unvested Phantom Units shall be forfeited.

The following chart illustrates the percentage of the Unvested Phantom Units that shall be converted to Vested Phantom Units based upon the Partnership’s ranking, at the end of the Measurement Period, of Percentage of Three-Year Annualized Total Return to Unitholders among the peer group established pursuant to Article 5.3.

THREE-YEAR ANNUALIZED TOTAL RETURN TO UNITHOLDERS PERCENTAGE PERFORMANCE			PERCENT OF TARGET GRANT EARNED
Ranked in top 3 (top quartile)					125	%
Ranked between 4 – 6 (50th/75th quartile)					100	%
Ranked between 7 – 9 (25th quartile)					50	%
Ranked 10 – 12 (bottom quartile)					0	%

5.4    Phantom Unit Distributions. These are cumulative phantom partnership cash distributions equal to each Participant’s Vested Phantom Units multiplied by the per-Common Unit distribution declared and paid by the Partnership for each quarter over the course of the Measurement Period.

5.5    Plan Distributions. Upon vesting, each Participant will receive a cash payment equal to the quantity of his Vested Phantom Units multiplied by the Fair Market Value of the Partnership’s Common Units on the last date of the Measurement Period plus the Participant’s Phantom Unit Distributions.

ARTICLE VI
VESTING

6.1    Vesting Schedule. Subject to Articles 6.2 and 6.3, vesting is in accordance with Article 5.3. Notwithstanding anything in this Article VI to the contrary, the Committee may accelerate the vesting of Unvested Phantom Units and all accrued Phantom Unit Distributions at any time for any reason with the consent of the General Partner.

6.2    Change of Control. Notwithstanding anything in this Plan to the contrary, upon a Change of Control, the cash value of 125% of all Unvested Phantom Units and a sum equal to 125% of the Unvested Phantom Units multiplied by an amount equal to the cumulative, per-Common Unit distribution from the beginning of the Measurement Period through the date on which the Change of Control occurred shall be fully vested and nonforfeitable and shall be paid to a Participant within thirty (30) days after the Change in Control.

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6.3    Forfeiture. Subject to Articles 6.2, 6.4 and 6.5, Unvested Phantom Units shall lapse and be forfeited upon the occurrence of either of the following events: (a) termination of the Participant’s employment or participation in the Plan for any reason, except under the circumstances provided in Articles 6.4 and 6.5; (b) any attempted or completed transfer, sale, pledge, hypothecation, or assignment by the Participant of the Unvested Phantom Units.

6.4    Disability or Death. Notwithstanding the provisions of Article 6.3, if a Participant’s employment terminates as a result of Disability or death, all Unvested Phantom Units and the Phantom Unit Distributions associated with said Unvested Phantom Units for such Participant shall vest in accordance with Articles 6.1 and 6.2, as applicable, and shall be paid in accordance with Article VII and VIII.

6.5    Termination without Cause or for Good Reason. In the event a Participant’s employment by the Partnership is terminated by the Partnership without Cause or by the Participant for Good Reason, all Unvested Phantom Units and all Phantom Unit Distributions associated with said Unvested Phantom Units shall vest upon the next succeeding scheduled vesting date pursuant to Articles 6.1 or 6.2, as applicable.

6.6    Notwithstanding anything in this Plan to the contrary, effective for Target Grants established for the Partnership’s 2008 and later fiscal years, said Target Grants shall be deemed ‘‘Incentive Compensation’’ covered by the terms of the Partnership’s Incentive Compensation Recoupment Policy (the ‘‘Policy’’) adopted by the Board on April 25, 2007, which is incorporated herein by reference. In accordance with the Policy, in the event of a significant restatement of the Partnership’s published financial results, where the percentage of the Unvested Phantom Units derived from Target Grants subject to this Section 6.6 that are converted to Vested Phantom Units pursuant to Section 5.3 herein would have been lower had the vesting percentage been calculated based on the restated financial results, the Committee may review the circumstances surrounding the restatement an d shall have the sole and absolute discretion and authority to determine whether to seek reimbursement of the amount, or some lesser portion thereof (without interest), by which certain Participants’ distributions under Section 5.5 of the Plan exceeded the lower payment that would have been made based on the restated financial results, regardless of the fault, misconduct or responsibility of any such Participants in the restatement. If the Committee determines that any fraud or intentional misconduct by a Participant was a contributing factor to the Partnership having to make a significant restatement, then, in addition to other disciplinary action, the Committee may require reimbursement of all, or any part, of the compensation paid to that executive in excess of that executive’s base salary, plus interest, including distributions made under the Plan, for the period of such restatement. This Section 6.6 shall be interpreted and administered in accordance with the Policy as in effect from time to time. In the case of any inconsistency between the Policy and this Section 6.6, the Policy shall control.

ARTICLE VII
PAYMENTS

The Plan Distributions associated with Vested Phantom Units earned by a Participant under the Plan shall be paid to the Participant within thirty days following the culmination of the Measurement Period.

ARTICLE VIII
BENEFICIARIES

A Participant may at any time and from time to time prior to death designate one or more Beneficiaries to receive any payments to be made following the Participant’s death. If no such designation is on file with the Partnership at the time of a Participant’s death, the Participant’s Beneficiary shall be the beneficiary or beneficiaries named in the Beneficiary designation most recently filed by the Participant with the Partnership. If the Participant has not effectively designated a Beneficiary, or if no Beneficiary so designated has survived the Participant, the Participant’s Beneficiary shall be the Participant’s surviving spouse, or, if no spouse has survived the Participant, the

6

estate of the deceased Participant. If an individual Beneficiary cannot be located for a period of one year following the Participant’s death, despite mail notification to the Beneficiary’s last known address, and if the Beneficiary has not made a written claim for benefits within such period to the Committee, the Beneficiary shall be deemed to have predeceased the Participant. The Committee may require such proof of death and such evidence of the right of any person to receive all or part of the benefit of a deceased Participant as the Committee may consider to be appropriate. The Committee may rely upon any direction by the legal representatives of the estate of a deceased Participant, without liability to any other person. If a Participant has designated his or her spouse as Beneficiary, upon entry of a judgment of divorce (or other evidence of formal dissolution of the marriage), the designation of the spouse as Beneficiary will be deemed to have been revoked unless the Participant reaffirms such designation thereafter.

ARTICLE IX
TERMINATION AND AMENDMENT OF THE PLAN

The Plan shall terminate by its terms on the day preceding the tenth anniversary of the Effective Date of this Plan as originally adopted and no Target Grant may be established thereafter. The previous sentence notwithstanding, the Board may, at any time and from time to time, amend, terminate, modify or suspend the Plan; provided, however, that no such amendment, modification, suspension or termination shall impair or adversely affect any Target Grants established for a Participant under the Plan, except with the consent of the Participant.

ARTICLE X
NON-EXCLUSIVITY OF THE PLAN

The adoption of the Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangement or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of options to acquire Common Units, and such arrangements may be either applicable generally or only in specific cases.

ARTICLE XI
LIMITATION OF LIABILITY

As illustrative of the limitation of liability of the Partnership, but not intended to be exhaustive thereof, nothing in the Plan shall be construed to:

(a)    give any person any right to the establishment of a Target Grant other than at the sole discretion of the Committee;

(b)    give any person any rights whatsoever with respect to a Target Grant or Unvested Phantom Units except as specifically provided in the Plan.

(c)    limit in any way the right of the Partnership to terminate the employment of any person at any time; or

(d)    be evidence of any agreement or understanding, express or implied, that the Partnership will employ any person at any particular rate of compensation or for any particular period of time.

ARTICLE XII
REGULATIONS AND OTHER APPROVALS; GOVERNING LAW

12.1    Except as to matters of federal law, this Plan and the rights of all persons claiming hereunder shall be construed and determined in accordance with laws of the State of New Jersey without giving effect to conflicts of law principles.

12.2    Except as provided in Article IX hereof the Board may make such changes to the Plan or an Agreement as may be necessary or appropriate to comply with the rules and regulations of any government authority.

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ARTICLE XIII
WITHHOLDING OF TAXES

At such time(s) as a Participant recognizes income for purposes of income, employment, or other tax liability, the Partnership shall withhold an amount equal to the federal, state and local taxes and other amounts as may be required by law to be withheld by the Partnership.

ARTICLE XIV
NO REQUIRED SEGREGATION OF ASSETS

Neither the Partnership nor any subsidiary shall be required to segregate any assets that may at any time be represented by Phantom Units or Phantom Unit Distributions made pursuant to the Plan.

ARTICLE XV
RIGHT OF DISCHARGE RESERVE

Neither the Plan nor the establishment of any Target Grant shall guarantee any Participant continued employment with the Partnership, or a subsidiary, or guarantee the establishment of future Target Grants.

ARTICLE XVI
NATURE OF PAYMENTS

All Phantom Units awarded and Phantom Unit Distributions made pursuant to the Plan are in consideration of services for the Partnership or its subsidiaries. The Phantom Units and Phantom Unit Distributions constitute a special incentive payment to the Participant and shall not be taken into account as compensation for purposes of any of the employee benefit plans of the Partnership or any subsidiary except as may be determined by the Committee.

ARTICLE XVII
CONSTRUCTION OF PLAN

The captions used in this Plan are for convenience only and shall not be construed in interpreting the Plan. Whenever the context so requires, the masculine shall include the feminine and neuter, and the singular shall also include the plural, and vice versa.

ARTICLE XVIII
SEVERABILITY

If any provision of the Plan shall be held unlawful or otherwise invalid or unenforceable in whole or in part, the unlawfulness, invalidity or unenforceability of said provision shall not affect any other provision of the Plan or part thereof, each of which shall remain in full force and effect.

ARTICLE XIX
DEFERRAL

Payments under the Plan may not be deferred by the Participants.

ARTICLE XX
RETIREMENT OF PARTICIPANT

Upon Retirement, a Participant shall not be eligible for any additional grants under the Plan; however, all Unvested Phantom Units and all Phantom Unit Distributions associated with said Unvested Phantom Units shall vest upon their normal scheduled vesting dates pursuant to Articles 6.1 or 6.2, as applicable.

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EX-10.3

EXHIBIT 10.3

Attachment 1

SUBURBAN PROPANE, L.P.
SEVERANCE PROTECTION PLAN
As Adopted in September 1996 and Amended in January 2008

The Board of Supervisors of Suburban Propane Partners, L.P. (the ‘‘Partnership’’), Suburban Propane, L.P. (‘‘Suburban’’), and all direct or indirect subsidiaries of Suburban, has adopted a program (referred to herein as the ‘‘Severance Protection Plan’’ or the ‘‘Plan’’) designed to protect certain key employees from the effects of an actual or possible Change in Control (as defined below), and thereby to enable Suburban to obtain the continued availability of such key employees’ services, managerial skills and business experience upon the threat or actual occurrence of a Change in Control.

An employee of Suburban or any of its subsidiaries who (a) received an unvested 2003 Long Term Incentive Plan (together with any successor plan thereto, the ‘‘LTIP’’) award during the fiscal year in which the Change in Control occurred, or (b), alternatively, if the Change in Control occurs on the first day of Suburban’s fiscal year, received an unvested LTIP award during the fiscal year immediately preceding the fiscal year in which the Change in Control occurred, or (c) Suburban agreed in writing would receive an unvested LTIP award at the commencement of the Suburban fiscal year immediately following the Change in Control, or (d), alternatively, if the Change in Control occurs on the first day of Suburban’s fiscal year, Suburban agreed in writing would receive an unvested LTIP award at the commencement of the Suburban fiscal year in wh ich the Change in Control occurred is eligible for benefits under this Severance Protection Plan unless otherwise provided by written agreement between such employee and Suburban.

An employee who is eligible for benefits under this Plan will become entitled to benefits under the Plan if there is a loss of his or her employment within one year following a Change in Control. In such event, the employee will be entitled to receive (in lieu of any other severance benefits to which he or she may be entitled) a lump-sum benefit equal to the product of sixty-five (65) times 1/52 of the sum of the employee’s base annual salary and Target Cash Bonus, defined as the percentage (established by Suburban as of the later of the start of the fiscal year or commencement of employment) of the employee’s annual base salary that would be paid as a cash bonus to the employee if, for that fiscal year, actual EBITDA eq uals the Partnership’s budgeted EBITDA, without regard to whether the Target Cash Bonus was earned or paid, as of the date of the Change in Control (but not lower than the highest sum of such amounts at any time during the period beginning one year prior to the Change in Control and ending on the employee’s termination date). The benefit shall be paid within 30 days following the employee’s termination of employment.

Each employee who becomes entitled to receive benefits under this Plan shall also receive payment for (a) all annual incentive bonus awards earned but unpaid for all fiscal years completed prior to the Change in Control and for all fiscal years completed prior to the employee’s termination of employment, plus (b) for any partially completed fiscal year during which the employee’s termination of employment occurred, a payment equal to his or her then current Target Cash Bonus, multiplied by a factor equal to a numerator representing the number of full and partial months of service during the partially completed fiscal year and a denominator of twelve. Any amounts payable under this paragraph shall be paid within 30 days following the employee’s termination of employment.

For purposes of this Plan, an employee shall be deemed to have lost his or her employment if (a) the employee’s employment is terminated by Suburban or its successor (unless such termination is due to willful malfeasance in office as that term is defined below), or (b) the employee’s employment is terminated by the employee subsequent to one of the following events (each a ‘‘Good Reason’’): (i) a material diminution of the employee’s authority, duties, responsibilities or status; (ii) a material diminution in the authority, duties, responsibilities or status of the supervisor to whom the employee is req uired to report, including, but not limited to, a requirement that the employee report to a company

1

officer (or subordinate employee) instead of directly to the Board of Supervisors; (iii) a reduction of 5% or greater in the employee’s base annual salary, or a failure to provide the employee with the opportunity to participate, on terms no less favorable than those existing immediately prior to the Change in Control, in any incentive bonus, savings, pension or other employee benefit plan of Suburban in effect immediately prior to the Change in Control (or successor plans and benefits which are, in the aggregate, no less favorable to the employee than those plans and benefits available to the employee immediately prior to the Change in Control); or (iv) a requirement, without the employee’s consent, that the employee be based more than 35 miles from his or her present office location if, and only if, the new location is farther from the employee’s place of residence than the office in which the employee performed services for Suburban o r its affiliates prior to the Change in Control. The term ‘‘willful malfeasance in office’’ shall require a finding with respect to the circumstances under consideration that the employee did not act in a manner he or she reasonably believed to be in, or not opposed to, the best interests of Suburban.

Prior to voluntary termination of employment for any of the four Good Reasons listed in subsection (b) of the preceding paragraph, and within 90 days of first becoming aware that one or more such Good Reasons has occurred, the employee must notify the Vice President or other highest ranking individual in charge of Human Resources, by certified mail, of such event, informing him or her that Suburban or, if applicable, a successor entity has 30 business days (the ‘‘Cure Period’’) from the date on which the notification was mailed to remedy such Good Reason.

If, for any reason, the twelve month anniversary of the Change in Control event occurs on, or within 30 days following, the date the foregoing notification was mailed to the Vice President or other highest ranking individual in charge of Human Resources, then the twelve-month severance protection period provided under this Plan shall be extended until the expiration of ten business days beyond the conclusion of the Cure Period.

For purposes of this Plan, the term ‘‘Change in Control’’ means:

(a)    the date on which any Person, or More than One Person Acting as a Group, (as those terms are defined below) acquires or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or More than One Person Acting as a Group (other than an acquisition directly by the Partnership, Suburban Energy Service Group LLC or any of their affiliates) Common Units or other voting equity interests of the Partnership (‘‘Voting Securities’’) immediately after which such Person or More than One Person Acting as a Group has Beneficial Ownership (as that term is defined below) of more than thirty percent (30%) of the combined voting power of the Partnership’s then outstanding Common Units; provided, however, that in determining whether a Ch ange in Control has occurred, Common Units which are acquired in a Non-Control Acquisition (as that term is defined below) shall not constitute an acquisition which would cause a Change in Control. A ‘‘Non-Control Acquisition’’ shall mean an acquisition by (x) an employee benefit plan (or a trust forming a part there) maintained by (A) the Partnership or Suburban, or (B) any corporation, partnership or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Partnership, (y) the Partnership or its subsidiaries, or (z) any Person or More than One Person Acting as a Group in connection with a Non-Control Transaction (as that term is defined below); or

(b)    approval by the partners of the Partnership of (x) a merger, consolidation or reorganization involving the Partnership, unless (A) the holders of the Common Units immediately before such merger, consolidation or reorganization own, directly or indirectly immediately following such merger, consolidation or reorganization, at least fifty percent (50%) of the combined voting power of the outstanding Common Units of the entity resulting from such merger, consolidation or reorganization (the ‘‘Surviving Entity’’) in substantially the same proportion as their ownership of the Common Units immediately before such merger, consolidation or reorganization, and (B) no person or entity (other than the Partnership, any subsidiary thereof, any employee benefit plan (or any trust formi ng a part thereof) maintained by the Partnership, any subsidiary thereof, the Surviving Entity, or any Person who, immediately

2

prior to such merger, consolidation or reorganization, had Beneficial Ownership of more than twenty five percent (25%) of then outstanding Common Units), has Beneficial Ownership of more than twenty five percent (25%) of the combined voting power of the Surviving Entity’s then outstanding voting securities; (y) a complete liquidation or dissolution of the Partnership; or (z) the sale or other disposition of forty percent (40%) of the total gross fair market value of all the assets of the Partnership to any Person or More than One Person Acting as a Group (other than a transfer to a subsidiary of the Partnership). For this purpose, gross fair market value means the value of the assets of the Partnership, or the value of the assets being disposed of, determined without regard to any liability associated with such assets. A transaction described in clause (A) or ( B) of subsection (x) hereof shall be referred to as a ‘‘Non-Control Transaction.’’

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the ‘‘Subject Person’’) acquired Beneficial Ownership of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by the Partnership which, by reducing the number of Voting Securities outstanding, increases the proportional number of Common Units Beneficially Owned by the Subject Person, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Partnership, and after such acquisition of Voting Securities by the Partnership, the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then a Change in Control shall occur.

For purposes of the foregoing definition of Change in Control, ‘‘Person’’ and ‘‘Beneficial Ownership’’ have the meanings used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, and ‘‘More than one Person Acting as a Group’’ has the same meaning as set forth in Treasury Regulation 1.409A-3(i)(5)(v)(B).

Suburban shall also pay all legal fees and expenses incurred by an employee or former employee, as the case may be, as a result of such employee’s or former employee’s enforcement of any right or benefit under this Plan, unless a court or arbitrator finds that such employee’s or former employee’s challenge was frivolous, in which case, Suburban and such employee or former employee shall each bear their respective costs and expenses.

The administrator of this Plan shall be the Compensation Committee (the ‘‘Committee’’) of the Board of Supervisors of the Partnership.    The Committee shall have absolute discretionary authority to determine eligibility for benefits under the Plan and to otherwise construe the terms of the Plan. All benefits under the Plan shall be paid out of the general assets of Suburban, and no eligible employee shall have any interest in any specific asset of Suburban as a result of participation in the Plan. The receipt of a benefit hereunder shall not cause an eligible employee to be treated as an employee of the Company for any purpose beyond the date of the eligible employee’s actual termination of employment.

This Plan may be amended, modified or terminated by the Committee, except that any termination and any amendment or modification of this Plan adverse to the interests of employees eligible for benefits hereunder shall not be effective for a period of one year after written notice thereof has been circulated generally to the participants in the Plan at the time of such termination or amendment. If Suburban shall merge with or consolidate with another entity, or transfer, sell or lease all or substantially all of its assets to another entity, Suburban will require that such successor entity assume the obligations of Suburban hereunder, and this Plan shall be binding upon such entity whether or not expressly assumed by such entity.

3

EX-31.1

EXHIBIT 31.1

Rule 13a-14(a)/15d-14(a)

Certification of the Chief Executive Officer

I, Mark A. Alexander, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Suburban Propane Partners, L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Supervisors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 7, 2008	By:	/s/ MARK A. ALEXANDER
		Mark A. Alexander Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Rule 13a-14(a)/15d-14(a)

Certification of the Chief Financial Officer

I, Michael A. Stivala, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Suburban Propane Partners, L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Supervisors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 7, 2008	By:	/s/ MICHAEL A. STIVALA
		Michael A. Stivala Chief Financial Officer and Chief Accounting Officer

EX-32.1

EXHIBIT 32.1

Certification of the Chief Executive Officer Pursuant to

18 U.S.C. Section 1350

In connection with the Quarterly Report of Suburban Propane Partners, L.P. (the “Partnership”) on Form 10-Q for the period ended December 29, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark A. Alexander, Chief Executive Officer of the Partnership, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

By:	/s/ MARK A. ALEXANDER
	Mark A. Alexander Chief Executive Officer February 7, 2008

EX-32.2

EXHIBIT 32.2

Certification of the Chief Financial Officer Pursuant to

18 U.S.C. Section 1350

In connection with the Quarterly Report of Suburban Propane Partners, L.P. (the “Partnership”) on Form 10-Q for the period ended December 29, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael A. Stivala, Chief Financial Officer and Chief Accounting Officer of the Partnership, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

By:	/s/ MICHAEL A. STIVALA
	Michael A. Stivala Chief Financial Officer and Chief Accounting Officer February 7, 2008