10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 27, 2008

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	(I.R.S. Employer
incorporation or organization)	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 þ No o

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

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

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 27, 2008 and September 27, 2008	1
Condensed Consolidated Statements of Operations for the three months ended December 27, 2008 and December 29, 2007	2
Condensed Consolidated Statements of Cash Flows for the three months ended December 27, 2008 and December 29, 2007	3
Condensed Consolidated Statement of Partners’ Capital for the three months ended December 27, 2008	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	29
ITEM 4. CONTROLS AND PROCEDURES	32
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS	33
SIGNATURES	34
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

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;

• Volatility in the unit cost of propane, fuel oil and other refined fuels and natural gas, the impact of the Partnership’s hedging and risk management activities, and the adverse impact of price increases on volumes as a result of customer conservation;

• The ability of the Partnership to compete with other suppliers of propane, fuel oil and other energy sources;

• The impact on the price and supply of propane, fuel oil and other refined fuels from the political, military or economic instability of the oil producing nations, global terrorism and other general economic conditions;

• The ability of the Partnership to acquire and maintain reliable transportation for its propane, fuel oil and other refined fuels;

• The ability of the Partnership to retain customers;

• The impact of customer conservation, energy efficiency and technology advances on the demand for propane and fuel oil;

• The ability of management to continue to control expenses;

• The impact of changes in applicable statutes and government regulations, or their interpretations, including those relating to the environment and global warming and other regulatory developments on the Partnership’s business;

• The impact of legal proceedings on the Partnership’s business;

• The impact of operating hazards that could adversely affect the Partnership’s operating results to the extent not covered by insurance;

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

• The impact of current conditions in the global capital and credit markets, and general economic pressures.

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 27, 2008. 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 Statement or Cautionary Statement except as otherwise required by law. 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 27,			September 27,
	2008			2008
ASSETS
Current assets:
Cash and cash equivalents	$	130,588		$	137,698
Accounts receivable, less allowance for doubtful accounts of $6,550 and $6,578, respectively		124,649			94,933
Inventories		83,816			79,822
Prepaid expenses and other current assets		35,389			47,098
Total current assets		374,442			359,551
Property, plant and equipment, net		365,294			367,808
Goodwill		276,282			276,282
Other intangible assets, net		15,463			16,018
Other assets		19,180			16,054
Total assets	$	1,050,661		$	1,035,713
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable	$	60,400		$	58,079
Accrued employment and benefit costs		22,739			27,053
Accrued insurance		17,190			41,120
Customer deposits and advances		67,929			71,206
Accrued interest		3,142			11,030
Other current liabilities		17,113			15,127
Total current liabilities		188,513			223,615
Long-term borrowings		531,830			531,772
Postretirement benefits obligation		17,138			17,153
Accrued insurance		27,652			31,913
Other liabilities		11,060			11,184
Total liabilities		776,193			815,637
Commitments and contingencies
Partners’ capital:
Common Unitholders (32,795 and 32,725 units issued and outstanding at December 27, 2008 and September 27, 2008, respectively)		319,098			264,231
Accumulated other comprehensive loss		(44,630	)		(44,155	)
Total partners’ capital		274,468			220,076
Total liabilities and partners’ capital	$	1,050,661		$	1,035,713

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 27,		December 29,
	2008		2007
Revenues
Propane	$	273,908	$	307,325
Fuel oil and refined fuels		54,191		78,035
Natural gas and electricity		22,281		23,983
Services		12,002		14,472
All other		933		1,294
		363,315		425,109
Costs and expenses
Cost of products sold		174,230		277,715
Operating		77,063		79,343
General and administrative		14,770		9,203
Depreciation and amortization		7,023		7,059
		273,086		373,320
Income before interest expense and provision for income taxes		90,229		51,789
Interest expense, net		9,403		8,388
Income before provision for taxes		80,826		43,401
Provision for income taxes		138		1,679
Income from continuing operations		80,688		41,722
Discontinued operations:
Gain on sale of discontinued operations		—		43,707
Net income	$	80,688	$	85,429
Income per Common Unit — basic
Income from continuing operations	$	2.46	$	1.27
Discontinued operations		—		1.34
Net income	$	2.46	$	2.61
Weighted average number of Common Units outstanding — basic		32,816		32,707
Income per Common Unit — diluted
Income from continuing operations	$	2.45	$	1.27
Discontinued operations		—		1.33
Net income	$	2.45	$	2.60
Weighted average number of Common Units outstanding — diluted		32,939		32,908

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
	December 27,			December 29,
	2008			2007
Cash flows from operating activities:
Net income	$	80,688		$	85,429
Adjustments to reconcile net income to net cash provided by (used in) operations:
Depreciation expense		6,468			6,501
Amortization of intangible assets		555			558
Amortization of debt origination costs		332			332
Compensation cost recognized under Restricted Unit Plan		569			(67	)
Amortization of discount on long-term borrowings		58			58
Gain on disposal of discontinued operations		—			(43,707	)
Gain on disposal of property, plant and equipment, net		(230	)		(1,429	)
Deferred tax provision		—			1,277
Changes in assets and liabilities:
(Increase) in accounts receivable		(29,716	)		(73,493	)
(Increase) in inventories		(3,994	)		(21,102	)
Decrease (increase) in prepaid expenses and other current assets		11,709			(8,812	)
Increase in accounts payable		2,321			44,292
(Decrease) in accrued employment and benefit costs		(4,314	)		(13,872	)
(Decrease) in accrued insurance		(23,930	)		(4,930	)
(Decrease) in customer deposits and advances		(3,277	)		(11,425	)
(Decrease) in accrued interest		(7,888	)		(7,316	)
Increase in other current liabilities		3,986			5,486
(Increase) decrease in other noncurrent assets		(2,446	)		639
(Decrease) in other noncurrent liabilities		(5,887	)		(372	)
Net cash provided by (used in) operating activities		25,004			(41,953	)
Cash flows from investing activities:
Capital expenditures		(4,445	)		(6,586	)
Proceeds from sale of property, plant and equipment		721			1,746
Proceeds from sale of discontinued operations		—			53,715
Net cash (used in) provided by investing activities		(3,724	)		48,875
Cash flows from financing activities:
Long-term debt repayments		(2,000	)		—
Partnership distributions		(26,390	)		(24,539	)
Net cash (used in) financing activities		(28,390	)		(24,539	)
Net decrease in cash and cash equivalents		(7,110	)		(17,617	)
Cash and cash equivalents at beginning of period		137,698			96,586
Cash and cash equivalents at end of period	$	130,588		$	78,969

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)

						Accumulated
						Other			Total
	Number of		Common			Comprehensive			Partners’			Comprehensive
	Common Units		Unitholders			(Loss)			Capital			Income
Balance at September 27, 2008		32,725	$	264,231		$	(44,155	)	$	220,076
Net income				80,688						80,688		$	80,688
Other comprehensive income:
Net unrealized losses on cash flow hedges							(1,288	)		(1,288	)		(1,288	)
Amortization of net actuarial losses and prior service credits into earnings							813			813			813
Comprehensive income												$	80,213
Partnership distributions				(26,390	)					(26,390	)
Common Units issued under Restricted Unit Plan		70
Compensation cost recognized under Restricted Unit Plan, net of forfeitures				569						569
Balance at December 27, 2008		32,795	$	319,098		$	(44,630	)	$	274,468

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 32,795,205 Common Units outstanding at December 27, 2008. 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. The General Partner has no 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 incentive distribution rights are outstanding and the sole member of the General Partner is the Partnership’s Chief Executive Officer.

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”). The operations of Agway Energy consisted of the distribution and marketing of propane, fuel oil and refined fuels, as well as the marketing of natural gas and electricity. The Partnership’s fuel oil and refined fuels, natural gas and electricity and services businesses are structured as limited liability companies owned by the Service Company (collectively referred to as the Corporate Entity) and, as such, are subject to corporate level income tax.

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.

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2. Basis of Presentation

Principles of Consolidation. The condensed 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. 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 27, 2008, 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 full 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. Given the retail nature of its operations, the Partnership maintains a certain level of priced physical inventory to ensure its field operations have adequate supply commensurate with the time of year. The Partnership’s strategy is to keep its physical inventory priced relatively close to market for its field operations. 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 hedge price risk associated with propane and fuel oil physical inventories, as well as future purchases of propane or fuel oil used in its operations and to ensure adequate supply during periods of high demand. Under this risk management strategy, realized gains or losses on derivative instruments will typically offset losses or gains on the physical inventory once the product is sold. All of the Partnership’s derivative instruments are reported on the condensed consolidated balance sheet 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 addition, in the course of normal 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 (“OCI”), depending on whether the derivative instrument is 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 SFAS 133, are recorded within cost of products sold as they occur. Cash flows associated with derivative instruments are reported as operating activities within the condensed consolidated statement of cash flows.

At December 27, 2008, the fair value of derivative instruments described above resulted in current derivative assets of $17,960 included within prepaid expenses and other current assets, non-current derivative assets of $3,540 included within other assets and derivative liabilities of $3,541 included within other current liabilities. The non-current derivative assets arise from the mark-to-market adjustment on short fuel oil futures, which mature during the second quarter of fiscal 2010. See Fair Value Measurements, below for details regarding fair value of derivative instruments.

6

Cost of products sold included unrealized (non-cash) gains of $15,006 and unrealized (non-cash) losses of $2,683 for the three months ended December 27, 2008 and December 29, 2007, 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 borrowings bear interest at a variable rate based upon LIBOR, plus an applicable margin depending on the level of the Partnership’s total leverage (the ratio of total debt to income before deducting interest expense, income taxes, depreciation and amortization (“EBITDA”)). 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. 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 27, 2008, the fair value of the interest rate swap amounted to an unrealized loss of ($4,488) and is included within other liabilities with a corresponding debit in accumulated OCI. See Fair Value Measurements, below for details regarding fair value of the interest rate swap agreement.

Fair Value Measurements. On September 28, 2008, the Partnership adopted SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 provides a single definition of fair value and a common framework for measuring fair value as well as new disclosure requirements for fair value measurements used in financial statements. Fair value measurements are based upon the “exit price” concept — the price that would be received to sell an asset or paid to transfer a liability exclusive of any transaction costs in an orderly transaction between market participants — in either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Adoption of SFAS 157 did not have a material effect on the Partnership’s financial position, results of operations or cash flows.

SFAS 157 establishes a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below with Level 1 having the highest priority and Level 3 having the lowest.

• Level 1: Quoted prices in active markets for identical assets or liabilities.

• Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

• Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

7

The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis:

			Basis of Fair Value Measurements
			Quoted
			Prices in
			Active
			Markets for		Significant
			Identical		Other		Significant
	As of		Assets /		Observable		Unobservable
	December 27,		Liabilities		Inputs		Inputs
	2008		Level 1		Level 2		Level 3
Current Assets
Derivative instruments — options	$	12,399	$	12,399	$	—	$	—
Derivative instruments — futures		5,561		5,561		—		—
Non-Current Assets
Derivative instruments — futures		3,540		3,540		—		—
	$	21,500	$	21,500	$	—	$	—
Current Liabilities
Derivative instruments — options	$	3,526	$	3,526	$	—	$	—
Derivative instruments — futures		15		15		—		—
Non-Current Liabilities
Interest rate swap		4,488		—		4,488		—
	$	8,029	$	3,541	$	4,488	$	—

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 from those estimates, making it reasonably possible that a change in these estimates could occur in the near term.

Reclassifications. Certain prior period amounts have been reclassified to conform with the current period presentation.

3. 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, 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 part of the agreement, the Operating Partnership entered into a long-term storage arrangement, not to exceed 7 million propane gallons, with the purchaser of the cavern that will enable the Operating Partnership to continue to meet the needs of its retail operations, consistent with past practices. 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 condensed consolidated statement of operations for the first quarter of fiscal 2008.

8

4. 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:

	As of
	December 27,		September 27,
	2008		2008
Propane, fuel oil and refined fuels	$	78,943	$	76,036
Natural gas		1,157		283
Appliances and related parts		3,716		3,503
	$	83,816	$	79,822

5. 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 utilization of a portion of the net operating losses established in purchase accounting for the Agway Acquisition.

Other intangible assets consist of the following:

	As of
	December 27,			September 27,
	2008			2008
Customer lists	$	22,316		$	22,316
Tradenames		1,499			1,499
Other		2,117			2,117
		25,932			25,932
Less: accumulated amortization
Customer lists		(9,123	)		(8,632	)
Tradenames		(750	)		(712	)
Other		(596	)		(570	)
		(10,469	)		(9,914	)
	$	15,463		$	16,018

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Aggregate amortization expense related to other intangible assets for the three months ended December 27, 2008 and December 29, 2007 was $555 and $558, respectively.

Aggregate amortization expense related to other intangible assets for the remainder of fiscal 2009 and for each of the five succeeding fiscal years as of December 27, 2008 is as follows: 2009 - $1,665; 2010 - $2,205; 2011 - $2,205; 2012 - $1,730; 2013 - $1,572 and 2014 - $1,237.

6. Income Per Common Unit

Computations of earnings per Common Unit are performed in accordance with SFAS No. 128 “Earnings per Share” (“SFAS 128”). Basic income per Common Unit was computed by dividing net income by the weighted average number of outstanding Common Units and restricted units granted under the 2000 Restricted Unit Plan, defined below, to retirement-eligible grantees. Diluted income per Common Unit was 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 Common Unit were increased by 122,722 and 200,543 units for the three months ended December 27, 2008 and December 29, 2007, respectively, to reflect the potential dilutive effect of the unvested restricted units outstanding using the treasury stock method.

7. Long-Term Borrowings

Long-term borrowings consist of the following:

	As of
	December 27,		September 27,
	2008		2008
Senior Notes, 6.875%, due December 15, 2013, net of unamortized discount of $1,170 and $1,228, respectively	$	423,830	$	423,772
Term Loan, 6.29% to 7.16%, due March 31, 2010		108,000		110,000
		531,830		533,772
Less: current portion of Term Loan		—		2,000
	$	531,830	$	531,772

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 2003 Senior Notes. In addition, in the event of a change of control of the Partnership, as defined in the indenture governing 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. The Operating Partnership has standby letters of credit issued under the working capital facility of the Revolving Credit Agreement in the aggregate amount of $55,825 primarily in support of retention levels under the Operating Partnership’s self-insurance programs, which expire periodically through October 25, 2009. Therefore, as of December 27, 2008 the Operating Partnership had available borrowing capacity of $119,175 under the working capital facility of the Revolving Credit Agreement. 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.

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In accordance with and as authorized by the Revolving Credit Agreement, the Operating Partnership has a credit facility under a Master Note Agreement (the “Master Note”) that provides for a line of credit between December 1, 2008 and April 1, 2009, pursuant to which the Operating Partnership may, but is not obligated to, request advances not exceeding an aggregate of $20,000 at any one time, payable in full on or before April 1, 2009. The Master Note provides the Operating Partnership with additional financial flexibility for general corporate working capital purposes during periods of peak demand, if necessary. The lender has the right, in its sole discretion, to decline to make any advance requested by the Operating Partnership.

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 27, 2008 and September 27, 2008, 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 an initial notional amount of $125,000. In connection with the $15,000 and $2,000 prepayments of the Term Loan on September 26, 2008 and November 10, 2008, respectively, the Operating Partnership also amended the interest rate swap contract to reduce the notional amount by the amounts of the respective prepayment. From the original borrowing date of 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 outstanding, 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 ($4,488) and ($3,200) at December 27, 2008 and September 27, 2008, respectively, and is included in other liabilities with a corresponding amount included within accumulated other comprehensive loss.

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. Under the 2003 Senior Note indenture, the Partnership is generally permitted to make cash distributions equal to available cash, as defined, as of the end of the immediately preceding quarter, if no event of default exists or would exist upon making such distributions, and the Partnership’s consolidated fixed charge coverage ratio, as defined, is greater than 1.75 to 1. Under the Revolving Credit Agreement, as long as no default exists or would result, the Partnership is permitted to make cash distributions not more frequently than quarterly in an amount not to exceed available cash, as defined, for the immediately preceding fiscal quarter. The Partnership and the Operating Partnership were in compliance with all covenants and terms of the 2003 Senior Notes and the Revolving Credit Agreement as of December 27, 2008.

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 27, 2008 and September 27, 2008 include debt origination costs with a net carrying amount of $4,570 and $4,902, respectively. Aggregate amortization expense related to deferred debt origination costs included within interest expense for the three months ended December 27, 2008 and December 29, 2007 was $332.

The aggregate amounts of long-term debt maturities subsequent to December 27, 2008 are as follows: fiscal 2009 - $0; fiscal 2010 - $108,000; fiscal 2011 - $0; fiscal 2012 - $0; and, thereafter - $425,000.

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Under the Revolving Credit Agreement, proceeds from the sale, transfer or other disposition of any asset of the Operating Partnership, other than the sale of inventory in the ordinary course of business, in excess of $15,000 must be used to acquire productive assets within twelve months of receipt of the proceeds. Any proceeds not used within twelve months of receipt to acquire productive assets must be used to prepay the outstanding principal of the Term Loan. On September 26, 2008 and November 10, 2008, the Operating Partnership prepaid $15,000 and $2,000, respectively, on the Term Loan with the net proceeds from the sale of the Tirzah storage facility that were not used to acquire productive assets within twelve months of receipt.

8. 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.

On January 21, 2009, the Board of Supervisors declared a quarterly distribution of $0.81 per Common Unit, or $3.24 per Common Unit on an annualized basis, in respect of the first quarter of fiscal 2009, payable on February 10, 2009 to holders of record on February 3, 2009. The distribution equates to $3.24 per Common Unit annualized, an increase of $0.02 per Common Unit from the previous distribution rate, and a growth rate of 6.2% compared to the first quarter of fiscal 2008.

9. Unit-Based Compensation Arrangements

The Partnership accounts for its unit-based compensation arrangements in accordance with the revised SFAS No. 123, “Share-Based Payment” (“SFAS 123R”), which requires the recognition of compensation cost over the respective service period for employee services received in exchange for an award of equity or equity-based compensation based on the grant date fair value of the award, as well as the measurement of liability awards under a unit-based payment arrangement based on remeasurement of the award’s fair value at the conclusion of each quarterly reporting period until the date of settlement, taking into consideration the probability that the performance conditions will be satisfied. The Partnership has historically recognized unearned compensation associated with awards under its 2000 Restricted Unit Plan ratably to expense over the vesting period based on the fair value of the award on the grant date and has historically recognized compensation cost and the associated unearned compensation liability for equity-based awards under its Long-Term Incentive Plan consistent with the requirements of SFAS 123R.

2000 Restricted Unit Plan. In November 2000, the Partnership adopted the Suburban Propane Partners, L.P. 2000 Restricted Unit Plan, as amended, (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 at the end of each of the third and fourth anniversaries of the grant date and the remaining 50% of the Common Units vesting at the end of 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 value of the Restricted Unit is established by the market price of the Common Unit on the date of grant. Restricted Units are subject to forfeiture in certain circumstances as defined in the 2000 Restricted Unit Plan. Compensation expense for the unvested awards is recognized ratably over the vesting periods, net of the value of estimated forfeitures.

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During the three months ended December 27, 2008, the Partnership awarded 68,799 Restricted Units under the 2000 Restricted Unit Plan at an aggregate grant date fair value of $1,245. Following is a summary of activity in the 2000 Restricted Unit Plan:

				Weighted
				Average Grant
				Date Fair Value
	Units			Per Unit
Outstanding September 27, 2008		446,515		$	30.57
Awarded		68,799			18.09
Forfeited		(11,313	)		(35.10	)
Issued		(69,822	)		(27.90	)
Outstanding December 27, 2008		434,179		$	28.91

As of December 27, 2008, $6,884 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 1.8 years. Compensation expense recognized under the 2000 Restricted Unit Plan, net of forfeitures, for the three months ended December 27, 2008 and December 29, 2007 was $569 and ($67), 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. Compensation expense, which includes adjustments to previously recognized compensation expense for current period changes in the fair value of unvested awards, for the three months ended December 27, 2008 was $401. As a result of the performance at the end of the first quarter of fiscal 2008, the Partnership recorded a reversal of compensation expense in the amount of ($112) for the three months ended December 29, 2007. As of December 27, 2008 and September 27, 2008, the Partnership had a liability included within accrued employment and benefit costs (or other liabilities, as applicable) of $3,556 and $5,921, respectively, related to estimated future payments under LTIP-2.

10. 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 27, 2008 and September 27, 2008, the Partnership had accrued insurance liabilities of $44,842 and $73,033, respectively, representing the total estimated losses under these self-insurance programs. 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-insured claims, as well as existing insurance policies in force. For the portion of the estimated self-insurance liability that exceeds insurance deductibles, the Partnership records an asset within other assets (or prepaid expense and other current assets, as applicable) related to the amount of the liability expected to be covered by insurance which amounted to $12,325 and $38,825 as of December 27, 2008 and September 27, 2008, respectively.

During the first quarter of fiscal 2009, the Partnership settled a claim involving alleged product liability for approximately $30,000. The settlement was covered by insurance above the level of the Partnership’s deductible. As a result of this settlement, in which the Partnership denied any liability, the Partnership increased the portion of its estimated self-insurance liability that exceeded the insurance deductible and established a corresponding asset of $30,000 as of September 27, 2008 to accrue for the settlement and subsequent reimbursement from the Partnership’s third party insurance carrier. During the first quarter of fiscal 2009, the Partnership paid $26,500 to certain claimants in this matter and was reimbursed for the same amount from the Partnership’s third party insurance carrier. The remaining $3,500 of the liability was paid by the Partnership and reimbursed from the Partnership’s insurance carrier in the second quarter of fiscal 2009.

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11. 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 2015. 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 the equipment is deemed worthless at the end of the lease term, is approximately $16,058. The fair value of residual value guarantees for outstanding operating leases was de minimis as of December 27, 2008 and September 27, 2008.

12. Pension Plans and Other Postretirement Benefits

The following table provides the components of net periodic benefit costs for the three months ended December 27, 2008 and December 29, 2007:

	Pension Benefits						Postretirement Benefits
	Three Months Ended						Three Months Ended
	December 27,			December 29,			December 27,			December 29,
	2008			2007			2008			2007
Service Cost	$	—		$	—		$	1		$	2
Interest cost		2,372			2,187			345			350
Expected return on plan assets		(2,301	)		(2,270	)		—			—
Amortization of prior service costs		—			—			(122	)		(122	)
Recognized net actuarial loss		1,012			844			(78	)		—
Net periodic benefit cost	$	1,083		$	761		$	146		$	230

There are no projected minimum employer contribution requirements under Internal Revenue Service Regulations for fiscal 2009 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 2009 is $1,923, of which $362 has been contributed during the three months ended December 27, 2008.

13. 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 condensed 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 basis in the Partnership.

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The earnings of the Corporate Entity 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 businesses are structured collectively as a corporate entity and, as such, are subject to corporate level income tax. However, because the Corporate Entity has experienced operating losses in recent years, a full valuation allowance has been provided against the deferred tax assets. As a result, at present, the Corporate Entity does not report a tax provision. The conclusion that a full valuation is necessary was based upon an analysis of all available evidence, both negative and positive at the balance sheet date, which, taken as a whole, indicates that it is more likely than not that sufficient future taxable income will not be available to utilize the Partnership’s deferred tax assets. Management’s periodic reviews include, among other things, the nature and amount of the taxable income and expense items, the expected timing when assets will be used or liabilities will be required to be reported and the reliability of historical profitability of businesses expected to provide future earnings. Furthermore, management considered tax-planning strategies it could use to increase the likelihood that the deferred tax assets will be realized.

As a result of the calendar year 2007 profitability of the Partnership’s fuel oil and refined fuel business, the Partnership reported taxable income and, as a result, utilized net operating losses to offset the current cash tax liability. Utilization of these net operating losses resulted in a $1,277 deferred tax provision, and a corresponding reversal of a portion of the valuation allowance established in purchase accounting for the Agway Acquisition, which reduced goodwill.

14. 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. 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 27, 2008.

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.

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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 27,			December 29,
	2008			2007
Revenues:
Propane	$	273,908		$	307,325
Fuel oil and refined fuels		54,191			78,035
Natural gas and electricity		22,281			23,983
Services		12,002			14,472
All other		933			1,294
Total revenues	$	363,315		$	425,109
Income before interest expense and income taxes:
Propane	$	97,669		$	59,843
Fuel oil and refined fuels		8,476			2,290
Natural gas and electricity		3,170			2,928
Services		(2,481	)		(2,217	)
All other		(463	)		(206	)
Corporate		(16,142	)		(10,849	)
Total income before interest expense and income taxes		90,229			51,789
Reconciliation to income from continuing operations:
Interest expense, net		9,403			8,388
Provision for income taxes		138			1,679
Income from continuing operations	$	80,688		$	41,722
Depreciation and amortization:
Propane	$	3,810		$	3,892
Fuel oil and refined fuels		815			865
Natural gas and electricity		252			252
Services		77			75
All other		16			31
Corporate		2,053			1,944
Total depreciation and amortization	$	7,023		$	7,059

	As of
	December 27,			September 27
	2008			2008
Assets:
Propane	$	765,056		$	746,281
Fuel oil and refined fuels		96,149			70,548
Natural gas and electricity		28,815			23,658
Services		2,973			2,841
All other		1,120			1,234
Corporate		244,529			279,132
Eliminations		(87,981	)		(87,981	)
Total assets	$	1,050,661		$	1,035,713

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15. Recently Issued Accounting Pronouncements

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 27, 2008, 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, clarifies how goodwill involved in a business combination is to be recognized and measured, as well as requires the expensing of acquisition-related costs as incurred. 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.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an Amendment of FASB Statement No. 133” (“SFAS 161”). SFAS 161 requires enhanced disclosures about an entity’s objectives for using derivative instruments and related hedged items, how those derivative instruments are accounted for under SFAS 133 and its related interpretations and, through tabular presentation, how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS 161 is effective for financial statements for interim or annual periods beginning after November 15, 2008, which will be the second quarter of the Partnership’s 2009 fiscal year beginning December 28, 2008. Because it is only a disclosure standard, the adoption of SFAS 161 will not have a material effect on the Partnership’s consolidated financial position, results of operations and cash flows.

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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 27, 2008. 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 27, 2008.

Executive Overview

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 27, 2008.

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.

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 have been 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 net 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 fourth quarter and following fiscal year first quarter.

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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 consumption.

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 and crude oil futures and option contracts traded on the New York Mercantile Exchange (“NYMEX”), to purchase and sell propane, fuel oil and crude oil at fixed prices in the future. The majority of the futures, forward and option agreements are used to hedge price risk associated with propane and fuel oil physical inventory, as well as, in certain instances, forecasted purchases of propane or fuel oil. Forward contracts are generally settled physically at the expiration of the contract and futures are generally settled in cash at the expiration of the contract. Although we use derivative instruments to reduce the effect of price volatility associated with priced physical inventory and forecasted transactions, we do not use derivative instruments for speculative trading purposes. Risk management activities are monitored by an internal Commodity Risk Management Committee, made up of five members of management and reporting to our Audit Committee, through enforcement of our Hedging and Risk Management Policy.

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 27, 2008.

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 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 amortization 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. Management has reviewed these critical accounting estimates and related disclosures with the Audit Committee of our Board of Supervisors.

Results of Operations and Financial Condition

The first quarter of fiscal 2009 was characterized by normal winter temperatures throughout most of our service territories, a declining yet volatile commodity price environment with average posted prices remaining high compared to historical levels and the challenges presented by the economic recession. Net income amounted to $80.7 million, or $2.46 per Common Unit, compared to $85.4 million, or $2.61 per Common Unit, in the prior year quarter. EBITDA (as defined and reconciled below) for the first quarter of fiscal 2009 amounted to $97.3 million, compared to $102.6 million in the prior year quarter. Included in the results for the prior year first quarter was a $43.7 million gain from the sale of our Tirzah, South Carolina, underground propane storage cavern and associated 62-mile pipeline.

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Retail propane gallons sold in the first quarter of fiscal 2009 decreased 12.9 million gallons, or 11.5%, to 99.0 million gallons compared to 111.9 million gallons in the prior year quarter. Sales of fuel oil and other refined fuels decreased 6.9 million gallons, or 29.2%, to 16.7 million gallons during the first quarter of fiscal 2009 compared to 23.6 million gallons in the prior year quarter. Overall, temperatures across our service territories were at normal levels for the first quarter of fiscal 2009 and 8% colder than the prior year quarter. The favorable volume impact of the colder average temperatures was more than offset by declines in commercial and industrial volumes resulting from the economic recession and, to a lesser extent, continued customer conservation.

In the commodities markets, prices trended in the opposite direction of the prior year quarter, but with similar volatility. Overall, average posted prices for propane and fuel oil declined 47.0% and 26.3%, respectively, compared to the prior year quarter. This recent decline in commodity prices has contributed to a reduction in our product costs that has outpaced the decline in our average selling prices. As a result, our retail propane and fuel oil unit margins for the first quarter of fiscal 2009 increased compared to the prior year quarter. In addition, the declining commodity price environment during the first quarter of fiscal 2009 had a positive impact on our risk management activities whereas the rising commodity price environment during the first quarter of fiscal 2008 had a negative effect, resulting in an $8.5 million decrease in cost of products sold compared to the prior year quarter.

The proactive steps we have taken in prior years to create a more efficient and cost effective operating structure continue to produce favorable results and have contributed to the overall strength of our cash flow and financial position. Combined operating and general and administrative expenses of $91.8 million for the first quarter of fiscal 2009 were $3.3 million, or 3.7%, higher than the prior year quarter, primarily due to higher variable compensation attributable to higher earnings, partially offset by continued savings in payroll and vehicles expenses resulting from further operating efficiencies, lower headcount and lower vehicle count.

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. During the first quarter of fiscal 2009, we generated more than $25.0 million in cash flow from operations during a quarter in which we historically use cash for our seasonal operating purposes. We ended the first quarter of fiscal 2009 with $130.6 million in cash on hand and are well positioned as we advance into the second half of the winter heating season. On the strength of these earnings and cash flows, our Board of Supervisors declared the twentieth increase (since our recapitalization in 1999) in our quarterly distribution from $0.805 to $0.810 per Common Unit. The distribution equates to $3.24 per Common Unit annualized, an increase of $0.02 per Common Unit from the previous distribution rate, and a growth rate of 6.2% compared to the first quarter of fiscal 2008.

Looking ahead to the remainder of fiscal 2009, we expect that the economic recession and volatile commodity price environment will continue to present challenges in each of our markets that will continue to affect customer buying habits, thus having a possible negative impact on sales volumes. 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.

Our anticipated cash requirements for the remainder of fiscal 2009 include: (i) maintenance and growth capital expenditures of approximately $20.6 million; (ii) interest payments of approximately $20.2 million; and (iii) cash distributions of approximately $79.7 million to our Common Unitholders based on the most recently increased quarterly distribution rate of $0.81 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 2009, 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 2009. Our Revolving Credit Agreement provides a working capital facility with available revolving borrowing capacity up to $175.0 million (with unused borrowing capacity of $119.2 million after considering outstanding letters of credit of $55.8 million as of December 27, 2008).

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Three Months Ended December 27, 2008 Compared to Three Months Ended December 29, 2007

Revenues

	Three Months Ended
	December 27,		December 29,					Percent
(Dollars in thousands)	2008		2007		Decrease			Decrease
Revenues
Propane	$	273,908	$	307,325	$	(33,417	)		(10.9	%)
Fuel oil and refined fuels		54,191		78,035		(23,844	)		(30.6	%)
Natural gas and electricity		22,281		23,983		(1,702	)		(7.1	%)
Services		12,002		14,472		(2,470	)		(17.1	%)
All other		933		1,294		(361	)		(27.9	%)
Total revenues	$	363,315	$	425,109	$	(61,794	)		(14.5	%)

Total revenues decreased $61.8 million, or 14.5%, to $363.3 million for the three months ended December 27, 2008 compared to $425.1 million for the three months ended December 29, 2007 due to lower volumes, and to a lesser extent, lower average selling prices associated with lower product costs. Volumes were lower than the prior year first quarter due to the negative impact of adverse economic conditions, particularly on our commercial and industrial accounts, as well as ongoing customer conservation resulting from the historically high commodity prices, partially offset by the favorable impact of colder temperatures. In our eastern service territories, temperatures were 2% colder than normal and 10% colder than the prior year. Temperatures in our western service territories were 3% warmer than normal but 4% colder than the prior year. On an overall basis, temperatures in our service territories were at normal levels during the first quarter of fiscal 2009 and 8% colder than the prior year first quarter.

Revenues from the distribution of propane and related activities of $273.9 million in the first quarter of fiscal 2009 decreased $33.4 million, or 10.9%, compared to $307.3 million in the prior year quarter, primarily due to lower volumes in our commercial and industrial accounts, and to a lesser extent, our residential accounts. Retail propane gallons sold in the first quarter of fiscal 2009 decreased 12.9 million gallons, or 11.5%, to 99.0 million gallons from 111.9 million gallons in the prior year quarter. Average propane selling prices in the first quarter of fiscal 2009 decreased approximately 1.0% compared to the prior year quarter due to lower product costs, thereby having a negative impact on revenues. Additionally, included within the propane segment are revenues from wholesale and other propane activities of $16.4 million for the three months ended December 27, 2008, which increased $2.0 million compared to the prior year quarter.

Revenues from the distribution of fuel oil and refined fuels of $54.2 million in the first quarter of fiscal 2009 decreased $23.8 million, or 30.6%, from $78.0 million in the prior year quarter, primarily due to lower volumes and lower average selling prices. Fuel oil and refined fuels gallons sold in the first quarter of fiscal 2009 decreased 6.9 million gallons, or 29.2%, to 16.7 million gallons from 23.6 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 driven by adverse economic conditions and 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 segment of approximately 1.4 million gallons, or 20.3% of the total volume decline in the first quarter of fiscal 2009 compared to the prior year quarter. Average selling prices in our fuel oil and refined fuels segment in the first quarter of fiscal 2009 decreased 3.8% compared to the prior year quarter due to lower product costs, thereby having a negative impact on revenues.

Revenues in our natural gas and electricity segment decreased $1.7 million, or 7.1%, to $22.3 million for the three months ended December 27, 2008 compared to $24.0 million in the prior year quarter as a result of lower electricity volumes. Revenues in our services segment decreased 17.1% to $12.0 million in the first quarter of fiscal 2009 from $14.5 million in the prior year quarter primarily due to reduced installation activities as a result of the market decline in residential and commercial construction and other adverse economic conditions.

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Cost of Products Sold

	Three Months Ended
	December 27,			December 29,						Percent
(Dollars in thousands)	2008			2007			Decrease			Decrease
Cost of products sold
Propane	$	117,885		$	187,903		$	(70,018	)		(37.3	%)
Fuel oil and refined fuels		35,605			65,634			(30,029	)		(45.8	%)
Natural gas and electricity		17,683			19,751			(2,068	)		(10.5	%)
Services		2,674			3,865			(1,191	)		(30.8	%)
All other		383			562			(179	)		(31.9	%)
Total cost of products sold	$	174,230		$	277,715		$	(103,485	)		(37.3	%)
As a percent of total revenues		48.0	%		65.3	%

The cost of products sold reported in the condensed 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 decreased $103.5 million, or 37.3%, to $174.2 million for the three months ended December 27, 2008 compared to $277.7 million in the prior year quarter due to the impact of the decline in product costs, lower volumes sold and the favorable impact of mark-to-market adjustments from our risk management activities. Cost of products sold in the fiscal 2009 first quarter also included a $15.0 million unrealized (non-cash) gain representing the net change in the fair value of derivative instruments during the period, compared to a $2.7 million unrealized (non-cash) loss in the prior year quarter resulting in a decrease of $17.7 million in cost of products sold for the three months ended December 27, 2008 compared to the prior year quarter ($12.5 million reported within the propane segment and $5.2 million within the fuel oil and refined fuels segment).

Cost of products sold associated with the distribution of propane and related activities of $117.9 million decreased $70.0 million, or 37.3%, compared to the prior year quarter. Lower average propane costs and lower propane volumes resulted in a decrease of $30.5 million and $20.5 million, respectively, in cost of products sold during the first quarter of fiscal 2009 compared to the prior year quarter. Risk management activities during the first quarter of fiscal 2009 resulted in a $3.5 million decrease in cost of products sold compared to the prior year quarter. Cost of products sold from wholesale and other propane activities decreased $3.0 million compared to the prior year quarter due to lower product costs.

Cost of products sold associated with our fuel oil and refined fuels segment of $35.6 million decreased $30.0 million, or 45.8%, compared to the prior year quarter. Lower average fuel oil costs and lower fuel oil volumes resulted in a decrease of $2.3 million and $17.5 million, respectively, in cost of products sold during the first quarter of fiscal 2009 compared to the prior year quarter. In addition, risk management activities during the first quarter of fiscal 2009 resulted in a $5.0 million decrease in cost of products sold compared to the prior year quarter.

Cost of products sold in our natural gas and electricity segment of $17.7 million decreased $2.1 million, or 10.5%, compared to the prior year quarter primarily due to lower electricity volumes. Cost of products sold in our services segment of $2.7 million decreased $1.2 million, or 30.8%, compared to the prior year quarter primarily due to lower sales volumes.

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For the quarter ended December 27, 2008, total cost of products sold represented 48.0% of revenues compared to 65.3% in the prior year quarter. This decrease was primarily attributable to the decrease in product costs which outpaced the decline in average selling prices, as well as the positive effect of declining commodity prices on our risk management activities during the first quarter of fiscal 2009 compared to the negative effect of rising commodity prices on our risk management activities in the prior year quarter.

Operating Expenses

	Three Months Ended
	December 27,			December 29,						Percent
(Dollars in thousands)	2008			2007			Decrease			Decrease
Operating expenses	$	77,063		$	79,343		$	(2,280	)		(2.9	%)
As a percent of total revenues		21.2	%		18.7	%

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 $77.1 million for the three months ended December 27, 2008 decreased $2.3 million, or 2.9%, compared to $79.3 million in the prior year quarter as a result of our continued efforts to drive operational efficiencies and reduce costs across all operating segments, partially offset by higher variable compensation associated with higher earnings in the first quarter of fiscal 2009 compared to the prior year quarter. Savings were primarily attributable to payroll and benefit related expenses as a result of lower headcount and routing efficiencies that enabled a reduction of our vehicle count.

General and Administrative Expenses

	Three Months Ended
	December 27,			December 29,					Percent
(Dollars in thousands)	2008			2007			Increase		Increase
General and administrative expenses	$	14,770		$	9,203		$	5,567		60.5	%
As a percent of total revenues		4.1	%		2.2	%

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 $14.8 million for the three months ended December 27, 2008 increased $5.6 million, or 60.5%, compared to $9.2 million during the prior year quarter. The increase was primarily attributable to higher variable compensation resulting from higher earnings in the first quarter of fiscal 2009 compared to the prior year quarter and higher compensation cost recognized under certain long-term incentive plans.

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Depreciation and Amortization

	Three Months Ended
	December 27,			December 29,						Percent
(Dollars in thousands)	2008			2007			Decrease			Decrease
Depreciation and amortization	$	7,023		$	7,059		$	(36	)		(0.5	%)
As a percent of total revenues		1.9	%		1.7	%

Depreciation and amortization expense of $7.0 million for the three months ended December 27, 2008 was relatively unchanged compared to the prior year quarter.

Interest Expense, net

	Three Months Ended
	December 27,			December 29,					Percent
(Dollars in thousands)	2008			2007			Increase		Increase
Interest expense, net	$	9,403		$	8,388		$	1,015		12.1	%
As a percent of total revenues		2.6	%		2.0	%

Net interest expense increased $1.0 million, or 12.1%, to $9.4 million for the three months ended December 27, 2008, compared to $8.4 million in the prior year quarter as a result of lower market interest rates for short-term investments, which contributed to less interest income earned. 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 cash on hand and cash flow from operations. We ended the first quarter of fiscal 2009 in a strong cash position with $130.6 million in cash on the condensed consolidated balance sheet.

Discontinued Operations.

During the first quarter of fiscal 2008, we completed the sale of our 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 million gain on disposal of discontinued operations in the first quarter of fiscal 2008.

Net Income and EBITDA.

Net income for the first quarter of fiscal 2009 amounted to $80.7 million, or $2.46 per Common Unit, a decrease of $4.7 million, or $0.15 per Common Unit, compared to the prior year quarter’s net income of $85.4 million, or $2.61 per Common Unit. EBITDA amounted to $97.3 million for the three months ended December 27, 2008 compared to $102.6 million in the prior year first quarter. Net income and EBITDA for the first quarter of fiscal 2008 included the $43.7 million gain on disposal of discontinued operations described above.

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 provided by operating activities determined in accordance with GAAP. Because 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.

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

	Three Months Ended
	December 27,			December 29,
(Dollars in thousands)	2008			2007
Net income	$	80,688		$	85,429
Add:
Provision for income taxes		138			1,679
Interest expense, net		9,403			8,388
Depreciation and amortization		7,023			7,059
EBITDA		97,252			102,555
Add (subtract):
Provision for income taxes — current		(138	)		(402	)
Interest expense, net		(9,403	)		(8,388	)
Compensation cost recognized under Restricted Unit Plan		569			(67	)
Gain on disposal of property, plant and equipment, net		(230	)		(1,429	)
Gain on disposal of discontinued operations		—			(43,707	)
Changes in working capital and other assets and liabilities		(63,046	)		(90,515	)
Net cash provided by (used in) operating activities	$	25,004		$	(41,953	)

Liquidity and Capital Resources

Analysis of Cash Flows

Operating Activities. Due to the seasonal nature of the propane and fuel oil businesses, cash flows generated from operating activities are typically greater during the winter and spring seasons (our second and third fiscal quarters) as customers pay for products purchased during the heating season. However, during the first quarter of fiscal 2009, we generated net cash from operating activities during a quarter in which we historically use cash for our seasonal operating purposes. For the three months ended December 27, 2008, net cash provided by operating activities was $25.0 million compared to net cash used in operating activities of $42.0 million for the first three months of the prior year. This improvement was primarily attributable to higher earnings from continuing operations, coupled with the decline in propane and fuel oil commodity prices that resulted in a smaller investment in working capital in comparison to the first three months of fiscal 2008. We continued to fund working capital through operating cash flow without the need to access the working capital facility under our Revolving Credit Agreement.

Investing Activities. Net cash used in investing activities of $3.7 million for the three months ended December 27, 2008 consisted of capital expenditures of $4.4 million (including $1.6 million for maintenance expenditures and $2.8 million to support the growth of operations), partially offset by $0.7 million in net proceeds from the sale of property, plant and equipment. Net cash provided by investing activities of $48.9 million for the three months ended December 29, 2007 consisted of the net proceeds from the sale of discontinued operations of $53.7 million and the net 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).

Financing Activities. Net cash used in financing activities for the three months ended December 27, 2008 of $28.4 million reflects quarterly distributions to Common Unitholders at a rate of $0.805 per Common Unit paid in respect of the fourth quarter of fiscal 2008, as well as a prepayment of $2.0 million under our term loan. 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.

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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. On September 26, 2008 and November 10, 2008 we made a prepayment of $15.0 million and $2.0 million, respectively, on the Term Loan thereby reducing the amount outstanding to $108.0 million. There were no outstanding borrowings under the working capital facility as of December 27, 2008 and 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 $55.8 million primarily in support of retention levels under our self-insurance programs, which expire periodically through October 25, 2009. Therefore, as of December 27, 2008 we had available borrowing capacity of $119.2 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. Because of our cash position, operating results and cash flow, we did not make any such short-term borrowings during the first three months of fiscal 2009.

In accordance with and as authorized by the Revolving Credit Agreement, we have a credit facility under a Master Note Agreement (the “Master Note”) that provides for a line of credit between December 1, 2008 and April 1, 2009, pursuant to which we may, but are not obligated to, request advances not exceeding an aggregate of $20.0 million at any one time, payable in full on or before April 1, 2009. The Master Note provides us with additional financial flexibility for general corporate working capital purposes during periods of peak demand, if necessary. The lender has the right, in its sole discretion, to decline to make any advance requested by us.

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 an initial notional amount of $125.0 million with the issuing lender. In connection with the prepayments of the Term Loan discussed above, the Operating Partnership also amended the interest rate swap contract to reduce the notional amount to $108.0 million, the net amount due after the prepayments. From an original borrowing date of 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, 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. Under the 2003 Senior Note indenture, the Partnership is generally permitted to make cash distributions equal to available cash, as defined, as of the end of the immediately preceding quarter, if no event of default exists or would exist upon making such distributions, and the Partnership’s consolidated fixed charge coverage ratio, as defined, is greater than 1.75 to 1. Under the Revolving Credit Agreement, as long as no default exists or would result, the Partnership is permitted to make cash distributions not more frequently than quarterly in an amount not to exceed available cash, as defined, for the immediately preceding fiscal quarter. 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 27, 2008 and September 27, 2008.

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Under the Revolving Credit Agreement, proceeds from the sale, transfer or other disposition of any asset of the Operating Partnership, other than the sale of inventory in the ordinary course of business, in excess of $15 million must be used to acquire productive assets within twelve months of receipt of the proceeds. Any proceeds not used within twelve months of receipt to acquire productive assets must be used to prepay the outstanding principal of the Term Loan.

Our Revolving Credit Agreement is supported by a diverse group of thirteen financial institutions. Management believes that we maintain strong relationships with the financial institutions within our current bank group and, to the extent necessary, will have sufficient access to the unused portion of the working capital facility. Our Revolving Credit Agreement matures in March 2010 and we will begin the process of renewing the agreement during the second quarter of fiscal 2009.

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 (the “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 21, 2009, we announced a quarterly distribution of $0.81 per Common Unit, or $3.24 on an annualized basis, in respect of the first quarter of fiscal 2009 payable on February 10, 2009 to holders of record on February 3, 2009. The distribution equates to $3.24 per Common Unit annualized, an increase of $0.02 per Common Unit from the previous distribution rate, representing the twentieth increase since our recapitalization in 1999 and a growth rate of 6.2% in the quarterly distribution rate compared to the first quarter of fiscal 2008.

Other Commitments

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 27, 2008, the fair value of the plan assets exceeded the accumulated benefit obligation of the plan by $0.1 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 27, 2008, we had a liability for accrued retiree health and life benefits of $19.1 million.

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 27, 2008, we had accrued insurance liabilities of $44.8 million, and an insurance recovery asset of $12.3 million related to the amount of the liability expected to be covered by insurance carriers.

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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 2015. 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 $16.1 million as of December 27, 2008. The fair value of residual value guarantees for outstanding operating leases was de minimis as of December 27, 2008 and September 27, 2008.

Recently Issued Accounting Standards

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 our 2010 fiscal year beginning September 27, 2009. As of December 27, 2008, we had no outstanding noncontrolling interests in any subsidiary; accordingly, the adoption of SFAS 160 should not have any impact on our 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, clarifies how goodwill involved in a business combination is to be recognized and measured, as well as requires the expensing of acquisition-related costs as incurred. SFAS 141R is effective for business combinations entered into in fiscal years beginning on or after December 15, 2008, which will be our 2010 fiscal year beginning September 27, 2009, with early adoption prohibited.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an Amendment of FASB Statement No. 133” (“SFAS 161”). SFAS 161 requires enhanced disclosures about an entity’s objectives for using derivative instruments and related hedged items, how those derivative instruments are accounted for under SFAS 133 and its related interpretations and, through tabular presentation, how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS 161 is effective for financial statements for interim or annual periods beginning after November 15, 2008, which will be the second quarter of our 2009 fiscal year beginning December 28, 2008. Because it is only a disclosure standard, the adoption of SFAS 161 will not have a material effect on our consolidated financial position, results of operations and cash flows.

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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 conditions. In certain instances, and when market conditions are favorable, 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 to eight weeks of our supply needs depending on the time of the year. 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, “Accounting 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. We do not use derivative instruments for speculative or trading purposes. 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 contract, 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. Under our hedging and risk management strategy, realized gains or losses on futures contracts will typically offset losses or gains on the physical inventory once the product is sold to customers at market prices.

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 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.

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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 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. On September 26, 2008 and November 10, 2008, we amended the interest rate swap contract to reduce the notional amount by $15.0 million and $2.0 million, respectively, representing the amount of the Term Loan prepaid on those dates. 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 27, 2008, the fair value of the interest rate swap was ($4.5) million representing an unrealized loss and is included within other liabilities with a corresponding debit in other comprehensive income (“OCI”).

Derivative Instruments and Hedging Activities

Pursuant to SFAS 133, all of our derivative instruments are reported on the balance sheet at their fair values. 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 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. Cash flows associated with derivative instruments are reported as operating activities within the condensed consolidated statement of cash flows.

At December 27, 2008, the fair value of derivative instruments described above resulted in current derivative assets (unrealized gains) of $18.0 million included within prepaid expenses and other current assets, non-current derivative assets of $3.5 million included within other assets and $3.5 million of derivative liabilities (unrealized losses) included within other current liabilities. Cost of products sold included unrealized (non-cash) gains of $15.0 million for the three months ended December 27, 2008, and unrealized (non-cash) losses of $2.7 million for the three months ended December 29, 2007, attributable to the change in fair value of derivative instruments not designated as cash flow hedges.

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Sensitivity Analysis

In an effort to estimate our exposure to unfavorable market price changes in propane or fuel oil related to our open positions under derivative instruments, we developed a model that incorporates the following data and assumptions:

A. The actual fixed contract price of open positions as of December 27, 2008 for each of the future periods.

B. The estimated future market prices for futures and forward contracts as of December 27, 2008 as derived from the NYMEX for traded propane or fuel oil futures for each of the future periods.

C. The market prices determined in B. above were adjusted adversely by a hypothetical 10% change in the future periods and compared to the fixed contract settlement amounts in A. above to project the potential negative impact on earnings that would be recognized for the respective scenario.

Based on the sensitivity analysis described above, a hypothetical 10% adverse change in market prices for which a futures, forward and/or option contract exists indicates a net reduction in potential future gains in future earnings of $3.0 million as of December 27 2008. See also Item 7A of our Annual Report on Form 10-K for the fiscal year ended September 27, 2008. 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.

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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 and submissions 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 27, 2008. Based on this evaluation, the Partnership’s principal executive officer and principal financial officer have concluded that as of December 27, 2008, 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 27, 2008 that have materially affected or are reasonably likely to materially affect its internal control over financial reporting.

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PART II

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, January 24, 2008 and January 20, 2009.
10.2	Suburban Propane, L.P. Severance Protection Plan, as amended on January 20, 2009.
10.3	Suburban Propane L.P. 2003 Long Term Incentive Plan, as amended October 17, 2006 and further amended on July 31, 2007, October 31, 2007, January 24, 2008 and January 20, 2009.
31.1	Certification of the Chief Executive Officer Pursuant to Section 202 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer and Chief Accounting Officer Pursuant to Section 202 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer and Chief Accounting Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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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 5, 2009	By:	/s/ MICHAEL A. STIVALA
Date		Michael A. Stivala
		Chief Financial Officer and Chief Accounting Officer
February 5, 2009	By:	/s/ MICHAEL A. KUGLIN
Date		Michael A. Kuglin
		Controller

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EXHIBIT INDEX

Exhibit
Number		Description
	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, January 24, 2008 and January 20, 2009.
	10.2	Suburban Propane, L.P. Severance Protection Plan, as amended on January 20, 2009.
	10.3	Suburban Propane L.P. 2003 Long Term Incentive Plan, as amended October 17, 2006 and further amended on July 31, 2007, October 31, 2007, January 24, 2008 and January 20, 2009.
	31.1	Certification of the Chief Executive Officer Pursuant to Section 202 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of the Chief Financial Officer and Chief Accounting Officer Pursuant to Section 202 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification of the Chief Financial Officer and Chief Accounting Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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, JANUARY 24, 2008 AND
JANUARY 20, 2009

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 interest, 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.

2.8 “Change of Control” shall mean:

(a) the date (which must be a date subsequent to the Effective Date) on which any Person (including the Partnership’s general partner) or More than One Person Acting as a Group (other than the Partnership and/or its Subsidiaries) acquires, during the 12 month period ending on the date of the most recent acquisition, Common Units or other voting equity interests eligible to vote for the election of Supervisors (or of any entity, including the Partnership’s general partner, that has the same authority as the Board to manage the affairs of the Partnership) (“Voting Securities”) representing thirty percent 30% or more of the combined voting power of the Partnership’s then outstanding Voting Securities; provided, however, that in determining whether a Change of Control has occurred, Voting Securities which have been acquired in a “Non-Control Acquisition” shall be excluded from the numerator. A “Non-Control Acquisition” shall mean an acquisition of Voting Securities (x) by the Partnership, any of its Subsidiaries and/or an employee benefit plan (or a trust forming a part thereof) maintained by any one or more of them, or (y) in connection with a “Non-Control Transaction”; or

(b) the date of approval by the limited partners of the Partnership, of (w) a merger, consolidation or reorganization involving the Partnership, unless (A) the holders of the Voting Securities of the Partnership 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 Voting Securities of the entity resulting from such merger, consolidation or reorganization (the “Surviving Entity”) in substantially the same proportion as their ownership of the Voting Securities of the Partnership 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, consolidation or reorganization, had Beneficial Ownership of more than twenty five percent (25%) of then outstanding Voting Securities of the Partnership), has Beneficial Ownership of more than twenty five percent (25%) of the combined voting power of the Surviving Entity’s then outstanding Voting Securities; (x) a complete liquidation or dissolution of the Partnership; or (y) 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 (w) hereof shall be referred to as a “Non-Control Transaction;” or

(c) the date a majority of the members of the Board is replaced during any twelve-month period by the action of the Board taken when a majority of the Supervisors who are then members of the Board are not Continuing Supervisors (for purposes of this section, the term “Continuing Supervisor” means a Supervisor who was either (A) first elected or appointed as a Supervisor prior to the Effective Date; or (B) subsequently elected or appointed as a Supervisor if such Supervisor was nominated or appointed by at least a majority of the then Continuing Supervisors);

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 Voting Securities 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.

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 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 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 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.

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 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 until 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.

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.

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 regulations 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 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.

EX-10.2

EXHIBIT 10.2

SUBURBAN PROPANE, L.P.
SEVERANCE PROTECTION PLAN
As Adopted in September 1996 and Amended in January 2008 and January 2009

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 which 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 equals 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 required to report, including, but not limited to, a requirement that the employee report to a company 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 or 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.

“Change of Control” shall mean:

(a) the date (which must be a date subsequent to the Effective Date) on which any Person (including the Partnership’s general partner) or More than One Person Acting as a Group (other than the Partnership and/or its Subsidiaries) acquires, during the 12 month period ending on the date of the most recent acquisition, Common Units or other voting equity interests eligible to vote for the election of Supervisors (or of any entity, including the Partnership’s general partner, that has the same authority as the Board to manage the affairs of the Partnership) (“Voting Securities”) representing thirty percent 30% or more of the combined voting power of the Partnership’s then outstanding Voting Securities; provided, however, that in determining whether a Change of Control has occurred, Voting Securities which have been acquired in a “Non-Control Acquisition” shall be excluded from the numerator. A “Non-Control Acquisition” shall mean an acquisition of Voting Securities (x) by the Partnership, any of its Subsidiaries and/or an employee benefit plan (or a trust forming a part thereof) maintained by any one or more of them, or (y) in connection with a “Non-Control Transaction”; or

(b) the date of approval by the limited partners of the Partnership, of (w) a merger, consolidation or reorganization involving the Partnership, unless (A) the holders of the Voting Securities of the Partnership 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 Voting Securities of the entity resulting from such merger, consolidation or reorganization (the “Surviving Entity”) in substantially the same proportion as their ownership of the Voting Securities of the Partnership 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, consolidation or reorganization, had Beneficial Ownership of more than twenty five percent (25%) of then outstanding Voting Securities of the Partnership), has Beneficial Ownership of more than twenty five percent (25%) of the combined voting power of the Surviving Entity’s then outstanding Voting Securities; (x) a complete liquidation or dissolution of the Partnership; or (y) 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 (w) hereof shall be referred to as a “Non-Control Transaction;” or

(c) the date a majority of the members of the Board is replaced during any twelve-month period by the action of the Board taken when a majority of the Supervisors who are then members of the Board are not Continuing Supervisors (for purposes of this section, the term “Continuing Supervisor” means a Supervisor who was either (A) first elected or appointed as a Supervisor prior to the Effective Date; or (B) subsequently elected or appointed as a Supervisor if such Supervisor was nominated or appointed by at least a majority of the then Continuing Supervisors);

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 Voting Securities 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.

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.

EX-10.3

EXHIBIT 10.3

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, January 24, 2008 and
January 20, 2009

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:

(a) the date (which must be a date subsequent to the Effective Date) on which any Person (including the Partnership’s general partner) or More than One Person Acting as a Group (other than the Partnership and/or its Subsidiaries) acquires, during the 12 month period ending on the date of the most recent acquisition, Common Units or other voting equity interests eligible to vote for the election of Supervisors (or of any entity, including the Partnership’s general partner, that has the same authority as the Board to manage the affairs of the Partnership) (“Voting Securities”) representing thirty percent 30% or more of the combined voting power of the Partnership’s then outstanding Voting Securities; provided, however, that in determining whether a Change of Control has occurred, Voting Securities which have been acquired in a “Non-Control Acquisition” shall be excluded from the numerator. A “Non-Control Acquisition” shall mean an acquisition of Voting Securities (x) by the Partnership, any of its Subsidiaries and/or an employee benefit plan (or a trust forming a part thereof) maintained by any one or more of them, or (y) in connection with a “Non-Control Transaction”; or

(b) the date of approval by the limited partners of the Partnership, of (w) a merger, consolidation or reorganization involving the Partnership, unless (A) the holders of the Voting Securities of the Partnership 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 Voting Securities of the entity resulting from such merger, consolidation or reorganization (the “Surviving Entity”) in substantially the same proportion as their ownership of the Voting Securities of the Partnership 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, consolidation or reorganization, had Beneficial Ownership of more than twenty five percent (25%) of then outstanding Voting Securities of the Partnership), has Beneficial Ownership of more than twenty five percent (25%) of the combined voting power of the Surviving Entity’s then outstanding Voting Securities; (x) a complete liquidation or dissolution of the Partnership; or (y) 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 (w) hereof shall be referred to as a “Non-Control Transaction;” or

(c) the date a majority of the members of the Board is replaced during any twelve-month period by the action of the Board taken when a majority of the Supervisors who are then members of the Board are not Continuing Supervisors (for purposes of this section, the term “Continuing Supervisor” means a Supervisor who was either (A) first elected or appointed as a Supervisor prior to the Effective Date; or (B) subsequently elected or appointed as a Supervisor if such Supervisor was nominated or appointed by at least a majority of the then Continuing Supervisors);

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 Voting Securities 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.

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.

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.

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 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.

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.

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	PERCENT OF TARGET
PERFORMANCE	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.

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 and 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 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.

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.

EX-31.1

EXHIBIT 31.1

Certification of the Chief Executive Officer
Pursuant to Section 202 of the Sarbanes-Oxley Act of 2002

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 5, 2009	By:	/s/ MARK A. ALEXANDER
		Mark A. Alexander
		Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of the Chief Financial Officer
and Chief Accounting Officer
Pursuant to Section 202 of the Sarbanes-Oxley Act of 2002

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 5, 2009	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, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Suburban Propane Partners, L.P. (the “Partnership”) on Form 10-Q for the period ended December 27, 2008 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 5, 2009

EX-32.2

EXHIBIT 32.2

Certification of the Chief Financial Officer and Chief Accounting Officer
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Suburban Propane Partners, L.P. (the “Partnership”) on Form 10-Q for the period ended December 27, 2008 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 5, 2009