Suburban Propane Partners, L.P.

Davin D’ambrosio - Vice President and Treasurer Mark Alexander - Chief Executive Officer Mike Stivala - Chief Financial Officer and Chief Accounting Officer Mike Dunn - President

Darren Horowitz – Raymond James & Associates Inc. Unidentified Participant

Great. Thank you, Ken.

Good morning, everyone. Welcome to Suburban's third quarter fiscal 2008 conference call.

I am Davin D'Ambrosio, Vice President and Treasurer at Suburban. Joining me this morning is Mark Alexander, our Chief Executive Officer, Mike Dunn, President, and Michael Stivala, Chief Financial Officer and Chief Accounting Officer.

The purpose of today's call is to review our third quarter financial results, along with our current outlook for the business. As usual, once we have concluded our prepared remarks, we will open the session to questions.

Before getting started, I would like to re-emphasize what the operator has just explained about forward-looking statements. Additional information about factors that could cause actual results to differ materially from those discussed in forward-looking statements is contained in the partnership's SEC filings including its form 10-K for the fiscal year ended September 29, 2007.

And form 10-Q as of June 28, 2008, which will be filed by the end of business today. Copies of these filings may be attained by contacting the partnership or SEC.

Certain non-GAAP measures will be discussed on this call. We have provided a description on those measures as well as a discussion of why we believe this information to be useful in our form 8-K furnished to the SEC this morning.

The form 8-K can be accessed through a link on our website at SuburbanPropane.com.

Thanks, Davin and thanks everybody for joining us this morning. Let me begin by saying that we are extremely pleased with our continued strong operating performance in a very challenging energy environment, to say the least, characterized by a dramatic rise in commodity prices and a sluggish economy.

As you saw in our press release this morning the most significant item impacting our results for the third quarter of fiscal 2008 was from realized losses in our hedging and risk management activities amounting to $14.5 million. Mike Stivala will provide some more detail on this topic shortly.

However, it is important to understand that putting these losses aside, the operating results from our base operations were only slightly below the prior year third quarter ahead of our internal expectations, and we think commendable considering the negative operating environment. Additionally with our streamlined operating platform nearly $119 million in cash on the balance sheet at the end of the quarter and continued strength of our distribution coverage, we are well positioned to continue to effectively manage through this difficult environment.

And as evidence of that, and as announced on July 24, our board increased our annualized distribution rate by $0.10 per common unit to $3.20, emphasizing the confidence in our base earnings and overall outlook going forward. This increase represents a distribution growth rate of more than 12% year over year.

A little later I will discuss some thoughts on our increased quarterly distribution, as well as our outlook for the remainder of the fiscal year and beyond.

Thanks, Mark. While the third quarter continued to present many challenges for the industry as a whole, particularly with the precipitous rise in commodity prices, our operation performed very well.

The numerous proactive steps taken over the past several years to focus on our operating platform, streamline our cost structure and strengthen our balance sheet have proven quite timely, given the current environment. As we discussed these results to be consistent with our reporting for previous periods, I am excluding the impact of a $4.7 million unrealized non-cash gain applicable to FAS 133 accounting compared to a $200,000 unrealized loss in the prior year quarter, both reported within cost of products sold.

Consistent with the seasonal nature of our businesses we typically experience a net loss in the third quarter. Net loss for the three months ended June 28 totaled $18.4 million or $0.56 per common unit compared to a loss of $1 million or $0.03 per common unit in the prior year quarter.

EBITDA amounted to a loss of $1.9 million compared to income of $15.5 million in the prior year quarter. The most significant factor impacting EBITDA and net loss for the third quarter of fiscal 2008 was the realized losses from our risk management activities that amounted to $14.5 million.

Let me take a moment to comment a bit on a risk management activities and the losses incurred in the quarter. Consistent with our past practices and given the retail nature of our operations, we maintain a certain level of priced physical inventory to ensure our field operations have adequate supply commensurate with the time of year.

Once priced our physical inventory is subject to the risk of prices declining. To address that risk our risk management strategy is and always has been to keep our priced inventory value close to or at current market.

In order to achieve this goal, we utilized a combination of futures contracts and/or options traded on the NYMEX or with third parties. Realized gains or losses on the futures or options contracts will typically offset losses or gains on the physical inventory once the product is sold.

During the third quarter of fiscal 2008, we realized losses on short positions which were not fully offset by the sales of physical product. Although our futures positions were relatively small, given the time of the year, the sustained rise in commodity prices during the third quarter of fiscal 2008 forced us to reassess our position relative to current market risks and conditions.

Early in the quarter, we decided the prudent thing to do was to list all of our hedges in light of the continued market volatility and unpredictability. However, depending on the movement in commodity prices and the level of volume sold, we may recover a portion of these realized losses in future periods.

And unlike much of what you see being reported in the media, our activities were not speculative in nature. Rather, they were part of our historical practices of mitigating price risks.

Putting these realized losses aside, our EBITDA was 2.9 million below the prior year third quarter, as a result of lower volumes offset to an extent by higher average margins. With respect to volumes, retail sales of propane during the quarter totaled 71.4 million-gallons compared to 80 million gallons in the prior quarter, a decrease of 8.6 million gallons or 10.8%.

Sales of fuel oil and refined fuels decreased 6.5 million gallons or 34% to 12.6 million gallons compared to 19.1 million gallons in the prior year quarter. In this environment of record high commodity prices, customer conservation continues to have a negative effect on our volumes.

As do proactive measures we have taken to help our customers manage their energy budgets and to manage customer credit risk. The decline in refined fuels’ volumes was also attributable, to a lesser extent, to the elimination of lower margin gasoline and diesel business which occurred throughout much of fiscal 2007.

In the commodities markets average posted prices for both propane and fuel oil remained at unprecedented high levels, increasing 50% and 85% respectively over the prior year third quarter. Total gross margins of 87.8 million for the three months ended June 28 were $16.6 million or 16% below the prior year third quarter of $104.4 million.

Obviously the $14.5 million of realized losses from our risk management activities had the most significant impact on overall gross margins. Combined operating and G&A expenses of $89.7 million for the third quarter of fiscal 2008 were flat compared to the prior year quarter.

We continue to experience savings in payroll and benefit related expenses including variable compensation resulting from lower earnings, as well as savings attributable to operating efficiencies achieved from our lower vehicle count. However, savings in these areas were offset by higher diesel fuel costs to operate our fleet, as well as higher bad debt expense in the higher priced environment.

Thanks, Mike. As announced on July 24, our board of supervisors declared the 18th increase since our recap in 1999 and ninth consecutive increase in the quarterly distribution from $0.771/2 to $0.80 per common unit.

This distribution equates to $3.20 per common unit on an annualized basis, an increase of $0.10 per common unit since the previous quarter and is payable on August 12 to common unit holders of record on August 5. As I stated earlier, this distribution increase represents an annual growth rate of 12.3% compared to the prior year third quarter.

Despite the earnings impact from the volatile commodity environment, we are very pleased with our operational performance and as Mike clearly stated we remain financially very strong and have sufficient working capital at our disposal. We are also poised to take advantage of opportunities that may arise in this challenging operating environment.

Looking ahead to the remainder of fiscal 2008 and beyond, while we have experienced a recent pull back in commodity prices, the longer term commodity price environment is still unclear. Therefore, sales volumes may continue to be affected by customer conservation efforts.

Nonetheless we believe that our flexible cost structure, continued focus on operating efficiencies and financial strength are all factors that will help us to effectively manage through this challenging environment and to continue to deliver increasing value to our unit holders. Lastly, I would like to thank our operating personnel, who continue to do an outstanding job of managing their local operations during these unique times while still maintaining the highest level of quality service to our customers.

As always, we appreciate your support and attention this morning and would now like to open the call up for questions. Ken if you could help us with that please, I would appreciate it.

Well. Let us look at it from a macro perspective.

One, I think we do expect to see continued conservation and volume drop. Maybe not as dramatic as it has been and we do expect it sometime in the near term to level out.

One of the things we see from a consumer's perspective is we have all, as consumers, experienced a dramatic rise in our energy costs, particularly in heating your home and driving to work as well. But what we think will happen, and what we are seeing is happening, is that we have entered a new era, where the consumer is forced to change their behavior because of the increase in costs of doing those day-to-day things.

We think that is a permanent change.

That is possible. But the consumer is feeling the pain of the rising commodity prices.

I think they will just push off as far as they can. I think what you might very well see, and these are crystal ball type of questions - when you get your first freeze, that is when panic buying might set in.

Good. To put price into perspective, okay which I think is important in psychology of volume today.

Last July, August, September you were looking at propane base value of $1.18, crude oil was in the 60s to 70s, and heating oil was around $2.

A couple of things, Darren. One, that makes us more confident than ever, that we are ready for whatever is going to be thrown at us from an economic perspective and we are also ready to expand our footprint.

So we would love to see…we are working hard to try and get our people the ability to do that. Also, when you talk about margins, a straight up comparison of margins between us and our peers is, while we think we do a pretty good job with that, it is difficult because they may have some fees in other places that do not get lumped in with your margin calculations.

Sure. And I agree with you.

I think that it sets the stage and puts you in an optimal position to consolidate in a very fragmented market. As this market continues to be challenged and you have got a lot of small, regional players that might be feeling the magnitude of the challenging market to a greater extent.

I think it is certainly brought people to the table. But I do not think it is affecting multiples as of yet.

It will only affect multiples if there is a discipline amongst the buying group. We have that discipline, which, in a lot of cases, means we are number two in bidding things.

And you are only as good as the last transaction you did, Darren, as you know it could screw up a good thing if you make a bad transaction. We can be more aggressive and we will be more aggressive within a range of doing the right thing.

So, we are poised to do some things and this is not a hint or foreshadowing anything.

Well thanks, guys I appreciate the time.

Good morning, Eve and I just want to remind you that we erased the distribution and I am here. Okay so, go ahead.

First question is - is it bigger than a bread basket?

That is, you are absolutely correct to a certain extent, Yves. As far as raw numbers I think that is proprietary.

In terms of number a week and the breadth and the logistics involved and so forth and so on, obviously, you are coming out, or going this quarter, you are coming out of your peak volume period so your volume numbers were not all that great. But let me try to frame for you the price explosion that we experienced so that we can reflect back on what we looked at.

Beginning of our fiscal year crude oil is trading in the 80s. In June it traded up to $140.

Heating oil was trading at $2.15, it traded up to $3.95, propane was $1.31 and it traded up to $1.91. That is more of an issue than anything else.

Obviously, when you see a market that has that kind of a dynamic rise, your desire and need in our opinion, because we are conservative to hedge, becomes even that greater. So in principle, we were managing our book pretty close to spot from a hedge perspective.

Obviously you come out of March where crude oil was $105, heating oil was $3 and propane was $1.50. And you look at where we ended the third quarter with June, crude was $140, heating oil was $3.90, propane was $1.90.

You are looking at a significant and I think when used in the press release - dramatic rise in the marketplace.

Well, we are constantly thinking about future distribution growth and $0.10 this quarter is evidence of our confidence level and as I said before, Yves, it is always it is an exciting topic with our board and something that is a recurring topic, obviously. We have got room, certainly relative to the rest of the MLP universe.

And our board is very active in those discussions. So it is, those are good discussions.

Unfortunately from some of your guys’ perspective, we have tended to be more conservative than our peers or other members of the MLP sector. The discussions we have about, as the board is getting closer to the way other people run their distribution growth rates.

Our growth rates have been very good. As a matter of fact it is terrific.

Okay. Kent, I appreciate that.

Since we can conclude that there is nobody else in queue. Kent we appreciate your help today and everyone we appreciate your attention, time and support.

And we look forward to reviewing our full year results in a few months. Thank you very much and have a great day.