Mike Dunn - Chief Executive Officer Mike Stivala - President Mark Wienberg - Chief Operating Officer Mike Kuglin - Vice President of Finance & Chief Accounting Officer Davin D’Ambrosio - Vice President & Treasurer.

Darren Horowitz - Raymond James Gabe Moreen - Bank of America Merrill Lynch Sharon Lui - Wachovia Securities.

Ladies and gentlemen, thank you for standing by. Welcome to the Suburban Propane's, Third Quarter 2014 Financial Results Conference Call. At this time all participants are in a listen-only mode and then later we’ll conduct a question-and-answer session. Instructions will be given at that time.

(Operator instructions) As a reminder, the conference is being recorded. This conference call contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended, relating to the Partnership’s future business expectations and predictions and financial condition and results of operations.

These forward-looking statements involve certain risks and uncertainties.

The Partnership has listed some of the important factors that could cause actual results to differ materially from those discussed in such forward-looking statements, which are referred to as cautionary statements in its earnings press release, which can be viewed on the company's website.

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 such cautionary statements. And now I’d now like to turn the meeting over to our host, Mr. Davin D’Ambrosio. Please go ahead. .

Thank you and good morning everyone. Welcome to Suburban’s fiscal 2014, third quarter earnings conference call. I’m Davin D’Ambrosio, Vice President and Treasurer at Suburban.

Joining me this morning is Mike Dunn, our Chief Executive Officer; Mike Stivala, President; Mark Wienberg, our Chief Operating Officer; and Mike Kuglin, Vice President of Finance and Chief Accounting Officer.

The purpose of today’s call is to review our third quarter financial results, along with our outlook for the business, including an update on the status of our integration efforts with regards to the Inergy Propane acquisition that was completed on August 1, 2012.

As usual, once we’ve concluded our prepared remarks, we will open the session to questions. Before getting started, I would like to reemphasize 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 28, 2013 and its Form 10-Q for the period ended June 28, 2014, which will be filed by the end of business today.

Copies of these filings may be obtained by contacting the Partnership or the SEC. Certain non-GAAP measures will be discussed on this call. We have provided a description of those measures, as well as the discussion of why we believe this information to be useful in our Form 8-K furnished to the SEC this morning.

Form 8-K can be accessed through a link on our website at www.suburbanpropane.com. At this point I’d like to get the call started by turning it over to Mike Stivala for some opening remarks. Mike..

Thanks Davin and thanks everyone for joining us this morning. Our results for the quarter reflect the lingering effects from this past heating season on customer buying habits, as well as warmer temperatures compared to the prior year third quarter, which benefited from a late burst of cold weather that favorably impacted April 2013 volumes.

Following the winter in which residential customers on average experienced a 25% to 30% increase in their energy costs, both as a result of greater usage and the rise of wholesale product costs. Customer demand in the third quarter slowed as customers delayed deliveries, while making payments on their winter usage.

This coupled with our efforts to assist customers with managing their balances resulted in lower volumes and higher provisions for potential bad debts during the third quarter.

Nonetheless taken together with our first half performance, our year-to-date adjusted EBITDA improved 2% compared to the comparable prior year period and we view the factors that had a negative impact on the third quarter results as timing issues, as customers take a break in order to manage their finances after a difficult heating season in many parts of the country.

Now that the heating season is behind us, our integration activities continue to progress on or ahead of schedule. We remain on target to substantially complete our system conversions and physical blending activities by the end of this fiscal year.

Finally in May, we took proactive steps to further strengthen our balance sheet with the successful refinancing of our 7.5% senior notes due 2018, with new 5.5% senior notes due in 2024.

As a result of this refinancing, we effectively extended maturities on this portion of our debt by six years and reduced our cash interest requirement by more than $8 million annually. In a moment I’ll comment further on our integration activities, along with our current outlook for the business.

However, at this point I’d like to turn the call over to Mike Kuglin to discuss our third quarter results in a little more detail. Mike. .

Mike Kuglin:.

Additionally, net income and EBITDA for the third quarter of fiscal 2014 include a loss on debt extinguishment of $11.6 million associated with the refinancing of our 2018 senior notes and $4.3 million of expenses related to our ongoing integration of Inergy Propane.

Net income and EBITDA for the third quarter of fiscal 2013 included a $6.0 million charge for our voluntary withdrawal from multi-employer pension plans covering certain employees acquired in the Inergy Propane acquisition, as well as $2.2 million in expenses related to our integration efforts.

Therefore adjusted EBITDA for the third quarter of fiscal 2014 amounts to $10 million compared to $19 million in the prior year third quarter. Typically due to the seasonality of our business, we reported a net loss in the third quarter.

With that being said, our net loss for the third quarter of fiscal 2014 was $59.7 million, about $0.99 per Common Unit, compared to a net loss of $45.1 million or $0.77 per Common Unit in the prior year third quarter.

Excluding the impact on the items that I previously mentioned, net loss for the third quarter of fiscal 2014 would have been $43.8 million or $0.72 per Common Unit compared to $36.9 million or $0.63 per Common Unit in the prior year third quarter.

Retail propane gallons sold in the third quarter of fiscal 2014 decreased 8.9 million gallons to 83.2 million gallons, from 92.1 million gallons in the prior year third quarter. Sales of fuel oil and other refined fuels decreased 1.3 million gallons to 7 million gallons compared to 8.3 million gallons in the prior year third quarter.

The decline in volume was primarily due to the combination of factors that Mike already mentioned, namely lower customer demand following the winter heating season in which customers experience significantly higher energy bills as a result of both greater usage and higher revenue prices.

Our efforts to manage exposure to higher than normal customer receivable balances and warmer temperatures during the month of April 2014 compared to colder temperatures during the month of April 2013, which had a unfavorable impact on volumes solid year-over-year.

Average temperatures across all of our service territories during April 2014 were 5% warmer than normal and 7% warmer than April 2013. Overall, average temperatures across all of our service territories for the third quarter of fiscal 2014 were 10% warmer than normal and 4% warmer than the prior year third quarter.

In the commodity market, average wholesale prices for propane for the third quarter of fiscal 2014 increased 16.6% compared to the prior year third quarter, basis Mont Belvieu. Average fuel oil prices increased 2.1% compared to the prior year third quarter.

While wholesale propane prices have abated since we exited the heating season, they still remain somewhat elevated in comparison to historical norms.

Total gross margins of $135 million for the third quarter of fiscal 2014 was $7.7 million lower than the prior year third quarter of $142.7 million, primarily due to lower volumes sold, both which set to an extent by slightly higher unit margins.

Combined operating and G&A expenses of $129.2 million for the third quarter of fiscal 2014 were $2.5 million lower than the prior year third quarter, primarily due to operating efficiencies and synergies realized as a result of the continued integration of Inergy Propane, including lower payroll and benefit related expenses attributable to reduced headcount and lower vehicle expenses attributable to the reduction of vehicles in our fleet.

Savings and payroll, vehicle expenses were partial offset by a $4.1 million increase in bad debt expenses, primarily due to an increase in the allowance for potential uncollectable accounts, and to a lesser extent an increase in the level of write-offs.

Our receivable balance at the end of third quarter of fiscal 2014 was significantly higher than June 2013 levels, due to the combination of higher selling prices and greater customer usage during the heating season.

However, through the first nine months of fiscal 2014, bad debt expense as a percentage of revenues was relatively consistent with out typical experience and we expect to work with our customers to continue to manage write-offs to a level in mind with historical percentages, despite the higher receivable balances coming out of this year’s heating season.

Net interest expense of $20.7 million for the third quarter of fiscal 2014 was $3.7 million lower than the prior year third quarter, as a result of the reduction of $157.3 million in debt during the fourth quarter of fiscal 2013, and to a lesser extent through financing of 2018 notes completed this past May.

Total capital spending for the quarter was $7.3 million, which included $5.2 million of maintenance capital. With the third quarter of fiscal 2014 behind us, our year-to-date adjusted EBITDA for the first nine months of fiscal 2014 was $334 million, an increase of $6.7 million compared to the same period in the prior year.

Turning to our balance sheet.

As mentioned earlier, during the third quarter of fiscal 2014, we took steps to further strengthen our balance sheet with the refinancing of $496.6 million in aggregate principal amount of our 7.5% senior notes in 2018, with net proceeds from the issuance of $525 million, aggregate principal amount of 5.5% senior notes due 2024 and $12.5 million of cash on hand.

With the completion of this refinancing, we will realize annual cash and interest savings of $8.4 million. Our liquidity position remains strong as we ended the quarter with $69.3 million of cash on hand and availability of approximately $246 million under our revolving credit facility. Back to you Mike. .

Thanks Mike. As announced on our July 23 press release, we were pleased to declare our quarterly distribution of $0.8750 per Common Unit, which equates to an annualized rate of $3.50 per Common Unit. This quarterly distribution will be paid on August 12 to our Unitholders of record as of August 5.

As far as integration efforts are concerned, we remain on schedule with our detailed plans to fully integrate onto one common system platform and one common operating model. As previously communicated, we expect to be fully completed with system conversions and blending activities by the end of this fiscal year.

Thereafter, as we have proven in the past, we will continue to refine our operating model and cost structure in order to enhance customer service, realize operating efficiencies and maximize the overall profitability of the combined enterprise.

We remain confident that we will achieve our target of synergies of $50 million over the first three years following the acquisition.

As for the remainder of fiscal 2014, we remain focused on working with our customers as they continue to make payments on their winter heating bills and look to replenish their inventories ahead of the new heating season.

Additionally, as we approach the upcoming heating season, we will be functioning on one system and employing our model across the combined platform. Our dedicated employees stand ready to respond to the level of customer service and comfort that our customer base has come to expect from us.

With that being said, I’d like to acknowledge the continued efforts of all of our dedicated employees, both in the field and in our home office, in executing our integration plans, while maintaining their focus on delivering outstanding service to our customer base.

And finally, as previously announced Mike Dunn will retire from the Partnership effective September 27.

As this is Mike’s last earnings call with us, I would like to take the opportunity to acknowledge and thank him for his overall leadership over the past 17-plus years and for the countless and significant contributions he has made to The Partnership.

I, along with the other members of the executive team am excited and focused on building upon the strong platform that Mike leaves behind. We wish Mike all the best as he enters this exciting next stage in his life. Thanks Mike. .

Thanks Mike and thank you all for your support throughout my tenure here at Suburban.

It has been my pleasure to serve the employees, customers, Unitholders and other stakeholders of Suburban over the past 17 years and I truly look forward to watching this management team continue to seek out growth opportunities, while leveraging the strength of our operating structure and balance sheet for the long term benefit of our Unitholders.

As always, we appreciate your support and attention this morning and would now like to open the call up for questions. Lory. .

(Operator Instructions). Our first question is from the line of Darren Horowitz with Raymond James. Please go ahead. .

Good morning guys and to Mike Dunn, Congratulations! It’s been great working with you and we wish you the best. .

Thank you. .

Mike Stivala, a quick question for you. Just if you could on a percentage basis, how much higher relative to historical norms is the current receivable balance running, and more importantly do you have an estimate as to the timing that you think it will take to get it back to a more normalized level. .

Well, the receivables balance is currently about almost 50% higher than this time last year and we expect to be able to turn that within the next few months frankly. As it gets closer to the next year’s heating season. I think we are going to see an acceleration of those payments come through.

The good thing is we are not seeing an elevation in the percentage of write-offs as a percentage of sales. We are still in our typical less than half percentage of write-offs and we expect that trend to continue, so it is really just a timing issue Darren.

Customers are clearly taking a break off of lasts year’s heating season and just focusing on getting their finances in order, getting their bills paid and getting prepared for next year’s heating season. So we do believe that it’s a bit of a timing issue. .

Okay. Switching gears a little bit, back to the prepared commentary regarding wholesale propane costs being elevated, they have been that way for a while, especially when you are looking at the inventory numbers and the incremental bid for propane to propylene or from a cracker consumption perspective.

I’m just curious, as we’re approaching the back half of this year from a calendar perspective, how do you think about propane costs going forward as a function of where Mid-Con and Gulf Coast inventories are? And if wholesale costs for propane continue to be elevated and possibility trend a little bit higher, how do you think that plays out for your ability to expand retain margins into the heating season.

.

I think if you categorize the expectation for price pretty well Darren, I mean I think we probably have a similar view as you do, although its tough to predict what’s going to happen as the heating season gets started.

Obviously last year there was some tremendous factors that changed the dynamics from pricing perspectives as the heating season progressed. So who knows what types of supply demand dynamics can occur again as this year’s heating season gets kick started. I think you are starting from a level that is similar to last year.

Propane seems to be kind of stuck in a range here of $1 to $1.10 basis Mont Belvieu and there is nothing that I can see that would change that dynamic that dramatically at this stage. So as it relates to propane margins, its continuing to be – the economy continues to weigh on what we’re seeing the customer behavior.

So its difficult in any pricing environment to raise prices and again, you have to be very careful with respect to the expectation that you have for continuing to raise margins on the economy that is still trying to come out of some difficult times here. .

As you guys Mike, progress with the system conversion and blending activities and as those integration activates ultimately get done here by the fiscal year, seeming from an economies of scale perspective that should benefit you, and I know its tough to quantify, but I would imagine it gives you greater purchasing power, which should theoretically help you, especially if wholesale prices rise.

Do you have a rough sense as to what that could mean across the system? I mean obviously it’s a benefit. I just love to put some numbers around it, if that’s possible. .

It’s really not possible to put numbers around the benefit of that, but the benefit that we see Darren is the benefit that we got last year of the relationships that we have with our suppliers in a very tight supply and logistics market, where we were able to insure that we always had supply when and where we needed it.

So I think that’s the benefit that we see in our relationships with our suppliers. Is there a slight financial benefit? Perhaps, but I think the bigger benefit is our ability to get product when we needed and where we need it. So how do you quantify that, I don’t really know. .

Yes, I guess we could just classify that as supply assurance, which is a good thing. Last question, just if could provide a brief update on the acquisition environment.

Obviously we’ve seen a few things kind of transition here over the past few quarters and I know that you had mentioned in previous calls the focus on diversifying the operations maybe was a bit more midstream. Has anything changed there, has anything just located with regard to multiples, where something may or may not look more or less attractive. .

No, I think our strategy certainly is the same. We continue to look for opportunities to both grow within propane, as well as diversify the platform.

As far as multiples, I haven’t seen a dramatic decline in multiples and I think the level of drop down activity that you’re seeing in the newly created MLPs over the past couple of years, also I think changes a bit of the dynamics in the M&A market place. Just in terms of the level of assets that are available to the open market if you will.

So, I think that’s what we are seeing. We are not seeing the dramatic decline in multiples yet, and we are seeing a little bit more competition for assets on the market, just given the drop down scenario that many of the these MLPs have created for themselves. .

Thanks Mike, I appreciate it. .

Thank you. We’ll got to Gabe Moreen with Bank of America Merrill Lynch. Please go ahead. .

Hi, good morning and best of luck in retirement Mike Dunn and sorry (inaudible) don’t appear to be worth watching in that retirement, so ….

I agree with you, Gabe. I appreciate it. .

You bet. Just a couple of follow up questions. Darren hit on most of mine, but just on the bad debt experience as it relates to percentage of revenue; its sort of where you’ve been running historically.

But as far as customer accounts and maintaining your customer accounts and the bad debt experience you had here, do you think you are looking more customers than usual. You are cutting off I should say, more customers than usual because of what you’ve been seeing on the bad debt deck side. .

No, I don’t think we are loosing more customers than usual Gabe. As far as when you say cutting off, we are also not loosing customers as a result of cutting off. We are both the customer, as well as Suburban are cautiously allowing deliveries to continue to progress, so that people have the time to get call-up, okay.

So that means that we have a few more customers perhaps on a credit hold for now, but not customers that we are ready to shut the door on for sure..

Okay, got it. And then maybe I should note this, from last quarter in the Q, but just a tick up in maintenance CapEx year-over-year seems to running also in this quarter as well.

Can you just talk about that and whether that’s sort of the new level going forward?.

I think, is it a new level going forward? I think what you are seeing right now is a bit more capital being deployed as we integrate the two businesses. So I expect as we get into next year and certainly the year after that we’ll probably level down a little bit from where we are right now..

Great, got it. Thanks guys. .

Thank you Dave..

(Operator Instructions). We’ll go to Sharon Lui with Wachovia Securities. Please go ahead..

Hi there, best of luck. Mike just a question on just the integration costs.

I know that the schedule remains in line with expectations, but maybe if you could just comment on whether the integration costs incurred to date is tracking in line also?.

Yes Sharon, it is. We always say, it takes $1 of cost to get $1 of synergies and I think over the three years that is still what we expect to pen out that way. Not all of its expense related. Some of its capital and that’s what you’re seeing in the maintenance and growth CapEx.

You’ll see a little bit more of that as we brand the two businesses in terms of signage and tank – storage tank painting and so forth over the next couple of years, but no, we’re not seeing an up-tick in what’s required..

Okay, and then I guess quarter to-date, is customer delivery still tracking behind schedule versus a year ago?.

The fourth quarter?.

Probably for just the month of July..

I think we’re still seeing the lingering effects of what we experienced in the third quarter. Obviously until the weather starts to turn around and customers see the heating season a little bit more eminent, I think that’s where you’ll start to see the deliveries turn around a bit more.

Right now, like I said, customers are just taking a break if you will, both from deliveries and as well as our own efforts to help them get through and work their finances to get themselves whole and ready for next year’s heating season..

Okay, thank you..

Thank you Sharon..

And I’ll turn it back to our presenters for closing remarks. .

Well, thank you all for joining us and thank you again Mike Dunn for all your leadership and we look forward to seeing everybody again after our fourth quarter. Thank you..

Thank you. Ladies and gentlemen, this conference call will be made available for replay that begins today, August 7 at 11:00 a.m. eastern. The replay runs until August 8 at midnight eastern. You can access the AT&T teleconference replay system by dialing 1-800-475-6701. Please enter the replay access code 332298.

That number again 1-800-475-6701 and the replay access code 332298. That will conclude our teleconference for today. Thank you for your participation and for using AT&T executive teleconference service. You may now disconnect..