Davin DAmbrosio - VP and Treasurer Mike Stivala - President and CEO Mike Kuglin - Chief Accounting Officer and CFO.

Brian Brungardt - Stifel Nicolaus.

Ladies and gentlemen, thank you for standing by. Welcome to the First Quarter 2015 Financial Results Conference Call. At this time all participants are in a listen-only mode. Later we'll conduct a question-and-answer session. Instructions will be given at that time. [Operator Instructions] As a reminder, this 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 attributed to the Partnership or persons acting on behalf are expressly qualified in the entirety by such cautionary statements. I would now like to turn the conference over to our host, Davin D'Ambrosio. Please go ahead..

Thank you, Joshua. Good morning. Welcome to Suburban's fiscal 2015 first quarter results conference call. I'm Davin D'Ambrosio, Vice President and Treasurer here at Suburban.

Joining me this morning is Mike Stivala, our President and Chief Executive Officer; Mark Wienberg, our Chief Operating Officer; and Mike Kuglin, our Chief Financial Officer and Chief Accounting Officer. The purpose of today’s call is to review our first quarter financial results, along with our current outlook for the business.

As usual, once we've concluded our prepared remarks, we will open the session to questions. Before getting started however, I'd 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 27, 2014, and its Form 10-Q for the period ended December 27, 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 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 web site at www.suburbanpropane.com. At this point I like to turn the call over to Mike Stivala for some opening remarks.

Mike?.

Thanks Davin and thank you everyone for joining us this morning. our reported results reflect a slow start to the 2014, 2015 heating season characterized by unseasonably warm weather in our service territories throughout much of the quarter, and then particularly during the month of December, which weighed on volumes and earnings for the quarter.

The negative effect of the weather in the first quarter was somewhat offset by higher margins and savings in operating expenses.

In the commodity markets, average propane prices started a rapid decline during the summer of 2014 in line with the dramatic declines in crude oil and natural gas prices and in stark contrast to the price movement during last year’s heating season.

For the quarter average propane prices, basis Mont Belvieu, were 36% below the prior year first quarter, and as we have said in the past a lower commodity price environment is obviously good for consumers in managing their energy budgets as well as the industry as a whole.

In a moment I will comment on our outlook for the remainder of the fiscal year, however, at this point I would like to turn the call over to Mike Kuglin to discuss our first quarter results in more detail.

Mike?.

Thanks Mike and good morning everyone. For the first quarter of fiscal 2015, we reported net income of $55.8 million or $0.92 per common unit, compared to net income of $58.7 million or $0.97 per common unit in the prior year first quarter.

To be consistent with previous reporting, as I discuss our first-quarter results, I am excluding the impact of unrealized non-cash mark-to-market adjustments on derivative instruments using risk management activities, as well as expenses related to our ongoing integration of Inergy Propane.

Mark-to-market adjustments on derivative instruments resulted in an unrealized gain of $9.5 million for the first quarter of fiscal 2015, and an unrealized loss of $300,000 in the prior year first quarter. Integration related expenses amounted to $1.9 million for the first quarter of fiscal 2015 and $2.5 million in the prior year first quarter.

Therefore excluding both of these items, adjusted EBITDA for the first quarter of fiscal 2015 amounted to $101 million compared to $117.7 million in the prior year first quarter.

Retail propane gallons sold in the first quarter of fiscal 2015 decreased 23.4 million gallons, or 14.8%, to 134.5 million gallons from 157.9 million gallons in the prior year first quarter. Sales of fuel oil and other refined fuels decreased 2.7 million gallons, to 11.3 million gallons compared to 14 million gallons in the prior year first quarter.

As Mike indicated the unseasonably warm temperatures had the most significant impact on our earnings for the first quarter. Average temperatures for the quarter across all of our service territories were 8% warmer than normal and the prior year first quarter.

Except for a burst of cold weather during late November, temperatures remained warmer than normal throughout the quarter and were most pronounced in our West Coast operations, where average temperatures were 23% warmer than normal and 19% warmer than the prior year first quarter.

Especially significant was the weather pattern in the month of December, where temperatures across all of our territories were 15% warmer than normal and 21% warmer than the prior year.

In the commodity market, average prices for propane of $0.77 per gallon, basis Mont Belvieu, for the first quarter of fiscal 2015 were 36% lower than the prior year first quarter. Average fuel oil prices of $2.32 per gallon in the first quarter of fiscal 2015 were 22.5% lower than the prior year first quarter.

Total gross margins of $225.5 million for the first quarter of fiscal 2015 were $20.3 million lower than the prior year first quarter of $245.8 million, due to lower propane volumes, offset to an extent by higher propane unit margins as a result of the decline in wholesale propane cost.

Combined operating and G&A expenses of $124.5 million for the first quarter of fiscal 2015 were $3.6 million or 2.8% lower than the prior year first quarter.

Savings were primarily attributable to overall operating efficiencies and synergies realized during the period, which included lower payroll and benefit related expenses, a reduction in vehicle cost, and lower bad debt expense.

The decrease in bad debt expense compared to the prior year first quarter was a result of our efforts to remain diligent about managing our receivables as well as from lower average customer balances stemming from lower selling prices and lower customer consumption.

Our bad debt expense as a percentage of revenues remains consistent with historical levels.

Net interest expense of $20 million for the first quarter of fiscal 2015 decreased $1.2 million from the prior year first quarter due to refinancing of our previously outstanding $496.6 million of 7.5% Senior Notes due 2018 with $525 million of 5.5% Senior Notes due 2024, which was completed during the third quarter of fiscal 2014.

Depreciation and amortization expense of $32.6 million decreased $2.2 million due to the acceleration of depreciation expense in the prior year first quarter and certain assets taken out of service as a result of the integration of Inergy. Capital spending for the quarter was $7.9 million, which included $3.6 million of maintenance capital.

Turning to our balance sheet, we ended the first quarter with $62 million of cash on hand and more than $245 million of availability under our bank revolver. This significantly lower commodity price environment in the first quarter of fiscal 2015 had a favorable impact on our working capital requirements.

As a result, we funded all of our working capital needs from cash on hand without the need to borrow under our revolver during the quarter.

In fact, as we approach peak working capital requirements towards the end of February 2015 we do not currently anticipate the need to borrow from our revolver during fiscal 2015 for working capital or capital expenditure purposes. Now I will turn it back to Mike for some closing remarks..

Thanks Mike. Good job. As announced on January 22nd, our Board of Supervisors declared our quarterly distribution of $0.8750 per common unit in respect of our first quarter of fiscal 2015, which equates to an annualized rate of $3.50 per common unit.

Our quarterly distribution will be paid on February 10 to our unit holders of record as of February 3rd. Looking ahead to the remainder of fiscal 2015 and with the heart of the heating season still ahead, our personnel are poised to react as the weather pattern returns to more normal temperatures reflective of the season.

Lower commodity prices have persisted and in fact have continued to decline throughout much of January from December levels despite a slight drawdown of domestic propane supplies resulting from an up tick in demand as colder weather arrived in January.

As for an update on our integration efforts, as we indicated on our last call we are substantially complete with our detailed integration plans.

We are now in the third full year following the acquisition of Inergy Propane and have accomplished a significant amount bringing together systems and cultures, improving our balance sheet and positioning the combined platform for growth.

As we progress from here we will continue to fine tune our operating model and cost structure in order to maximize the earnings potential of the combined business.

We anticipate realizing an additional $20 million of savings this fiscal year, which when achieved will complete our initial goal of $50 million in synergies over the first three years following the acquisition date.

With Inergy integration substantially complete and our balance sheet in solid condition we remain active in seeking acquisition opportunities both within the propane industry and through efforts to diversify our cash flow profile.

As has been the case in the past, we will remain patient and disciplined in our approach to growth with the overall focus on increasing unit holder value for the long-term.

At this point I would like to take this opportunity to acknowledge the ongoing efforts of all of our dedicated employees, who remain focused on delivering outstanding customer service, growing our customer base and driving efficiencies in all aspects of our business, and as always we appreciate your support and attention this morning and now we would like to open the call up for questions.

Joshua, if you can help us with that..

[Operator Instructions] And our first question comes from the line of Brian Brungardt from Stifel. Please go ahead..

Good morning to everyone. Thank you for taking my call..

Good morning..

I just had a question as it relates to the market, due to the significant pull-back in alternative fuel source prices, particularly natural gas, have you guys seen an increase in customers converting away from propane?.

No, Brian, not at this stage. In fact, I think what you still have going on particularly in the north east as you have more switching away from fuel oil, which is generating some additional opportunities in propane as well as in natural gas. So, no, we are not seeing encroachment in natural gas increasing from historical level at this point..

That is all. Thank you..

Thank you, Brian..

[Operator instructions] And there are no other questions coming into the queue..

Okay, great Joshua. Thank you for your help. Thank you all for your participation this morning and we look forward to catching up with you after our second quarter results. Thank you..

Ladies and gentlemen, this conference will be made available for replay after 11:00 a.m. Eastern today, until February 6, 2015 at midnight. You may access the AT&T playback system by dialing 1-800-475-6701 and entering the access code, 350416. If you are dialing in from internationally, please dial 3203653844.

Again those numbers are 1-800-475-6701 and 3203653844 with access code 350416. That does conclude our conference for today. Thank you for your participation and using AT&T executive teleconference service. You may now disconnect..