Davin D'Ambrosio - VP, Treasurer Mike Stivala - President and CEO Mike Kuglin - CFO and CAO.

Brian Brungardt - Stifel Nicolaus Ben Brownlow - Raymond James Sharon Lui - Wells Fargo.

Welcome to the Third Quarter 2015 Financial Results Conference Call. At this time all participant lines are in a listen-only mode and later there will be an opportunity for question. As a reminder today's conference is being recorded and will begin with a Safe Harbor statement.

This conference call contains forward-looking statements within the meaning of section 21-E 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 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 its behalf are expressly qualified in their entirety by such cautionary statements. I'd now like to turn the conference call over to our host, Vice President and Treasurer, Davin D'Ambrosio..

Thank you, Justin. Good morning, everyone. Welcome to Suburban's Fiscal 2015 Third Quarter Earnings Conference Call. With me this morning is Mike Stivala, President and Chief Executive Officer, Mike Kuglin, Chief Financial Officer and Chief Accounting Officer, and Mark Wienberg, our Chief Operating 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've conclude our prepared remarks we will open the session to questions.

However, before getting started, I would like to take a moment 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 our Form 10-K for the fiscal year ended September 27, 2014 and our Form 10-Q for the period ended June 27, 2015 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 access through a link on our website at www.SuburbanPropane.com. At this time I will turn the call over to Mike Stivala for some opening remarks.

Mike?.

Thank you, Davin. And thanks, everyone, for joining us this morning. August 1 marked the three year anniversary from the closing of the energy propane acquisition.

I want to start by thanking all of the employees of Suburban Propane for their hard work and dedication in bringing these organizations together and accomplishing so much in such a short period of time. I'm extremely proud of our accomplishments to date.

Our integration efforts are now substantially complete and we have achieved or exceeded our expectations including reaching our goal of $50 million in cost synergies in the first three years.

With much of the heavy lifting behind us we are well positioned to leverage the strengths of the combined platform to enhance our long-term growth prospects with an increased focus on external growth opportunities.

In line with this enhanced focus on external growth, yesterday Suburban announced a shift in organizational responsibilities within its senior leadership ranks with the creation of a new senior role of Chief Development Officer.

Mark Wienberg, our current Chief Operating Officer will take on this new role effective with the beginning of the new fiscal year and will focus 100% of his time and energy on corporate development activities in line with our strategic growth initiatives.

Mark and I have worked closely on corporate development matters over the years and Mark will now be responsible for identifying and evaluating growth opportunities both within the propane industry as well as through our efforts to diversify our cash flow profile.

Steve Boyd, our current Senior Vice President of Field Operations will move into the role of Senior Vice President of Operations, overseeing all of the operations and operational support functions and will now report directly to me.

Steve will be responsible for continuing to fine-tune our operating model to maximize operational efficiencies and building our market share through our efforts to grow and retain our customer base. This management realignment follows the success of our internal focus on integration and supports our focus on the next phase of growth.

In a moment I'll provide some closing remarks, including comments on our outlook for the remainder of the year. However, at this point I'd like to turn the call over to Mike Kuglin to discuss our third quarter results.

Mike?.

Thanks, Mike. And good morning, everyone. We are very pleased to report an increase in our adjusted EBITDA for the third quarter of fiscal 2015 compared to the prior year's third quarter.

Our results benefited from our ongoing focus on achieving operating efficiencies and cost savings as well as from the sustained lower commodity price environment which has had a favorable impact on customer buying habits and overall margins.

As I discuss our third quarter results, I'm excluding the impact of unrealized non-cash mark to market adjustments on derivative instruments used and risk management activities which result in a de minimis unrealized loss in the third quarter of fiscal 2015 compared to an unrealized gain of $707,000 in the prior year third quarter.

Additionally, net loss and EBITDA for the third quarter of fiscal 2015 included $1.1 million of expenses related to the integration of Inergy Propane.

Net loss of EBITDA for the third quarter of fiscal 2014 including loss on debt extinguishment of $11.6 million associated with the refinancing of our previously outstanding 2018 senior notes and $4.3 million in expenses related to our integration of Inergy Propane.

Therefore, adjusted EBITDA for the third quarter of fiscal 2015 amounted to $12.1 million, an increase of $2.1 million compared to the prior year third quarter. Consistent with the seasonality of our business, we typically report a net loss in the third quarter.

With that being said our net loss for the third quarter of fiscal 2015 was $41 million or $0.67 per common unit compared to a net loss of $59 million or $0.98 per common unit in the prior year third quarter.

Excluding the impact of the items that I previously mentioned, net loss for the third quarter of fiscal 2015 would have been $39.8 million or $0.66 per common unit compared to $43.8 million or $0.72 per common unit in the prior year third quarter.

Retail propane gallons sold in the third quarter of fiscal 2015 decreased 5.6 million gallons or 6.7% to 77.6 million gallons from 83.2 million gallons in the prior year third quarter. Sales of fuel oil and other refined fuels decreased 800,000 gallons, or 11.4%, to 6.2 million gallons compared to 7 million gallons in the prior year third quarter.

Although weather during the third quarter typically has less of an impact on volumes sold than it does during the heating season, volumes for the quarter were adversely impacted by warmer than normal temperatures throughout or services territories, particularly during the month of April where average temperatures were 10% warmer than normal and 5% warmer than? April 2014.

In addition, the timing of the extreme colder than normal temperatures that were experienced in our Eastern and Midwestern territories during March 2015 led to higher deliveries in March that would otherwise have occurring in the third quarter.

Overall, average temperatures across our service territories for the third quarter of fiscal 2015 were 16% warmer than normal and 6% warmer than the prior year third quarter.

In the commodity markets, while propane prices are considerably lower than they were in fiscal 2014, propane prices were somewhat volatile during the third quarter of fiscal 2015 with posted prices, basis? Mont Belvieu, reaching a high of $0.57 per gallon, a low of $0.32 per gallon representing an inter-quarter swing of 43%.

Overall, average posted prices for propane for the third quarter of fiscal 2015 decreased 55.9% compared to the prior year third quarter and average fuel oil prices decreased 35.7% compared to the prior year third quarter.

On a sequential basis, average propane prices were 11.8% lower while fuel oil prices were 5.2% higher than the second quarter of fiscal 2015.

Total gross margins of $126.1 million for the third quarter of fiscal 2015 were $8.8 million lower than the prior year third quarter or $134.9 million primarily due to lower volumes sold offset to an extent by slightly higher unit margins.

Combined operating and G&A expenses of $115.2 million for the third quarter of fiscal 2015 or $14 million were 10.8% than in prior year third quarter, primarily due to operating efficiencies and synergies realized as a result of the continuing integration of Inergy Propane, including lower payroll and benefit expenses attributable to reduced headcount, lower vehicle expenses attributable to the reduction of vehicles in our fleet and lower fuel costs to operate our fleet as well as lower general insurance and bad debt expenses.

Net interest expense of $18.9 million for third quarter fiscal 2015 or $1.8 million lower than prior year third quarter as a result of savings from the refinancing of certain of the Partnership's senior notes complete in second quarter of fiscal 2015 and in the third quarter of fiscal 2014. Total capital spending for the quarter was $11.

1 million compared to $7.3 million in the prior year third quarter.

The increased level of capital spending was primarily attributable to upgrades to our information systems as well as tank purchases to support new customer activity and expansion of the relationships with certain existing customers and our rebranding efforts associated with the Inergy integration.

Turning to our balance sheet, the declining wholesale cost environment experienced during the first nine months of fiscal 2015 compared to the rising and elevated wholesale cost environment in the prior year resulted in a significant reduction in our working capital requirements which contributed to a year over year increase of $114.1 million in cash generated from operating activities during the quarter.

During the third quarter of fiscal 2015 we once again funded all working capital needs from internally generated cash without the need to borrow under our revolving credit facility. Our liquidity position remains strong with $147 million in cash on hand at the end of the quarter, more $245 million of availability under our revolver.

Through opportunistic refinancing and debt reductions over the past three years, our balance sheet is strong and our credit metrics continue to improve in line with our strategic goals. Back to you, Mike..

Thanks, Mike. As announced in our July 23 press release we were pleased to declare our quarterly distribution of$0.8875?per common unit which equates to an annualized rate of $3.55?per Common Unit. This quarterly distribution will be paid on?August 11 to unit holders of record as of?August 4, 2015.

As Mike mentioned, throughout the last three years while we've been focused on executing on our integration plans, we have also focused on restoring the strength of our balance sheet from the higher leverage profile we took on in order to acquire Inergy Propane.

With our credit metrics now trending toward our goal of mid-three times debt to EBITDA and our cash balance of $147 million, we are once again well positioned to continue to pursue growth opportunities both within our existing operating platform as well as through strategic expansion.

We remain active in our pursuit and will continue our disciplined approach with the overall goal of enhancing overall unit holder value for the long-term.

As for the remainder of fiscal 2015, we continue to be focused on fine-tuning our operating model and driving efficiencies in our effort to finish strong and to prepare operations for the upcoming heating season.

Regardless of what the what the upcoming winter season bring in terms of weather and/or commodity prices, our dedicated employees stand ready to respond with the level of customer service and comfort that our customer base has come to expect from us.

In closing, I would like to once again acknowledge the ongoing efforts of all of our employees both in the field and in our home office in successfully executing our three year integration plan on schedule and with the desired results while always maintaining their focus on delivering the highest level of service to our customer base.

As always, we appreciate your support and attention this morning and we'd now like to open the call to questions and, Justin, if you could do us a favor and help us with that?.

[Operator Instructions]. The first question is from Brian Brungardt of Stifel..

I guess to start here, I'd just be curious, any update to the M&A market both in propane and elsewhere? If I recall correctly, this is kind of the time of year historically most conducive to the propane M&A market?.

Yes. I think we're seeing a similar level of smaller businesses that are exploring opportunities to sell. However, we're not really seeing a tremendous shift in their expectations of what value their business is worth. But we continue to pursue a couple that we've had on the list for quite awhile..

Got it.

And then as it relates to the optimization efforts going forward, any color on what you see as the potential in this post-Inergy integration environment?.

We're excited about where we take the combined platform from here.

We've been so internally focused and rightly so for the past three years in really bringing the two organizations together from a systems prospective, from a model perspective, branding, bringing the culture to one culture and we're really pleased that we can look back three years now and say that we've accomplished all of that and really what we look at the benefits of the combined platform is really enhancing the customer service experience for our customer base as well as taking the strength of our offerings out to the marketplace and enhancing our overall market share.

So, I see the benefits really coming from customer base management and growth as well as, as you know from following us and as most folks know, Suburban will always continue to focus on our cost structure and our operating efficiencies and continue to find ways to manage the expense base. So, I think that's Business 101 for us.

I think we're more excited about the prospects of getting our head out of the sand as I like to say in such an internal focus for such a period time and really get back out in the marketplace and use our strength..

The next question is from Ben Brownlow of Raymond James..

Thanks for taking the question. Just to kind of dovetail on the prior question, you said you weren't seeing a big shift in valuation in terms of expectations with M&A.

I know you previously commented that given the commodity price level you weren't seeing a lot of deals and I just wonder if you could expand on the newly created position of the Chief Development Officer.

Is that just more of a strategic proactive approach in hope of finding those deals in the midstream space? Or are you seeing a ramp in kind of the number of smaller deals that are coming to market?.

I think, Ben, it's most reflective of the fact that we've been so heavily internally focused, driving the value through the integration of the two companies. And as I said in our prepared remarks we're really extremely proud of the efforts of the people to accomplish what we've done in short period of time.

So, it also reflects the work that we've done in restoring our balance sheet to the strength that it is today, starting to look a lot like what our balance sheet looked like right before the Inergy deal.

As you know, the Inergy deal was a bit of a leveraging event for Suburban and we worked hard to restore the balance sheet to something that looks like a mid-three times debt to EBITDA with a heavily cash position that we've built up.

So, really, where it is is we're really well positioned to enhance our focus and spend more time and resources on the next stage of growth. And frankly we didn't need two heavy senior leaders overseeing the operations.

Mark and I have been working closely on corporate development activities and now this move gives him the opportunity to devote all of his time and effort on doing exactly what you said, seeking deals, seeking opportunities a bit more proactively, and digging in to do the analysis, to see what makes sense for Suburban for the long-term.

Steve Boyd who's going to oversee all the operations now has been with the company over 25 years and he's held leadership positions over the operations for a couple of decades and I'm excited to have him oversee the whole operations and continue the momentum that we have in driving efficiencies and enhancing our model.

So, I think it was a logical progression for us to recognize where we are in our lifecycle, to move away from such an internal focus where both Steve and Mark were driving the operational excellence to now leverage both of their skills on driving operations while at the same time driving growth..

The next question is from Sharon Lui of Wells Fargo..

Hi.

Just wondering if you could just touch on what the propane gross margin per gallon was for the quarter and potential opportunities to expand that margin given the commodity environment?.

We don't disclose the per unit margin. I think as our prepared remarks said, the lower commodity price environment did benefit margins to a slight degree but it was slight and as far as where do we go from here, I think all signs point to an extended period of lower commodity prices.

We're sitting here with over 90 million barrels of propane in the US which is 50% higher than the five year average. That would normally portend lower prices and I think as we've been consistent in saying over the years, lower prices is good for everybody, good for the industry, and good for the consumer.

Is it going to generate a significant movement in margins? No. It will give us an opportunity to probably demonstrate or experience more stickiness with our customer base in terms of their desire to seek other alternative uses for their energy needs.

I think it's really a matter of lower prices is going to be good for the overall demand for the product..

That's helpful. You mentioned in terms of potential oversupply for a prolonged period of time.

Does that, I guess, change the way you think about sourcing your product heading into the heating season?.

No. We'll continue to -- we're pretty proud of the way we have relationships with our suppliers and how we buy the product. It doesn't really change our philosophy..

We have no further questions in queue for you..

Okay. Great, Justin. Thanks for your help and thank you, all, for your time this morning and we look forward to talking to you at the end of the fiscal year. Thank you very much..

Ladies and gentlemen, that does conclude the conference for today. We do thank you for your participation and for using our executive teleconference service..