SUBURBAN PROPANE PARTNERS LP (Form: 8-K, Received: 05/04/2017 07:33:05)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

May 1, 2017

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		(IRS Employer
of Incorporation)		Identification No.)

240 Route 10 West

Whippany, New Jersey 07981

(973) 887-5300

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

I TEM 1.01 . E NTRY INTO A M ATERIAL D EFINITIVE A GREEMENT

On May 1, 2017, Suburban Propane Partners, L.P. (the “Partnership”) and Suburban Propane, L.P., a wholly-owned subsidiary of the Partnership (the “Operating Partnership”), entered into the First Amendment (the “Amendment”) to the Second Amended and Restated Credit Agreement, dated as of March 3, 2016 (the “Credit Agreement”), with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and the other lenders named therein (collectively, the “Lenders”).

The following summary does not purport to be a complete summary of the Amendment and is qualified in its entirety by reference to the Amendment, a copy of which is filed herewith as Exhibit 10.1 and is incorporated by reference herein. Terms used, but not defined, in this Form 8-K have the meanings set forth in the Amendment.

The Amendment, among other things, provides for certain modifications to the terms of the Credit Agreement, including the following: (i) to amend the definition of Applicable Rate to add an additional pricing level of 3.00% for Eurodollar Rate Loans and Letter of Credit Fees, 2.00% for Base Rate Loans and 0.500% for Commitment Fee, which will be applicable when the Total Consolidated Leverage Ratio (as defined in the Credit Agreement) exceeds 5.50:1.00 at the end of the applicable measuring period and (ii) to amend the maximum permitted Total Consolidated Leverage Ratio from 5.50:1.00 at the end of any fiscal quarter to 5.95:1.00 for each fiscal quarter ending in the months of June, September and December 2017, and March and June 2018, 5.75:1.00 for the fiscal quarter ending in the month of September 2018, and 5.50:1.00 for the fiscal quarter ending in the month of December 2018 and for each fiscal quarter thereafter.

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following information, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On May 4, 2017, the Partnership issued a press release (the “Press Release”) describing its Fiscal 2017 Second Quarter Financial Results. A copy of the Press Release has been furnished as Exhibit 99.1 to this Current Report.

Within the Press Release, we reference net income before deducting interest expense, income taxes, depreciation and amortization (“EBITDA”) which is considered a non-GAAP financial measure. Additionally, we discuss EBITDA excluding the unrealized net gain or loss from mark-to-market activity for derivative instruments and certain other items (“Adjusted EBITDA”). Our calculations of EBITDA and Adjusted EBITDA are presented in the Press Release furnished as Exhibit 99.1 to this Current Report.

We provide these non-GAAP financial measures because we believe that they provide the investment community with supplemental measures of operating performance. In addition, we believe that these non-GAAP financial measures provide useful information to investors and industry analysts to evaluate our operating results.

We also reference gross margins, computed as revenues less cost of products sold as those amounts are reported on the consolidated financial statements. Since cost of products sold does not include depreciation and amortization expense, the gross margin we reference is considered a non-GAAP financial measure. Given the nature of our business, the level of profitability in the retail propane, fuel oil, and natural gas and electricity businesses is largely dependent on the difference between retail sales price and product cost. Therefore, we discuss gross margins in order to provide investors and industry analysts with useful information to facilitate their understanding of the impact of the commodity prices on profitability.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

10.1

First Amendment to the Second Amended and Restated Credit Agreement among Suburban Propane, L.P., Suburban Propane Partners, L.P. and Bank of America, N.A., as Administrative Agent, and the Lenders party thereto, dated May 1, 2017.

99.1

Press Release of Suburban Propane Partners, L.P. dated May 4, 2017, describing the Fiscal 2017 Second Quarter Financial Results.

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 hereunto duly authorized.

May 4, 2017	SUBURBAN PROPANE PARTNERS, L.P.

	By:	/s/ MICHAEL A. KUGLIN
	Name:	Michael A. Kuglin
	Title:	Chief Financial Officer & Chief Accounting Officer

EXHIBITS


Exhibit No.		Exhibit
10.1		First Amendment to the Second Amended and Restated Credit Agreement among Suburban Propane, L.P., Suburban Propane Partners, L.P. and Bank of America, N.A., as Administrative Agent, and the Lenders party thereto, dated May 1, 2017.
99.1		Press Release of Suburban Propane Partners, L.P. dated May 4, 2017, describing the Fiscal 2017 Second Quarter Financial Results.

Exhibit 10.1

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “ First Amendment ”) is dated effective as of May 1, 2017 (the “ Effective Date ”) by and among SUBURBAN PROPANE, L.P. , a Delaware limited partnership (the “ Borrower ”), SUBURBAN PROPANE PARTNERS, L.P. , a Delaware limited partnership (the “ Parent ”), EACH LENDER SIGNATORY HERETO , and BANK OF AMERICA, N.A. (“ Bank of America ”), as the administrative agent for the Lenders (in such capacity, the “ Administrative Agent ”), Swing Line Lender, L/C Issuer and a Lender.

W I T N E S S E T H:

WHEREAS , the Administrative Agent, the Lenders, the Borrower and the Parent are parties to that certain Second Amended and Restated Credit Agreement dated as of March 3, 2016 (as amended, restated, or otherwise modified, the “ Credit Agreement ”);

WHEREAS , the Borrower has requested certain amendments to the Credit Agreement, and subject to the terms and conditions set forth herein, the Administrative Agent and the Lenders that are signatories hereto are willing to agree to such amendments and waivers;

NOW, THEREFORE , in consideration of the mutual covenants and the fulfillment of the conditions set forth herein, the parties hereby agree as follows:

1. Definitions . Unless otherwise defined in this First Amendment, each capitalized term used herein but not otherwise defined herein has the meaning given such term in the Credit Agreement, as amended by this First Amendment. The interpretive provisions set forth in Section 1.02 of the Credit Agreement shall apply to this First Amendment.

2. Amendments to the Credit Agreement . On the Effective Date, the Credit Agreement is amended as follows:

(a) The definition of “Applicable Rate” in Section 1.01 of the Credit Agreement is hereby deleted in its entirety and replaced as follows:

““ Applicable Rate ” means with respect to the Revolving Credit Facility, the applicable percentage per annum set forth below determined by reference to the Total Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(a) :

Pricing Level	Total Consolidated Leverage Ratio	Applicable Margin for Eurodollar Rate Loans/ Letter of Credit Fee	Applicable Margin for Base Rate Loans	Commitment Fee
I	< 3.00:1	1.50%	0.50%	0.300%
II	> 3.00:1 but < 3.50:1	1.75%	0.75%	0.375%
III	> 3.50:1 but < 4.00:1	2.00%	1.00%	0.375%
IV	> 4.00:1 but < 4.50:1	2.25%	1.25%	0.500%
V	> 4.50:1 but < 5.50:1	2.50%	1.50%	0.500%
VI	> 5.50:1	3.00%	2.00%	0.500%

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Any increase or decrease in the Appli c able Rate for the Revolving Credit F a cility resulting from a change in the Total Consolidated Leverage R a tio shall become ef f ective as of the first Business D ay i mmed iately following the date a C o mpliance Certi f icate is deli v ered pursuant to Section 6 . 02(a ) ; provi d e d , however , that if a Co mp liance Certificate is not delivered when due in accordance with such Section, then, upon the request of the Required Revolving Len ders, Pricing Level VI shall apply in respect of the Revolving Credit Facili t y, in each case as of the first Business D a y after the d a te on which su ch Co mp li a nce Certifica t e was requir e d to have been delivered (after giving effect to any applicable gra c e p eriods set f o rth in Section 8.01(b) ) and in each case shall remain in effect until the date on which such Co mp lian c e Certifica t e is delivered. The te r m “ Applicable Rate ”, a s it rela t es to any In c r em ental T er m Facilit y , shall have the me aning set for t h in such amendment or s upple m ent to this Agree m ent entered into in connection with such Inc r e m ental Term Facility a m ong the Borrower, the Guarantors, th e Incremental Term Facili t y Lenders that have agreed to participate in such Incre m ental Term Facility and th e Administrative Agent.

Notwithstanding anything to the contrary contained in this definition, the determination of theApplicable Rate for any period shall be subject to the provisions of Section 2.10(b) .”

(b) Section 7.11(b) of the Credit Agreement is hereby deleted in its entirety and replaced as follows:

“(b) Total Consolidated Leverage Ratio . Permit the Total Consolidated Leverage Ratio as of the end of any fiscal quarter of the Parent to be greater than the ratio set forth below opposite such period:

Fiscal Quarter Ending in the Month of	Total Consolidated Leverage Ratio
June 2017	5.95 to 1.00
September 2017	5.95 to 1.00
December 2017	5.95 to 1.00
March 2018	5.95 to 1.00
June 2018	5.95 to 1.00
September 2018	5.75 to 1.00
December 2018 and each fiscal quarter thereafter	5.50 to 1.00

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3 . Repr e sentat i ons and Warranties . In o r der to induce the A dm inistrative Agent and the Required Lenders to exec u te this First Am en d ment, each of the P arent and the Borrower r e pre sents and warrants that as of the date hereof, both b efore a nd after giving effect to this First A m en d ment:

(a) each of the First Amendment and the Guarantors’ Consent and Agreement (A) has been duly authorized, executed and delivered by each Loan Party party thereto, (B) constitutes a legal, valid and binding obligation of each such Loan Party, enforceable against each such Loan Party in accordance with its terms subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and (C) does not and will not (1) contravene the terms of any of such Person’s Organization Documents; (2) materially conflict with or result in any material breach or contravention of, or the creation of any Lien under, or require any material payment to be made under (x) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (y) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (3) violate any Law; and

(b) the representations and warranties of the Borrower and each other Loan Party contained in Article V of the Credit Agreement or in any other Loan Document, shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, and except that for purposes hereof, the representations and warranties contained in Sections 5.05(a) and (b) of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) , (b) , (c) and (d) , respectively.

4. Effect of Amendment .

(a) This First Amendment (i) except as expressly provided herein, shall not be deemed to be a consent to the modification or waiver of any other term or condition of the Credit Agreement or of any of the instruments or agreements referred to therein and (ii) shall not prejudice any right or rights which the Administrative Agent or the Lenders may now have under or in connection with the Credit Agreement, as amended by this First Amendment. Except as otherwise expressly provided by this First Amendment, all of the terms, conditions and provisions of the Credit Agreement shall remain the same, and the Credit Agreement, as amended hereby, shall continue in full force and effect. This First Amendment and such Credit Agreement shall be read and construed as one instrument.

(b) From and after the Effective Date, each reference in the Credit Agreement, including the schedules and exhibits thereto and the other documents delivered in connection therewith, to the “Credit Agreement,” “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, shall mean and be a reference to the Credit Agreement as amended hereby.

5. Loan Document . This First Amendment is a Loan Document, and all provisions in the Credit

Agreement pertaining to Loan Documents apply hereto.

6. Miscellaneous . This First Amendment shall be governed by and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely within such state, and applicable federal law. The captions in this First Amendment are for convenience of reference only and shall not define or limit the provisions hereof. This First Amendment may be executed in separate counterparts, each of which when so executed and delivered shall be an original, but all of which together shall constitute one instrument. Delivery of an executed counterpart of this First Amendment by electronic mail, facsimile or in other electronic form shall be effective as the delivery of a

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manually executed counterpart. In prov i ng this First A m en d ment, it shall not be necessary to produce or account for more than one su ch counter p art.

7. Entire Agreement . The Credit Agreement (as amended by this First Amendment) and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.

8. Release . In consideration of the amendment to the Credit Agreement provided for herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower and the Parent each, for themself and their successors and assigns, fully and without reserve, releases and forever discharges each Secured Party, its respective successors and assigns, officers, directors, employees, representatives, trustees, attorneys, agents and affiliates (collectively the “ Released Parties ” and individually a “ Released Party ”) from any and all actions, claims, demands, causes of action, judgments, executions, suits, debts, liabilities, costs, damages, expenses or other obligations of any kind and nature whatsoever, direct and/or indirect, at law or in equity, whether now existing or hereafter asserted (INCLUDING, WITHOUT LIMITATION, ANY OFFSETS, REDUCTIONS, REBATEMENT, CLAIMS OF USURY OR CLAIMS WITH RESPECT TO THE NEGLIGENCE OF ANY RELEASED PARTY), for or because of any matters or things occurring, existing or actions done, omitted to be done, or suffered to be done by any of the Released Parties, in each case, on or prior to the date hereof and are in any way directly or indirectly arising out of or in any way connected to any of this First Amendment, the Credit Agreement, any other Loan Document, or any of the transactions contemplated hereby or thereby (collectively, the “ Released Matters” ); provided, that the Released Matters shall not include any of the Lenders’ obligations to fund under their Commitments to the Credit Agreement after the date hereof in accordance therewith. The Borrower and the Parent each, by execution hereof, hereby acknowledge and agree that the agreements in this Section 8 are intended to cover and be in full satisfaction for all or any alleged injuries or damages arising in connection with the Released Matters herein compromised and settled.

9. Effectiveness . This First Amendment shall be effective as of the Effective Date upon receipt by the Administrative Agent of (i) signature pages to this First Amendment, executed on behalf of the Parent, the Borrower, the Administrative Agent, and the Required Lenders, (ii) signature page to the Guarantors’ Consent and Agreement, executed on behalf of each Guarantor, (iii) the Amendment Fee as set forth in Section 10 and (iv) any amounts due and payable to the Administrative Agent, including any amounts due and payable to pursuant to that certain letter agreement dated as of the date hereof among Bank of America, Merrill Lynch, Pierce, Fenner & Smith Incorporated and the Borrower. The Administrative Agent shall notify all Lenders and the Borrower and the Parent promptly upon effectiveness of this First Amendment.

10. Amendment Fee . The Borrower shall pay to the Administrative Agent in immediately available funds, on or before the Effective Date, for the account of each Lender who executes this First Amendment on or before the Effective Date, an amendment fee (the “ Amendment Fee ”) in an amount equal to each such Lender’s Commitment times 12.5 basis points. The Amendment Fee shall be payable in full on the Effective Date and shall be nonrefundable.

[Remainder of Page Intentionally Left Blank. Signature Pages Follow.]

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed by their duly authorized offi cers, all as of the day and yea r first above written.

SIGNATURE PAGE TO

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

GUARANTORS' CONSENT AND AGREEMENT

Each of the undersigned Guarantors hereby (a) consents to the foregoing First Amendment to Second Amended and Restated Credit Agreement (the " First Amendment"), (b) acknowledges and agrees that its obligations and liabilities in respect of the Guaranty and other Loan Documents to which it is a party are not released, diminished, impaired, or otherwise adversely affected by the First Amendment, and that all such obligations and liabilities are, and shall continue to be, in full force and effect, (c) confirms that the Liens held by the Administrative Agent for the benefit of the Lenders as security for payment of the Obligations (including any increase thereof pursuant to the First Amendment) remain in full force and effect and are unimpaired by the First Amendment, and (d) agrees that the Guaranty and other Loan Documents to which it is a party are hereby ratified in all respects. This consent and agreement shall be binding upon each of the undersigned Guarantors, and the respective successors and assigns of each, and shall be governed by and construed in accordance with the laws of the State of New York.

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Exhibit 99.1

News Release

Contact: Michael A. Kuglin

Chief Financial Officer & Chief Accounting Officer

P.O. Box 206, Whippany, NJ 07981-0206

Phone: 973-503-9252

FOR IMMEDIATE RELEASE

Suburban Propane Partners, L.P.

Announces Second Quarter Earnings

Whippany, New Jersey, May 4, 2017 -- Suburban Propane Partners, L.P. (NYSE:SPH), a nationwide distributor of propane, fuel oil and related products and services, as well as a marketer of natural gas and electricity, today announced earnings for its second quarter ended March 25, 2017.

Net income for the second quarter of fiscal 2017 was $83.8 million, or $1.37 per Common Unit, compared to net income of $92.0 million, or $1.51 per Common Unit, in the prior year second quarter.

Net income and earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the second quarters of fiscal 2017 and 2016 included losses on debt extinguishment of $1.6 million and $0.3 million, respectively. Excluding the effects of the foregoing items and unrealized (non-cash) mark-to-market adjustments on derivative instruments in both periods, Adjusted EBITDA (as defined and reconciled below) amounted to $138.0 million for the second quarter of fiscal 2017, compared to $145.1 million in the prior year second quarter.

In announcing these results, President and Chief Executive Officer Michael A. Stivala said, “The propane industry as a whole has just endured an unprecedented stretch of back-to-back record warm winters. The fiscal 2017 heating season was a bit more challenging than the prior year, with four out of six months reported as record warm, and two separate three-week stretches of cold weather toward the end of each of the first and second quarters. Nonetheless, we are proud of the way our operating personnel managed through the challenges presented by this sustained warm weather trend. We remain focused on the things we can control – delivering exceptional customer satisfaction in every market we serve, driving further operating efficiencies, controlling costs and capital spending levels, managing margins in a challenging commodity price environment and executing on our customer base growth and retention initiatives. During the short bursts of cold weather that did arrive, our volumes and earnings responded as expected, which is a testament to the strength and readiness of our platform.”

Mr. Stivala continued, “As a result, we are pleased to report an improvement of $10 million, or nearly 5%, in Adjusted EBITDA for the first half of fiscal 2017 compared to the prior year. We also took proactive steps to lower our interest costs and enhance liquidity. During the second quarter of fiscal 2017, we successfully refinanced our previous 7 3/8% Senior Notes due 2021 with the issuance of 5 7/8% Senior Notes due 2027, effectively extending maturities on $350.0 million of our debt by six years at a very attractive interest rate, and reducing our cash interest requirement by nearly $5.0 million annually.”

On May 1, 2017, the Partnership secured an amendment to its revolving credit facility whereby the maximum consolidated leverage ratio covenant has been increased from 5.50 to 5.95 starting with the fiscal quarter ending June 2017 and continuing through each of the fiscal quarters ending June 2018, stepping down to 5.75 for the

quarter ending September 2018 and then returning to the pre-amendment level of 5.50 for the fiscal quarter ending December 2018, which is the Partnership’s first quarter of fiscal 2019.

Discussing the amendment, Mr. Stivala said, “Our decision to secure this amendment was to proactively enhance our liquidity position in light of the recent warm weather trends. The amendment provides added cushion under our consolidated leverage test, which we believe is a prudent measure that gives us added flexibility to support our cash needs and continue to invest in our long-term, strategic growth initiatives. We received strong support from our bank group for this amendment, which is a testament to their confidence in our operating philosophy and business fundamentals.”

Retail propane gallons sold in the second quarter of fiscal 2017 of 153.9 million gallons decreased 7.7 million gallons, or 4.8%, compared to the prior year second quarter. Sales of fuel oil and other refined fuels decreased 0.3 million gallons, or 2.3%, compared to the prior year. According to the National Oceanic and Atmospheric Administration, average temperatures (as measured by heating degree days) across all of the Partnership’s service territories for the second quarter of fiscal 2017 were 15% warmer than normal, and 2% warmer than the prior year second quarter. In certain markets, principally the Partnership’s Midwest and Southeast service territories, average temperatures were approximately 30% warmer than normal and 16% warmer than the prior year second quarter. In the Partnership’s Northeast and West Coast regions, the Partnership experienced cooler weather compared to the prior year which helped contribute to an increase in volumes sold in those markets.

Revenues in the second quarter of fiscal 2017 of $450.6 million increased $46.4 million, or 11.5%, compared to the prior year second quarter, primarily due to higher retail selling prices associated with higher wholesale product costs, offset to an extent by lower volumes sold. Average posted propane prices (basis Mont Belvieu, Texas) and fuel oil prices were 84.6% and 48.9% higher than the prior year, respectively. Cost of products sold for the second quarter of fiscal 2017 of $192.5 million increased $55.5 million, or 40.5%, compared to $137.0 million in the prior year, primarily due to higher wholesale product costs. Cost of products sold included a $2.5 million unrealized (non-cash) loss attributable to the mark-to-market adjustment for derivative instruments used in risk management activities, compared to a $0.7 million unrealized (non-cash) loss in the prior year second quarter. These unrealized losses are excluded from Adjusted EBITDA for both periods in the table below.

Combined operating and general and administrative expenses of $122.6 million for the second quarter of fiscal 2017 were essentially flat with the prior year second quarter. Savings in fixed costs due to steps taken in the prior fiscal year to streamline operations and achieve operating efficiencies were offset by higher general insurance expenses, vehicle fuel costs, and higher provisions for potential uncollectible accounts as a result of higher commodity prices.

Depreciation and amortization expense of $32.7 million decreased $0.5 million, or 1.5%, compared to the prior year second quarter. Net interest expense of $17.5 million decreased $1.4 million compared to the prior year second quarter, primarily due to savings from the refinancing of the Partnership’s previously outstanding 2021 Senior Notes.

During the second quarter of fiscal 2017, the Partnership funded working capital, capital expenditures and costs associated with the repurchase of its 2021 Senior Notes from operating cash flow and $26.4 million of incremental borrowings under its revolving credit facility.

As previously announced on April 20, 2017, the Partnership’s Board of Supervisors has declared a quarterly distribution of $0.8875 per Common Unit for the three months ended March 25, 2017. On an annualized basis, this distribution rate equates to $3.55 per Common Unit. The distribution is payable on May 9, 2017 to Common Unitholders of record as of May 2, 2017.

Suburban Propane Partners, L.P. is a publicly traded master limited partnership listed on the New York Stock Exchange. Headquartered in Whippany, New Jersey, Suburban has been in the customer service business since 1928. The Partnership serves the energy needs of approximately 1.1 million residential, commercial, industrial and agricultural customers through 675 locations in 41 states.

This press release contains certain forward-looking statements relating to future business expectations and financial condition and results of operations of the Partnership, based on management’s current good faith expectations and beliefs concerning future developments. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed or implied in such forward-looking statements, including the following:

•	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, natural gas and electricity, the impact of the Partnership’s hedging and risk management activities, and the adverse impact of price increases on volumes sold 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 sufficient volumes of, and the costs to the Partnership of acquiring, transporting and storing, propane, fuel oil and other refined fuels;

•	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 or acquire new customers;

•	The impact of customer conservation, energy efficiency and technology advances on the demand for propane, fuel oil and other refined fuels, natural gas and electricity;

•	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 climate change, derivative instruments and other regulatory developments on the Partnership’s business;

•	The impact of changes in tax laws that could adversely affect the tax treatment of the Partnership for income tax purposes;

•	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;

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

•	The operating, legal and regulatory risks the Partnership may face; and

•	Other risks referenced from time to time in filings with the Securities and Exchange Commission (“SEC”) and those factors listed or incorporated by reference into the Partnership’s Annual Report under “Risk Factors.”

Some of these risks and uncertainties are discussed in more detail in the Partnership’s Annual Report on Form 10-K for its fiscal year ended September 24, 2016 and other periodic reports filed with the SEC. 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, except as otherwise required by law.

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Suburban Propane Partners, L.P. and Subsidiaries

Consolidated Statements of Operations

For the Three and Six Months Ended March 25, 2017 and March 26, 2016

(in thousands, except per unit amounts)

(unaudited)

	Three Months Ended					Six Months Ended
	March 25, 2017			March 26, 2016		March 25, 2017		March 26, 2016
Revenues
Propane	$	385,654		$	348,216	$	655,113	$	579,691
Fuel oil and refined fuels		34,630			28,814		56,726		49,502
Natural gas and electricity		19,239			15,962		32,306		27,636
All other		11,055			11,148		23,740		23,168
		450,578			404,140		767,885		679,997

Costs and expenses
Cost of products sold		192,467			137,009		310,632		229,515
Operating		110,420			107,560		209,769		212,431
General and administrative		12,164			15,208		27,211		30,706
Depreciation and amortization		32,670			33,150		63,931		64,788
		347,721			292,927		611,543		537,440
Operating income		102,857			111,213		156,342		142,557
Loss on debt extinguishment		1,567			292		1,567		292
Interest expense, net		17,487			18,852		36,318		37,745

Income before provision for income taxes		83,803			92,069		118,457		104,520
Provision for income tax (benefit) expense		(9	)		58		156		243

Net income	$	83,812		$	92,011	$	118,301	$	104,277

Net income per Common Unit - basic	$	1.37		$	1.51	$	1.94	$	1.72
Weighted average number of Common Units outstanding - basic		61,203			60,857		61,127		60,802

Net income per Common Unit - diluted	$	1.36		$	1.51	$	1.93	$	1.71
Weighted average number of Common Units outstanding - diluted		61,503			61,135		61,386		61,072


Supplemental Information:
EBITDA (a)	$	133,960		$	144,071	$	218,706	$	207,053
Adjusted EBITDA (a)	$	138,039		$	145,102	$	222,326	$	212,294
Retail gallons sold:
Propane		153,875			161,597		272,476		271,361
Refined fuels		12,996			13,296		22,008		21,861
Capital expenditures:
Maintenance	$	3,012		$	5,831	$	6,130	$	10,517
Growth	$	7,365		$	5,922	$	11,075	$	14,188

(more)

(a)

EBITDA represents net income before deducting interest expense, income taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA excluding the unrealized net gain or loss on mark-to-market activity for derivative instruments and other items, as applicable, as provided in the table below. Our management uses EBITDA and Adjusted EBITDA as supplemental measures of operating performance and we are including them because we believe that they provide our investors and industry analysts with additional information that we determined is useful to evaluate our operating results.

EBITDA and Adjusted EBITDA are not recognized terms under accounting principles generally accepted in the United States of America (“US GAAP”) and should not be considered as an alternative to net income or net cash provided by operating activities determined in accordance with US GAAP. Because EBITDA and Adjusted EBITDA as determined by us excludes some, but not all, items that affect net income, they may not be comparable to EBITDA and Adjusted EBITDA or similarly titled measures used by other companies.

The following table sets forth our calculations of EBITDA and Adjusted EBITDA:

	Three Months Ended					Six Months Ended
	March 25, 2017			March 26, 2016		March 25, 2017		March 26, 2016
Net income	$	83,812		$	92,011	$	118,301	$	104,277
Add:
Provision for income tax (benefit) expense		(9	)		58		156		243
Interest expense, net		17,487			18,852		36,318		37,745
Depreciation and amortization		32,670			33,150		63,931		64,788
EBITDA		133,960			144,071		218,706		207,053
Unrealized (non-cash) losses on changes in fair value of derivatives		2,512			739		2,053		1,949
Loss on debt extinguishment		1,567			292		1,567		292
Product liability settlement		-			-		-		3,000
Adjusted EBITDA	$	138,039		$	145,102	$	222,326	$	212,294

The unaudited financial information included in this document is intended only as a summary provided for your convenience, and should be read in conjunction with the complete consolidated financial statements of the Partnership (including the Notes thereto, which set forth important information) contained in its Quarterly Report on Form 10-Q to be filed by the Partnership with the United States Securities and Exchange Commission (“SEC”). Such report, once filed, will be available on the public EDGAR electronic filing system maintained by the SEC.