EXHIBIT 99.2
SUBURBAN PROPANE PARTNERS, L.P.
NYFS08...:\63\76463\0001\1713\EXHD028V.390
SUBURBAN PROPANE PARTNERS, L.P.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking statements with respect to the
financial condition and results of operations of Suburban Propane Partners, L.P.
(the "Partnership") assuming the consummation of the proposed recapitalization
and substitution of the general partner, including statements relating to (i)
the Partnership's post-recapitalization debt levels, cash flows, earnings per
unit, potential for increased tax shield and potential for increased
distributions to common unitholders and (ii) the restructuring charges expected
to be incurred in connection with the recapitalization. These forward-looking
statements involve certain risks and uncertainties. Important factors that could
cause actual results to differ materially from those discussed in such
forward-looking statements ("Cautionary Statements") include, among other
things: the impact of the additional debt at the operating partnership level,
which may reduce the ability of the Partnership to make distributions to common
unitholders; the impact of the replacement of a third-party distribution support
arrangement with alternative support from the Partnership; the impact of weather
conditions on the demand for propane; fluctuations in the unit cost of propane;
the ability of management to continue to control expenses; the ability of the
Partnership to retain customers; and the impact of regulatory developments on
the Partnership's business. 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.
2
SUBURBAN PROPANE PARTNERS, L.P.
INITIAL PUBLIC OFFERING - February 29, 1996
IPO Price $20.50
IPO Yield 9.75%
Common Units & GP Units 21.56 million
Subordinated Units 7.20 million
Restricted Units 0.74 million
-----
Total Units 29.50 million
=====
Net Debt $425 million @ 7.54%
====
3
SUBURBAN PROPANE PARTNERS, L.P.
Current Capitalization ($Mil.)
Annual
Units $ Requirements
----- - ------------
Gross Debt (1) - $425 $30.9
Common & GP Units 21.6 389 44.0
Sub Units (2) 7.2 129 14.6
APUs .2 22 0
---- --- ----
29.0 $965 $89.5
==== ==== =====
(1) Net Debt = $395 (Gross Debt less $30 mil. of excess cash)
(2) Not paid since November 1996
4
SUBURBAN PROPANE PARTNERS, L.P.
CURRENT OWNERSHIP STRUCTURE
[Chart showing current ownership structure of the Partnership as follows: (i)
21.56 Units and .74 Restricted Units held by Common Unitholders representing an
approximate 74% interest in the Partnership and (ii) 7.16 Subordinated Units,
.58 General Partner Units and .22 APUs held by Millennium representing an
approximate 26% interest in the Partnership and (iii) the Partnership holds
Suburban Propane, LP (the Operating Partnership)]
5
SUBURBAN PROPANE PARTNERS, L.P.
FISCAL 1998 RESULTS
1998 EBITDA (1) $104
Coverage Ratios:
Common Units 1.38
All Units 1.03
Debt Ratios:
Debt/EBITDA 4.12
Interest Coverage 3.37
Debt/Enterprise Value 45.6%
EPU $1.26
(1) Excludes non-recurring items
6
SUBURBAN PROPANE PARTNERS, L.P.
FISCAL 1998 RESULTS
Distributable Cash Flow:
1998 EBITDA $104.0
Less:
Interest Expense (Net) 30.9
Capital Expenditures 12.6
Common & GP Distribution 44.0
-----
Available for Sub Unit Distribution,
APU Retirement and Reserves 16.5
Sub Unit Distribution/APU Retirement 0.0
-----
Undistributed Cash $16.5
=====
7
SUBURBAN PROPANE PARTNERS, L.P.
COMPARABLES
Unit Coverage Ratios (Generally as of 9/98)*
Common All
------ ---
Suburban 1.38 1.04
Suburban (Including APUs) 1.87 1.41
Propane MLP #1 1.30 .69
Propane MLP #2 1.00 .47
Propane MLP #3 .51 .34
Propane MLP #4 1.30 .75
Propane MLP #5 .69 .43
Propane MLP #6 .38 .23
* Calculated using latest available rolling twelve months data from publicly
filed documents and includes all capital spending except acquisitions
8
SUBURBAN PROPANE PARTNERS, L.P.
COMPARABLES
Debt Ratios (Generally as of 9/98)*
Debt/ Interest Debt/
EBITDA Coverage Enterprise Value
------ -------- ----------------
Suburban 4.1 3.4 45.6%
Propane MLP #1 4.5 2.3 41.0%
Propane MLP #2 5.2 2.1 44.2%
Propane MLP #3 5.6 2.4 39.1%
Propane MLP #4 4.7 2.6 47.3%
Propane MLP #5 5.5 2.4 46.6%
Propane MLP #6 7.3 2.3 65.3%
* Based on publicly filed documents and excludes reported
non-recurring items
9
SUBURBAN PROPANE PARTNERS, L.P.
Details of Recapitalization
o Partnership redeems all Sub Units and eliminates obligation to
repay all $22 million of APUs for a total of $69 million
o Partnership replaces remaining Millennium distribution support
agreement with cash and/or alternative support arrangement
10
SUBURBAN PROPANE PARTNERS, L.P.
Details of Recapitalization
o Management LLC purchases GP 2% interest for $6 million
o Management gives back upside above the first IDR to common
unitholders
o Board of Supervisors has the right to cap and convert remaining
IDR
o Management defers receipt of Restricted Units
o Management access to GP income is prohibited until additional
OLP debt is repaid
o Management access to restricted units is prohibited until LLC
debt is repaid
11
SUBURBAN PROPANE PARTNERS, L.P.
OWNERSHIP STRUCTURE - POST-RECAP
[Chart showing the post-recapitalization ownership structure of the Partnership
as follows: (i) 22.29 Units held by Common Unitholders representing an
approximate 98% interest in the Partnership and (ii) the Management LLC, as
General Partner, holds an adjusted 2% interest in the Partnership and (iii) the
Partnership holds Suburban Propane, LP (the Operating Partnership)]
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SUBURBAN PROPANE PARTNERS, L.P.
LLC STRUCTURE
[Chart showing the Management LLC ownership structure as follows: management
owns 100% of Suburban Energy Services Group LLC, which in turn holds an adjusted
2% general partner interest in the Partnership]
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SUBURBAN PROPANE PARTNERS, L.P.
Sources and Uses of Funds
Sources
Bank Debt $76
LLC Debt 6
----
Total Sources $82
====
Uses
Payment to Millennium $75
Fees and Expenses 7
----
Total Uses $82
====
14
SUBURBAN PROPANE PARTNERS, L.P.
Capitalization ($Mil.)
Post-Recap Pre-Recap
Annual Annual
Units $ Requirements Requirements
----- - ------------ ------------
Gross Debt (1) - $501 $36.9 $30.9
Common & GP Units 21.6 389 44.0 44.0
Restricted Units .7 13 1.5 0.0
Sub Units (2) 0 0 0 14.6
---- --- ---- ----
22.3 $903 $82.4 $89.5
==== ==== ===== =====
(1) Net Debt = $471 (Gross Debt less $30 million of excess cash)
(2) Not paid since November 1996
15
SUBURBAN PROPANE PARTNERS, L.P.
RATIO ANALYSIS
Pre- Post-
Recap Recap
----- -----
Coverage Ratios:
Common Units 1.38 1.20
All Units 1.04 1.20
Debt Ratios:
Debt/EBITDA 4.12 4.83
Interest Coverage 3.37 2.82
Debt/Enterprise Value 46% 55%
EPU $1.26 $1.38
16
SUBURBAN PROPANE PARTNERS, L.P.
DISTRIBUTABLE CASH FLOW
Pre- Post-
Recap Recap
----- -----
1998 EBITDA (1) $104.0 $104.0
Less:
Interest Expense (Net) 30.9 36.9
Capital Expenditures 12.6 12.6
Common & GP Distribution 44.0 45.5
---- ----
Available for Sub Unit Distribution,
APU Retirement and Reserves 16.5 9.0
Sub Unit Distribution/APU Retirement 0.0 0.0
---- ---
Undistributed Cash $16.5 $9.0
==== ===
Per Common Unit $0(2) $.40
== ===
(1) Excludes non-recurring items
(2) Due to Subordinated Unit and APU requirements
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SUBURBAN PROPANE PARTNERS, L.P.
Purchase Price/Discount Per Unit
Purchase Price* $69
# of Sub Units 7.2
Price Per Unit $9.63
====
Discount to Market 47%
Including $22 APU Retirement:
Price Per Unit $6.56
====
Discount to Market 64%
* Before estimated expenses of $7 million
18
SUBURBAN PROPANE PARTNERS, L.P.
COMPARABLES
Unit Coverage Ratios (Generally as of 9/98)*
Common All
------ ---
Suburban (Post-Recap) 1.20 1.20
Suburban (Post-Recap including
support arrangement) 1.67 1.67
Propane MLP #1 1.30 .69
Propane MLP #2 1.00 .47
Propane MLP #3 .51 .34
Propane MLP #4 1.30 .75
Propane MLP #5 .69 .43
Propane MLP #6 .38 .23
* Calculated using rolling twelve months data from publicly filed documents and
includes all capital spending except acquisitions
19
SUBURBAN PROPANE PARTNERS, L.P.
COMPARABLES
Debt Ratios (Generally as of 9/98)*
Debt/
Debt/ Interest Enterprise
EBITDA Coverage Value
------ -------- -----
Suburban (Post-Recap) 4.9 2.8 56%
Suburban (Post-Recap/Net Debt) 4.5 2.8 54%
Propane MLP #1 4.5 2.3 41%
Propane MLP #2 5.2 2.1 44%
Propane MLP #3 5.6 2.4 39%
Propane MLP #4 4.7 2.6 47%
Propane MLP #5 5.5 2.4 47%
Propane MLP #6 7.3 2.3 65%
* Based on publicly filed documents and excludes reported
non-recurring items
20
SUBURBAN PROPANE PARTNERS, L.P.
COMPARABLES
Per Gallon (Generally as of 9/98)*
Gross Net
Profit Expenses EBITDA Income
------ -------- ------ ------
Suburban (Post-Recap) $.64 $.45 $.19 $.06
Propane MLP #1 $.60 $.41 $.20 $.05
Propane MLP #2 $.49 $.35 $.15 $.01
Propane MLP #3 $.63 $.43 $.20 $.03
Propane MLP #4 $.61 $.35 $.26 $.06
Propane MLP #5 $.63 $.44 $.19 ($.01)
Propane MLP #6 $.51 $.38 $.13 ($.01)
* Based on publicly filed documents and excludes reported
non-recurring items
21
SUBURBAN PROPANE PARTNERS, L.P.
COMPARABLES
Yield
@ 12/2/98
---------
Suburban (Post-Recap) 11.0%
Propane MLP #1 9.5%
Propane MLP #2 9.8%
Propane MLP #3 10.9%
Propane MLP #4 9.3%
Propane MLP #5 11.4%
Propane MLP #6 17.1%
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SUBURBAN PROPANE PARTNERS, L.P.
Potential Negative Impact From Recap
o Moves $6 Million of Interest Payments and $76 Million of Debt
in Front of Common
o Decreases Coverage on Common from 1.38 to 1.20
o One Time Charge of Approximately $15 Million (Mostly Non-Cash)
o Shift of Distribution Support from Third Party to the
Partnership
23
SUBURBAN PROPANE PARTNERS, L.P.
Potential Positive Impact From Recap
o Common Unit ownership increases from 74% to 98%
o Cash on balance sheet more readily available to benefit common
unitholders
o Brings us at least three years closer to potential increases in
common distributions
o Increase in distributions currently under consideration
o Coverage on all units improves from 1.03 to 1.20
o EPU improves from $1.26 to $1.38
o Simplifies capital structure
o Eliminates uncertainty of ownership of General Partner
24
SUBURBAN PROPANE PARTNERS, L.P.
Potential Positive Impact From Recap
o Purchasing Sub Units and APUs at significant discount
o Eliminates potential dilution upon conversion
o Increases tax shield
o Increases opportunities for acquisitions
o Combines economic and operational control
o All groups working for common units
o Increased potential for growth in common unit value
o Benefits of growth go directly to common unitholders
o Conversion from yield to growth vehicle
o Almost all upside potential to common unitholders
25
SUBURBAN PROPANE PARTNERS, L.P.
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