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): September 25, 2003
Ferrellgas Partners, L.P.
Ferrellgas Partners Finance Corp.
Ferrellgas, L.P.
Ferrellgas Finance Corp.
-----------------------------------------------
(Exact name of registrants as specified in their charters)
Delaware 001-11331 43-1698480
Delaware 333-06693 43-1742520
Delaware 000-50182 43-1698481
Delaware 000-50183 14-1866671
---------------- ----------------- ------------------
(States or other Commission file (I.R.S. Employer
jurisdictions of numbers Identification Nos.)
incorporation or
organization)
One Liberty Plaza, Liberty, Missouri 64068
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code: (816) 792-1600
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit
Number Description
------- -----------
99.1 Press release of Ferrellgas Partners, L.P. dated September 25, 2003,
reporting its financial results for the fourth quarter and year
ended July 31, 2003.
ITEM 9. REGULATION FD DISCLOSURE AND
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS
On September 25, 2003, Ferrellgas Partners, L.P. issued a press release
regarding its financial results for the fourth quarter and year ended July 31,
2003. A copy of this earnings press release is furnished as Exhibit 99.1 to this
Current Report on Form 8-K.
Limitation on Incorporation by Reference and Materiality
The information, including the exhibit attached hereto, in this Current Report
on Form 8-K is being furnished to the SEC and is not to be deemed "filed" with
the SEC for purposes of Section 18 of the Exchange Act or otherwise subject to
the liabilities of Section 18. In addition, the information in this Current
Report is not to be incorporated by reference into any registration statement of
Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P.
or Ferrellgas Finance Corp. or other filings of such entities made pursuant to
the Exchange Act or the Securities Act, unless specifically identified as being
incorporated therein by reference.
The furnishing of the information set forth in this Current Report is not
intended to, and does not, constitute a determination or admission by Ferrellgas
Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P. or
Ferrellgas Finance Corp. as to the materiality or completeness of such
information.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FERRELLGAS PARTNERS, L.P.
By Ferrellgas, Inc. (General Partner)
Date: September 25, 2003 By /s/ Kevin T. Kelly
--------------------------------------
Kevin T. Kelly
Senior Vice President and
Chief Financial Officer (Principal
Financial and Accounting Officer)
FERRELLGAS PARTNERS FINANCE CORP.
Date: September 25, 2003 By /s/ Kevin T. Kelly
--------------------------------------
Kevin T. Kelly
Senior Vice President and
Chief Financial Officer (Principal
Financial and Accounting Officer)
FERRELLGAS, L.P.
By Ferrellgas, Inc. (General Partner)
Date: September 25, 2003 By /s/ Kevin T. Kelly
--------------------------------------
Kevin T. Kelly
Senior Vice President and
Chief Financial Officer (Principal
Financial and Accounting Officer)
FERRELLGAS FINANCE CORP.
Date: September 25, 2003 By /s/ Kevin T. Kelly
--------------------------------------
Kevin T. Kelly
Senior Vice President and
Chief Financial Officer (Principal
Financial and Accounting Officer)
Exhibit 99.1
For immediate release
Contact:
Ryan VanWinkle, Investor Relations, 816-792-7998
Ferrellgas Partners, L.P.
Announces Earnings For Fiscal Year 2003
Liberty, MO (September 25, 2003)--Ferrellgas Partners, L.P. (NYSE: FGP),
one of the nation's largest retail marketers of propane, today reported net
earnings of $56.7 million for the fiscal year ended July 31, 2003.
"We are extremely pleased to once again deliver strong financial results to
our investors," said James E. Ferrell, Chairman and Chief Executive Officer.
"Investors continue to benefit from our consistent annual performance, the
security of our quarterly distributions and a total return in excess of 30
percent from our common units this fiscal year."
Retail propane sales volumes for the fiscal year were 899 million gallons,
an increase of 8 percent as compared to 832 million retail gallons sold in
fiscal year 2002. This increased sales volume reflects the impact of more normal
winter heating season temperatures this fiscal year and, to a lesser extent,
acquisitions, partially offset by the continued effects of a sluggish economy
and customer conservation stemming from higher wholesale propane product costs.
Gross profit and operating expense for the fiscal year were $530.7 million
and $298.0 million, respectively, increases of $29.3 million and $18.3 million,
respectively, compared to the prior year. These increases were primarily
attributable to this year's increase in retail propane sales volumes. General
and administrative expense was $28.0 million, up slightly from $27.2 million in
the prior fiscal year. Equipment lease expense was $20.6 million, down $3.9
million from the prior fiscal year, partially reflecting the Partnership's
fiscal year 2003 second quarter refinancing of certain operating lease
obligations.
-more-
Ferrellgas
Page 2 of 2
The resulting Adjusted EBITDA for fiscal year 2003 was $184.0 million, an
increase of 8 percent compared to $170.0 million in the prior fiscal year. Net
earnings were $56.7 million, compared to the prior fiscal year's near record
performance of $60.0 million. The net earnings this fiscal year included special
charges of $7.1 million related to the early extinguishment of debt and $2.8
million related to a cumulative effect of a change in accounting principle.
Excluding these special charges, net earnings for this fiscal year would have
exceeded the Partnership's fiscal year 2001 record net earnings by over $2.0
million.
"We continue our focus on improving operations and effectively managing our
business for the long-term," Ferrell added. "I am proud of this year's financial
results and of our employees, whose hard work and dedication made this past year
a success."
The partnership historically experiences losses during the fourth quarter,
as sales volumes typically represent less than 15 percent of annual sales,
causing fixed costs to exceed off-season cash flow. Retail propane sales volumes
and gross profit for the fourth quarter of fiscal year 2003 were 116 million
gallons and $66.8 million, respectively. Operating and general and
administrative expenses were $70.7 million and $6.2 million, respectively.
Equipment lease expense was $4.1 million. These seasonal results produced an
expected Adjusted EBITDA loss of $14.2 million and net loss of $44.8 million for
the fourth quarter. The extraordinary performance experienced during the same
quarter last year was not expected to be repeated this fiscal year. The fourth
quarter results this fiscal year were consistent with recent fiscal years and
consistent with the Partnership's expectations.
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., currently serves more than one million customers in 45 states. Ferrellgas
employees indirectly own more than 17 million common units of the partnership
through an employee stock ownership plan.
Statements in this release concerning expectations for the future are
forward-looking statements. A variety of known and unknown risks,
uncertainties and other factors could cause results, performance and
expectations to differ materially from anticipated results,
performance or expectations. These risks, uncertainties and other
factors are discussed in the partnership's Form 10-K for the fiscal
year ended July 31, 2002, as amended, and other documents filed from
time to time, by the Partnership, with the Securities and Exchange
Commission.
###
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS July 31, 2003 July 31, 2002
- ----------------------------------------------------------------------------- ----------------- -----------------
Current Assets:
Cash and cash equivalents $ 11,154 $ 19,781
Accounts and notes receivable, net 56,742 74,274
Inventories 69,077 48,034
Prepaid expenses and other current assets 8,306 10,724
----------------- -----------------
Total Current Assets 145,279 152,813
Property, plant and equipment, net 684,917 506,531
Goodwill 124,190 124,190
Intangible assets, net 98,157 98,170
Other assets, net 8,853 3,424
----------------- -----------------
Total Assets $ 1,061,396 $ 885,128
================= =================
LIABILITIES AND PARTNERS' CAPITAL
- -----------------------------------------------------------------------------
Current Liabilities:
Accounts payable $ 59,454 $ 54,316
Other current liabilities (a) 89,687 89,061
----------------- -----------------
Total Current Liabilities 149,141 143,377
Long-term debt (a) 888,226 703,858
Other liabilities 18,747 14,861
Contingencies and commitments - -
Minority interest 2,363 1,871
Partners' Capital:
Senior unitholder (1,994,146 and 2,782,211 units outstanding at July 2003
and July 2002, respectively - liquidation preference $79,766 and $111,288
at July 2003 and July 2002, respectively) 79,766 111,288
Common unitholders (37,673,455 and 36,081,203 units outstanding
at July 2003 and July 2002, respectively) (15,602) (28,320)
General partner unitholder (400,683 and 392,556 units outstanding
at July 2003 and July 2002, respectively) (59,277) (59,035)
Accumulated other comprehensive loss (1,968) (2,772)
----------------- -----------------
Total Partners' Capital 2,919 21,161
----------------- -----------------
Total Liabilities and Partners' Capital $ 1,061,396 $ 885,128
================= =================
(a) The principal difference between the Ferrellgas Partners, L.P. balance
sheet and that of Ferrellgas, L.P., is $218 million of 8 3/4% notes and a
$10 million short-term note payable, which are liabilities of Ferrellgas
Partners, L.P. and not of Ferrellgas, L.P.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND TWELVE MONTHS ENDED JULY 31, 2003 AND 2002
(in thousands, except per unit data)
(unaudited)
Three months ended July 31 Twelve months ended July 31
-------------------------- ---------------------------
2003 2002 2003 2002
---------- ---------- ----------- -----------
Revenues:
Propane and other gas liquids sales $ 150,819 $ 127,878 $ 1,136,358 $ 953,117
Other 20,675 18,776 85,281 81,679
---------- ---------- ----------- ----------
Total revenues 171,494 146,654 1,221,639 1,034,796
Cost of product sold 104,645 72,259 690,969 533,437
---------- ---------- ----------- ----------
Gross profit 66,849 74,395 530,670 501,359
Operating expense 70,744 67,438 297,970 279,624
Depreciation and amortization expense 10,060 9,093 40,779 41,937
General and administrative expense 6,161 5,583 28,024 27,157
Equipment lease expense 4,130 6,095 20,640 24,551
Employee stock ownership plan compensation
charge 2,125 1,362 6,778 5,218
Loss on disposal of assets and other 2,898 2,127 6,679 3,957
---------- ---------- ----------- ----------
Operating income (loss) (29,269) (17,303) 129,800 118,915
Interest expense (16,337) (14,569) (63,665) (59,608)
Interest income 441 229 1,291 1,423
Early extinguishment of debt expense (a) - - (7,052) -
---------- ---------- ----------- ----------
Earnings (loss) before minority interest
and cumulative effect of change in
accounting principle (45,165) (31,643) 60,374 60,730
Minority interest (b) (405) (281) 871 771
---------- ---------- ----------- ----------
Earnings (loss) before cumulative effect
of change in accounting principle (44,760) (31,362) 59,503 59,959
Cumulative effect of change in accounting
principle, net of minority interest
of $28 (c) - - (2,754) -
---------- ---------- ----------- ----------
Net earnings (loss) (44,760) (31,362) 56,749 59,959
Distribution to senior unitholder 2,471 2,782 10,771 11,172
Net earnings (loss) available to
general partner (472) (341) 460 488
---------- ---------- ----------- ----------
Net earnings (loss) available to
common unitholders $ (46,759) $ (33,803) $ 45,518 $ 48,299
========== ========== =========== ==========
Basic earnings (loss) per common unit:
Earnings (loss) before cumulative effect
of change in accounting principle (d) $ (1.27) $ (0.94) $ 1.33 $ 1.34
Net earnings (loss) available to common
unitholder $(1.27) $ (0.94) $ 1.25 $ 1.34
Weighted average common units outstanding 36,769.3 36,077.4 36,300.5 36,022.3
Supplemental Data and Reconciliation of Non-GAAP Item:
Three months ended July 31 Twelve months ended July 31
-------------------------- ---------------------------
2003 2002 2003 2002
---------- ---------- ----------- -----------
Retail gallons 115,588 110,902 898,622 831,592
=========== ========== ========== ===========
Net earnings (loss) $ (44,760) $ (31,362) $ 56,749 $ 59,959
Interest expense 16,337 14,569 63,665 59,608
Depreciation and amortization expense 10,060 9,093 40,779 41,937
Interest income (441) (229) (1,291) (1,423)
----------- ---------- ---------- -----------
EBITDA $ (18,804) $ (7,929) $ 159,902 $160,081
Employee stock ownership plan
compensation charge 2,125 1,362 6,778 5,218
Loss on disposal of assets and other 2,898 2,127 6,679 3,957
Minority interest (b) (405) (281) 871 771
Early extinguishment of debt expense (a) - - 7,052 -
Cumulative effect of change in accounting
principle (c) - - 2,754 -
----------- ---------- ---------- -----------
Adjusted EBITDA (e) $ (14,186) $ (4,721) $ 184,036 $170,027
=========== ========== ========== ===========
(a) Expenses related to the refinancing of the $160 million Ferrellgas
Partners, L.P. senior secured debt in September 2002.
(b) Amounts allocated to the general partner for its 1.0101% interest in the
operating partnership, Ferrellgas, L.P.
(c) Amount related to recognition of liabilities for future retirements of
underground storage facilities, as required by SFAS No. 143.
(d) Amount calculated as 99% of the earnings (loss) before cumulative effect of
change in accounting principle less distribution to senior unitholder; the
result then divided by the weighted average common units outstanding.
(e) Management considers Adjusted EBITDA to be a chief measurement of the
partnership's overall economic performance and return on invested capital.
Adjusted EBITDA is calculated as earnings before interest, income taxes,
depreciation and amortization, employee stock ownership compensation
charge, loss from disposal of assets and other, minority interest, early
extinguishment of debt expense, cumulative effect of change in accounting
principle and other non-cash and non-operating charges. Management believes
the presentation of this measure is relevant and useful because it allows
investors to view the partnership's performance in a manner similar to the
method management uses, adjusted for items management believes are unusual
or non-recurring, and makes it easier to compare its results with other
companies that have different financing and capital structures. In
addition, management believes this measure is consistent with the manner in
which the partnership's lenders and investors measure its overall
performance and liquidity, including its ability to pay quarterly equity
distributions, service its long-term debt and other fixed obligations and
to fund its capital expenditures and working capital requirements. This
method of calculating Adjusted EBITDA may not be consistent with that of
other companies and should be viewed in conjuction with measurements that
are computed in accordence with GAAP.
