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 27, 2004
Ferrellgas Partners, L.P.
Ferrellgas Partners Finance Corp.
Ferrellgas, L.P.
Ferrellgas Finance Corp.
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(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
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(States or other Commission file (I.R.S. Employer
jurisdictions of numbers Identification Nos.)
incorporation or
organization)
One Liberty Plaza, Liberty, Missouri 64068
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(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code: (816) 792-1600
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) The following material is furnished as an exhibit to this Current Report on
Form 8-K.
Exhibit
Number Description
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99.1 Press release of Ferrellgas Partners, L.P. dated May 27,
2004, reporting its financial results for the third quarter
ended April 30, 2004.
ITEM 9. REGULATION FD DISCLOSURE
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 27, 2004, Ferrellgas Partners, L.P. issued a press release regarding
its financial results for the third quarter ended April 30, 2004. 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 furnished herewith, 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 in this Current Report, including the exhibit
furnished herewith, 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 any such information that is required to be disclosed solely by
Regulation FD of the Exchange Act.
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: May 27, 2004 By /s/ Kevin T. Kelly
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Kevin T. Kelly
Senior Vice President and
Chief Financial Officer (Principal
Financial and Accounting Officer)
FERRELLGAS PARTNERS FINANCE CORP.
Date: May 27, 2004 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: May 27, 2004 By /s/ Kevin T. Kelly
------------------------------------
Kevin T. Kelly
Senior Vice President and
Chief Financial Officer (Principal
Financial and Accounting Officer)
FERRELLGAS FINANCE CORP.
Date: May 27, 2004 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
Scott Brockelmeyer, Media Relations, 816-792-7837
Ferrellgas Partners, L.P.
Reports Third Quarter Results
Liberty, MO (May 27, 2004)--Ferrellgas Partners, L.P. (NYSE:FGP), one of
the nation's largest retail marketers of propane, today reported earnings for
the third quarter of fiscal year 2004. The third quarter covers the three-month
period ended April 30, 2004.
During the quarter, the partnership announced the acquisition of
substantially all of the assets of Blue Rhino. Blue Rhino is the nation's
leading provider of branded propane tank exchange service as well as leading
supplier of complimentary propane and non-propane products. Its tank exchange
service is offered at more than 30,000 retail locations in 49 states, Puerto
Rico and the U.S. Virgin Islands through leading home improvement centers, mass
merchants, hardware, grocery and convenience stores. The partnership completed
the transaction on April 21, 2004, near the beginning of the propane grilling
and tank exchange season.
Retail propane sales for the third quarter were 249 million gallons,
compared to near-record retail propane sales of 251 million gallons in the
previous fiscal year's quarter, as retail gallon growth from acquisitions was
offset by the impact from warmer than normal winter heating season temperatures
and customer conservation that resulted from historically high wholesale propane
costs. For the third quarter, national temperatures were 7 percent warmer than
normal and 9 percent warmer than the prior fiscal year's quarter, according to
the National Oceanic and Atmospheric Administration.
Gross profit for the quarter was $155.8 million, compared to record gross
profit results of $161.4 million reported in the third quarter of fiscal 2003.
This quarter's gross profit results reflect a smaller contribution from risk
management activities and a slight reduction in the record-setting margins
achieved during the same quarter last fiscal year when wholesale propane costs
declined during the quarter.
-more-
Ferrellgas
Page 2 of 2
Operating and general and administrative expenses for the quarter were
$80.9 million and $7.9 million, respectively, compared to $79.1 million and $7.2
million in the prior year's quarter. Reductions in operating expense this
quarter were offset by increases related to acquisitions made during the fiscal
year. Equipment lease expense for the third quarter was $5.0 million,
essentially unchanged compared to the prior fiscal year's quarter.
Adjusted EBITDA and net earnings for the third quarter were $62.0 million
and $27.9 million, respectively, compared to a record-setting $70.1 million and
$39.4 million achieved during the prior fiscal year's quarter.
"We have been able to effectively manage our business through a challenging
environment this fiscal year, remaining focused on the long-term growth of the
company and the security in distributions to our common unitholders, yet aware
of the impact that high energy costs have on our customer base," said James E.
Ferrell, Chairman and Chief Executive Officer. "As we move into the summer
months, we are excited about the positive cash flow contribution we anticipate
coming from the recently acquired Blue Rhino tank exchange operations, as these
operations have historically produced more than half of their annual cash flow
during our fiscal fourth quarter."
For the nine-months ended April 30, 2004, retail propane sales volumes and
gross profit were 744 million gallons and $446.9 million, respectively, and
operating and general and administrative expenses were $233.1 million and $23.8
million, respectively. Equipment lease expense for the nine-month period was
$14.3 million. Adjusted EBITDA and net earnings for the nine-month period were
$175.7 million and $76.3 million, respectively.
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., currently serves more than one million customers in 49 states. Ferrellgas
employees indirectly own approximately 18 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 and
expectations. These risks, uncertainties and other factors are discussed in
the partnership's Form 10-K for the fiscal year ended July 31, 2003 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 April 30, 2004 July 31, 2003
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Current Assets:
Cash and cash equivalents $ 21,027 $ 11,154
Accounts and notes receivable, net 147,211 56,742
Inventories 78,871 69,077
Prepaid expenses and other current assets 12,942 8,306
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Total Current Assets 260,051 145,279
Property, plant and equipment, net 784,800 684,917
Goodwill 212,341 124,190
Intangible assets, net 317,210 98,157
Other assets 14,608 8,853
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Total Assets $1,589,010 $1,061,396
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LIABILITIES AND PARTNERS' CAPITAL
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Current Liabilities:
Accounts payable $ 94,314 $ 59,454
Other current liabilities 82,572 89,687
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Total Current Liabilities 176,886 149,141
Long-term debt (a) 1,113,762 888,226
Other liabilities 21,216 18,747
Contingencies and commitments - -
Minority interest 5,051 2,363
Partners' Capital:
Senior unitholder (1,994,146 units outstanding at both April 2004
and July 2003 - liquidation preference $79,766 at both 79,766 79,766
April 2004 and July 2003)
Common unitholders (48,771,875 and 37,673,455 units outstanding 250,767 (15,602)
at April 2004 and July 2003, respectively)
General partner unitholder (512,788 and 400,683 units outstanding
at April 2004 and July 2003, respectively) (56,647) (59,277)
Accumulated other comprehensive loss (1,791) (1,968)
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Total Partners' Capital 272,095 2,919
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Total Liabilities and Partners' Capital $ 1,589,010 $ 1,061,396
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(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,
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 NINE MONTHS ENDED APRIL 30, 2004 AND 2003
(in thousands, except per unit data)
(Unaudited)
Three months ended April 30 Nine months ended April 30
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2004 2003 2004 2003
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Revenues:
Propane and other gas liquids sales $ 368,264 $ 351,338 $1,057,751 $ 985,539
Other 21,883 18,027 69,591 64,606
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Total revenues 390,147 369,365 1,127,342 1,050,145
Cost of product sold 234,331 207,934 680,479 586,324
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Gross profit 155,816 161,431 446,863 463,821
Operating expense 80,858 79,121 233,141 227,226
Depreciation and amortization expense 13,270 10,563 37,130 30,719
General and administrative expense 7,888 7,202 23,761 21,863
Equipment lease expense 5,029 4,990 14,272 16,510
Employee stock ownership plan compensation charge 2,042 1,619 5,990 4,653
Loss on disposal of assets and other 925 1,985 4,477 3,781
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Operating income 45,804 55,951 128,092 159,069
Interest expense (17,998) (16,548) (52,083) (47,328)
Interest income 459 424 1,260 850
Early extinguishment of debt expense (a) - - - (7,052)
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Earnings before income taxes,
minority interest and cumulative
effect of change in accounting principle 28,265 39,827 77,269 105,539
Income taxes 17 - 17 -
Minority interest (b) 336 454 931 1,276
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Earnings before cumulative effect of
change in accounting principle 27,912 39,373 76,321 104,263
Cumulative effect of change in
accounting principle, net of
minority interest of $28 (c) - - - (2,754)
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Net earnings 27,912 39,373 76,321 101,509
Distribution to senior unitholder 1,994 2,775 5,982 8,300
Net earnings available to general partner 259 366 703 932
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Net earnings available to common unitholders $ 25,659 $ 36,232 $ 69,636 $ 92,277
============ ============= ============ ============
Basic earnings per common unit:
Earnings before cumulative effect of change
in accounting principle (d) $ 0.63 $ 1.00 $ 1.78 $ 2.62
Net earnings available to common unitholders $ 0.63 $ 1.00 $ 1.78 $ 2.55
Weighted average common units outstanding 40,664.1 36,197.3 39,128.4 36,142.5
Supplemental Data and Reconciliation of Non-GAAP Item:
Three months ended April 30 Nine months ended April 30
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2004 2003 2004 2003
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Retail gallons 249,424 250,620 743,763 783,034
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Net earnings $27,912 $39,373 $ 76,321 $101,509
Income taxes 17 - 17 -
Interest expense 17,998 16,548 52,083 47,328
Depreciation and amortization expense 13,270 10,563 37,130 30,719
Interest income (459) (424) (1,260) (850)
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EBITDA $58,738 $66,060 $164,291 $178,706
Employee stock ownership plan
compensation charge 2,042 1,619 5,990 4,653
Loss on disposal of assets and other 925 1,985 4,477 3,781
Minority interest (b) 336 454 931 1,276
Early extinguishment of debt expense (a) - - - 7,052
Cumulative effect of change in accounting
principle (c) - - - 2,754
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Adjusted EBITDA (e) $62,041 $70,118 $175,689 $198,222
========== ========== ========== ==========
(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 plan
compensation charge, loss on 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
conjunction with measurements that are computed in accordance with GAAP.