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 29, 2015
Ferrellgas Partners, L.P.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-11331 |
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43-1698480 |
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(State or other jurisdiction |
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(Commission |
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(I.R.S. Employer |
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of incorporation) |
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File Number) |
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Identification No.) |
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7500 College Blvd., Suite 1000, |
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66210 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: 913-661-1500
n/a
Former name or former address, if changed since last report
Ferrellgas Partners Finance Corp.
(Exact name of registrant as specified in its charter)
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Delaware |
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333-06693 |
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43-1742520 |
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(State or other jurisdiction |
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(Commission |
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(I.R.S. Employer |
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of incorporation) |
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File Number) |
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Identification No.) |
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7500 College Blvd., Suite 1000, |
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66210 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: 913-661-1500
n/a
Former name or former address, if changed since last report
Ferrellgas, L.P.
(Exact name of registrant as specified in its charter)
|
Delaware |
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000-50182 |
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43-1698481 |
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(State or other jurisdiction |
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(Commission |
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(I.R.S. Employer |
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of incorporation) |
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File Number) |
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Identification No.) |
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7500 College Blvd., Suite 1000, |
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66210 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: 913-661-1500
n/a
Former name or former address, if changed since last report
Ferrellgas Finance Corp.
(Exact name of registrant as specified in its charter)
|
Delaware |
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000-50183 |
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14-1866671 |
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(State or other jurisdiction |
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(Commission |
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(I.R.S. Employer |
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of incorporation) |
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File Number) |
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Identification No.) |
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7500 College Blvd., Suite 1000, |
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66210 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: 913-661-1500
n/a
Former name or former address, if changed since last report
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
The information included in Item 7.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.02 of this Current Report on Form 8-K.
Item 7.01 Regulation FD Disclosure.
On September 29, 2015, Ferrellgas Partners, L.P. issued a press release regarding its financial results for the fourth fiscal quarter and fiscal year ended July 31, 2015. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
Exhibit 99.1 — Press release of Ferrellgas Partners, L.P. dated September 29, 2015, reporting its financial results for the fourth fiscal quarter and fiscal year ended July 31, 2015.
Limitation on Materiality and Incorporation by Reference
The information in this Current Report on Form 8-K related to Items 2.02 and 7.01, including Exhibit 99.1 furnished herewith, is being furnished to the SEC pursuant to Item 2.02 and Item 7.01 of Form 8-K and is not deemed to be “filed” with the SEC for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of Section 18. In addition, such information 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 particular information in this Current Report, including Exhibit 99.1 furnished herewith, pursuant to Item 7.01 of Form 8-K 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.
SIGNATURES
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.
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FERRELLGAS PARTNERS, L.P. | |
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By Ferrellgas, Inc. (General Partner) | |
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Date: |
September 29, 2015 |
By |
/s/ Alan C. Heitmann |
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Alan C. Heitmann |
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Executive Vice President and Chief Financial Officer; Treasurer (Principal Financial and Accounting Officer) |
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FERRELLGAS PARTNERS FINANCE CORP. | |
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Date: |
September 29, 2015 |
By |
/s/ Alan C. Heitmann |
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Alan C. Heitmann |
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Chief Financial Officer and Sole Director |
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FERRELLGAS, L.P. | |
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By Ferrellgas, Inc. (General Partner) | |
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Date: |
September 29, 2015 |
By |
/s/ Alan C. Heitmann |
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Alan C. Heitmann |
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Executive Vice President and Chief Financial Officer;; Treasurer (Principal Financial and Accounting Officer) |
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FERRELLGAS FINANCE CORP. | |
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Date: |
September 29, 2015 |
By |
/s/ Alan C. Heitmann |
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Alan C. Heitmann |
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Chief Financial Officer and Sole Director |
Exhibit Index
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Exhibit No. |
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Description |
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99.1 |
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Press release of Ferrellgas Partners, L.P. dated September 29, 2015, reporting its financial results for the fourth fiscal quarter and fiscal year ended July 31, 2015. |
Exhibit 99.1
FERRELLGAS PARTNERS, L.P. REPORTS RECORD ADJUSTED EBITDA
FOR FISCAL 2015
OVERLAND PARK, KAN. — September 29, 2015 (GLOBE NEWSWIRE) — Ferrellgas Partners, L.P. (NYSE:FGP) today announced record Adjusted EBITDA of $300.2 million for fiscal 2015, up 4% from the previous year of $288.1 million despite temperatures that were 8% warmer than the prior year. Distributable Cash Flow (DCF) to equity investors for the year was $189.6 million, producing DCF coverage of 1.12x for the 12-month period.
“We are thrilled to present strong results to our investors despite weather that was a hindrance to our core propane business,” said President and Chief Executive Officer Stephen L. Wambold. “Strong propane margins, operational flexibility, a continued focus on expense discipline in our retail operations and our focus on our diversification strategy allowed us to offset the effect of the warmer nationwide temperatures Mother Nature handed us throughout the year.”
Propane margin cents per gallon benefited from wholesale commodity prices that were 43% lower than the prior year. Operating expense of $432.3 million was down more than 3% from the year-ago level, driven primarily by the company’s ability to flex down variable delivery costs, including personnel and fuel cost, which more than offset additional operating expenses associated with the full-year impact our midstream water solutions acquisition in May of 2014 and the impact of our Bridger Logistics, LLC (“Bridger”) acquisition in the fourth quarter.
Strong margin cents per gallon and lower operating expenses helped minimize the effect of warmer temperatures in the more highly concentrated geographic areas we serve. General and administrative expense rose to $56.4 million from $46.0 million, primarily attributable to one-time transaction costs associated with the Bridger acquisition of $16.4 million. Interest expense increased to $100.4 million from $86.5 million, reflecting increased borrowings to fund acquisition and growth capital
expenditures. Net earnings for the year were $30.1 million, or $0.35 per common unit, compared to $33.7 million, or $0.41 per common unit.
During the fourth quarter Ferrellgas closed on its previously announced $822.5 million acquisition of Bridger. The Bridger transaction is a significant step toward Ferrellgas’ near-term diversification goals. Ferrellgas remains dedicated to the aggressive pursuit of accretive, complementary acquisitions in both the traditional propane space and midstream.
“Our acquisition of Bridger contributed nearly $8.6 million of Adjusted EBITDA during the short period of time we’ve owned these high-quality assets, and we continue to believe Bridger will meet or exceed our expectations in fiscal 2016,” Wambold said. “We’ve made smart business decisions over the last few years and put ourselves in position to move boldly and decisively on the acquisition front. Our midstream and propane acquisition pipelines remain robust, and we remain committed to exploring a wide range of opportunities that fit our strategic model and our growth culture.”
About Ferrellgas
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., and subsidiaries, serves propane customers in all 50 states, the District of Columbia, and Puerto Rico, and provides midstream services to major energy companies in the United States. Ferrellgas employees indirectly own 22.8 million common units of the partnership, or 22.7% of the outstanding units, through an employee stock ownership plan. Ferrellgas Partners, L.P. filed a Form 10-K with the Securities and Exchange Commission on September 29, 2015. Investors can request a hard copy of this filing free of charge and obtain more information about the partnership online at www.ferrellgas.com.
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 Form 10-K of Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2014 and in other documents filed from time to time by these entities with the Securities and Exchange Commission.
Contacts
Jack Herrold, Investor Relations — jackherrold@ferrellgas.com or (913) 661-1851
Jim Saladin, Media Relations — jimsaladin@ferrellgas.com or (913) 661-1833
Scott Brockelmeyer, Media Relations — scottbrockelmeyer@ferrelllgas.com or (913) 661-1830
###
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
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July 31, 2015 |
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July 31, 2014 |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
7,652 |
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$ |
8,289 |
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Accounts and notes receivable, net (including $123,791 and $159,003 of accounts receivable pledged as collateral at July 31, 2015 and July 31, 2014, respectively) |
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196,918 |
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178,602 |
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Inventories |
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96,754 |
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145,969 |
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Prepaid expenses and other current assets |
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64,285 |
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32,071 |
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Total Current Assets |
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365,609 |
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364,931 |
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Property, plant and equipment, net |
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965,217 |
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611,787 |
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Goodwill |
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478,747 |
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273,210 |
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Intangible assets, net |
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580,043 |
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276,171 |
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Other assets, net |
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74,440 |
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46,171 |
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Total Assets |
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$ |
2,464,056 |
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$ |
1,572,270 |
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LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT) |
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Current Liabilities: |
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Accounts payable |
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$ |
83,974 |
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$ |
69,360 |
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Short-term borrowings |
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75,319 |
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69,519 |
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Collateralized note payable |
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70,000 |
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91,000 |
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Other current liabilities |
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180,687 |
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125,161 |
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Total Current Liabilities |
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409,980 |
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355,040 |
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Long-term debt (a) |
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1,804,392 |
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1,292,214 |
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Other liabilities |
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41,975 |
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36,662 |
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Contingencies and commitments |
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Partners’ Capital (Deficit): |
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Common unitholders (100,376,789 and 81,228,237 units outstanding at July 31, 2015 and July 31, 2014, respectively) |
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299,730 |
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(57,893 |
) | ||
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General partner unitholder (1,013,907 and 820,487 units outstanding at July 31, 2015 and July 31, 2014, respectively) |
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(57,042 |
) |
(60,654 |
) | ||
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Accumulated other comprehensive income (loss) |
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(38,934 |
) |
6,181 |
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Total Ferrellgas Partners, L.P. Partners’ Capital (Deficit) |
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203,754 |
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(112,366 |
) | ||
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Noncontrolling Interest |
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3,955 |
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720 |
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Total Partners’ Capital (Deficit) |
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207,709 |
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(111,646 |
) | ||
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Total Liabilities and Partners’ Capital (Deficit) |
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$ |
2,464,056 |
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$ |
1,572,270 |
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(a) The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $182 million of 8.625% notes which are liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND TWELVE MONTHS ENDED JULY 31, 2015 AND 2014
(in thousands, except per unit data)
(unaudited)
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Three months ended |
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Twelve months ended |
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July 31 |
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July 31 |
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2015 |
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2014 |
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2015 |
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2014 |
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Revenues: |
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Propane and other gas liquids sales |
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$ |
256,121 |
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$ |
350,557 |
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$ |
1,657,016 |
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$ |
2,147,343 |
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Midstream operations |
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86,827 |
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7,435 |
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107,189 |
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7,435 |
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Other |
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39,563 |
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41,038 |
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260,185 |
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251,082 |
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Total revenues |
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382,511 |
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399,030 |
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2,024,390 |
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2,405,860 |
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Cost of sales: |
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Propane and other gas liquids sales |
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128,034 |
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223,872 |
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977,224 |
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1,456,388 |
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Midstream operations |
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70,526 |
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1,970 |
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76,590 |
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1,970 |
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Other |
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23,025 |
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24,739 |
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170,697 |
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156,182 |
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Gross profit |
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160,926 |
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148,449 |
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799,879 |
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791,320 |
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Operating expense |
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115,369 |
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112,561 |
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432,282 |
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446,193 |
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Depreciation and amortization expense |
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28,003 |
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22,431 |
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98,579 |
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84,202 |
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General and administrative expense |
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26,730 |
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10,913 |
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56,431 |
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45,983 |
| ||||
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Equipment lease expense |
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6,599 |
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4,767 |
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24,273 |
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17,745 |
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Non-cash employee stock ownership plan compensation charge |
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7,985 |
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11,400 |
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24,713 |
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21,789 |
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Non-cash stock and unit-based compensation charge (a) |
|
6,281 |
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8,326 |
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25,982 |
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24,508 |
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Loss on disposal of assets |
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2,521 |
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3,060 |
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7,099 |
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6,486 |
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Operating income (loss) |
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(32,562 |
) |
(25,009 |
) |
130,520 |
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144,414 |
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Interest expense |
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(28,599 |
) |
(22,130 |
) |
(100,396 |
) |
(86,502 |
) | ||||
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Loss on extinguishment of debt |
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— |
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— |
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— |
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(21,202 |
) | ||||
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Other income (expense), net |
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65 |
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(977 |
) |
(350 |
) |
(479 |
) | ||||
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Earnings (loss) before income taxes |
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(61,096 |
) |
(48,116 |
) |
29,774 |
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36,231 |
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Income tax expense (benefit) |
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(1,763 |
) |
125 |
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(315 |
) |
2,516 |
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Net earnings (loss) |
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(59,333 |
) |
(48,241 |
) |
30,089 |
|
33,715 |
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Net earnings (loss) attributable to noncontrolling interest (b) |
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(558 |
) |
(446 |
) |
469 |
|
504 |
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|
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Net earnings (loss) attributable to Ferrellgas Partners, L.P. |
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(58,775 |
) |
(47,795 |
) |
29,620 |
|
33,211 |
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|
|
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|
|
|
|
|
|
| ||||
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Less: General partner’s interest in net earnings (loss) |
|
(588 |
) |
(478 |
) |
296 |
|
332 |
| ||||
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Common unitholders’ interest in net earnings (loss) |
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$ |
(58,187 |
) |
$ |
(47,317 |
) |
$ |
29,324 |
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$ |
32,879 |
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Earnings (loss) Per Unit |
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Basic and diluted net earnings (loss) per common unitholders’ interest |
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$ |
(0.64 |
) |
$ |
(0.58 |
) |
$ |
0.35 |
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$ |
0.41 |
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Weighted average common units outstanding |
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90,908.0 |
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81,206.1 |
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84,646.2 |
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79,651.1 |
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Supplemental Data and Reconciliation of Non-GAAP Items:
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Three months ended |
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Twelve months ended |
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July 31 |
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July 31 |
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2015 |
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2014 |
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2015 |
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2014 |
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Net earnings (loss) attributable to Ferrellgas Partners, L.P. |
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$ |
(58,775 |
) |
$ |
(47,795 |
) |
$ |
29,620 |
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$ |
33,211 |
|
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Income tax expense (benefit) |
|
(1,763 |
) |
125 |
|
(315 |
) |
2,516 |
| ||||
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Interest expense |
|
28,599 |
|
22,130 |
|
100,396 |
|
86,502 |
| ||||
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Depreciation and amortization expense |
|
28,003 |
|
22,431 |
|
98,579 |
|
84,202 |
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EBITDA |
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(3,936 |
) |
(3,109 |
) |
228,280 |
|
206,431 |
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Loss on extinguishment of debt |
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— |
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— |
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— |
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21,202 |
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Non-cash employee stock ownership plan compensation charge |
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7,985 |
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11,400 |
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24,713 |
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21,789 |
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Non-cash stock and unit-based compensation charge (a) |
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6,281 |
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8,326 |
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25,982 |
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24,508 |
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Loss on disposal of assets |
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2,521 |
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3,060 |
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7,099 |
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6,486 |
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Other income (expense), net |
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(65 |
) |
977 |
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350 |
|
479 |
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Change in fair value of contingent consideration (included in operating expense) |
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— |
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5,000 |
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(6,300 |
) |
5,000 |
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Litigation accrual and related legal fees associated with a class action lawsuit (included in general and administration expense) |
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— |
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327 |
|
806 |
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1,749 |
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Unrealized (non-cash) losses (gains) on changes in fair value of derivatives |
|
4,021 |
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— |
|
2,412 |
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— |
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Acquisition and transition expenses (included in general and administration expense) |
|
16,373 |
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— |
|
16,373 |
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— |
| ||||
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Net earnings (loss) attributable to noncontrolling interest (b) |
|
(558 |
) |
(446 |
) |
469 |
|
504 |
| ||||
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Adjusted EBITDA (c) |
|
32,622 |
|
25,535 |
|
300,184 |
|
288,148 |
| ||||
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Net cash interest expense (d) |
|
(27,551 |
) |
(22,179 |
) |
(96,150 |
) |
(83,686 |
) | ||||
|
Maintenance capital expenditures (e) |
|
(4,749 |
) |
(4,328 |
) |
(19,612 |
) |
(17,673 |
) | ||||
|
Cash paid for taxes |
|
(379 |
) |
(413 |
) |
(712 |
) |
(816 |
) | ||||
|
Proceeds from asset sales |
|
1,845 |
|
1,257 |
|
5,905 |
|
4,524 |
| ||||
|
Distributable cash flow attributable to equity investors (f) |
|
1,788 |
|
(128 |
) |
189,615 |
|
190,497 |
| ||||
|
Distributable cash flow attributable to general partner and non-controlling interest |
|
35 |
|
(3 |
) |
3,792 |
|
3,810 |
| ||||
|
Distributable cash flow attributable to common unitholders |
|
1,753 |
|
(125 |
) |
185,823 |
|
186,687 |
| ||||
|
Less: Distributions paid to common unitholders |
|
41,359 |
|
40,614 |
|
165,433 |
|
159,316 |
| ||||
|
Distributable cash flow excess/(shortage) |
|
$ |
(39,606 |
) |
$ |
(40,739 |
) |
$ |
20,390 |
|
$ |
27,371 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Propane gallons sales |
|
|
|
|
|
|
|
|
| ||||
|
Retail - Sales to End Users |
|
90,055 |
|
93,216 |
|
608,781 |
|
651,358 |
| ||||
|
Wholesale - Sales to Resellers |
|
58,997 |
|
61,548 |
|
270,065 |
|
295,212 |
| ||||
|
Total propane gallons sales |
|
149,052 |
|
154,764 |
|
878,846 |
|
946,570 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Salt water volumes - Midstream operations (barrels processed) |
|
3,801 |
|
2,500 |
|
17,035 |
|
2,500 |
| ||||
|
Crude oil hauled - Midstream operations (barrel) |
|
10,447 |
|
— |
|
10,447 |
|
— |
| ||||
(a) Non-cash stock and unit-based compensation charges consist of the following:
|
|
|
Three months ended |
|
Twelve months ended |
| ||||||||
|
|
|
July 31 |
|
July 31 |
| ||||||||
|
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| ||||
|
Operating expense |
|
$ |
942 |
|
$ |
1,832 |
|
$ |
5,175 |
|
$ |
5,335 |
|
|
General and administrative expense |
|
5,339 |
|
6,494 |
|
20,807 |
|
19,173 |
| ||||
|
Total |
|
$ |
6,281 |
|
$ |
8,326 |
|
$ |
25,982 |
|
$ |
24,508 |
|
|
(b) |
Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P. |
|
(c) |
Adjusted EBITDA is calculated as net earnings attributable to Ferrellgas Partners, L.P., income tax expense, interest expense, depreciation and amortization expense, loss on extinguishment of debt, non-cash employee stock ownership plan compensation charge, non-cash stock-based compensation charge, loss on disposal of assets, other income (expense), net, change in fair value of contingent consideration, litigation accrual and related legal fees associated with a class action lawsuit, unrealized (non-cash) losses (gains) on changes in fair value of derivatives, acquisition and transition expenses and net earnings attributable to noncontrolling interest. 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 makes it easier to compare its results with other companies that have different financing and capital structures. 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. |
|
(d) |
Net cash interest expense is the sum of interest expense less non-cash interest expense and other income (expense), net. This amount includes interest expense related to the accounts receivable securitization facility. |
|
(e) |
Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment. |
|
(f) |
Management considers distributable cash flow to equity investors a meaningful non-GAAP measure of the partnership’s ability to declare and pay quarterly distributions to equity investors. Distributable cash flow to equity investors, as management defines it, may not be comparable to distributable cash flow to equity investors or similarly titled measurements used by other corporations and partnerships. Items added into our calculation of distributable cash flow to equity investors that will not occur on a continuing basis may have associated cash payments. Distributable cash flow to equity investors may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP. |