View:
Download DOC
Download PDF
Download XLS
Ferrellgas Partners, L.P. (Form: 8-K)  

 

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):   January 31, 2008

Ferrellgas Partners, L.P.
__________________________________________
(Exact name of registrant as specified in its charter)

     
Delaware 001-11331 43-1698480
_____________________
(State or other jurisdiction 		_____________
(Commission 		______________
(I.R.S. Employer
of incorporation) File Number) Identification No.)
      
7500 College Blvd., Suite 1000, Overland Park, Kansas   66210
_________________________________
(Address of principal executive offices) 		  ___________
(Zip Code)
     
Registrant’s telephone number, including area code:   913-661-1500

Not Applicable
______________________________________________
Former name or former address, if changed since last report

 

Ferrellgas Partners Finance Corp.
__________________________________________
(Exact name of registrant as specified in its charter)

     
Delaware 333-06693 43-1742520
_____________________
(State or other jurisdiction 		_____________
(Commission 		______________
(I.R.S. Employer
of incorporation) File Number) Identification No.)
      
7500 College Blvd., Suite 1000, Overland Park, Kansas   66210
_________________________________
(Address of principal executive offices) 		  ___________
(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 000-50182 43-1698481
_____________________
(State or other jurisdiction 		_____________
(Commission 		______________
(I.R.S. Employer
of incorporation) File Number) Identification No.)
      
7500 College Blvd., Suite 1000, Overland Park, Kansas   66210
_________________________________
(Address of principal executive offices) 		  ___________
(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 000-50183 14-1866671
_____________________
(State or other jurisdiction 		_____________
(Commission 		______________
(I.R.S. Employer
of incorporation) File Number) Identification No.)
      
7500 College Blvd., Suite 1000, Overland Park, Kansas   66210
_________________________________
(Address of principal executive offices) 		  ___________
(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:

[  ]  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))

Top of the Form

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 March 7, 2008, Ferrellgas Partners, L.P. issued a press release regarding its financial results for its second fiscal quarter ended January 31, 2008. 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 March 7, 2008, reporting its financial results for its second fiscal quarter ended January 31, 2008.





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 do es not, constitute a deterination 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 soley by Regulation FD of the Exchange Act.

Top of the Form

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.

         
    Ferrellgas Partners, L.P.
          
March 7, 2008   By:   /s/ Kevin T. Kelly
       
        Name: Kevin T. Kelly
        Title: Senior Vice President and Chief Financial Officer
         
    Ferrellgas Partners Finance Corp.
          
March 7, 2008   By:   /s/ Kevin T. Kelly
       
        Name: Kevin T. Kelly
        Title: Senior Vice President and Chief Financial Officer
         
    Ferrellgas, L.P.
          
March 7, 2008   By:   /s/ Kevin T. Kelly
       
        Name: Kevin T. Kelly
        Title: Senior Vice President and Chief Financial Officer
         
    Ferrellgas Finance Corp.
          
March 7, 2008   By:   /s/ Kevin T. Kelly
       
        Name: Kevin T. Kelly
        Title: Senior Vice President and Chief Fincancial Officer

Top of the Form

Exhibit Index


     
Exhibit No.   Description
 
99.1
  Press release of Ferrellgas Partners, L.P. dated March 7, 2008, reporting its financial results for its second fiscal quarter ended January 31, 2008
EX-99.1

For Immediate Release
Contact:

Ryan VanWinkle, Investor Relations, 913-661-1528

Scott Brockelmeyer, Media Relations, 913-661-1830

Ferrellgas Partners’ Second-Quarter Adjusted EBITDA Declines Slightly;
Operating Platform Continues to Provide Significant Efficiencies

OVERLAND PARK, Kan., March 7, 2008 – Ferrellgas Partners, L.P. (NYSE: FGP), one of the nation’s largest propane distributors, today reported for the second fiscal quarter ended January 31 that Adjusted EBITDA declined slightly to $103.2 million from $111.5 million for the same quarter in the prior fiscal year, while net earnings were $51.2 million compared to $59.2 million for the same period in the prior fiscal year. The lower results were in part caused by the quarter’s hedging performance.

Propane sales volume in the second fiscal quarter decreased to 267 million gallons from 276 million gallons for the same fiscal quarter in the prior year. During the fiscal quarter, nationwide, temperatures were 3 percent warmer than normal, but 8 percent cooler than the same period in the prior fiscal year.

Chairman and Chief Executive Officer James Ferrell pointed out, “The second-quarter performance masked the underlying strength of our operations. During the quarter operating expenses, driven by our operating platform, decreased nearly 9 percent, with certain variable expenses being flexed significantly in reaction to the lesser demand.”

Ferrell also explained, “The unprecedented sharp increase in propane costs was responsible for reduced results in our risk management operations. We have already taken steps to reduce our exposure in this area.”

- more -

1

Revenues for the fiscal second quarter increased 15 percent to $764 million, from $662.8 million in the prior fiscal year period. Gross profit for the period totaled $211 million, down from a near-record $227.5 million in the same period the fiscal year before. On a quarter-over-quarter basis, general and administrative expenses increased to $11.1 million from nearly $10 million reflecting nonrecurring costs, while equipment lease expense improved to $6.1 million from $6.5 million.

Looking ahead, President and Chief Operating Officer Steve Wambold observed, “Our strategies remain on track and in the right direction with our relatively new operating platform producing ongoing benefits. We fully expect ongoing benefits, for example, we have driven the percentage of profitable accounts to more than 80 percent and will continue to use the system to identify unprofitable accounts and address them. Our Blue Rhino branded tank exchange program is extremely healthy and we intend to add more than 1,100 locations by the end of July, positioning the partnership to do well during the all-important summer season.” Wambold concluded, “In addition, we expect general and administrative expenses to return to more normal levels in the third fiscal quarter.”

The following is a comparison for the first half of fiscal 2008, as compared to the first half of fiscal 2007. Net earnings and Adjusted EBITDA were $28.3 million and $126.5 million, respectively, compared with $29.7 million and $131.2 million, respectively. Revenues grew to $1.2 billion from $1.0 billion, while gross profit was $342.5 million compared with $354.6 million. Propane sales volumes were 408 million gallons, down from 437 million gallons. Operating and general and administrative expenses were $181.5 million and $22.9 million, respectively, compared with $189.9 million and $21 million. Equipment lease expense was $12.5 million, down from $13.1 million.

Ferrellgas Partners, L.P., through its operating partnership. Ferrellgas, L.P., serves approximately one million customers in all 50 states, the District of Columbia and Puerto Rico. Ferrellgas employees indirectly own more than 20 million common units of the partnership through an employee stock ownership plan. More information about the partnership can be found online at www.ferrellgas.com.

- more -

2

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 end July 31, 2007, and other documents filed from time to time by these entities with the Securities and Exchange Commission.

3

                 
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES    
CONSOLIDATED BALANCE SHEETS    
(in thousands, except unit data)    
(unaudited)    
ASSETS   January 31, 2008   July 31, 2007
Current Assets:
                
Cash and cash equivalents
   $ 37,018     $ 20,685  
Accounts and notes receivable, net
     169,074       118,320  
Inventories
     181,421       113,807  
Prepaid expenses and other current assets
     26,727       16,772  
 
                
Total Current Assets
     414,240       269,584  
Property, plant and equipment, net
     696,586       720,190  
Goodwill
     249,145       249,481  
Intangible assets, net
     235,644       246,283  
Other assets, net
     19,636       17,865  
 
                
Total Assets
   $ 1,615,251     $ 1,503,403  
 
                
LIABILITIES AND PARTNERS’ CAPITAL
                
 
                
Current Liabilities:
                
Accounts payable
   $ 135,302     $ 62,103  
Short term borrowings
     128,052       57,779  
Other current liabilities (a)
     100,430       107,199  
 
                
Total Current Liabilities
     363,784       227,081  
Long-term debt (a)
     1,017,865       1,011,751  
Other liabilities
     23,481       22,795  
Contingencies and commitments
     —       —  
Minority interest
     4,834       5,119  
Partners’ Capital:
                
Common unitholders (62,958,674 and 62,957,674 units
                
outstanding at January 2008 and July 2007, respectively)
     261,153       289,075  
General partner unitholder (635,946 and 635,936 units
                
outstanding at Janaury 2008 and July 2007, respectively)
     (57,435 )     (57,154 )
Accumulated other comprehensive income
     1,569       4,736  
 
                
Total Partners’ Capital
     205,287       236,657  
 
                
Total Liabilities and Partners’ Capital
   $ 1,615,251     $ 1,503,403  
 
                
(a) The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $268 million of
8 3/4% notes which are liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.
        

4

                                                 
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE, SIX AND TWELVE MONTHS ENDED JANUARY 31, 2008 AND 2007
(in thousands, except per unit data)
(unaudited)
    Three months ended   Six months ended   Twelve months ended
    January 31,   January 31,   January 31,
    2008   2007   2008   2007   2008   2007
Revenues:
                                                
Propane and other gas liquids sales
   $ 684,456   $ 581,997   $ 1,043,391   $ 926,916   $ 1,873,898   $ 1,691,057
Other
   79,512   80,776   115,493   112,270   238,240   205,433
 
                                                
Total revenues
   763,968   662,773   1,158,884   1,039,186   2,112,138   1,896,490
Cost of product sold:
                                                
Propane and other gas liquids sales
   504,524   380,009   757,043   614,695   1,289,517   1,092,610
Other
   48,422   55,301   59,382   69,921   146,684   133,902
 
                                                
Gross profit
   211,022   227,463   342,459   354,570   675,937   669,978
Operating expense
   91,020   99,844   181,479   189,855   372,462   377,889
Depreciation and amortization expense
   21,075   22,035   42,440   43,691   86,132   85,918
General and administrative expense
   11,115   9,963   22,908   21,048   46,730   46,270
Equipment lease expense
   6,143   6,454   12,494   13,098   25,538   26,201
Employee stock ownership plan compensation charge
   3,072   2,739   6,246   5,580   11,891   10,933
Loss on disposal of assets and other
   3,680   3,492   6,067   6,495   10,394   11,397
 
                                                
Operating income
   74,917   82,936   70,825   74,803   122,790   111,370
Interest expense
   (22,851 )   (22,329 )   (45,137 )   (44,709 )   (88,381 )   (86,829 )
Interest income
   181   920   998   1,890   2,253   3,028
 
                                                
Earnings before income taxes and minority interest
   52,247   61,527   26,686   31,984   36,662   27,569
Income tax expense – current
   670   1,418   357   1,399   2,532   3,469
Income tax expense (benefit) — deferred (h)
   (206 )   254   (2,381 )   483   122   1,237
Minority interest (a)
   585   666   412   426   587   473
 
                                                
Net earnings
   51,198   59,189   28,298   29,676   33,421   22,390
Net earnings available to general partner
   3,657   6,257   283   297   334   224
 
                                                
Net earnings available to common unitholders
   $ 47,541   $ 52,932   $ 28,015   $ 29,379   $ 33,087   $ 22,166
 
                                                
Earnings Per Unit
                                                
 
                                                
Basic and diluted net earnings available per common unit
   $ 0.76   $ 0.84   $ 0.44   $ 0.47   $ 0.53   $ 0.36
Dilutive effect of EITF 03-6 (b)
   0.05   0.09   —   —   —   —
Adjusted net earnings per unit available to common unitholders
   $ 0.81   $ 0.93   $ 0.44   $ 0.47   $ 0.53   $ 0.36
 
                                                
Weighted average common units outstanding
   62,958.7   62,884.2   62,958.7   62,561.4   62,956.1   61,609.7
                                                 
Supplemental Data and Reconciliation of Non-GAAP Items:
    Three months ended January 31,   Six months ended January 31,   Twelve months ended January 31,
             
 
     2008       2007       2008       2007       2008       2007  
 
                                                
Propane gallons
     266,525       275,915       407,670       437,160       775,242       795,351  
 
                                                
Net earnings
   $ 51,198     $ 59,189     $ 28,298     $ 29,676     $ 33,421     $ 22,390  
Income tax expense (benefit)
     464       1,672       (2,024 )     1,882       2,654       4,706  
Interest expense
     22,851       22,329       45,137       44,709       88,381       86,829  
Depreciation and amortization expense
     21,075       22,035       42,440       43,691       86,132       85,918  
Interest income
     (181 )     (920 )     (998 )     (1,890 )     (2,253 )     (3,028 )
 
                                                
EBITDA
     95,407       104,305       112,853       118,068       208,335       196,815  
Employee stock ownership plan compensation charge
     3,072       2,739       6,246       5,580       11,891       10,933  
Unit and stock-based compensation charge (c)
     450       333       900       666       1,123       1,294  
Loss on disposal of assets and other
     3,680       3,492       6,067       6,495       10,394       11,397  
Minority interest
     585       666       412       426       587       473  
 
                                                
Adjusted EBITDA (d)
     103,194       111,535       126,478       131,235       232,330       220,912  
Net cash interest expense (e)
     (24,115 )     (22,352 )     (46,098 )     (44,272 )     (90,846 )     (87,240 )
Maintenance capital expenditures (f)
     (6,344 )     (5,735 )     (9,468 )     (9,719 )     (16,684 )     (16,663 )
Cash paid for taxes
     (68 )     —       (1,279 )     (1,765 )     (3,256 )     (2,680 )
Proceeds from asset sales
     3,272       1,882       6,250       5,506       10,574       10,266  
 
                                                
Distributable cash flow to equity investors (g)
   $ 75,939     $ 85,330     $ 75,883     $ 80,985     $ 132,118     $ 124,595  
 
                                                

5

 
(a) Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.
(b) Emerging Issues Task Force (“EITF”) 03-6 “Participating Securities and the Two-Class Method under FASB Statement No. 128,
Earnings per Share,” requires the calculation of net earnings per limited partner unit for each period presented according to
distributions declared and participation rights in undistributed earnings, as if all of the earnings for the period had to be
distributed. In periods with undistributed earnings above certain levels, the calculation according to the two-class method results
in an increased allocation of undistributed earnings to the general partner and a dilution of earnings to the limited partners. Due to
the seasonality of the propane business, the dilution effect of EITF 03-6 on net earnings per limited partner unit will typically only
impact the three months ending January 31. EITF 03-6 did not have a dilutive effect on the six and twelve months ended January 31,
2008 and 2007.
(c) Statement of Financial Accounting Standards (“SFAS”) No. 123( R), “Share-Based Payment” requires that the cost resulting from all
share-based payment transactions be recognized in the financial statements. Share-based payment transactions resulted in a non-cash
compensation charge of $0.2 million and $0.1 million to operating expense, for the three months ended January 31, 2008 and 2007,
respectively, and $0.3 million and $0.2 million to operating expense for the six months ended January 31, 2008 and 2007, respectively.
A non-cash compensation charge of $0.3 million and $0.2 million was recorded to general and administrative expense for the three
months ended January 31, 2008 and 2007, respectively, and $0.6 million and $0.5 million for the six months ended January 31, 2008 and
2007, respectively. A non-cash charge of $0.4 and $0.3 was recorded to operating expense for the twelve months ended January 31, 2008
and 2007, respectively. A non-cash charge of $0.7 and $1.0 was recorded to general and administrative expense for the twelve months
ended January 31, 2008 and 2007, respectively.
(d) 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, unit and stock-based compensation charge, loss on disposal of assets and other, minority
interest, 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 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.
(e) Net cash interest expense is the sum of interest expense less non-cash interest expense and interest income. This amount also
includes interest expense related to the accounts receivable securitization facility.
(f) Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment.
(g) 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 common unitholders. Distributable cash flow to equity investors, as management defines it,
may not be comparable to distributable cash flow or similarly titled measures used by other corporations and partnerships.
(h) During the fourth quarter of fiscal 2007 the governor of the state of Michigan signed into law a new Michigan Business Tax. The
passing of this new tax law caused Ferrellgas to recognize a one time deferred tax expense of $2.8 million during fiscal 2007. During
fiscal 2008 a credit for this deferred tax expense was created by a new Michigan tax law. The passing of this new tax law caused
Ferrellgas to recognize a one time deferred tax credit during fiscal 2008.

6