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): March 9, 2012
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
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)
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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 March 9, 2012, Ferrellgas Partners, L.P. issued a press release regarding its financial results for the second fiscal quarter ended January 31, 2012. 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 9, 2012, reporting its financial results for the second fiscal quarter ended January 31, 2012.
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 hereunto duly authorized.
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Ferrellgas Partners, L.P. |
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March 9, 2012 |
By: |
/s/ J. Ryan VanWinkle | |
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Name: J. Ryan VanWinkle | |
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Title: Senior Vice President and Chief Financial | |
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Officer; Treasurer | |
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(Principal Financial and Accounting Officer) of | |
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Ferrellgas Partners Finance Corp. | ||
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March 9, 2012 |
By: |
/s/ J. Ryan VanWinkle | |
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Name: J. Ryan VanWinkle | |
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Title: Chief Financial Officer and Sole Director | |
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Ferrellgas, L.P. | ||
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March 9, 2012 |
By: |
/s/ J. Ryan VanWinkle | |
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Name: J. Ryan VanWinkle | |
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Title: Senior Vice President and Chief Financial | |
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Officer; Treasurer | |
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(Principal Financial and Accounting Officer) of | |
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Ferrellgas, Inc., the general partner | |
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Ferrellgas Finance Corp. | ||
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March 9, 2012 |
By: |
/s/ J. Ryan VanWinkle | |
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Name: J. Ryan VanWinkle | |
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Title: 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 March 9, 2012, reporting its financial results for the second fiscal quarter ended January 31, 2012. |
Exhibit 99.1
FERRELLGAS PARTNERS REPORTS SECOND-QUARTER EARNINGS
OVERLAND PARK, KS, March 9, 2012- Ferrellgas Partners, L.P. (NYSE:FGP), one of the nation’s largest distributors of propane, today reported operating results for its fiscal second quarter ended January 31, 2012.
Net earnings for the quarter rose 64% to $36.8 million while Adjusted EBITDA fell to $87.5 million resulting from near record warm, nationwide temperatures and significantly elevated wholesale propane costs.
Propane sales for the quarter declined 7% to 305.1 million gallons on temperatures that were 18% warmer than in the prior year’s quarter and customer conservation resulting from historically high wholesale propane costs.
Second quarter revenues declined approximately 1% to $829.3 million while gross profit declined 16% to $204.2 million primarily on reduced weather dependent retail sales volumes and margins that were negatively impacted by rising wholesale propane costs. Operating expense of $103.7 million improved by nearly 4% on lower sales in the quarter and general and administrative expense improved by 6% to $10.3 million reflecting reductions in back office expense. Equipment lease expense was materially unchanged at $3.5 million. The partnership continues to benefit from prior year financings, as interest expense for the quarter declined nearly 9% to $24.0 million and a loss associated with a prior year debt financing not repeated this quarter.
“This year has proven to be one of the most challenging the propane industry has faced,” said President and Chief Executive Officer Steve Wambold. “While I am very pleased by our strong sales efforts and notable expense reductions, nothing can fully offset the impact from year to date temperatures that were 16% warmer than normal and wholesale propane costs that increased nearly 19%.”
Wambold continued, “Despite the extremely challenging operating environment, we continue to look for opportunities to grow our customer base while reducing our operating costs for the benefit of our customers and unit holders alike. We’ve made meaningful progress toward these goals. For instance, we have announced five immediately accretive acquisitions this fiscal year, and are evaluating a growing list of other companies that could be accretive to earnings in the future. We have additionally stepped up our efforts to reduce our overall operating costs which we believe will generate more than $20 million in annualized savings by fiscal 2013.”
-more-
In the quarter, the partnership announced the expansion and extension of its accounts receivable securitization facility through January 2017. The partnership also announced the issuance of $50 million in Ferrellgas Partners common units. Proceeds from the equity offerings were used to reduce long-term borrowings on the partnership’s bank funded credit facility.
Year to date, revenues of $1.4 billion rose on increased sales prices to customers primarily resulting from increased wholesale propane costs, while gross profit of $332.9 million decreased due to fewer weather dependent retail sales and margins negatively impacted by higher wholesale propane costs.
Propane sales volume for the six months ended January 31 were 501.4 million, up nearly 1% with increased wholesale sales volumes offsetting more weather dependent retail demand. Operating expense remained materially unchanged at $203.2 million, while general and administrative expense declined 8% to $19.7 million reflecting back office expense reductions. Year to date, interest expense was down 11% to $47.4 million reflecting prior year financings. Net earnings and Adjusted EBITDA for the fiscal year were $3.9 million and $103.9 million, respectively.
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., serves approximately one million customers in all 50 states, the District of Columbia and Puerto Rico. Ferrellgas employees indirectly own nearly 22 million common units of the partnership through an employee stock ownership plan. More information about the partnership can be found online at www.ferrellgas.com.
Statements in this release concerning expectations for the future are forward-looking statements. A variety of known and unknown risks, uncertainties and other factors could cause results, performance and expectations to differ materially from anticipated results, performance and expectations. These risks, uncertainties and other factors are discussed in the Form 10-K of Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2011, and other documents filed from time to time by these entities with the Securities and Exchange Commission.
###
Contact:
Tom Colvin, Investor Relations, 913-661-1530
Scott Brockelmeyer, Media Relations, 913-661-1830
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
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January 31, 2012 |
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July 31, 2011 |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
15,725 |
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$ |
7,437 |
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Accounts and notes receivable, net (including $293,163 and $112,509 of accounts receivable pledged as collateral at January 31, 2012 and July 31, 2011, respectively) |
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292,890 |
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159,532 |
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Inventories |
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170,479 |
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136,139 |
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Prepaid expenses and other current assets |
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26,389 |
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23,885 |
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Total Current Assets |
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505,483 |
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326,993 |
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Property, plant and equipment, net |
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641,013 |
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642,205 |
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Goodwill |
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248,944 |
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248,944 |
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Intangible assets, net |
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199,836 |
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204,136 |
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Other assets, net |
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40,397 |
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38,308 |
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Total Assets |
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$ |
1,635,673 |
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$ |
1,460,586 |
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LIABILITIES AND PARTNERS’ CAPITAL |
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Current Liabilities: |
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Accounts payable |
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$ |
132,425 |
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$ |
67,541 |
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Short-term borrowings |
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56,037 |
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64,927 |
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Collateralized note payable |
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205,000 |
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61,000 |
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Other current liabilities (a) |
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116,053 |
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104,813 |
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Total Current Liabilities |
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509,515 |
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298,281 |
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Long-term debt (a) |
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1,032,993 |
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1,050,920 |
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Other liabilities |
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23,792 |
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23,068 |
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Contingencies and commitments |
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— |
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— |
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Partners’ Capital: |
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Common unitholders (78,950,469 and 75,966,353 units outstanding at January 31, 2012 and July 31, 2011, respectively) |
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127,508 |
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139,614 |
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General partner unitholder (797,479 and 767,337 units outstanding at January 31, 2012 and July 31, 2011, respectively) |
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(58,784 |
) |
(58,660 |
) | ||
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Accumulated other comprehensive income (loss) |
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(1,889 |
) |
4,633 |
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Total Ferrellgas Partners, L.P. Partners’ Capital |
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66,835 |
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85,587 |
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Noncontrolling Interest |
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2,538 |
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2,730 |
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Total Partners’ Capital |
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69,373 |
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88,317 |
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Total Liabilities and Partners’ Capital |
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$ |
1,635,673 |
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$ |
1,460,586 |
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(a) The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $182 million of 8.625% notes which are liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE, SIX AND TWELVE MONTHS ENDED JANUARY 31, 2012 AND 2011
(in thousands, except per unit data)
(unaudited)
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Three months ended |
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Six months ended |
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Twelve months ended |
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2012 |
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2011 |
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2012 |
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2011 |
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2012 |
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2011 |
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Revenues: |
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Propane and other gas liquids sales |
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$ |
779,567 |
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$ |
774,179 |
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$ |
1,293,786 |
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$ |
1,142,802 |
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$ |
2,363,241 |
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$ |
1,991,106 |
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Other |
|
49,705 |
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66,813 |
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73,912 |
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98,382 |
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186,488 |
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219,216 |
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Total revenues |
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829,272 |
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840,992 |
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1,367,698 |
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1,241,184 |
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2,549,729 |
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2,210,322 |
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Cost of product sold: |
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|
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|
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|
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Propane and other gas liquids sales |
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600,600 |
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559,416 |
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1,003,722 |
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815,902 |
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1,797,164 |
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1,368,536 |
| ||||||
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Other |
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24,468 |
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38,500 |
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31,094 |
|
51,358 |
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104,206 |
|
128,608 |
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Gross profit |
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204,204 |
|
243,076 |
|
332,882 |
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373,924 |
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648,359 |
|
713,178 |
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Operating expense |
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103,741 |
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107,562 |
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203,152 |
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202,822 |
|
407,611 |
|
409,112 |
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Depreciation and amortization expense |
|
21,042 |
|
19,990 |
|
41,716 |
|
40,365 |
|
83,837 |
|
81,682 |
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General and administrative expense |
|
10,344 |
|
11,005 |
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19,708 |
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21,392 |
|
50,476 |
|
44,657 |
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Equipment lease expense |
|
3,528 |
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3,543 |
|
7,057 |
|
7,192 |
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14,300 |
|
13,732 |
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Non-cash employee stock ownership plan compensation charge |
|
1,937 |
|
2,932 |
|
4,516 |
|
5,376 |
|
9,297 |
|
10,435 |
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Non-cash stock and unit-based compensation charge (b) |
|
1,565 |
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11,068 |
|
4,482 |
|
12,081 |
|
5,889 |
|
16,748 |
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Loss on disposal of assets and other |
|
523 |
|
603 |
|
832 |
|
371 |
|
4,094 |
|
6,072 |
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Operating income |
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61,524 |
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86,373 |
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51,419 |
|
84,325 |
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72,855 |
|
130,740 |
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Interest expense |
|
(24,046 |
) |
(26,395 |
) |
(47,433 |
) |
(53,272 |
) |
(96,046 |
) |
(105,645 |
) | ||||||
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Loss on extinguishment of debt |
|
— |
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(36,449 |
) |
— |
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(36,449 |
) |
(10,513 |
) |
(39,857 |
) | ||||||
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Other income (expense), net |
|
80 |
|
88 |
|
47 |
|
266 |
|
348 |
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(286 |
) | ||||||
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Earnings (loss) before income taxes |
|
37,558 |
|
23,617 |
|
4,033 |
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(5,130 |
) |
(33,356 |
) |
(15,048 |
) | ||||||
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|
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|
|
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Income tax expense |
|
771 |
|
1,198 |
|
141 |
|
716 |
|
666 |
|
2,380 |
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|
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|
|
|
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Net earnings (loss) |
|
36,787 |
|
22,419 |
|
3,892 |
|
(5,846 |
) |
(34,022 |
) |
(17,428 |
) | ||||||
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|
|
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|
|
|
|
|
|
|
|
|
|
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Net earnings (loss) attributable to noncontrolling interest (a) |
|
413 |
|
290 |
|
122 |
|
68 |
|
(58 |
) |
123 |
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Net earnings (loss) attributable to Ferrellgas Partners, L.P. |
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36,374 |
|
22,129 |
|
3,770 |
|
(5,914 |
) |
(33,964 |
) |
(17,551 |
) | ||||||
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|
|
|
|
|
|
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|
|
|
|
|
|
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Less: General partner’s interest in net earnings (loss) |
|
364 |
|
221 |
|
38 |
|
(59 |
) |
(339 |
) |
(176 |
) | ||||||
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|
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Common unitholders’ interest in net earnings (loss) |
|
$ |
36,010 |
|
$ |
21,908 |
|
$ |
3,732 |
|
$ |
(5,855 |
) |
$ |
(33,625 |
) |
$ |
(17,375 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Earnings (loss) Per Unit |
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|
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|
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Basic and diluted net earnings (loss) per common unitholders’ interest |
|
$ |
0.47 |
|
$ |
0.31 |
|
$ |
0.05 |
|
$ |
(0.08 |
) |
$ |
(0.45 |
) |
$ |
(0.25 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Weighted average common units outstanding |
|
76,401.6 |
|
70,668.8 |
|
76,184.0 |
|
70,114.2 |
|
75,373.4 |
|
69,813.9 |
| ||||||
Supplemental Data and Reconciliation of Non-GAAP Items:
|
|
|
Three months ended |
|
Six months ended |
|
Twelve months ended |
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|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||||
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|
|
|
|
|
|
|
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Net earnings (loss) attributable to Ferrellgas Partners, L.P. |
|
$ |
36,374 |
|
$ |
22,129 |
|
$ |
3,770 |
|
$ |
(5,914 |
) |
$ |
(33,964 |
) |
$ |
(17,551 |
) |
|
Income tax expense |
|
771 |
|
1,198 |
|
141 |
|
716 |
|
666 |
|
2,380 |
| ||||||
|
Interest expense |
|
24,046 |
|
26,395 |
|
47,433 |
|
53,272 |
|
96,046 |
|
105,645 |
| ||||||
|
Depreciation and amortization expense |
|
21,042 |
|
19,990 |
|
41,716 |
|
40,365 |
|
83,837 |
|
81,682 |
| ||||||
|
EBITDA |
|
82,233 |
|
69,712 |
|
93,060 |
|
88,439 |
|
146,585 |
|
172,156 |
| ||||||
|
Loss on extinguishment of debt |
|
— |
|
36,449 |
|
— |
|
36,449 |
|
10,513 |
|
39,857 |
| ||||||
|
Non-cash employee stock ownership plan compensation charge |
|
1,937 |
|
2,932 |
|
4,516 |
|
5,376 |
|
9,297 |
|
10,435 |
| ||||||
|
Non-cash stock and unit-based compensation charge (b) |
|
1,565 |
|
11,068 |
|
4,482 |
|
12,081 |
|
5,889 |
|
16,748 |
| ||||||
|
Loss on disposal of assets and other |
|
523 |
|
603 |
|
832 |
|
371 |
|
4,094 |
|
6,072 |
| ||||||
|
Other income (expense), net |
|
(80 |
) |
(88 |
) |
(47 |
) |
(266 |
) |
(348 |
) |
286 |
| ||||||
|
Nonrecurring litigation reserve and related legal fees |
|
892 |
|
335 |
|
892 |
|
667 |
|
12,345 |
|
667 |
| ||||||
|
Net earnings (loss) attributable to noncontrolling interest |
|
413 |
|
290 |
|
122 |
|
68 |
|
(58 |
) |
123 |
| ||||||
|
Adjusted EBITDA (c) |
|
87,483 |
|
121,301 |
|
103,857 |
|
143,185 |
|
188,317 |
|
246,344 |
| ||||||
|
Net cash interest expense (d) |
|
(22,724 |
) |
(24,660 |
) |
(44,755 |
) |
(48,382 |
) |
(89,726 |
) |
(96,617 |
) | ||||||
|
Maintenance capital expenditures (e) |
|
(3,511 |
) |
(3,436 |
) |
(8,838 |
) |
(7,848 |
) |
(16,427 |
) |
(16,407 |
) | ||||||
|
Cash paid for taxes |
|
(87 |
) |
168 |
|
(90 |
) |
85 |
|
(766 |
) |
(1,133 |
) | ||||||
|
Proceeds from asset sales |
|
1,011 |
|
1,122 |
|
2,374 |
|
3,200 |
|
5,168 |
|
9,259 |
| ||||||
|
Distributable cash flow to equity investors (f) |
|
$ |
62,172 |
|
$ |
94,495 |
|
$ |
52,548 |
|
$ |
90,240 |
|
$ |
86,566 |
|
$ |
141,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Propane gallons sales |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Retail - Sales to End Users |
|
223,977 |
|
249,227 |
|
356,825 |
|
369,788 |
|
642,445 |
|
648,476 |
| ||||||
|
Wholesale - Sales to Resellers |
|
81,129 |
|
79,156 |
|
144,550 |
|
126,932 |
|
261,893 |
|
237,537 |
| ||||||
|
Total propane gallons sales |
|
305,106 |
|
328,383 |
|
501,375 |
|
496,720 |
|
904,338 |
|
886,013 |
| ||||||
|
(a) |
Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P. |
|
(b) |
Non-cash stock and unit-based compensation charges consist of the following: |
|
|
|
Three months ended |
|
Six months ended |
|
Twelve months ended |
| ||||||||||||
|
|
|
2012 |
|
2011 |
|
2011 |
|
2011 |
|
2012 |
|
2011 |
| ||||||
|
Operating expense |
|
$ |
673 |
|
$ |
3,126 |
|
$ |
1,840 |
|
$ |
3,262 |
|
$ |
2,335 |
|
$ |
4,546 |
|
|
General and administrative expense |
|
892 |
|
7,942 |
|
2,642 |
|
8,819 |
|
3,554 |
|
12,202 |
| ||||||
|
Total |
|
$ |
1,565 |
|
$ |
11,068 |
|
$ |
4,482 |
|
$ |
12,081 |
|
$ |
5,889 |
|
$ |
16,748 |
|
|
(c) |
Adjusted EBITDA is calculated as earnings (loss) before 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 and unit-based compensation charge, loss on disposal of assets and other, other income (expense), net, a nonrecurring litigation reserve and related legal fees and net earnings (loss) 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 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. |