þ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 43-1698480 | |
Delaware | 43-1742520 | |
Delaware | 43-1698481 | |
Delaware | 14-1866671 | |
(States or other jurisdictions of incorporation or organization) |
(I.R.S. Employer Identification Nos.) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Ferrellgas Partners, L.P. |
62,958,674 | Common Units | ||||||
Ferrellgas Partners Finance Corp. |
1,000 | Common Stock | ||||||
Ferrellgas, L.P. |
n/a | n/a | ||||||
Ferrellgas Finance Corp. |
1,000 | Common Stock |
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
ASSETS |
||||||||
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 |
100,430 | 107,199 | ||||||
Total current liabilities |
363,784 | 227,081 | ||||||
Long-term debt |
1,017,865 | 1,011,751 | ||||||
Other liabilities |
23,481 | 22,795 | ||||||
Contingencies and commitments (Note H) |
| | ||||||
Minority interest |
4,834 | 5,119 | ||||||
Partners capital: |
||||||||
Common unitholders (62,958,674 and 62,957,674 units
outstanding at January 31, 2008 and July 31, 2007, respectively) |
261,153 | 289,075 | ||||||
General partner (635,946 and 635,936 units outstanding at
January 31, 2008 and July 31, 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 | ||||
1
For the three months ended | For the six months ended | |||||||||||||||
January 31, | January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenues: |
||||||||||||||||
Propane and other gas liquids sales |
$ | 684,456 | $ | 581,997 | $ | 1,043,391 | $ | 926,916 | ||||||||
Other |
79,512 | 80,776 | 115,493 | 112,270 | ||||||||||||
Total revenues |
763,968 | 662,773 | 1,158,884 | 1,039,186 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Cost of product sold propane and other gas liquids sales |
504,524 | 380,009 | 757,043 | 614,695 | ||||||||||||
Cost of product sold other |
48,422 | 55,301 | 59,382 | 69,921 | ||||||||||||
Operating expense |
91,020 | 99,844 | 181,479 | 189,855 | ||||||||||||
Depreciation and amortization expense |
21,075 | 22,035 | 42,440 | 43,691 | ||||||||||||
General and administrative expense |
11,115 | 9,963 | 22,908 | 21,048 | ||||||||||||
Equipment lease expense |
6,143 | 6,454 | 12,494 | 13,098 | ||||||||||||
Employee stock ownership plan compensation charge |
3,072 | 2,739 | 6,246 | 5,580 | ||||||||||||
Loss on disposal of assets and other |
3,680 | 3,492 | 6,067 | 6,495 | ||||||||||||
Operating income |
74,917 | 82,936 | 70,825 | 74,803 | ||||||||||||
Interest expense |
(22,851 | ) | (22,329 | ) | (45,137 | ) | (44,709 | ) | ||||||||
Interest income |
181 | 920 | 998 | 1,890 | ||||||||||||
Earnings before income taxes and minority interest |
52,247 | 61,527 | 26,686 | 31,984 | ||||||||||||
Income tax expense (benefit) |
464 | 1,672 | (2,024 | ) | 1,882 | |||||||||||
Minority interest |
585 | 666 | 412 | 426 | ||||||||||||
Net earnings |
51,198 | 59,189 | 28,298 | 29,676 | ||||||||||||
Net earnings available to general partner unitholder |
3,657 | 6,257 | 283 | 297 | ||||||||||||
Net earnings available to common unitholders |
$ | 47,541 | $ | 52,932 | $ | 28,015 | $ | 29,379 | ||||||||
Basic and diluted net earnings available per common unit |
$ | 0.76 | $ | 0.84 | $ | 0.44 | $ | 0.47 | ||||||||
2
Accumulated other | ||||||||||||||||||||||||||||||||
Number of units | comprehensive income | |||||||||||||||||||||||||||||||
General | General | Currency | Total | |||||||||||||||||||||||||||||
Common | partner | Common | partner | Risk | translation | Pension | partners | |||||||||||||||||||||||||
unitholders | unitholder | unitholders | unitholder | management | adjustments | liability | capital | |||||||||||||||||||||||||
July 31, 2007 |
62,957.7 | 635.9 | $ | 289,075 | $ | (57,154 | ) | $ | 5,055 | $ | 30 | $ | (349 | ) | $ | 236,657 | ||||||||||||||||
Contributions in connection with
ESOP and stock-based compensation charges |
| | 7,003 | 71 | | | | 7,074 | ||||||||||||||||||||||||
Common unit distribution |
| | (62,959 | ) | (635 | ) | | | | (63,594 | ) | |||||||||||||||||||||
Common unit options exercised |
1.0 | | 19 | | | | | 19 | ||||||||||||||||||||||||
Comprehensive income (loss): |
||||||||||||||||||||||||||||||||
Net earnings |
| | 28,015 | 283 | | | | 28,298 | ||||||||||||||||||||||||
Other comprehensive income (loss): |
||||||||||||||||||||||||||||||||
Net earnings on risk management derivatives |
| | | | (5,055 | ) | | | ||||||||||||||||||||||||
Reclassification of derivatives to earnings |
| | | | 1,856 | | | |||||||||||||||||||||||||
Foreign currency translation adjustment |
| | | | | (12 | ) | | ||||||||||||||||||||||||
Tax effect on foreign currency translation adjustment |
| | | | | 5 | | |||||||||||||||||||||||||
Pension liability adjustment |
| | | | | | 39 | (3,167 | ) | |||||||||||||||||||||||
Comprehensive income |
25,131 | |||||||||||||||||||||||||||||||
January 31, 2008 |
62,958.7 | 635.9 | $ | 261,153 | $ | (57,435 | ) | $ | 1,856 | $ | 23 | $ | (310 | ) | $ | 205,287 | ||||||||||||||||
3
For
the six months ended January 31, |
||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: |
||||||||
Net earnings |
$ | 28,298 | $ | 29,676 | ||||
Reconciliation of net earnings to net cash provided by
operating activities |
||||||||
Depreciation and amortization expense |
42,440 | 43,691 | ||||||
Employee stock ownership plan compensation charge |
6,246 | 5,580 | ||||||
Stock-based compensation charge |
900 | 666 | ||||||
Loss on disposal of assets |
2,015 | 2,464 | ||||||
Minority interest |
412 | 426 | ||||||
Loss on transfer of accounts receivable related to the
accounts receivable securitization |
5,815 | 5,784 | ||||||
Deferred tax expense (benefit) |
(2,381 | ) | 483 | |||||
Other |
4,959 | 785 | ||||||
Changes in operating assets and liabilities, net of effects
from business acquisitions: |
||||||||
Accounts and notes receivable, net of securitization |
(156,542 | ) | (105,264 | ) | ||||
Inventories |
(70,000 | ) | 14,396 | |||||
Prepaid expenses and other current assets |
(12,848 | ) | (5,203 | ) | ||||
Accounts payable |
72,253 | 22,638 | ||||||
Accrued interest expense |
(2,857 | ) | (1,500 | ) | ||||
Other current liabilities |
(3,835 | ) | (22,097 | ) | ||||
Other liabilities |
159 | 1,166 | ||||||
Accounts receivable securitization: |
||||||||
Proceeds from new accounts receivable securitizations |
103,000 | 93,000 | ||||||
Proceeds from collections reinvested in revolving
period accounts receivable securitizations |
671,536 | 622,251 | ||||||
Remittances of amounts collected as servicer of
accounts receivable securitizations |
(675,536 | ) | (632,251 | ) | ||||
Net cash provided by operating activities |
14,034 | 76,691 | ||||||
Cash flows from investing activities: |
||||||||
Business acquisitions, net of cash acquired |
(187 | ) | (30,910 | ) | ||||
Capital expenditures |
(15,289 | ) | (18,202 | ) | ||||
Proceeds from sale of assets |
6,250 | 5,506 | ||||||
Other |
(203 | ) | (2,641 | ) | ||||
Net cash used in investing activities |
(9,429 | ) | (46,247 | ) | ||||
Cash flows from financing activities: |
||||||||
Distributions |
(63,594 | ) | (63,482 | ) | ||||
Issuance of common units, net of issuance costs of $226 |
| 44,319 | ||||||
Proceeds from increase in long-term debt |
97,527 | 51,176 | ||||||
Reductions in long-term debt |
(91,721 | ) | (59,592 | ) | ||||
Net additions to short-term borrowings |
70,273 | 3,124 | ||||||
Cash paid for financing costs |
| (59 | ) | |||||
Minority interest activity |
(769 | ) | (768 | ) | ||||
Proceeds from exercise of common unit options |
19 | 875 | ||||||
Cash contribution from general partner |
| 470 | ||||||
Net cash provided by (used in) financing activities |
11,735 | (23,937 | ) | |||||
Effect of exchange rate changes on cash |
(7 | ) | (116 | ) | ||||
Increase in cash and cash equivalents |
16,333 | 6,391 | ||||||
Cash and cash equivalents beginning of year |
20,685 | 16,525 | ||||||
Cash and cash equivalents end of period |
$ | 37,018 | $ | 22,916 | ||||
4
A. | Partnership organization and formation | |
Ferrellgas Partners, L.P. (Ferrellgas Partners) is a publicly traded limited partnership, owning an approximate 99% limited partner interest in Ferrellgas, L.P. (the operating partnership). Ferrellgas Partners and the operating partnership are collectively referred to as Ferrellgas. Ferrellgas, Inc. (the general partner), a wholly-owned subsidiary of Ferrell Companies, Inc. (Ferrell Companies), has retained a 1% general partner interest in Ferrellgas Partners and also holds an approximate 1% general partner interest in the operating partnership, representing an effective 2% general partner interest in Ferrellgas on a combined basis. As general partner, it performs all management functions required by Ferrellgas. At January 31, 2008 Ferrell Companies beneficially owns 20.3 million of Ferrellgas Partners outstanding common units. | ||
Ferrellgas Partners is a holding entity that conducts no operations and has two subsidiaries, Ferrellgas Partners Finance Corp. and the operating partnership. Ferrellgas Partners owns a 100% equity interest in Ferrellgas Partners Finance Corp., whose only business activity is to act as the co-issuer and co-obligor of any debt issued by Ferrellgas Partners. The operating partnership is the only operating subsidiary of Ferrellgas Partners. | ||
The condensed consolidated financial statements of Ferrellgas reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the interim periods presented. All adjustments to the condensed consolidated financial statements were of a normal, recurring nature. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with (i) the section entitled Managements Discussion and Analysis of Financial Condition and Results of Operations, and (ii) the consolidated financial statements and accompanying notes, each as set forth in Ferrellgas Annual Report on Form 10-K for fiscal 2007. | ||
B. | Summary of significant accounting policies | |
(1) Nature of operations: | ||
The operating partnership is engaged primarily in the distribution of propane and related equipment and supplies in the United States. The propane distribution market is seasonal because propane is used primarily for heating in residential and commercial buildings. Therefore, the results of operations for the six months ended January 31, 2008 and 2007 are not necessarily indicative of the results to be expected for a full fiscal year. We have approximately 1 million customers. These customers include residential, industrial/commercial, portable tank exchange, agricultural and other customers in all 50 states, the District of Columbia and Puerto Rico. | ||
(2) Accounting estimates: | ||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from these estimates. Significant estimates impacting the condensed consolidated financial statements include accruals that have been established for contingent liabilities, pending claims and legal actions arising in the normal course of business, useful lives of property, plant and equipment assets, residual values of tanks, capitalization of customer tank installation costs, amortization methods of intangible assets, and valuation methods |
5
used to value sales returns and allowances, allowance for doubtful accounts, derivative commodity contracts and stock and unit-based compensation calculations. | ||
(3) Supplemental cash flow information: |
For the six months ended | ||||||||
January 31, | ||||||||
2008 | 2007 | |||||||
CASH PAID FOR: |
||||||||
Interest |
$ | 46,978 | $ | 45,024 | ||||
Income taxes |
$ | 1,279 | $ | 1,765 | ||||
NON-CASH INVESTING ACTIVITIES: |
||||||||
Issuance of common units in connection
with acquisitions |
$ | 0 | $ | 2,751 | ||||
Assumption of liabilities in connection
with acquisitions |
$ | 0 | $ | 2,331 | ||||
Property, plant and equipment additions |
$ | 2,132 | $ | 1,718 |
(4) New accounting standards: | ||
Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007. Ferrellgas is currently evaluating the potential impact of this statement. | ||
SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, provides entities the irrevocable option to elect to carry most financial assets and liabilities at fair value with changes in fair value recorded in earnings. This statement is effective for fiscal years beginning after November 15, 2007. Ferrellgas is currently evaluating the potential impact of this statement. | ||
FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109 provides a recognition threshold and measurement attribute for the recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on derecognition, classification, treatment of interest and penalties, and disclosure. The adoption of this interpretation during fiscal 2008 did not have a significant impact to Ferrellgas. | ||
SFAS No. 141(R) Business Combinations (a replacement of SFAS No. 141, Business Combinations) establishes principles and requirements for how the acquirer in a business combination recognizes and measures the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree, how the acquirer recognizes and measures goodwill or a gain from a bargain purchase (formerly negative goodwill) and how the acquirer determines what information to disclose. This statement is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Ferrellgas is currently evaluating the potential impact of this statement. | ||
SFAS No. 160 Noncontrolling Interests in Consolidated Financial Statements establishes accounting and reporting standards for the noncontrolling interest (formerly minority interest) in a subsidiary and for the deconsolidation of a subsidiary and it clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity. This Statement is effective for fiscal years beginning on or after December 15, 2008. Ferrellgas is currently evaluating the potential impact of this statement. |
6
(5) Income taxes: |
For the three months | For the six months ended | |||||||||||||||
ended January 31, | January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Current expense |
$ | 670 | $ | 1,418 | $ | 357 | $ | 1,399 | ||||||||
Deferred expense (benefit) |
(206 | ) | 254 | (2,381 | ) | 483 | ||||||||||
Income tax expense (benefit) |
$ | 464 | $ | 1,672 | $ | (2,024 | ) | $ | 1,882 | |||||||
Deferred taxes consisted of the following: |
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
Deferred tax assets |
$ | 4,722 | $ | 1,718 | ||||
Deferred tax liabilities |
(4,618 | ) | (4,000 | ) |
During the first quarter of fiscal 2008 the Governor of the State of Michigan signed into law a one time credit for a previously passed Michigan Business Tax law. The passing of this new tax law caused Ferrellgas to recognize a one time deferred tax benefit of $2.8 million during fiscal 2008. | ||
C. | Supplemental financial statement information | |
Inventories consist of: |
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
Propane gas and related products |
$ | 160,791 | $ | 89,769 | ||||
Appliances, parts and supplies |
20,630 | 24,038 | ||||||
$ | 181,421 | $ | 113,807 | |||||
In addition to inventories on hand, Ferrellgas enters into contracts primarily to buy propane for supply procurement purposes. Most of these contracts have terms of less than one year and call for payment based on market prices at the date of delivery. All fixed price contracts have terms of fewer than 24 months. As of January 31, 2008, Ferrellgas had committed, for supply procurement purposes, to take net delivery of approximately 21.0 million gallons of propane at fixed prices. |
Loss on disposal of assets and other consist of: |
For the three months | For the six months | |||||||||||||||
ended January 31, | ended January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Loss on disposal of assets |
$ | 912 | $ | 810 | $ | 2,015 | $ | 2,464 | ||||||||
Loss on transfer of accounts receivable
related to the accounts receivable
securitization |
3,947 | 3,770 | 5,815 | 5,784 | ||||||||||||
Service income related to the accounts
receivable securitization |
(1,179 | ) | (1,088 | ) | (1,763 | ) | (1,753 | ) | ||||||||
$ | 3,680 | $ | 3,492 | $ | 6,067 | $ | 6,495 | |||||||||
7
Shipping and handling expenses are classified in the following condensed consolidated statements of earnings line items: |
For the three months | For the six months | |||||||||||||||
ended January 31, | ended January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Operating expense |
$ | 46,571 | $ | 46,153 | $ | 83,021 | $ | 77,395 | ||||||||
Depreciation and amortization expense |
1,236 | 1,336 | 2,532 | 2,725 | ||||||||||||
Equipment lease expense |
5,686 | 5,748 | 11,531 | 11,659 | ||||||||||||
$ | 53,493 | $ | 53,237 | $ | 97,084 | $ | 91,779 | |||||||||
Other current liabilities consist of: |
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
Accrued interest |
$ | 20,590 | $ | 23,447 | ||||
Accrued payroll |
12,155 | 16,680 | ||||||
Accrued Insurance |
12,224 | 11,602 | ||||||
Customer deposits and advances |
20,735 | 21,018 | ||||||
Other |
34,726 | 34,452 | ||||||
$ | 100,430 | $ | 107,199 | |||||
D. | Accounts receivable securitization | |
The operating partnership transfers certain of its trade accounts receivable to Ferrellgas Receivables, LLC (Ferrellgas Receivables), a wholly-owned unconsolidated, special purpose entity, and retains an interest in a portion of these transferred receivables. As these transferred receivables are subsequently collected and the funding from the accounts receivable securitization facility is reduced, the operating partnerships retained interest in these receivables is reduced. The accounts receivable securitization facility consisted of the following: |
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
Retained interest |
$ | 37,256 | $ | 14,022 | ||||
Accounts receivable transferred |
$ | 200,000 | $ | 76,250 |
The retained interest was classified as accounts and notes receivable on the condensed consolidated balance sheets. The operating partnership had fully utilized the accounts receivable securitization facilitys capacity as of January 31, 2008. | ||
Other accounts receivable securitization disclosures consist of the following items: |
For the three months | For the six months ended | |||||||||||||||
ended January 31, | January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Net non-cash activity |
$ | 2,768 | $ | 965 | $ | 4,052 | $ | 1,582 | ||||||||
Bad debt expense |
$ | | $ | 61 | $ | | $ | 202 |
The net non-cash activity reported in the condensed consolidated statements of earnings approximates the financing cost of issuing commercial paper backed by these accounts receivable plus an allowance for doubtful accounts associated with the outstanding receivables transferred to Ferrellgas Receivables. The weighted average discount rate used to value the retained interest in the transferred receivables was 5.2% and 5.3% as of January 31, 2008 and July 31, 2007, respectively. |
8
E. | Long-term debt | |
Long-term debt consists of: |
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
Senior notes |
||||||||
Fixed rate, Series C-E, ranging from 7.12% to 7.42% due 2008-2013 |
$ | 204,000 | $ | 204,000 | ||||
Fixed rate, 8.75%, due 2012, net of unamortized premium |
269,661 | 269,851 | ||||||
Fixed rate, Series C, 8.87%, due 2009 |
73,000 | 163,000 | ||||||
Fixed rate, 6.75% due 2014, net of unamortized discount |
249,439 | 249,391 | ||||||
Credit facilities, variable interest rates, expiring 2009 and 2010
(net of $128.1 million and $57.8 million classified as short-term
borrowings at January 31, 2008 and July 31, 2007 respectively) |
217,548 | 120,021 | ||||||
Notes payable, due 2008 to 2016, net of unamortized discount |
6,936 | 8,395 | ||||||
Capital lease obligations |
39 | 50 | ||||||
1,020,623 | 1,014,708 | |||||||
Less: current portion, included in other current liabilities
on the condensed consolidated balance sheets |
2,758 | 2,957 | ||||||
$ | 1,017,865 | $ | 1,011,751 | |||||
During August 2007, Ferrellgas made scheduled principal payments of $90.0 million of the 8.78% Series B senior notes using proceeds from borrowings on the unsecured bank credit facilities. | ||
Unsecured bank credit facilities | ||
As of January 31, 2008, Ferrellgas had total borrowings outstanding under the unsecured bank credit facilities of $345.6 million. Ferrellgas classified $128.1 million of this amount as short term borrowings since it was used to fund working capital needs that management intends to pay down within the next 12 months. These borrowings have a weighted average interest rate of 6.77%. As of July 31, 2007, Ferrellgas had total borrowings outstanding under the unsecured bank credit facilities of $177.8 million. Ferrellgas classified $57.8 million of this amount as short term borrowings since it was used to fund working capital needs that management had intended to pay down within the following 12 months. These borrowings had a weighted average interest rate of 7.21%. | ||
F. | Partners capital | |
Partnership distributions | ||
Ferrellgas Partners has paid the following distributions: |
For the three months | For the six months | |||||||||||||||
ended January 31, | ended January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Public common unit holders |
$ | 19,169 | $ | 19,113 | $ | 38,339 | $ | 38,227 | ||||||||
Ferrell Companies (1) |
10,040 | 10,040 | 20,081 | 20,081 | ||||||||||||
FCI Trading Corp. (2) |
98 | 98 | 196 | 196 | ||||||||||||
Ferrell Propane, Inc. (3) |
26 | 26 | 51 | 51 | ||||||||||||
James E. Ferrell (4) |
2,146 | 2,146 | 4,292 | 4,292 | ||||||||||||
General partner |
318 | 318 | 635 | 635 | ||||||||||||
$ | 31,797 | $ | 31,741 | $ | 63,594 | $ | 63,482 | |||||||||
9
(1) | Ferrell Companies is the owner of the general partner and a 32% owner of Ferrellgas common units and thus a related party. | |
(2) | FCI Trading Corp. (FCI Trading) is an affiliate of the general partner and thus a related party. | |
(3) | Ferrell Propane, Inc. (Ferrell Propane) is controlled by the general partner and thus a related party. | |
(4) | James E. Ferrell (Mr. Ferrell) is the Chairman and Chief Executive Officer of the general partner and thus a related party. |
On February 26, 2008, Ferrellgas Partners declared a cash distribution of $0.50 per common unit for the three months ended January 31, 2008, which is expected to be paid on March 14, 2007. Included in this cash distribution are the following amounts expected to be paid to related parties: |
Ferrell Companies |
$ | 10,040 | ||
FCI Trading Corp. |
98 | |||
Ferrell Propane, Inc. |
26 | |||
James E. Ferrell |
2,157 | |||
General partner |
318 |
See additional discussions about transactions with related parties in Note G Transactions with related parties. | ||
G. | Transactions with related parties | |
Reimbursable costs | ||
Ferrellgas has no employees and is managed and controlled by its general partner. Pursuant to Ferrellgas partnership agreements, the general partner is entitled to reimbursement for all direct and indirect expenses incurred or payments it makes on behalf of Ferrellgas, and all other necessary or appropriate expenses allocable to Ferrellgas or otherwise reasonably incurred by its general partner in connection with operating Ferrellgas business. These costs primarily include compensation and benefits paid to employees of the general partner who perform services on Ferrellgas behalf and are reported in the condensed consolidated statements of earnings as follows: |
For the three months | For the six months | |||||||||||||||
ended January 31, | ended January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Operating expense |
$ | 46,494 | $ | 54,186 | $ | 91,923 | $ | 103,511 | ||||||||
General and administrative expense |
6,436 | 5,586 | 13,432 | 11,297 |
See additional discussions about transactions with related parties in Note F Partners capital. | ||
H. | Contingencies | |
Ferrellgas operations are subject to all operating hazards and risks normally incidental to handling, storing, transporting and otherwise providing for use by consumers of combustible liquids such as propane. As a result, at any given time, Ferrellgas is threatened with or named as a defendant in various lawsuits arising in the ordinary course of business. Currently, Ferrellgas is not a party to any legal proceedings other than various claims and lawsuits arising in the ordinary course of business. It is not possible to determine the ultimate disposition of these matters; however, management is of the opinion that there are no known claims or contingent claims that are reasonably expected to have a material adverse effect on the condensed consolidated financial condition, results of operations and cash flows of Ferrellgas. |
10
I. | Earnings per common unit |
Below is a calculation of the basic and diluted earnings per common unit in the condensed consolidated statements of earnings for the periods indicated. In accordance with EITF 03-6, Participating Securities and the Two-Class Method under FASB Statement No. 128, Earnings per Share (EITF 03-6), Ferrellgas calculates 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 been 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 the 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 impact the three months ending January 31. The dilutive effect of EITF 03-6 on basic and diluted net earnings available per common unit was $0.05 and $0.09 for the three months ended January 31, 2008 and 2007, respectively. EITF 03-6 did not result in a dilutive effect for the six months ended January 31, 2008 and 2007. | ||
In periods with year-to-date net losses the allocation of the net losses to the limited partners and the general partner will be determined based on the same allocation basis specified in the Ferrellgas Partners partnership agreement that would apply to periods in which there were no undistributed earnings. Ferrellgas typically incurs net losses in the three month period ended October 31. |
For the three months | For the six months | |||||||||||||||
ended January 31, | ended January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Net earnings available to common
unitholders |
$ | 47,541 | $ | 52,932 | $ | 28,015 | $ | 29,379 | ||||||||
Weighted average common units
outstanding (in thousands) |
62,958.7 | 62,884.2 | 62,958.7 | 62,561.4 | ||||||||||||
Dilutive securities |
12.6 | 15.7 | 13.3 | 18.1 | ||||||||||||
Weighted average common units
outstanding plus dilutive
securities |
62,971.3 | 62,899.9 | 62,972.0 | 62,579.5 | ||||||||||||
Basic and diluted net earnings
available per common unit |
$ | 0.76 | $ | 0.84 | $ | 0.44 | $ | 0.47 |
11
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
ASSETS |
||||||||
Cash |
$ | 1,000 | $ | 1,000 | ||||
Total assets |
$ | 1,000 | $ | 1,000 | ||||
STOCKHOLDERS EQUITY |
||||||||
Common stock, $1.00 par value; 2,000 shares
authorized; 1,000 shares issued and outstanding |
$ | 1,000 | $ | 1,000 | ||||
Additional paid in capital |
4,262 | 4,157 | ||||||
Accumulated deficit |
(4,262 | ) | (4,157 | ) | ||||
Total stockholders equity |
$ | 1,000 | $ | 1,000 | ||||
For the three months ended | For the six months ended | |||||||||||||||
January 31, | January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
General and administrative expense |
$ | 60 | $ | | $ | 105 | $ | 45 | ||||||||
Net loss |
$ | (60 | ) | $ | | $ | (105 | ) | $ | (45 | ) | |||||
12
For the six months ended | ||||||||
January 31, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (105 | ) | $ | (45 | ) | ||
Cash used in operating activities |
(105 | ) | (45 | ) | ||||
Cash flows from financing activities: |
||||||||
Capital contribution |
105 | 45 | ||||||
Cash provided by financing activities |
105 | 45 | ||||||
Change in cash |
| | ||||||
Cash beginning of period |
1,000 | 1,000 | ||||||
Cash end of period |
$ | 1,000 | $ | 1,000 | ||||
A. | Formation | |
Ferrellgas Partners Finance Corp. (the Finance Corp.), a Delaware corporation, was formed on March 28, 1996, and is a wholly-owned subsidiary of Ferrellgas Partners, L.P (the Partnership). | ||
The condensed financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the interim periods presented. All adjustments to the condensed financial statements were of a normal, recurring nature. | ||
The Finance Corp. has nominal assets, does not conduct any operations, has no employees and serves as co-issuer and co-obligor for debt securities of the Partnership. |
13
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 36,860 | $ | 20,407 | ||||
Accounts and notes receivable, net |
169,074 | 118,320 | ||||||
Inventories |
181,421 | 113,807 | ||||||
Prepaid expenses and other current assets |
26,058 | 16,103 | ||||||
Total current assets |
413,413 | 268,637 | ||||||
Property, plant and equipment, net |
696,586 | 720,190 | ||||||
Goodwill |
249,145 | 249,481 | ||||||
Intangible assets, net |
235,644 | 246,283 | ||||||
Other assets, net |
17,447 | 15,360 | ||||||
Total assets |
$ | 1,612,235 | $ | 1,499,951 | ||||
LIABILITIES AND PARTNERS CAPITAL |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 135,302 | $ | 62,103 | ||||
Short-term borrowings |
128,052 | 57,779 | ||||||
Other current liabilities |
97,179 | 104,018 | ||||||
Total current liabilities |
360,533 | 223,900 | ||||||
Long-term debt |
748,204 | 741,900 | ||||||
Other liabilities |
23,481 | 22,795 | ||||||
Contingencies and commitments (Note H) |
| | ||||||
Partners capital |
||||||||
Limited partner |
473,614 | 501,501 | ||||||
General partner |
4,834 | 5,119 | ||||||
Accumulated other comprehensive income |
1,569 | 4,736 | ||||||
Total partners capital |
480,017 | 511,356 | ||||||
Total liabilities and partners capital |
$ | 1,612,235 | $ | 1,499,951 | ||||
14
For the three months | For the six months ended | |||||||||||||||
ended January 31, | January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenues: |
||||||||||||||||
Propane and other gas liquids sales |
$ | 684,456 | $ | 581,997 | $ | 1,043,391 | $ | 926,916 | ||||||||
Other |
79,512 | 80,776 | 115,493 | 112,270 | ||||||||||||
Total revenues |
763,968 | 662,773 | 1,158,884 | 1,039,186 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Cost of product sold propane and other gas liquids sales |
504,524 | 380,009 | 757,043 | 614,695 | ||||||||||||
Cost of product sold other |
48,422 | 55,301 | 59,382 | 69,921 | ||||||||||||
Operating expense |
90,958 | 99,782 | 181,354 | 189,730 | ||||||||||||
Depreciation and amortization expense |
21,075 | 22,035 | 42,440 | 43,691 | ||||||||||||
General and administrative expense |
11,115 | 9,963 | 22,908 | 21,048 | ||||||||||||
Equipment lease expense |
6,143 | 6,454 | 12,494 | 13,098 | ||||||||||||
Employee stock ownership plan compensation charge |
3,072 | 2,739 | 6,246 | 5,580 | ||||||||||||
Loss on disposal of assets and other |
3,680 | 3,492 | 6,067 | 6,495 | ||||||||||||
Operating income |
74,979 | 82,998 | 70,950 | 74,928 | ||||||||||||
Interest expense |
(16,917 | ) | (16,403 | ) | (33,277 | ) | (32,809 | ) | ||||||||
Interest income |
181 | 920 | 998 | 1,890 | ||||||||||||
Earnings before income taxes |
58,243 | 67,515 | 38,671 | 44,009 | ||||||||||||
Income tax expense (benefit) |
389 | 1,672 | (2,099 | ) | 1,882 | |||||||||||
Net earnings |
$ | 57,854 | $ | 65,843 | $ | 40,770 | $ | 42,127 | ||||||||
15
Accumulated other | ||||||||||||||||||||||||
comprehensive income | ||||||||||||||||||||||||
Currency | Total | |||||||||||||||||||||||
Limited | General | Risk | translation | Pension | partners | |||||||||||||||||||
partner | partner | management | adjustments | liability | capital | |||||||||||||||||||
July 31, 2007 |
$ | 501,501 | $ | 5,119 | $ | 5,055 | $ | 30 | $ | (349 | ) | $ | 511,356 | |||||||||||
Contributions in connection with
ESOP and stock-based compensation charges |
7,074 | 72 | | | | 7,146 | ||||||||||||||||||
Distribution |
(75,319 | ) | (769 | ) | | | | (76,088 | ) | |||||||||||||||
Comprehensive income (loss): |
||||||||||||||||||||||||
Net earnings |
40,358 | 412 | | | | 40,770 | ||||||||||||||||||
Other comprehensive income (loss): |
||||||||||||||||||||||||
Net earnings on risk management derivatives |
| | (5,055 | ) | | | ||||||||||||||||||
Reclassification of derivatives to earnings |
| | 1,856 | | | |||||||||||||||||||
Foreign currency translation adjustment |
| | | (12 | ) | | ||||||||||||||||||
Tax effect on foreign currency translation adjustment |
| | | 5 | | |||||||||||||||||||
Pension liability adjustment |
| | | | 39 | (3,167 | ) | |||||||||||||||||
Comprehensive income |
37,603 | |||||||||||||||||||||||
January 31, 2008 |
$ | 473,614 | $ | 4,834 | $ | 1,856 | $ | 23 | $ | (310 | ) | $ | 480,017 | |||||||||||
16
For the six months ended | ||||||||
January 31, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: |
||||||||
Net earnings |
$ | 40,770 | $ | 42,127 | ||||
Reconciliation of net earnings to net cash provided by
operating activities: |
||||||||
Depreciation and amortization expense |
42,440 | 43,691 | ||||||
Employee stock ownership plan compensation charge |
6,246 | 5,580 | ||||||
Stock-based compensation charge |
900 | 666 | ||||||
Loss on disposal of assets |
2,015 | 2,464 | ||||||
Loss on transfer of accounts receivable related to the
accounts receivable securitization |
5,815 | 5,784 | ||||||
Deferred tax expense (benefit) |
(2,381 | ) | 483 | |||||
Other |
4,833 | 659 | ||||||
Changes in operating assets and liabilities, net of effects
from business acquisitions: |
||||||||
Accounts and notes receivable, net of securitization |
(156,542 | ) | (105,264 | ) | ||||
Inventories |
(70,000 | ) | 14,396 | |||||
Prepaid expenses and other current assets |
(12,848 | ) | (5,203 | ) | ||||
Accounts payable |
72,253 | 22,638 | ||||||
Accrued interest expense |
(2,857 | ) | (1,501 | ) | ||||
Other current liabilities |
(3,905 | ) | (22,189 | ) | ||||
Other liabilities |
159 | 1,166 | ||||||
Accounts receivable securitization: |
||||||||
Proceeds from new accounts receivable securitizations |
103,000 | 93,000 | ||||||
Proceeds from collections reinvested in revolving
period accounts receivable securitizations |
671,536 | 622,251 | ||||||
Remittances of amounts collected as servicer of
accounts receivable securitizations |
(675,536 | ) | (632,251 | ) | ||||
Net cash provided by operating activities |
25,898 | 88,497 | ||||||
Cash flows from investing activities: |
||||||||
Business acquisitions, net of cash acquired |
(187 | ) | (30,937 | ) | ||||
Capital expenditures |
(15,289 | ) | (18,202 | ) | ||||
Proceeds from asset sales |
6,250 | 5,506 | ||||||
Other |
(203 | ) | (2,640 | ) | ||||
Net cash used in investing activities |
(9,429 | ) | (46,273 | ) | ||||
Cash flows from financing activities: |
||||||||
Distributions |
(76,088 | ) | (75,975 | ) | ||||
Contributions from partners |
| 46,570 | ||||||
Proceeds from increase in long-term debt |
97,527 | 51,176 | ||||||
Reductions in long-term debt |
(91,721 | ) | (59,592 | ) | ||||
Net additions to short-term borrowings |
70,273 | 3,124 | ||||||
Cash paid for financing costs |
| (15 | ) | |||||
Net cash used in financing activities |
(9 | ) | (34,712 | ) | ||||
Effect of exchange rate changes on cash |
(7 | ) | (116 | ) | ||||
Increase in cash and cash equivalents |
16,453 | 7,396 | ||||||
Cash and cash equivalents beginning of period |
20,407 | 14,875 | ||||||
Cash and cash equivalents end of period |
$ | 36,860 | $ | 22,271 | ||||
17
A. | Partnership organization and formation | |
Ferrellgas, L.P. is a limited partnership that owns and operates propane distribution and related assets. Ferrellgas Partners, L.P. (Ferrellgas Partners), a publicly traded limited partnership, owns an approximate 99% limited partner interest in, and consolidates, Ferrellgas, L.P. Ferrellgas, Inc. (the general partner), a wholly-owned subsidiary of Ferrell Companies, Inc. (Ferrell Companies), holds an approximate 1% general partner interest in Ferrellgas, L.P. and performs all management functions required by Ferrellgas, L.P. | ||
Ferrellgas, L.P. owns a 100% equity interest in Ferrellgas Finance Corp. whose only business activity is to act as the co-issuer and co-obligor of any debt issued by Ferrellgas, L.P. | ||
The condensed consolidated financial statements of Ferrellgas, L.P. and subsidiaries reflect all adjustments, that are, in the opinion of management, necessary for a fair statement of the interim periods presented. All adjustments to the condensed consolidated financial statements were of a normal, recurring nature. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with (i) the section entitled Managements Discussion and Analysis of Financial Condition and Results of Operations and (ii) the consolidated financial statements and accompanying notes, each as set forth in Ferrellgas, L.P.s Annual Report on Form 10-K for fiscal 2007. | ||
B. | Summary of significant accounting policies | |
(1) Nature of operations: | ||
Ferrellgas, L.P. is engaged primarily in the distribution of propane and related equipment and supplies in the United States. The propane distribution market is seasonal because propane is used primarily for heating in residential and commercial buildings. Therefore, the results of operations for the six months ended January 31, 2008 and 2007 are not necessarily indicative of the results to be expected for a full fiscal year. We have approximately 1 million customers. These customers include residential, industrial/commercial, portable tank exchange, agricultural and other customers in all 50 states, the District of Columbia and Puerto Rico. | ||
(2) Accounting estimates: | ||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from these estimates. Significant estimates impacting the condensed consolidated financial statements include accruals that have been established for contingent liabilities, pending claims and legal actions arising in the normal course of business, useful lives of property, plant and equipment assets, residual values of tanks, capitalization of customer tank installation costs, amortization methods of intangible assets, and valuation methods used to value sales returns and allowances, allowance for doubtful accounts, derivative commodity contracts and stock and unit-based compensation calculations. |
18
(3) Supplemental cash flow information: |
For the six months ended | ||||||||
January 31, | ||||||||
2008 | 2007 | |||||||
CASH PAID FOR: |
||||||||
Interest |
$ | 35,244 | $ | 33,299 | ||||
Income taxes |
$ | 1,279 | $ | 1,765 | ||||
NON-CASH INVESTING ACTIVITIES: |
||||||||
Assets contributed from Ferrellgas
Partners in connection with acquisitions |
$ | 0 | $ | 2,009 | ||||
Issuance of liabilities in connection
with acquisitions |
$ | 0 | $ | 2,331 | ||||
Property, plant and equipment additions |
$ | 2,132 | $ | 1,718 |
(4) New accounting standards: | ||
Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007. Ferrellgas, L.P. is currently evaluating the potential impact of this statement. | ||
SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, provides entities the irrevocable option to elect to carry most financial assets and liabilities at fair value with changes in fair value recorded in earnings. This statement is effective for fiscal years beginning after November 15, 2007. Ferrellgas, L.P. is currently evaluating the potential impact of this statement. | ||
FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109 provides a recognition threshold and measurement attribute for the recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on derecognition, classification, treatment of interest and penalties, and disclosure. The adoption of this interpretation during fiscal 2008 did not have a significant impact to Ferrellgas, L.P. | ||
SFAS No. 141(R) Business Combinations (a replacement of SFAS No. 141, Business Combinations) establishes principles and requirements for how the acquirer in a business combination recognizes and measures the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree, how the acquirer recognizes and measures goodwill or a gain from a bargain purchase (formerly negative goodwill) and how the acquirer determines what information to disclose. This statement is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Ferrellgas, L.P. is currently evaluating the potential impact of this statement. | ||
SFAS No. 160 Noncontrolling Interests in Consolidated Financial Statements establishes accounting and reporting standards for the noncontrolling interest (formerly minority interest) in a subsidiary and for the deconsolidation of a subsidiary and it clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity. This Statement is effective for fiscal years beginning on or after December 15, 2008. Ferrellgas, L.P. is currently evaluating the potential impact of this statement. |
19
(5) Income taxes: |
For the three months | For the six months | |||||||||||||||
ended January 31, | ended January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Current expense |
$ | 595 | $ | 1,418 | $ | 282 | $ | 1,399 | ||||||||
Deferred expense (benefit) |
(206 | ) | 254 | (2,381 | ) | 483 | ||||||||||
Income tax expense (benefit) |
$ | 389 | $ | 1,672 | $ | (2,099 | ) | $ | 1,882 | |||||||
Deferred taxes consisted of the following: |
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
Deferred tax assets |
$ | 4,722 | $ | 1,718 | ||||
Deferred tax liabilities |
(4,618 | ) | (4,000 | ) |
During the first quarter of fiscal 2008 the Governor of the State of Michigan signed into law a one time credit for a previously passed Michigan Business Tax law. The passing of this new tax law caused Ferrellgas, L.P. to recognize a one time deferred tax benefit of $2.8 million during fiscal 2008. |
C. | Supplemental financial statement information | |
Inventories consist of: |
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
Propane gas and related products |
$ | 160,791 | $ | 89,769 | ||||
Appliances, parts and supplies |
20,630 | 24,038 | ||||||
$ | 181,421 | $ | 113,807 | |||||
In addition to inventories on hand, Ferrellgas, L.P. enters into contracts primarily to buy propane for supply procurement purposes. Most of these contracts have terms of less than one year and call for payment based on market prices at the date of delivery. All fixed price contracts have terms of fewer than 24 months. As of January 31, 2008, Ferrellgas, L.P. had committed, for supply procurement purposes, to take net delivery of approximately 21.0 million gallons of propane at fixed prices. |
For the three months | For the six months | |||||||||||||||
ended January 31, | ended January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Loss on disposal of assets |
$ | 912 | $ | 810 | $ | 2,015 | $ | 2,464 | ||||||||
Loss on transfer of accounts
receivable related to the
accounts receivable securitization |
3,947 | 3,770 | 5,815 | 5,784 | ||||||||||||
Service income related to the accounts
receivable securitization |
(1,179 | ) | (1,088 | ) | (1,763 | ) | (1,753 | ) | ||||||||
$ | 3,680 | $ | 3,492 | $ | 6,067 | $ | 6,495 | |||||||||
20
Shipping and handling expenses are classified in the following condensed consolidated statements of earnings line items: |
For the three months | For the six months | |||||||||||||||
ended January 31, | ended January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Operating expense |
$ | 46,571 | $ | 46,153 | $ | 83,021 | $ | 77,395 | ||||||||
Depreciation and amortization expense |
1,236 | 1,336 | 2,532 | 2,725 | ||||||||||||
Equipment lease expense |
5,686 | 5,748 | 11,531 | 11,659 | ||||||||||||
$ | 53,493 | $ | 53,237 | $ | 97,084 | $ | 91,779 | |||||||||
Other current liabilities consist of: |
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
Accrued interest |
$ | 17,594 | $ | 20,451 | ||||
Accrued payroll |
12,155 | 16,680 | ||||||
Accrued Insurance |
12,224 | 11,602 | ||||||
Customer deposits and advances |
20,735 | 21,018 | ||||||
Other |
34,471 | 34,267 | ||||||
$ | 97,179 | $ | 104,018 | |||||
D. | Accounts receivable securitization | |
Ferrellgas, L.P. transfers certain of its trade accounts receivable to Ferrellgas Receivables, LLC (Ferrellgas Receivables), a wholly-owned unconsolidated, special purpose entity, and retains an interest in a portion of these transferred receivables. As these transferred receivables are subsequently collected and the funding from the accounts receivable securitization facility is reduced, Ferrellgas, L.P.s retained interest in these receivables is reduced. The accounts receivable securitization facility consisted of the following: |
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
Retained interest |
$ | 37,256 | $ | 14,022 | ||||
Accounts receivable transferred |
$ | 200,000 | $ | 76,250 |
The retained interest was classified as accounts and notes receivable on the condensed consolidated balance sheets. Ferrellgas, L.P. had fully utilized the accounts receivable securitization facilitys capacity as of January 31, 2008. | ||
Other accounts receivable securitization disclosures consist of the following items: |
For the three months | For the six months | |||||||||||||||
ended January 31, | ended January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Net non-cash activity |
$ | 2,768 | $ | 965 | $ | 4,052 | $ | 1,582 | ||||||||
Bad debt expense |
$ | | $ | 61 | $ | | $ | 202 |
The net non-cash activity reported in the condensed consolidated statements of earnings approximates the financing cost of issuing commercial paper backed by these accounts receivable plus an allowance for doubtful accounts associated with the outstanding receivables transferred to Ferrellgas Receivables. The weighted average discount rate used to value the retained interest in the transferred receivables was 5.2% and 5.3% as of January 31, 2008 and July 31, 2007, respectively. |
21
E. | Long-term debt | |
Long-term debt consists of: |
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
Senior notes |
||||||||
Fixed rate, Series C-E, ranging from 7.12% to 7.42% due 2008-2013 |
$ | 204,000 | $ | 204,000 | ||||
Fixed rate, Series C, 8.87%, due 2009 |
73,000 | 163,000 | ||||||
Fixed rate, 6.75% due 2014, net of unamortized discount |
249,439 | 249,391 | ||||||
Credit facilities, variable interest rates, expiring 2009 and 2010
(net of $128.1 million and $57.8 million classified as short-term
borrowings at January 31, 2008 and July 31, 2007 respectively) |
217,548 | 120,021 | ||||||
Notes payable, due 2008 to 2016, net of unamortized discount |
6,936 | 8,395 | ||||||
Capital lease obligations |
39 | 50 | ||||||
$ | 750,962 | $ | 744,857 | |||||
Less: current portion, included in other current liabilities
on the condensed consolidated balance sheets |
2,758 | 2,957 | ||||||
$ | 748,204 | $ | 741,900 | |||||
During August, 2007, Ferrellgas, L.P. made scheduled principal payments of $90.0 million of the 8.78% Series B Senior Notes using proceeds from borrowings on the unsecured bank credit facilities. | ||
Unsecured bank credit facilities | ||
As of January 31, 2008, Ferrellgas L.P. had total borrowings outstanding under the unsecured bank credit facilities of $345.6 million. Ferrellgas L.P. classified $128.1 million of this amount as short term borrowings since it was used to fund working capital needs that management intends to pay down within the next 12 months. These borrowings have a weighted average interest rate of 6.77%. As of July 31, 2007, Ferrellgas L.P. had total borrowings outstanding under the unsecured bank credit facilities of $177.8 million. Ferrellgas L.P. classified $57.8 million of this amount as short term borrowings since it was used to fund working capital needs that management had intended to pay down within the following 12 months. These borrowings had a weighted average interest rate of 7.21%. | ||
F. | Partners capital | |
Partnership distributions paid |
For the three months | For the six months | |||||||||||||||
ended January 31, | ended January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Ferrellgas Partners |
$ | 43,522 | $ | 43,466 | $ | 75,319 | $ | 75,207 | ||||||||
General partner |
444 | 444 | 769 | 768 | ||||||||||||
$ | 43,966 | $ | 43,910 | $ | 76,088 | $ | 75,975 | |||||||||
On February 26, 2008, Ferrellgas L.P. declared distributions to Ferrellgas Partners and the general partner of $31.8 million and $0.3 million, respectively. | ||
See additional discussions about transactions with related parties in Note G Transactions with related parties. |
22
G. | Transactions with related parties | |
Reimbursable costs | ||
Ferrellgas, L.P. has no employees and is managed and controlled by its general partner. Pursuant to Ferrellgas, L.P.s partnership agreement, the general partner is entitled to reimbursement for all direct and indirect expenses incurred or payments it makes on behalf of Ferrellgas, L.P., and all other necessary or appropriate expenses allocable to Ferrellgas, L.P. or otherwise reasonably incurred by its general partner in connection with operating Ferrellgas, L.P.s business. These costs primarily include compensation and benefits paid to employees of the general partner who perform services on Ferrellgas, L.P.s behalf and are reported in the condensed consolidated statements of earnings as follows: |
For the three months | For the six months | |||||||||||||||
ended January 31, | ended January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Operating expense |
$ | 46,494 | $ | 54,186 | $ | 91,923 | $ | 103,511 | ||||||||
General and administrative expense |
6,436 | 5,586 | 13,432 | 11,297 |
See additional discussions about transactions with related parties in Note F Partners capital | ||
H. | Contingencies | |
Ferrellgas, L.P.s operations are subject to all operating hazards and risks normally incidental to handling, storing, transporting and otherwise providing for use by consumers of combustible liquids such as propane. As a result, at any given time, Ferrellgas, L.P. is threatened with or named as a defendant in various lawsuits arising in the ordinary course of business. Currently, Ferrellgas, L.P. is not a party to any legal proceedings other than various claims and lawsuits arising in the ordinary course of business. It is not possible to determine the ultimate disposition of these matters; however, management is of the opinion that there are no known claims or contingent claims that are reasonably expected to have a material adverse effect on the condensed consolidated financial condition, results of operations and cash flows of Ferrellgas, L.P. |
23
January 31, | July 31, | |||||||
2008 | 2007 | |||||||
ASSETS |
||||||||
Cash |
$ | 1,100 | $ | 1,000 | ||||
Total assets |
$ | 1,100 | $ | 1,000 | ||||
STOCKHOLDERS EQUITY |
||||||||
Common stock, $1.00 par value; 2,000 shares
authorized; 1,000 shares issued and outstanding |
$ | 1,000 | $ | 1,000 | ||||
Additional paid in capital |
2,425 | 2,220 | ||||||
Accumulated deficit |
(2,325 | ) | (2,220 | ) | ||||
Total stockholders equity |
$ | 1,100 | $ | 1,000 | ||||
For the three months | For the six months ended | |||||||||||||||
ended January 31, | January 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
General and administrative expense |
$ | 105 | $ | | $ | 105 | $ | | ||||||||
Net loss |
$ | (105 | ) | $ | | $ | (105 | ) | $ | | ||||||
24
For the six months ended | |||||||||
January 31, | |||||||||
2008 | 2007 | ||||||||
Cash flows from operating activities: |
|||||||||
Net loss |
$ | (105 | ) | $ | | ||||
Cash used in operating activities |
(105 | ) | | ||||||
Cash flows from financing activities: |
|||||||||
Capital contribution |
205 | | |||||||
Cash provided by financing activities |
205 | | |||||||
Change in cash |
100 | | |||||||
Cash beginning of period |
1,000 | 1,000 | |||||||
Cash end of period |
$ | 1,100 | $ | 1,000 | |||||
A. | Formation | |
Ferrellgas Finance Corp. (the Finance Corp.), a Delaware corporation, was formed on January 16, 2003 and is a wholly-owned subsidiary of Ferrellgas, L.P (the Partnership). | ||
The condensed financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the interim periods presented. All adjustments to the condensed financial statements were of a normal, recurring nature. | ||
The Finance Corp. has nominal assets, does not conduct any operations, has no employees and serves as co-issuer and co-obligor for debt securities of the Partnership. |
25
ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
| us, we, our, or ours are references exclusively to Ferrellgas Partners, L.P. together with its consolidated subsidiaries, including Ferrellgas Partners Finance Corp., Ferrellgas, L.P. and Ferrellgas Finance Corp., except when used in connection with common units in which case these terms refer to Ferrellgas Partners, L.P. without its consolidated subsidiaries; | ||
| Ferrellgas Partners refers to Ferrellgas Partners, L.P. itself, without its consolidated subsidiaries; | ||
| the operating partnership refers to Ferrellgas, L.P., together with its consolidated subsidiaries, including Ferrellgas Finance Corp.; | ||
| our general partner refers to Ferrellgas, Inc.; | ||
| Ferrell Companies refers to Ferrell Companies, Inc., the sole shareholder of our general partner; | ||
| unitholders refers to holders of common units of Ferrellgas Partners; | ||
| customers refers to customers other than our wholesale customers or our other bulk propane distributors and marketers; | ||
| propane sales volumes refers to the volume of propane sold to our customers and excludes any volumes of propane sold to our wholesale customers and other bulk propane distributors or marketers; and | ||
| Notes refers to the notes to the condensed consolidated financial statements of Ferrellgas Partners or the operating partnership, as applicable. |
26
27
| maximize operating efficiencies through utilization of our technology platform; | ||
| capitalize on our national presence and economies of scale; | ||
| expand our operations through disciplined acquisitions and internal growth; and | ||
| align employee interests with our investors through significant employee ownership. |
| whether the operating partnership will have sufficient funds to meet its obligations, including its obligations under its debt securities, and to enable it to distribute to Ferrellgas Partners sufficient funds to permit Ferrellgas Partners to meet its obligations with respect to its existing debt and equity securities; | ||
| whether Ferrellgas Partners and the operating partnership will continue to meet all of the quarterly financial tests required by the agreements governing their indebtedness; and | ||
| the expectation that higher propane prices will continue and that temperatures for the remaining winter heating season will be normal causing revenues propane and other gas liquids sales, cost of product sold propane and other gas liquids sales to increase during the remainder of fiscal 2008 compared to our prior fiscal year. |
28
| because Ferrellgas Partners issued $268.0 million in aggregate principal amount of 8 3/4% senior secured notes due fiscal 2012 during fiscal 2004 and 2003, the two partnerships incur different amounts of interest expense on their outstanding indebtedness; see the statements of earnings in their respective condensed consolidated financial statements; and | ||
| Ferrellgas Partners issued common units in several transactions during fiscal 2007. |
(amounts in thousands) | Favorable | |||||||||||||||
(unfavorable) | ||||||||||||||||
Three months ended January 31, | 2008 | 2007 | Variance | |||||||||||||
Propane sales volumes (gallons) |
266,525 | 275,915 | (9,390 | ) | (3 | )% | ||||||||||
Propane and other gas liquids sales |
$ | 684,456 | $ | 581,997 | 102,459 | 18 | % | |||||||||
Gross margin from propane and
other gas liquids sales (a) |
179,932 | 201,988 | (22,056 | ) | (11 | )% | ||||||||||
Operating income |
74,917 | 82,936 | (8,019 | ) | (10 | )% | ||||||||||
Interest expense |
22,851 | 22,329 | (522 | ) | (2 | )% |
(a) | Gross margin from propane and other gas liquids sales represents Propane and other gas liquids sales less Cost of product sold propane and other gas liquids sales. |
29
(amounts in thousands) | Favorable | |||||||||||||||
(unfavorable) | ||||||||||||||||
Six months ended January 31, | 2008 | 2007 | Variance | |||||||||||||
Propane sales volumes (gallons) |
407,670 | 437,160 | (29,490 | ) | (7 | )% | ||||||||||
Propane and other gas liquids sales |
1,043,391 | $ | 926,916 | 116,475 | 13 | % | ||||||||||
Gross margin from propane and
other gas liquids sales (a) |
286,348 | 312,221 | (25,873 | ) | (8 | )% | ||||||||||
Operating income |
70,825 | 74,803 | (3,978 | ) | (5 | )% | ||||||||||
Interest expense |
45,137 | 44,709 | (428 | ) | (1 | )% |
(a) | Gross margin from propane and other gas liquids sales represents Propane and other gas liquids sales less Cost of product sold propane and other gas liquids sales. |
30
| our belief that higher propane prices will continue and that temperatures for the remaining winter heating season will be normal. |
31
| significantly warmer than normal winter temperatures; | ||
| a continued volatile energy commodity cost environment; | ||
| an unexpected downturn in business operations; or | ||
| a general economic downturn in the United States. |
32
| a shelf registration statement for the periodic sale of common units, debt securities and/or other securities. Ferrellgas Partners Finance Corp. may, at our election, be the co-issuer and co-obligor on any debt securities issued by Ferrellgas Partners under this shelf registration statement; | ||
| an acquisition shelf registration statement for the periodic sale of up to $250.0 million of common units to fund acquisitions. As of February 29, 2008 we had $240.0 million available under this shelf agreement; and | ||
| a shelf registration statement for the periodic sale of up to $200.0 million of common units in connection with the Ferrellgas Partners direct purchase and distribution reinvestment plan. As of February 29, 2008 we had $200.0 million available under this shelf agreement. |
33
34
| a base rate, which is defined as the higher of the federal funds rate plus 0.50% or Bank of Americas prime rate (as of January 31, 2008, the federal funds rate and Bank of Americas prime rate were 3.22% and 6.0%, respectively); or | |
| the Eurodollar Rate plus a margin varying from 1.50% to 2.50% (as of January 31, 2008, the one-month and three-month Eurodollar Rates were 3.15% and 3.15%, respectively). |
| a significant increase in the wholesale cost of propane; | |
| a significant delay in the collections of accounts receivable; | |
| increased volatility in energy commodity prices related to risk management activities; | |
| increased liquidity requirements imposed by insurance providers; | |
| a significant downgrade in our credit rating; | |
| decreased trade credit; or | |
| a significant acquisition. |
35
Distributions paid | ||||||||
Common unit | during the six | |||||||
ownership at | months ended | |||||||
January 31, 2008 | January 31, 2008 | |||||||
Ferrell Companies (1) |
20,081 | $ | 20,081 | |||||
FCI Trading Corp. (2) |
196 | 196 | ||||||
Ferrell Propane, Inc. (3) |
51 | 51 | ||||||
James E. Ferrell (4) |
4,314 | 4,292 |
(1) | Ferrell Companies is the sole shareholder of our general partner. | |
(2) | FCI Trading Corp. is an affiliate of the general partner and is wholly-owned by Ferrell Companies. | |
(3) | Ferrell Propane, Inc. is wholly-owned by our general partner. | |
(4) | James E. Ferrell (Mr. Ferrell) is the Chairman and Chief Executive Officer of our general partner. |
36
37
38
| Stephen L. Wambold, President and Chief Operating Officer, | ||
| Tod D. Brown, Vice President, Blue Rhino. | ||
| Eugene D. Caresia, Vice President, Human Resources, | ||
| Kevin T. Kelly, Senior Vice President and Chief Financial Officer, | ||
| George L. Koloroutis, Vice President, Ferrell North America, and | ||
| Patrick J. Walsh, Regional Vice President |
| Richard V. Mayberry, Vice President of Operations, and | ||
| James R. VanWinkle, Vice President, Finance and Corporate Development; Secretary. |
39
Exhibit | ||||
Number | Description | |||
3.1 | Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P., dated as of February 18, 2003. Incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed February 18, 2003. | |||
3.2 | First Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P., dated as of March 8, 2003. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed March 8, 2005. | |||
3.3 | Second Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P., dated as of June 29, 2005. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed June 30, 2005. | |||
3.4 | Third Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. dated as of October 11, 2006. Incorporated by reference to Exhibit 3.4 to our Annual Report on Form 10-K filed October 12, 2006. | |||
3.5 | Certificate of Incorporation for Ferrellgas Partners Finance Corp. Incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q filed December 16, 1996. | |||
3.6 | Bylaws of Ferrellgas Partners Finance Corp. Incorporated by reference to Exhibit 3.3 to our Quarterly Report on Form 10-Q filed June 13, 1997. | |||
3.7 | Third Amended and Restated Agreement of Limited Partnership of Ferrellgas, L.P., dated as of April 7, 2004. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed April 22, 2004. | |||
3.8 | Certificate of Incorporation of Ferrellgas Finance Corp. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Ferrellgas Partners, L.P. filed February 18, 2003. | |||
3.9 | Bylaws of Ferrellgas Finance Corp. Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Ferrellgas Partners, L.P. filed February 18, 2003. | |||
4.1 | Specimen Certificate evidencing Common Units representing Limited Partner Interests. Incorporated by reference to Exhibit A of Exhibit 4.3 to the Current Report on Form 8-K of Ferrellgas Partners, L.P. filed February 18, 2003. | |||
4.2 | Indenture dated as of September 24, 2002, with form of Note attached, among Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., and U.S. Bank National Association, as trustee, relating to $170,000,000 aggregate principal amount of the Registrants 8 3/4% Senior Notes due 2012. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed September 24, 2002. |
40
Exhibit | ||||
Number | Description | |||
4.3 | Indenture dated as of April 20, 2004, with form of Note attached, among Ferrellgas Escrow LLC and Ferrellgas Finance Escrow Corporation and U.S. Bank National Association, as trustee, relating to 6 3/4% Senior Notes due 2014. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed April 22, 2004. | |||
4.4 | Ferrellgas, L.P. Note Purchase Agreement, dated as of July 1, 1998, relating to: $109,000,000 6.99% Senior Notes, Series A, due August 1, 2005, $37,000,000 7.08% Senior Notes, Series B, due August 1, 2006, $52,000,000 7.12% Senior Notes, Series C, due August 1, 2008, $82,000,000 7.24% Senior Notes, Series D, due August 1, 2010, and $70,000,000 7.42% Senior Notes, Series E, due August 1, 2013. Incorporated by reference to Exhibit 4.4 to our Annual Report on Form 10-K filed October 29, 1998. | |||
4.5 | Ferrellgas, L.P. Note Purchase Agreement, dated as of February 28, 2000, relating to: $21,000,000 8.68% Senior Notes, Series A, due August 1, 2006, $90,000,000 8.78% Senior Notes, Series B, due August 1, 2007, and $73,000,000 8.87% Senior Notes, Series C, due August 1, 2009. Incorporated by reference to Exhibit 4.2 to our Quarterly Report on Form 10-Q filed March 16, 2000. | |||
4.6 | Registration Rights Agreement dated as of December 17, 1999, by and between Ferrellgas Partners, L.P. and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed December 29, 1999. | |||
4.7 | First Amendment to the Registration Rights Agreement dated as of March 14, 2000, by and between Ferrellgas Partners, L.P. and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q filed March 16, 2000. | |||
4.8 | Second Amendment to the Registration Rights Agreement dated as of April 6, 2001, by and between Ferrellgas Partners, L.P. and The Williams Companies, Inc. Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed April 6, 2001. | |||
4.9 | Third Amendment to the Registration Rights Agreement dated as of June 29, 2005, between JEF Capital Management, Inc. and Ferrellgas Partners, L.P. Incorporated by reference to Exhibit 10.1 to our Current Report of Form 8-K filed June 30, 2005. | |||
10.1 | Fifth Amended and Restated Credit Agreement dated as of April 22, 2005, by and among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America N.A., as administrative agent and swing line lender, and the lenders and L/C issuers party hereto. Incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q filed June 8, 2005. | |||
10.2 | Credit Agreement dated as of May 1, 2007, by and among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America N.A., as administrative agent. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed May 4, 2007. |
41
Exhibit | ||||
Number | Description | |||
10.3 | Lender Addendum dated as of June 6, 2006, by and among Deutsche Bank Trust Company Americas as the new lender, Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. and Bank of America, N.A., as Administrative Agent. Incorporated by reference to Exhibit 10.2 to our Annual Report on Form 10-K filed October 12, 2006. | |||
10.4 | Commitment Increase Agreement dated as of August 28, 2006, by and among Fifth Third Bank as the lender, Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. and Bank of America, N.A. as Administrative Agent. Incorporated by reference to Exhibit 10.3 to our Annual Report on Form 10-K filed October 12, 2006. | |||
10.5 | Amended and Restated Receivable Interest Sale Agreement dated June 7, 2005 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, L.L.C., as buyer. by reference to Exhibit 10.9 to our Quarterly Report on Form 10-Q filed June 8, 2005. | |||
10.6 | Amendment No. 1 to the Amended and Restated Receivable Interest Sale Agreement and Subordinated Note dated June 6, 2006 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, LLC, as buyer. Incorporated by reference to Exhibit 10.11 to our Quarterly Report on Form 10-Q filed on June 8, 2006. | |||
10.7 | Amendment No. 2 to the Amended and Restated Receivable Interest Sale Agreement dated June 6, 2006 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, LLC, as buyer. Incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K filed October 12, 2006. | |||
10.8 | Amendment No. 3 to the Amended and Restated Receivable Interest Sale Agreement dated May 31, 2007 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, LLC, as buyer. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K Filed June 1, 2007. | |||
10.9 | Second Amended and Restated Receivables Purchase Agreement dated as of June 6, 2006, by and among Ferrellgas Receivables, L.L.C., as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, Fifth Third Bank and JPMorgan Chase Bank, NA, as agent. Incorporated by reference to Exhibit 10.19 to our Quarterly Report on Form 10-Q filed June 8, 2006. | |||
10.10 | Amendment No. 1 to Second Amended and Restated Receivables Purchase Agreement dated August 18, 2006, by and among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, Fifth Third Bank and JPMorgan Chase Bank, NA, as agent. Incorporated by reference to Exhibit 99.2 to our Current Report on Form 8-K filed August 18, 2006. | |||
10.11 | Amendment No. 2 to Second Amended and Restated Receivables Purchase Agreement dated May 31, 2007, by and among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, Fifth Third Bank and JPMorgan Chase Bank, NA, as agent. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed June 1, 2007. | |||
# |
10.12 | Ferrell Companies, Inc. Supplemental Savings Plan, restated January 1, 2000. Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed February 18, 2003. |
42
Exhibit | ||||
Number | Description | |||
# |
10.13 | Second Amended and Restated Ferrellgas Unit Option Plan. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed June 5, 2001. | ||
# |
10.14 | Ferrell Companies, Inc. 1998 Incentive Compensation Plan, as amended and restated effective October 11, 2004. Incorporated by reference to Exhibit 10.23 to our Annual Report on Form 10-K filed October 13, 2004. | ||
# |
10.15 | Employment Agreement between James E. Ferrell and Ferrellgas, Inc., dated July 31, 1998. Incorporated by reference to Exhibit 10.13 to our Annual Report on Form 10-K filed October 29, 1998. | ||
# |
10.16 | Waiver to Employment, Confidentiality, and Non-Compete Agreement by and among Ferrell Companies, Inc., Ferrellgas, Inc., James E. Ferrell and Greatbanc Trust Company, dated as of December 19, 2006. Incorporated by reference to Exhibit 10.19 to our Quarterly Report on Form 10-Q filed March 9, 2007. | ||
# |
10.17 | Amended and Restated Employment Agreement dated October 11, 2004, by and among Ferrellgas, Inc., Ferrell Companies, Inc. and Billy D. Prim. Incorporated by reference to Exhibit 10.25 to our Annual Report on Form 10-K filed October 13, 2004. | ||
# |
10.18 | Separation Agreement and Release dated March 9, 2006 between Timothy E. Scronce and Ferrellgas, Inc. Incorporated by reference to Exhibit 10.28 to our Quarterly Report on Form 10-Q filed March 10, 2006. | ||
# |
10.19 | Agreement and Release dated as of May 11, 2006 by and among Jeffrey B. Ward, Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed June 22, 2006. | ||
# |
10.20 | Agreement and Release dated as of August 15, 2006 by and among Kenneth A. Heinz, Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P. Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed August 18, 2006. | ||
#* |
10.21 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Stephen L. Wambold and Ferrellgas, Inc. | ||
#* |
10.22 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Eugene D. Caresia and Ferrellgas, Inc. | ||
#* |
10.23 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Kevin T. Kelly and Ferrellgas, Inc. | ||
#* |
10.24 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between George L. Koloroutis and Ferrellgas, Inc. | ||
#* |
10.25 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Patrick J. Walsh and Ferrellgas, Inc | ||
#* |
10.26 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Tod D. Brown and Ferrellgas, Inc | ||
#* |
10.27 | Change In Control Agreement dated as of March 5, 2008 by and between James R. VanWinkle and Ferrellgas, Inc | ||
43
Exhibit | ||||
Number | Description | |||
#* |
10.28 | Change In Control Agreement dated as of March 5, 2008 by and between Richard V. Mayberry and Ferrellgas, Inc | ||
# |
10.29 | Change In Control Agreement dated as of October 9, 2006 by and between James E. Ferrell and Ferrellgas, Inc. Incorporated by reference to Exhibit 10.30 to our Annual Report on Form 10-K filed October 12, 2006. | ||
# |
10.30 | Agreement and release dated as of December 4, 2007 by and among Brian J. Kline, Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners L.P. and Ferrellgas L.P. Incorporated by reference to Exhibit 10.33 to our Quarterly Report on Form 10-Q filed December 6, 2007. | ||
* |
31.1 | Certification of Ferrellgas Partners, L.P. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. | ||
* |
31.2 | Certification of Ferrellgas Partners Finance Corp. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. | ||
* |
31.3 | Certification of Ferrellgas, L.P. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. | ||
* |
31.4 | Certification of Ferrellgas Finance Corp. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. | ||
* |
32.1 | Certification of Ferrellgas Partners, L.P. pursuant to 18 U.S.C. Section 1350. | ||
* |
32.2 | Certification of Ferrellgas Partners Finance Corp. pursuant to 18 U.S.C. Section 1350. | ||
* |
32.3 | Certification of Ferrellgas, L.P. pursuant to 18 U.S.C. Section 1350. | ||
* |
32.4 | Certification of Ferrellgas Finance Corp. pursuant to 18 U.S.C. Section 1350. |
* | Filed herewith | |
# | Management contracts or compensatory plans. |
44
FERRELLGAS PARTNERS, L.P. By Ferrellgas, Inc. (General Partner) |
||||
Date: March 7, 2008 | By | /s/ Kevin T. Kelly | ||
Kevin T. Kelly | ||||
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | ||||
FERRELLGAS PARTNERS FINANCE CORP. |
||||
Date: March 7, 2008 | By | /s/ Kevin T. Kelly | ||
Kevin T. Kelly | ||||
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | ||||
FERRELLGAS, L.P. By Ferrellgas, Inc. (General Partner) |
||||
Date: March 7, 2008 | By | /s/ Kevin T. Kelly | ||
Kevin T. Kelly | ||||
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | ||||
FERRELLGAS FINANCE CORP. |
||||
Date: March 7, 2008 | By | /s/ Kevin T. Kelly | ||
Kevin T. Kelly | ||||
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
45
Exhibit | ||||
Number | Description | |||
3.1 | Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P., dated as of February 18, 2003. Incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed February 18, 2003. | |||
3.2 | First Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P., dated as of March 8, 2003. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed March 8, 2005. | |||
3.3 | Second Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P., dated as of June 29, 2005. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed June 30, 2005. | |||
3.4 | Third Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. dated as of October 11, 2006. Incorporated by reference to Exhibit 3.4 to our Annual Report on Form 10-K filed October 12, 2006. | |||
3.5 | Certificate of Incorporation for Ferrellgas Partners Finance Corp. Incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q filed December 16, 1996. | |||
3.6 | Bylaws of Ferrellgas Partners Finance Corp. Incorporated by reference to Exhibit 3.3 to our Quarterly Report on Form 10-Q filed June 13, 1997. | |||
3.7 | Third Amended and Restated Agreement of Limited Partnership of Ferrellgas, L.P., dated as of April 7, 2004. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed April 22, 2004. | |||
3.8 | Certificate of Incorporation of Ferrellgas Finance Corp. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Ferrellgas Partners, L.P. filed February 18, 2003. | |||
3.9 | Bylaws of Ferrellgas Finance Corp. Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Ferrellgas Partners, L.P. filed February 18, 2003. | |||
4.1 | Specimen Certificate evidencing Common Units representing Limited Partner Interests. Incorporated by reference to Exhibit A of Exhibit 4.3 to the Current Report on Form 8-K of Ferrellgas Partners, L.P. filed February 18, 2003. | |||
4.2 | Indenture dated as of September 24, 2002, with form of Note attached, among Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., and U.S. Bank National Association, as trustee, relating to $170,000,000 aggregate principal amount of the Registrants 8 3/4% Senior Notes due 2012. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed September 24, 2002. |
Exhibit | ||||
Number | Description | |||
4.3 | Indenture dated as of April 20, 2004, with form of Note attached, among Ferrellgas Escrow LLC and Ferrellgas Finance Escrow Corporation and U.S. Bank National Association, as trustee, relating to 6 3/4% Senior Notes due 2014. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed April 22, 2004. | |||
4.4 | Ferrellgas, L.P. Note Purchase Agreement, dated as of July 1, 1998, relating to: $109,000,000 6.99% Senior Notes, Series A, due August 1, 2005, $37,000,000 7.08% Senior Notes, Series B, due August 1, 2006, $52,000,000 7.12% Senior Notes, Series C, due August 1, 2008, $82,000,000 7.24% Senior Notes, Series D, due August 1, 2010, and $70,000,000 7.42% Senior Notes, Series E, due August 1, 2013. Incorporated by reference to Exhibit 4.4 to our Annual Report on Form 10-K filed October 29, 1998. | |||
4.5 | Ferrellgas, L.P. Note Purchase Agreement, dated as of February 28, 2000, relating to: $21,000,000 8.68% Senior Notes, Series A, due August 1, 2006, $90,000,000 8.78% Senior Notes, Series B, due August 1, 2007, and $73,000,000 8.87% Senior Notes, Series C, due August 1, 2009. Incorporated by reference to Exhibit 4.2 to our Quarterly Report on Form 10-Q filed March 16, 2000. | |||
4.6 | Registration Rights Agreement dated as of December 17, 1999, by and between Ferrellgas Partners, L.P. and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed December 29, 1999. | |||
4.7 | First Amendment to the Registration Rights Agreement dated as of March 14, 2000, by and between Ferrellgas Partners, L.P. and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q filed March 16, 2000. | |||
4.8 | Second Amendment to the Registration Rights Agreement dated as of April 6, 2001, by and between Ferrellgas Partners, L.P. and The Williams Companies, Inc. Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed April 6, 2001. | |||
4.9 | Third Amendment to the Registration Rights Agreement dated as of June 29, 2005, between JEF Capital Management, Inc. and Ferrellgas Partners, L.P. Incorporated by reference to Exhibit 10.1 to our Current Report of Form 8-K filed June 30, 2005. | |||
10.1 | Fifth Amended and Restated Credit Agreement dated as of April 22, 2005, by and among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America N.A., as administrative agent and swing line lender, and the lenders and L/C issuers party hereto. Incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q filed June 8, 2005. | |||
10.2 | Credit Agreement dated as of May 1, 2007, by and among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America N.A., as administrative agent. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed May 4, 2007. |
Exhibit | ||||
Number | Description | |||
10.3 | Lender Addendum dated as of June 6, 2006, by and among Deutsche Bank Trust Company Americas as the new lender, Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. and Bank of America, N.A., as Administrative Agent. Incorporated by reference to Exhibit 10.2 to our Annual Report on Form 10-K filed October 12, 2006. | |||
10.4 | Commitment Increase Agreement dated as of August 28, 2006, by and among Fifth Third Bank as the lender, Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. and Bank of America, N.A. as Administrative Agent. Incorporated by reference to Exhibit 10.3 to our Annual Report on Form 10-K filed October 12, 2006. | |||
10.5 | Amended and Restated Receivable Interest Sale Agreement dated June 7, 2005 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, L.L.C., as buyer. by reference to Exhibit 10.9 to our Quarterly Report on Form 10-Q filed June 8, 2005. | |||
10.6 | Amendment No. 1 to the Amended and Restated Receivable Interest Sale Agreement and Subordinated Note dated June 6, 2006 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, LLC, as buyer. Incorporated by reference to Exhibit 10.11 to our Quarterly Report on Form 10-Q filed on June 8, 2006. | |||
10.7 | Amendment No. 2 to the Amended and Restated Receivable Interest Sale Agreement dated June 6, 2006 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, LLC, as buyer. Incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K filed October 12, 2006. | |||
10.8 | Amendment No. 3 to the Amended and Restated Receivable Interest Sale Agreement dated May 31, 2007 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, LLC, as buyer. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K Filed June 1, 2007. | |||
10.9 | Second Amended and Restated Receivables Purchase Agreement dated as of June 6, 2006, by and among Ferrellgas Receivables, L.L.C., as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, Fifth Third Bank and JPMorgan Chase Bank, NA, as agent. Incorporated by reference to Exhibit 10.19 to our Quarterly Report on Form 10-Q filed June 8, 2006. | |||
10.10 | Amendment No. 1 to Second Amended and Restated Receivables Purchase Agreement dated August 18, 2006, by and among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, Fifth Third Bank and JPMorgan Chase Bank, NA, as agent. Incorporated by reference to Exhibit 99.2 to our Current Report on Form 8-K filed August 18, 2006. | |||
10.11 | Amendment No. 2 to Second Amended and Restated Receivables Purchase Agreement dated May 31, 2007, by and among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, Fifth Third Bank and JPMorgan Chase Bank, NA, as agent. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed June 1, 2007. | |||
# |
10.12 | Ferrell Companies, Inc. Supplemental Savings Plan, restated January 1, 2000. Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed February 18, 2003. |
Exhibit | ||||
Number | Description | |||
# |
10.13 | Second Amended and Restated Ferrellgas Unit Option Plan. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed June 5, 2001. | ||
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10.14 | Ferrell Companies, Inc. 1998 Incentive Compensation Plan, as amended and restated effective October 11, 2004. Incorporated by reference to Exhibit 10.23 to our Annual Report on Form 10-K filed October 13, 2004. | ||
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10.15 | Employment Agreement between James E. Ferrell and Ferrellgas, Inc., dated July 31, 1998. Incorporated by reference to Exhibit 10.13 to our Annual Report on Form 10-K filed October 29, 1998. | ||
# |
10.16 | Waiver to Employment, Confidentiality, and Non-Compete Agreement by and among Ferrell Companies, Inc., Ferrellgas, Inc., James E. Ferrell and Greatbanc Trust Company, dated as of December 19, 2006. Incorporated by reference to Exhibit 10.19 to our Quarterly Report on Form 10-Q filed March 9, 2007. | ||
# |
10.17 | Amended and Restated Employment Agreement dated October 11, 2004, by and among Ferrellgas, Inc., Ferrell Companies, Inc. and Billy D. Prim. Incorporated by reference to Exhibit 10.25 to our Annual Report on Form 10-K filed October 13, 2004. | ||
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10.18 | Separation Agreement and Release dated March 9, 2006 between Timothy E. Scronce and Ferrellgas, Inc. Incorporated by reference to Exhibit 10.28 to our Quarterly Report on Form 10-Q filed March 10, 2006. | ||
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10.19 | Agreement and Release dated as of May 11, 2006 by and among Jeffrey B. Ward, Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed June 22, 2006. | ||
# |
10.20 | Agreement and Release dated as of August 15, 2006 by and among Kenneth A. Heinz, Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P. Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed August 18, 2006. | ||
#* |
10.21 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Stephen L. Wambold and Ferrellgas, Inc. | ||
#* |
10.22 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Eugene D. Caresia and Ferrellgas, Inc. | ||
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10.23 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Kevin T. Kelly and Ferrellgas, Inc. | ||
#* |
10.24 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between George L. Koloroutis and Ferrellgas, Inc. | ||
#* |
10.25 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Patrick J. Walsh and Ferrellgas, Inc | ||
#* |
10.26 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Tod D. Brown and Ferrellgas, Inc | ||
#* |
10.27 | Change In Control Agreement dated as of March 5, 2008 by and between James R. VanWinkle and Ferrellgas, Inc | ||
Exhibit | ||||
Number | Description | |||
#* |
10.28 | Change In Control Agreement dated as of March 5, 2008 by and between Richard V. Mayberry and Ferrellgas, Inc | ||
# |
10.29 | Change In Control Agreement dated as of October 9, 2006 by and between James E. Ferrell and Ferrellgas, Inc. Incorporated by reference to Exhibit 10.30 to our Annual Report on Form 10-K filed October 12, 2006. | ||
# |
10.30 | Agreement and release dated as of December 4, 2007 by and among Brian J. Kline, Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners L.P. and Ferrellgas L.P. Incorporated by reference to Exhibit 10.33 to our Quarterly Report on Form 10-Q filed December 6, 2007. | ||
* |
31.1 | Certification of Ferrellgas Partners, L.P. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. | ||
* |
31.2 | Certification of Ferrellgas Partners Finance Corp. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. | ||
* |
31.3 | Certification of Ferrellgas, L.P. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. | ||
* |
31.4 | Certification of Ferrellgas Finance Corp. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. | ||
* |
32.1 | Certification of Ferrellgas Partners, L.P. pursuant to 18 U.S.C. Section 1350. | ||
* |
32.2 | Certification of Ferrellgas Partners Finance Corp. pursuant to 18 U.S.C. Section 1350. | ||
* |
32.3 | Certification of Ferrellgas, L.P. pursuant to 18 U.S.C. Section 1350. | ||
* |
32.4 | Certification of Ferrellgas Finance Corp. pursuant to 18 U.S.C. Section 1350. |
* | Filed herewith | |
# | Management contracts or compensatory plans. |