-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KWo1w0rqRJiA06rBIYvXnkD81jjmGuAuJuFNz7n3SVQbYNas9FaLSIS7HU4EXs5j gD7q3UVtWva1h7jTUeuo/Q== 0000922358-96-000003.txt : 19960314 0000922358-96-000003.hdr.sgml : 19960314 ACCESSION NUMBER: 0000922358-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19960313 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FERRELLGAS PARTNERS L P CENTRAL INDEX KEY: 0000922358 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RETAIL STORES, NEC [5990] IRS NUMBER: 431675728 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11331 FILM NUMBER: 96534181 BUSINESS ADDRESS: STREET 1: ONE LIBERTY PLAZA CITY: LIBERTY STATE: MO ZIP: 64068 BUSINESS PHONE: 8167921600 MAIL ADDRESS: STREET 1: 0NE LIBERTY PLAZA CITY: LIBERTY STATE: MO ZIP: 64068 10-Q 1 SECOND QUARTER REPORT 01/31/96 - ------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended January 31, 1996 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________ Commission file number: 1-11331 FERRELLGAS PARTNERS, L.P. (Exact name of registrants as specified in their charters) Delaware 43-1698480 - ---------------------------- ------------------------------- (States or other jurisdictions of (I.R.S. Employer Identification Nos.) incorporation or organization) One Liberty Plaza, Liberty, Missouri 64068 (Address of principal executive offices) (Zip Code) Registrants' telephone number, including area code: (816) 792-1600 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] At February 15, 1996, the registrant had units outstanding as follows: Ferrellgas Partners, L.P. - 14,540,810 Common Units 16,593,721 Subordinated Units - -------------------------------------------------------------------------------- FERRELLGAS PARTNERS, L.P. FERRELLGAS, L.P. FERRELLGAS FINANCE CORP. Table of Contents Page PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS FERRELLGAS PARTNERS, L.P. AND SUBSIDIARY Consolidated Balance Sheets - January 31, 1996 and July 31, 1995 1 Consolidated Statements of Earnings - Three months and six months ended January 31, 1996 and 1995 2 Consolidated Statements of Partners' Capital - Six months ended January 31, 1996 3 Consolidated Statements of Cash Flows - Six months ended January 31, 1996 and 1995 4 Notes to Consolidated Financial Statements 5 FERRELLGAS, L.P. AND SUBSIDIARIES Consolidated Balance Sheets - January 31, 1996 and July 31, 1995 7 Consolidated Statements of Earnings - 8 Three months and six months ended January 31, 1996 and 1995 Consolidated Statements of Partners' Capital - Six months ended January 31, 1996 9 Consolidated Statements of Cash Flows - Six months ended January 31, 1996 and 1995 10 Notes to Consolidated Financial Statements 11 FERRELLGAS FINANCE CORP. Balance Sheets - January 31, 1996 and July 31, 1995 12 Statements of Earnings - Three months and six months ended January 31, 1996 and 1995 12 Statements of Stockholder's Equity - Six months ended January 31, 1996 13 Statements of Cash Flows - Six months ended January 31, 1996 and 1995 13 Note to Financial Statements 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 14 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 17 ITEM 2. CHANGES IN SECURITIES 17 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 17 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 17 ITEM 5. OTHER INFORMATION 17 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 17 SIGNATURES 18 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS FERRELLGAS PARTNERS, L.P. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (in thousands, except unit data) January 31, July 31, ASSETS 1996 1995 - --------------------------------------------------------------------------- ----------------- ----------------- (unaudited) Current Assets: Cash and cash equivalents $ 22,253 $ 29,877 Accounts and notes receivable 135,462 58,239 Inventories 37,587 44,090 Prepaid expenses and other current assets 6,593 5,884 ----------------- ----------------- Total Current Assets 201,895 138,090 Property, plant and equipment, net 339,217 345,642 Intangible assets, net 86,817 86,886 Other assets, net 7,731 7,978 ----------------- ----------------- Total Assets $635,660 $578,596 ================= ================= LIABILITIES AND PARTNERS' CAPITAL - --------------------------------------------------------------------------- Current Liabilities: Accounts payable $ 93,991 $ 57,729 Other current liabilities 37,107 31,433 Short-term borrowings 19,000 20,000 ----------------- ----------------- Total Current Liabilities 150,098 109,162 Long-term debt 347,186 338,188 Other liabilities 12,438 11,398 Minority interest 1,274 1,211 Partners' Capital: Common unitholders, (14,540,810 and 14,398,942 units outstanding in January 1996 and July 1995, respectively) 89,032 84,489 Subordinated unitholders (16,593,721 units outstanding in both January 1996 and July 1995) 93,248 91,824 General partner (57,616) (57,676) ----------------- ----------------- Total Partners' Capital 124,664 118,637 ----------------- ----------------- Total Liabilities and Partners' Capital $635,660 $578,596 ================= =================
See notes to consolidated financial statements. 1 FERRELLGAS PARTNERS, L.P. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS (in thousands, except per unit data) (unaudited) Three months ended Six months ended ----------------------------------- ----------------------------------- January 31, January 31, January 31, January 31, 1996 1995 1996 1995 ----------------- ----------------- ----------------- ----------------- Revenues: Gas liquids and related product sales $226,676 $208,685 $341,205 $320,469 Other 11,705 9,976 21,764 17,605 ----------------- ----------------- ----------------- ----------------- Total revenues 238,381 218,661 362,969 338,074 Cost of product sold (exclusive of depreciation, shown separately below) 126,472 122,889 195,581 190,300 ----------------- ----------------- ----------------- ----------------- Gross profit 111,909 95,772 167,388 147,774 Operating expense 47,750 44,646 88,620 79,697 Depreciation and amortization expense 8,810 8,265 17,136 15,412 General and administrative expense 3,119 2,934 6,554 5,248 Vehicle lease expense 1,117 1,107 2,203 2,147 ----------------- ----------------- ----------------- ----------------- Operating income 51,113 38,820 52,875 45,270 Interest expense (9,196) (8,217) (18,208) (15,315) Interest income 369 345 625 514 Loss on disposal of assets (386) (109) (770) (303) ----------------- ----------------- ----------------- ----------------- Earnings before minority interest 41,900 30,839 34,522 30,166 Minority interest 424 312 349 305 ----------------- ----------------- ----------------- ----------------- Net earnings 41,476 30,527 34,173 29,861 General partner's interest in net earnings 415 305 342 299 ----------------- ----------------- ----------------- ----------------- Limited partners' interest in net earnings $ 41,061 $ 30,222 $ 33,831 $ 29,562 ================= ================= ================= ================= Net earnings per limited partner unit $ 1.32 $ 0.98 $ 1.09 $ 0.96 ================= ================= ================= ================= Weighted average number of units outstanding 31,135 30,956 31,085 30,824 ================= ================= ================= =================
See notes to consolidated financial statements. 2 FERRELLGAS PARTNERS, L.P. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (in thousands) (unaudited) ------------------------------ Number of units ------------------------------ Total Sub- Sub- General partners' Common ordinated Common ordinated partner capital ------------ --------------- --------------- ---------------- -------------- -------------- July 31, 1995 14,398.9 16,593.7 $84,489 $91,824 $ (57,676) $118,637 Common units issued in connection with acquisitions 141.9 3,200 32 3,232 Quarterly distributions (14,470) (16,594) (314) (31,378) Net earnings 15,813 18,018 342 34,173 ------------ --------------- --------------- ---------------- -------------- -------------- January 31, 1996 14,540.8 16,593.7 $89,032 $93,248 $(57,616) $124,664 ============ =============== =============== ================ ============== ==============
See notes to consolidated financial statements. 3 FERRELLGAS PARTNERS, L.P. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
Six months ended ------------------------------------ January 31, January 31, 1996 1995 ---------------- ---------------- Cash Flows From Operating Activities: Net earnings $34,173 $29,861 Reconciliation of net earnings to net cash from operating activities: Depreciation and amortization 17,136 15,412 Other 2,475 1,514 Changes in operating assets and liabilities net of effects from business acquisitions: Accounts and notes receivable (77,355) (43,304) Inventories 6,631 837 Prepaid expenses and other current assets (744) (1,492) Accounts payable 36,986 43,287 Other current liabilities 5,082 4,281 Other liabilities 1,041 71 ---------------- ---------------- Net cash provided by operating activities 25,425 50,467 ---------------- ---------------- Cash Flows From Investing Activities: Business acquisitions (3,079) (15,693) Capital expenditures (7,218) (9,216) Other 1,288 49 ---------------- ---------------- Net cash used by investing activities (9,009) (24,860) ---------------- ---------------- Cash Flows From Financing Activities: Net reductions to short-term borrowings (1,000) (3,000) Additions to long-term debt 7,752 60,000 Reductions of long-term debt (354) (45,784) Distributions (31,378) (20,348) Other 940 (193) ---------------- ---------------- Net cash used by financing activities (24,040) (9,325) ---------------- ---------------- (Decrease) Increase in cash and cash equivalents (7,624) 16,282 Cash and cash equivalents - beginning of period 29,877 14,535 ================ ================ Cash and cash equivalents - end of period $22,253 $30,817 ================ ================ Cash paid for interest $16,996 $ 2,571 ================ ================
See notes to consolidated financial statements. 4 FERRELLGAS PARTNERS, L.P. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 1996 Unaudited A. The unaudited consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the interim periods presented. All adjustments to the financial statements were of a normal recurring nature. B. The propane industry is seasonal in nature because propane is used primarily for heating in residential and commercial buildings. Therefore, the results of operations for the periods ended January 31, 1996 and January 31, 1995 are not necessarily indicative of the results to be expected for a full year. C. Supplemental balance sheet information (in thousands)
Inventories consist of: January 31, July 31, 1996 1995 ---------------- ----------------- Liquefied propane gas and related products $30,865 $37,550 Appliances, parts and supplies 6,722 6,540 ---------------- ----------------- $37,587 $44,090 ================ =================
In addition to inventories on hand, the Partnership enters into contracts to buy product for supply purposes. All such contracts have terms of less than one year and call for payment based on market prices at date of delivery.
Property, plant and equipment, net consist of: January 31, July 31, 1996 1995 ----------------- ----------------- Property, plant and equipment $523,721 $521,110 Less: accumulated depreciation 184,504 175,468 ---------------- ----------------- $339,217 $345,642 ================= =================
Intangibles, net consist of: January 31, July 31, 1996 1995 ----------------- ----------------- Intangibles $173,565 $168,881 Less: accumulated amortization 86,748 81,995 ---------------- ----------------- $ 86,817 $ 86,886 ================= =================
D. The Partnership is threatened with or named as a defendant in various lawsuits which, among other items, claim damages for product liability. 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 likely to have a material adverse effect on the results of operations, financial condition or liquidity of the Partnership. 5
E. Summary of distributions to Unitholders Cash Distribution Quarter Ending Declaration Date Record Date Paid Date Per Unit -------------- ---------------- ----------- --------- -------- 10/31/94 11/18/94 11/30/94 12/14/94 $0.65 (a) 01/31/95 02/17/95 02/28/95 03/14/95 $0.50 04/30/95 05/19/95 05/31/95 06/12/95 $0.50 07/31/95 08/16/95 08/31/95 09/13/95 $0.50 10/31/95 11/17/95 11/30/95 12/14/95 $0.50 (a) This initial cash distribution covered the period from July 5, 1994, when the Partnership began operations, to October 31, 1994, the end of the first full fiscal quarter. Accordingly, the distribution was prorated.
6 FERRELLGAS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (in thousands) January 31, July 31, ASSETS 1996 1995 ------------------------------------------------------------------------ --------------- ------------- (unaudited) Current Assets: Cash and cash equivalents $ 22,253 $ 29,877 Accounts and notes receivable 135,462 58,239 Inventories 37,587 44,090 Prepaid expenses and other current assets 6,593 5,884 --------------- ------------- Total Current Assets 201,895 138,090 Property, plant and equipment, net 339,217 345,642 Intangible assets, net 86,817 86,886 Other assets, net 7,731 7,978 --------------- ------------- Total Assets $635,660 $578,596 =============== ============= LIABILITIES AND PARTNERS' CAPITAL ------------------------------------------------------------------------ Current Liabilities: Accounts payable $ 93,991 $ 57,729 Other current liabilities 37,106 31,432 Short-term borrowings 19,000 20,000 --------------- ------------- Total Current Liabilities 150,097 109,161 Long-term debt 347,186 338,188 Other liabilities 12,438 11,398 Partners' Capital: Limited partner 124,665 118,638 General partner 1,274 1,211 --------------- ------------- Total Partners' Capital 125,939 119,849 --------------- ------------- Total Liabilities and Partners' Capital $635,660 $578,596 =============== ============= See notes to consolidated financial statements.
7 FERRELLGAS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (in thousands) (unaudited) Three months ended Six months ended -------------------------------------- --------------------------------- January 31, January 31, January 31, January 31, 1996 1995 1996 1995 ---------------- ------------------- ---------------- --------------- Revenues: Gas liquids and related product sales $226,676 $208,685 $341,205 $320,469 Other 11,705 9,976 21,764 17,605 ---------------- ------------------- --------------- --------------- Total revenues 238,381 218,661 362,969 338,074 Cost of product sold (exclusive of depreciation, shown separately below) 126,472 122,889 195,581 190,300 ---------------- ------------------- --------------- --------------- Gross profit 111,909 95,772 167,388 147,774 Operating expense 47,750 44,645 88,620 79,696 Depreciation and amortization expense 8,810 8,265 17,136 15,412 General and administrative expense 3,119 2,934 6,554 5,248 Vehicle lease expense 1,117 1,107 2,203 2,147 ---------------- ------------------- --------------- --------------- Operating income 51,113 38,821 52,875 45,271 Interest expense (9,196) (8,217) (18,208) (15,315) Interest income 369 345 625 514 Loss on disposal of assets (386) (109) (770) (303) ---------------- ------------------- --------------- --------------- Net earnings $ 41,900 $ 30,840 $ 34,522 $ 30,167 ================ =================== =============== =============== See notes to consolidated financial statements.
8 FERRELLGAS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (in thousands) (unaudited) Limited General Total partners' partner partner capital ----------------- ----------------- ----------------- July 31, 1995 $118,638 $1,211 $119,849 Additions to capital in connection with acquisitions 3,232 34 3,266 Quarterly distributions (31,378) (320) (31,698) Net earnings 34,173 349 34,522 ----------------- ----------------- ----------------- January 31, 1996 $124,665 $1,274 $125,939 ================= ================= ================= See notes to consolidated financial statements.
9 FERRELLGAS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Six months ended ------------------------------------ January 31, January 31, 1996 1995 ----------------- ----------------- Cash Flows From Operating Activities: Net earnings $34,522 $30,167 Reconciliation of net earnings to net cash from operating activities: Depreciation and amortization 17,136 15,412 Other 2,126 1,514 Changes in operating assets and liabilities net of effects from business acquisitions: Accounts and notes receivable (77,355) (43,304) Inventories 6,631 837 Prepaid expenses and other current assets (744) (1,492) Accounts payable 36,986 43,287 Other current liabilities 5,082 4,280 Other 1,041 71 ----------------- ----------------- Net cash provided by operating activities 25,425 50,772 ----------------- ----------------- Cash Flows From Investing Activities: Business acquisitions (3,079) (15,693) Capital expenditures (7,218) (9,216) Other 1,288 49 ----------------- ----------------- Net cash used by investing activities (9,009) (24,860) ----------------- ----------------- Cash Flows From Financing Activities: Net reductions to short-term borrowings (1,000) (3,000) Additions to long-term debt 7,752 60,000 Reductions of long-term debt (354) (45,784) Distributions (31,698) (20,556) Other 1,260 (290) ----------------- ----------------- Net cash used by financing activities (24,040) (9,630) ----------------- ----------------- (Decrease) Increase in cash and cash equivalents (7,624) 16,282 Cash and cash equivalents - beginning of period 29,877 14,535 ================= ================= Cash and cash equivalents - end of period $22,253 $30,817 ================= ================= Cash paid for interest $16,996 $ 2,571 ================= =================
See notes to consolidated financial statements. 10 FERRELLGAS, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JANUARY 31, 1996 (unaudited) A. The unaudited consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the interim periods presented. All adjustments to the financial statements were of a normal recurring nature. B. The propane industry is seasonal in nature because propane is used primarily for heating in residential and commercial buildings. Therefore, the results of operations for the periods ended January 31, 1996 and January 31, 1995 are not necessarily indicative of the results to be expected for a full year. C. Supplementary balance sheet information (in thousands)
Inventories consist of: January 31, July 31, 1996 1995 ----------------- ----------------- Liquefied propane gas and related products $30,865 $37,550 Appliances, parts and supplies 6,722 6,540 ----------------- ----------------- $37,587 $44,090 ================= =================
In addition to inventories on hand, the Partnership enters into contracts to buy product for supply purposes. All such contracts have terms of less than one year and call for payment based on market prices at date of delivery.
Property, plant and equipment, net consist of: January 31, July 31, 1996 1995 ------------------ ----------------- Property, plant and equipment $523,721 $521,110 Less: accumulated depreciation 184,504 175,468 ----------------- ----------------- $339,217 $345,642 ================== =================
Intangibles, net consist of: January 31, July 31, 1996 1995 ------------------ ----------------- Intangibles $173,565 $168,881 Less: accumulated amortization 86,748 81,995 ----------------- ----------------- $ 86,817 $ 86,886 ================== =================
D. The Partnership is threatened with or named as a defendant in various lawsuits which, among other items, claim damages for product liability. 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 likely to have a material adverse effect on the results of operations, financial condition or liquidity of the Partnership. 11 FERRELLGAS FINANCE CORP. (A wholly owned subsidiary of Ferrellgas, L.P.)
BALANCE SHEETS January 31, July 31, ASSETS 1996 1995 ---------------------------------------------------------------- ---------------- ---------------- (unaudited) Cash $1,000 $697 ---------------- ---------------- Total Assets $1,000 $697 ================ ================ LIABILITIES AND STOCKHOLDER'S EQUITY ---------------------------------------------------------------- Payable to affiliate $ - $153 Common stock, $1.00 par value; 2,000 shares authorized; 1,000 shares issued and outstanding 1,000 1,000 Additional paid in capital 545 - Accumulated deficit (545) (456) ---------------- ---------------- Total Stockholder's Equity 1,000 544 ---------------- ---------------- Total Liabilities and Stockholder's Equity $1,000 $697 ================ ================ - ----------------------------------------------------------------------------------------------------------------------- STATEMENTS OF EARNINGS (unaudited) Three Months Ended Six Months Ended ----------------------------------- ----------------------------------- January 31, January 31, January 31, January 31, 1996 1995 1996 1995 ---------------- ----------------- ----------------- ----------------- General and administrative expense $ - $ - $ 89 $ 40 ---------------- ----------------- ----------------- ----------------- Net earnings (loss) $ - $ - $(89) $(40) ================ ================= ================= =================
See note to financial statements. 12 FERRELLGAS FINANCE CORP. (a wholly owned subsidiary of Ferrellgas, L.P.)
STATEMENTS OF STOCKHOLDER'S EQUITY Common Stock ------------------------------------ Additional Total paid in Accumulated stockholder's Shares Dollars capital deficit equity ----------------- ----------------- ----------------- --------------- ----------------- July 31, 1995 1,000 $1,000 $ - $(456) $ 544 Capital contribution 545 - 545 Net earnings (loss) - (89) (89) ----------------- ----------------- ----------------- --------------- ----------------- January 31, 1996 1,000 $1,000 $545 $(545) $1,000 ================= ================= ================= =============== ================= - -----------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended --------------------------------- January 31, January 31, 1996 1995 ----------------- ------------------ Cash Flows From Operating Activities: Net earnings (loss) $ (89) $ (40) ----------------- ------------------ Cash used by operating activities (89) (40) ----------------- ------------------ Cash Flows From Financing Activities: Capital contribution 545 - Net payment to affiliate (153) - ----------------- ------------------ Cash provided by financing activities 392 - ----------------- ------------------ Increase (decrease) in cash 303 (40) Cash - beginning of period 697 1,000 ----------------- ----------------- Cash - end of period $1,000 $960 ================= ================== See note to financial statements. - --------------------------------------------------------------------------------------------------------------------
NOTE TO FINANCIAL STATEMENTS JANUARY 31, 1996 (unaudited) The unaudited financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the interim periods presented. All adjustments to the financial statements were of a normal recurring nature. 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited) The following is a discussion of the results of operations and liquidity and capital resources of the Ferrellgas, L.P. (the "Operating Partnership"). Because the Operating Partnership accounts for all of the consolidated assets, sales and earnings of the Ferrellgas Partners, L.P. (the "Partnership" or "MLP"), a separate discussion of the results of operations and liquidity and capital resources of the Partnership is not presented. Ferrellgas Finance Corp. has nominal assets and does not conduct any operations. Accordingly, a discussion of the results of operations and liquidity and capital resources is not presented. Results of Operations The propane industry is seasonal in nature with peak activity during the winter months. Due to the seasonality of the business, results of operations for the three and six months ended January 31, 1996 and 1995, are not necessarily indicative of the results to be expected for a full year. Other factors affecting the results of operations include competitive conditions, demand for product, variations in weather and fluctuations in propane prices. Three Months Ended January 31, 1996 vs. January 31, 1995 Total Revenues. Total revenues increased 9.0% to $238,381,000 as compared to $218,661,000 for the prior period. The increase is principally due to the impact of colder weather on retail propane operations partially offset by declines in chemical feedstocks activity. For the quarter ended January 31, 1996, winter temperatures, as reported by the American Gas Association, were 17.5% colder than the same period last year and 2.6% colder than normal. Weak petrochemical demand as compared to the prior period contributed to the $19,229,000 decline in chemical feedstocks revenues. Gross Profit. Gross profit increased 16.8% to $111,909,000 as compared to $95,772,000 for the prior period primarily due to favorable retail performance. Retail propane operations results improved due to a 16.7% increase in gallons sold to 243,070,000 gallons as compared to 208,361,000 for the prior period. These favorable results are attributable to the colder weather, partially offset by aggressive pricing strategies by competitors, higher cost of product and warm weather in the western third of the country. Operating Expenses. Operating expenses increased 7.0% to $47,750,000 as compared to $44,645,000 for the prior period. The increase is attributable to principally incremental costs of acquisition and higher retail volumes. Depreciation and Amortization. Depreciation and amortization expense increased 6.6% to $8,810,000 as compared to $8,265,000 for the prior period primarily due to acquisitions of propane businesses. Interest Expense. Interest expense increased 11.9% to $9,196,000 as compared to $8,217,000 in the prior period. This increase is primarily the result of the increase in the net borrowings from the Partnership's revolving credit loans, partially offset by lower interest rates. 14 Six months ended January 31, 1996 vs. January 31, 1995 Total Revenues. Total revenues increased 7.4% to $362,969,000 as compared to $338,074,000 for the prior period. The increase is primarily attributable to the impact of colder weather on retail operations in the second quarter and acquisitions of propane businesses, partially offset by declines in chemical feedstocks activity and warmer weather in the first quarter. To date, fiscal 1996 winter temperatures, as reported by the American Gas Association, are 16.9% colder than the same period last year and 2.0% colder than normal. The $26,552,000 decrease in chemical feedstocks marketing revenues is due to a decrease in sales volume and selling price. Both volume and price decreased as a result of decreased availability of product from refineries and decreased demand from petrochemical companies. Gross Profit. Gross profit increased 13.3% to $167,388,000 as compared with $147,774,000 for the prior period. The increase is primarily attributable to an increase in retail operations gross profit partially offset by a decrease in trading gross profit. Retail operations results increased due to a increase in gallons sold to 374,439,000 gallons as compared to 330,670,000 for the prior period, partially offset by a decrease in retail margins. The increase in gallons is primarily attributable to favorable weather and acquisition related growth, while margins have been reduced by greater price competition by independent operators and some major marketers. Other operations gross profit decreased primarily due to relatively weaker margins. Operating Expenses. Operating expenses increased 11.2% to $88,620,000 as compared to $79,696,000 for the prior period. The increase is primarily attributable to acquisitions of propane businesses as well as general increases in various components of operating expenses due to increased retail activity. Depreciation and Amortization. Depreciation and amortization expense increased 11.2% to $17,136,000 as compared to $15,412,000 for the prior period due primarily to acquisitions of propane businesses. Interest Expense. Interest expense increased 18.9% to $18,208,000 as compared to $15,315,000 in the prior period. This increase is primarily the result of the increase in the net borrowings from the Partnership's revolving credit loans, partially offset by decreasing interest rates. Liquidity and Capital Resources The ability of the Operating Partnership to satisfy its obligations is dependent upon future performance, which will be subject to prevailing economic, financial, business and weather conditions and other factors, many of which are beyond its control. For the fiscal year ending July 31, 1996, the General Partner believes that the Operating Partnership will generate sufficient Cash from Operations (as defined in the Partnership Agreement) to meet its obligations and enable it to distribute the Minimum Quarterly Distribution ($0.50 per Unit) on all Common Units and Subordinated Units. Future maintenance and working capital needs of the Operating Partnership are expected to be provided by cash generated from future operations, existing cash balances and the working capital borrowing facility. In order to fund expansive capital projects and future acquisitions, the Operating Partnership may borrow on existing bank lines or the MLP may issue additional Common Units. Toward this purpose, the MLP maintains a shelf registration statement filed with the Securities and Exchange Commission registering 2,400,000 Common Units representing limited partner interests in the MLP. The Common Units may be issued from time to time by the MLP in connection with the Operating Partnership's acquisition of other businesses, properties or securities in business combination transactions. 15 The Partnership declared and paid its first quarter cash distribution of $0.50 per unit on November 17, 1995 and December 14, 1995, respectively. On February 20, 1996, the Partnership declared its second quarter cash distribution of $0.50 per unit, payable March 14, 1996. Cash Flows From Operating Activities. Cash provided by operating activities was $25,425,000 for the six months ended January 31, 1996. This decrease of $25,347,000 as compared to the six months ended January 31, 1995 is primarily due to the increase in accounts receivable due to the timing of increased deliveries of product at the end of the second quarter and the increase in accounts receivable from trading activity. Cash Flows From Investing Activities. During the six months ended January 31, 1996, the Operating Partnership made aggregate growth and maintenance capital expenditures of $7,218,000 consisting primarily of the following: 1) additions to Partnership-owned customer tanks and cylinders, 2) vehicle lease buyouts, 3) relocating and upgrading district plant facilities, and 4) development and upgrading computer equipment and software. Capital requirements for repair and maintenance of property, plant and equipment are relatively low since technological change is limited and the useful lives of propane tanks and cylinders, the Operating Partnership's principal physical assets, are generally long. The Operating Partnership maintains its vehicle and transportation equipment fleet by leasing light- and medium-duty trucks and trailers. The General Partner believes vehicle leasing is a cost effective method for meeting the Partnership's transportation equipment needs. The Partnership does not have any material commitments of funds for capital expenditures other than to support the current level of operations. During the six months ended January 31, 1996, the Operating Partnership made total acquisition capital expenditures of $7,100,000 (including working capital acquired of $494,000). This amount was funded by $3,079,000 cash, $3,200,000 issuance of MLP equity units, and $821,000 other costs and consideration. The Partnership continues seeking to expand its operations through strategic acquisitions of smaller retail propane operations located throughout the United States. These acquisitions will be funded through internal cash flow, external borrowings or the issuance of additional Partnership interests. Cash Flows From Financing Activities. During the six months ended January 31, 1996, the Operating Partnership borrowed $6,752,000 from its Credit Facility to fund business acquisitions, capital expenditures and seasonal working capital needs. Effects of Inflation. In the past the Partnership has generally been able to adjust its sales price of product in response to market demand, cost of product, competitive factors and other industry trends. Consequently, changing prices as a result of inflationary pressures has not had a material adverse effect on profitability although revenues may be affected. Inflation has not materially impacted the results of operations and management does not believe normal inflationary pressures will have a material adverse effect on the profitability of the Partnership in the future. 16 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. None. ITEM 2. CHANGES IN SECURITIES. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits 27 Financial Data Schedule (filed in electronic format only) (b) Reports on Form 8-K There were no reports on Form 8-K filed for the three months ended January 31, 1996. 17 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FERRELLGAS PARTNERS, L.P. By Ferrellgas, Inc. (General Partner) Date: March 12, 1996 By /s/ Danley K. Sheldon ------------------------ Danley K. Sheldon Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer 18 EX-27 2 ART. 5 FDS FOR THE 3 MONTHS ENDED 01/31/96
5 (THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FERRELLGAS PARTNERS, L.P. AND SUBSIDIARY BALANCE SHEET ON JANUARY 31, 1996 AND THE STATEMENT OF EARNINGS ENDING JANUARY 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS) 0000922358 Ferrellgas Partners, L.P. 1,000 U.S. Dollars 3-MOS JUL-31-1996 NOV-01-1995 JAN-31-1996 1 22,253 0 135,462 0 37,587 201,895 523,721 184,504 635,660 150,098 347,186 182,280 0 0 (57,616) 635,660 226,676 238,381 126,472 184,149 0 0 9,196 41,476 0 41,476 0 0 0 41,476 1.32 1.32 1. For the MLP, the Common and Subordinated are considered to possess the characteristics of Common Stock. Note that both are included in the determination of EPS providing support for such a classification. 2. For the OLP, ownership is maintained by the MLP and GP. Thus, there is no market and no relevant characteristics of either Common or Preferred Stock. Classification is reasonable. 3. Ferrell Finance has no income statement items other than totals as their only costs are G&A, and such costs are not required in the Financial Data Schedule. 4. A determination was made that Deprec. & Amort. and Vehicle leases are more appropriately reflected as costs and expenses related to sales and revenues. Therefore, there will be no amounts reported for item 5-03(b)3 "other costs/expenses".
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