-----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, SKV+owGepUtt48kYBva1Tm86i7FFCZPVisZyYXjkh7lBekAMOdpbunkPOwAAc4HQ DYKjN1htGivwATIsYvdLeQ== 0000922359-98-000008.txt : 19980616 0000922359-98-000008.hdr.sgml : 19980616 ACCESSION NUMBER: 0000922359-98-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980430 FILED AS OF DATE: 19980615 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FERRELLGAS L P CENTRAL INDEX KEY: 0000922359 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS RETAIL [5900] IRS NUMBER: 431676206 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-53379 FILM NUMBER: 98648226 BUSINESS ADDRESS: STREET 1: ONE LIBERTY PLAZA CITY: LIBERTY STATE: MO ZIP: 64068 BUSINESS PHONE: 8167921600 MAIL ADDRESS: STREET 1: ONE LIBERTY PLAZA CITY: LIBERTY STATE: MO ZIP: 64068 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FERRELLGAS FINANCE CORP CENTRAL INDEX KEY: 0000922360 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS RETAIL [5900] IRS NUMBER: 431677595 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-53379-01 FILM NUMBER: 98648227 BUSINESS ADDRESS: STREET 1: ONE LIBERTY PLAZA CITY: LIBERTY STATE: MO ZIP: 64068 BUSINESS PHONE: 8167921600 MAIL ADDRESS: STREET 1: ONE LIBERTY PLAZA CITY: LIBERTY STATE: MO ZIP: 64068 10-Q 1 10-Q 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 April 30, 1998 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 numbers: 33-53379 33-53379-01 Ferrellgas, L.P. Ferrellgas Finance Corp. (Exact name of registrants as specified in their charters) Delaware 43-1698481 Delaware 43-1677595 ---------------------------- ------------------------------- (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 May 20, 1998, Ferrellgas Finance Corp. had 1,000 shares of $1.00 par value common stock outstanding. FERRELLGAS, L.P. FERRELLGAS FINANCE CORP. Table of Contents Page PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Ferrellgas, L.P. and Subsidiaries Consolidated Balance Sheets - April 30, 1998 and July 31, 1997 1 Consolidated Statements of Earnings - Three and nine months ended April 30, 1998 and 1997 2 Consolidated Statement of Partners' Capital - Nine months ended April 30, 1998 3 Consolidated Statements of Cash Flows - Nine months ended April 30, 1998 and 1997 4 Notes to Consolidated Financial Statements 5 Ferrellgas Finance Corp. Balance Sheets - April 30, 1998 and July 31, 1997 7 Statements of Earnings - Three and nine months ended April 30, 1998 and 1997 7 Statements of Cash Flows - Nine months ended April 30, 1998 and 1997 8 Note to Financial Statements 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 13 ITEM 2. CHANGES IN SECURITIES 13 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 13 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 13 ITEM 5. OTHER INFORMATION 13 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS FERRELLGAS, L.P. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands)
ASSETS April 30, 1998 July 31, 1997 - ------------------------------------------------------------- -------------- -------------- (unaudited) Current Assets: Cash and cash equivalents $ 9,054 $ 14,787 Accounts and notes receivable 70,667 61,835 Inventories 26,916 43,112 Prepaid expenses and other current assets 7,957 10,102 -------------- -------------- Total Current Assets 114,594 129,836 Property, plant and equipment, net 398,548 405,736 Intangible assets, net 103,661 112,058 Other assets, net 5,564 6,147 -------------- -------------- Total Assets $622,367 $653,777 ============== ============== LIABILITIES AND PARTNERS' CAPITAL - ------------------------------------------------------------- Current Liabilities: Accounts payable $ 38,099 $ 39,322 Other current liabilities 33,051 47,546 Short-term borrowings 5,663 21,786 -------------- -------------- Total Current Liabilities 76,813 108,654 Long-term debt 338,437 327,334 Other liabilities 12,782 12,354 Contingencies and commitments Partners' Capital Limited partner 192,372 203,360 General partner 1,963 2,075 -------------- -------------- Total Partners' Capital 194,335 205,435 -------------- -------------- Total Liabilities and Partners' Capital $622,367 $653,777 ============== ==============
See notes to consolidated financial statements 1 FERRELLGAS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (in thousands) (unaudited)
For the three months ended For the nine months ended ---------------------------- ---------------------------- April 30, 1998 April 30, 1997 April 30, 1998 April 30, 1997 ------------- ------------- ------------- ------------- (restated) (restated) Revenues: Gas liquids and related product sales $166,066 $181,426 $545,110 $672,604 Other 9,101 11,447 32,073 35,185 ------------- ------------- ------------- ------------- Total revenues 175,167 192,873 577,183 707,789 Cost of product sold (exclusive of depreciation, shown separately below) 85,718 110,029 303,213 420,399 ------------- ------------- ------------- ------------- Gross profit 89,449 82,844 273,970 287,390 Operating expense 49,328 48,054 154,275 157,768 Depreciation and amortization expense 11,193 10,893 33,717 32,477 General and administrative expense 4,231 3,466 12,510 11,234 Vehicle and tank lease expense 2,621 1,949 7,432 5,356 ------------- ------------- ------------- ------------- Operating income 22,076 18,482 66,036 80,555 Interest expense (8,243) (7,334) (25,208) (22,705) Interest income 548 613 1,347 1,498 Gain (loss) on disposal of assets 421 (114) 115 (864) ------------- ------------- ------------- ------------- Net earnings $ 14,802 $ 11,647 $ 42,290 $ 58,484 ============= ============= ============= =============
See notes to consolidated financial statements 2 FERRELLGAS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (in thousands) (unaudited)
Limited General Total partners' partner partner capital ---------------- --------------- ------------------- July 31, 1997 $ 203,360 $ 2,075 $ 205,435 Additions to capital in connection with acquisitions 2,020 21 2,041 Quarterly distributions (54,871) (560) (55,431) Net earnings 41,863 427 42,290 ---------------- --------------- ------------------- April 30, 1998 $ 192,372 $ 1,963 $ 194,335 ================ =============== ===================
See notes to consolidated financial statements. 3 FERRELLGAS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
For the nine months ended --------------------------------- April 30, 1998 April 30, 1997 ---------------- --------------- (restated) Cash Flows From Operating Activities: Net earnings $42,290 $58,484 Reconciliation of net earnings to net cash from operating activities: Depreciation and amortization 33,717 32,477 Other 2,478 3,501 Changes in operating assets and liabilities net of effects from business acquisitions: Accounts and notes receivable (9,842) (33,933) Inventories 15,708 5,187 Prepaid expenses and other current assets 2,106 (2,736) Accounts payable (1,223) 3,737 Other current liabilities (13,625) 1,797 Other 428 38 ---------------- --------------- Net cash provided by operating activities 72,037 68,552 ---------------- --------------- Cash Flows From Investing Activities: Business acquisitions (4,080) (11,663) Capital expenditures (15,267) (12,299) Other 3,235 2,501 ---------------- --------------- Net cash used by investing activities (16,112) (21,461) ---------------- --------------- Cash Flows From Financing Activities: Net additions to short-term borrowings (16,123) (6,954) Additions to long-term debt 11,438 20,951 Reductions of long-term debt (1,622) (2,118) Distributions (55,431) (57,404) Other 80 (393) ---------------- --------------- Net cash used by financing activities (61,658) (45,918) ---------------- --------------- Increase (decrease) in cash and cash equivalents (5,733) 1,173 Cash and cash equivalents - beginning of period 14,787 13,769 ---------------- --------------- Cash and cash equivalents - end of period $ 9,054 $14,942 ================ =============== Cash paid for interest $29,040 $25,853 ================ ===============
See notes to consolidated financial statements 4 FERRELLGAS, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS APRIL 30, 1998 (unaudited) A. The 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 preparation of financial statements in conformity with generally accepted accounting principles ("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. C. The propane industry is seasonal in nature with peak activity during the winter months. Therefore, the results of operations for the periods ended April 30, 1998 and April 30, 1997 are not necessarily indicative of the results to be expected for a full year.
D. Inventories consist of: April 30, July 31, (in thousands) 1998 1997 ---------------- -------------- Liquefied propane gas and related products $18,341 $35,351 Appliances, parts and supplies 8,575 7,761 ---------------- -------------- $26,916 $43,112 ================ ==============
In addition to inventories on hand, Ferrellgas, L.P. (the "Partnership", "Operating Partnership", or the "OLP") enters into contracts to buy product for supply purposes. Nearly all such contracts have terms of less than one year and most call for payment based on market prices at date of delivery. All fixed price contracts have terms of less than one year. As of April 30, 1998, the Partnership does not have a material commitment to purchase propane from its suppliers whereby the volume, price and date of delivery have been agreed.
Property, plant and equipment, net consist of: April 30, July 31, (in thousands) 1998 1997 --------------- --------------- Property, plant and equipment $622,878 $614,974 Less: accumulated depreciation 224,330 209,238 --------------- --------------- $398,548 $405,736 =============== ===============
Intangible assets, net consist of: April 30, July 31, (in thousands) 1998 1997 --------------- --------------- Intangible assets $223,540 $221,269 Less: accumulated amortization 119,879 109,211 --------------- --------------- $103,661 $112,058 =============== ===============
5 E. 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 or financial condition of the Partnership. 6 FERRELLGAS FINANCE CORP. (a wholly owned subsidiary of Ferrellgas, L.P.) BALANCE SHEETS
April 30, July 31, ASSETS 1998 1997 - -------------------------------------------------------------------- ------------------- ------------------- (unaudited) Cash $1,000 $1,000 ------------------- ------------------- Total Assets $1,000 $1,000 =================== ===================
STOCKHOLDER'S 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 980 759 Accumulated deficit (980) (759) ------------------- ------------------- Total Stockholder's Equity 1,000 1,000 ------------------- ------------------- Total Liabilities and Stockholder's Equity $1,000 $1,000 =================== ===================
STATEMENTS OF EARNINGS (unaudited)
Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended April 30, April 30, April 30, April 30, 1998 1997 1998 1997 --------------------- ---------------------- ------------------- ----------------- General and administrative expense $ 176 $ 169 $ 221 $ 214 --------------------- ---------------------- ------------------- ----------------- Net loss $ (176) $(169) $ (221) $(214) ===================== ====================== =================== =================
See notes to financial statements. 7 FERRELLGAS FINANCE CORP. (A wholly owned subsidiary of Ferrellgas, L.P.) STATEMENTS OF CASH FLOWS (unaudited)
Nine Months Ended Nine Months Ended April 30, April 30, 1998 1997 -------------------- -------------------- Cash Flows From Operating Activities: Net loss $ (221) $ (214) -------------------- -------------------- Cash used by operating activities (221) (214) -------------------- -------------------- Cash Flows From Financing Activities: Capital contribution 221 214 -------------------- -------------------- Cash provided by financing activities 221 214 -------------------- -------------------- Increase (decrease) in cash - - Cash - beginning of period 1,000 1,000 -------------------- -------------------- Cash - end of period $1,000 $1,000 ==================== ====================
See note to financial statements. NOTE TO FINANCIAL STATEMENTS APRIL 30, 1998 (unaudited) The 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. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion of the results of operations and liquidity and capital resources of Ferrellgas, L.P. 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. Forward-looking statements Statements included in this report that are not historical facts, including a statement concerning the General Partner's belief that the OLP will have sufficient funds to meet its obligations are forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. The risks and uncertainties include but are not limited to the following and their effect on the Partnership's operations: a) the effect of weather conditions on demand for propane, b) price and availability of propane supplies, c) the availability of capacity to transport propane to market areas, d) competition from other energy sources and within the propane industry, e) operating risks incidental to transporting, storing, and distributing propane, f) changes in interest rates, g) governmental legislation and regulations, h) energy efficiency and technology trends and i) other factors that are discussed in the Partnership's filings with the Securities and Exchange Commission. Fiscal 1997 Quarterly Restatement In the Form 10-K originally filed on October 29, 1997, an inventory costing adjustment affecting all quarters during fiscal 1997 was quantified and discussed in the "Selected Quarterly Financial Data" section of Item 7. The Partnership originally reflected the entire adjustment in the fourth quarter of fiscal 1997 instead of restating each quarter affected. Subsequent to the original filing of Form 10-K, the Partnership determined that the quarters affected by the inventory costing adjustment should be restated to more accurately reflect the Partnership's fiscal 1997 quarterly results used for comparative purposes. Thus, the Partnership restated all fiscal 1997 quarterly results affected by this adjustment with the filing of a Form 10-K/A on January 28, 1998. This Form 10-Q reflects the restatement of the Statements of Earnings for the three and nine months ended April 30, 1997 and Statements of Cash Flows for the nine months ended April 30, 1997 after giving retroactive effect to the inventory costing adjustments. Year 2000 Compliance The Partnership has evaluated the "Year 2000" computer programming issue and does not expect that the total cost of related modifications and conversions will have a material effect on its financial position, results of operations or cash flows and is being expensed as incurred. The Year 2000 issue may also affect the systems and applications of the Partnership's customers or vendors. The Partnership is contacting others with whom it conducts business to receive appropriate assurances that those third parties are, or will be, Year 2000 compliant. If compliance by the Partnership's customers and vendors is not achieved in a timely manner, it is unknown what affect, if any, the Year 2000 issue could have on the Partnership's operations. 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 nine months ended April 30, 1998 and 1997, 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. As the Partnership has grown through acquisitions, fixed costs such as personnel costs, depreciation and interest expense have increased. Over time, these fixed cost increases have caused losses in the first and fourth quarters and net income in the second and third quarters to be more pronounced. 9 Three Months Ended April 30, 1998 as compared to April 30, 1997 Total Revenues. Total revenues decreased 9.2% to $175,167,000 as compared to $192,873,000 in the third quarter of fiscal 1997, primarily due to decreased sales price per retail gallon, a decrease in revenues from other operations (wholesale marketing, chemical feedstocks and net trading operations), partially offset by an increase in retail sales volumes. Retail sales prices per gallon were significantly lower than those in same quarter last year due to the unusually higher wholesale cost of propane experienced in the prior year. Retail volumes increased 7.3% to 175,168,000 gallons as compared to 163,323,000 gallons for the same quarter last year, primarily due to increases in the base business due to demand resulting from customer deferrals during the mild winter when compared with the same period as last year. Fiscal 1998 winter temperatures, as reported by the American Gas Association ("AGA"), were unchanged compared to the same quarter last year and 11.4% warmer than normal. Fiscal 1998 warmer than normal temperatures were also compounded by the El Nino weather factors of reduced wind chill, humidity, snow and cloud cover. Revenues from other operations decreased by $8,824,000 primarily due to a decreased wholesale marketing price per gallon. Gross Profit. Gross profit increased 8.0% to $89,449,000 as compared to $82,844,000 in the third quarter of fiscal 1997, primarily as the result of increased retail propane volumes and to a lesser extent the effect of acquisitions and slightly higher retail margins. Operating Expenses. Operating expenses increased 2.7% to $49,328,000 as compared to $48,054,000 in the third quarter of fiscal 1997 primarily due to acquisition related increases in personnel costs, plant and office expenses, vehicle and other expenses. Depreciation and Amortization. Depreciation and amortization expense increased 2.8% to $11,193,000 as compared to $10,893,000 primarily due to acquisitions of propane businesses since the third quarter of fiscal 1997. Interest expense. Interest expense increased 12.4% to $8,243,000 as compared to $7,334,000 in the third quarter of fiscal 1997. This increase is primarily the result of increased borrowings for the financing of acquisitions in the fourth quarter of fiscal 1997, partially offset by a slight decrease in the overall average interest rate paid by the Partnership on its borrowings. Nine Months Ended April 30, 1998 as compared to April 30, 1997 Total Revenues. Total revenues decreased 18.5% to $577,183,000 as compared to $707,789,000 for the prior period, primarily due to decreased sales price per retail gallon, decreased retail propane volumes due to warmer weather and a decrease in revenues from other operations (wholesale marketing, chemical feedstocks and net trading operations), partially offset by an increase in retail sales volume due to the effect of acquisitions. Retail sales prices per gallon were significantly lower than those during the prior year due to the unusually higher wholesale cost of propane experienced in the prior year. Retail volumes decreased 4.4% to 573,644,000 gallons as compared to 600,021,000 gallons for the same period last year, primarily due to warmer weather than the prior year. Fiscal 1998 winter temperatures, as reported by the AGA, were 4.0% warmer than the same period as last year and 8.1% warmer than normal. Fiscal 1998 warmer than normal temperatures were also compounded by the El Nino weather factors of reduced wind chill, humidity, snow and cloud cover. Revenues from other operations decreased by $24,993,000 primarily due to decreased wholesale marketing price per gallon and volume and decreased chemical feedstocks marketing volumes. 10 Gross Profit. Gross profit decreased 4.7% to $273,970,000 as compared to $287,390,000 in the same period last year, primarily as the result of decreased retail propane volumes, warmer weather, and to a lesser extent decreased trading profits, partially offset by the effect of acquisitions. Operating Expenses. Operating expenses decreased 2.2% to $154,275,000 as compared to $157,768,000 in the same period last year primarily due to lower variable costs associated with delivering fewer gallons partially offset by acquisition related increases in personnel costs, plant and office expenses, and vehicle and other expenses. Depreciation and Amortization. Depreciation and amortization expense increased 3.8% to $33,717,000 as compared to $32,477,000 for the same period last year primarily due to acquisitions of propane businesses since the third quarter of fiscal 1997. Interest expense. Interest expense increased 11.0% to $25,208,000 as compared to $22,705,000 in the first three quarters of fiscal 1997. This increase is primarily the result of increased borrowings for the financing of acquisitions in the fourth quarter of fiscal 1997, partially offset by a slight decrease in the overall average interest rate paid by the Partnership on its borrowings. Liquidity and Capital Resources The ability of the OLP 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, 1998, the General Partner believes that the OLP will have sufficient funds to meet the OLP's obligations. Future maintenance and working capital needs of the OLP 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 OLP may borrow on existing bank lines or the MLP may issue additional Common Units. Toward this purpose the MLP maintains a shelf registration statement with the Securities and Exchange Commission for, 1,800,322 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 OLP's acquisition of other businesses, properties or securities in business combination transactions. Operating Activities. Cash provided by operating activities was $72,037,000 for the nine months ended April 30, 1998, compared to $68,552,000 for the prior period. This increase is primarily due to the decreased receivables and inventory partially offset by decreased net income. These results were caused primarily by a decrease in propane prices, the decrease in volumes held in inventory and reduced retail volume activity as compared to those experienced during fiscal 1997. Investing Activities. During the nine months ended April 30, 1998, the Partnership made total acquisition capital expenditures of $6,203,000. This amount was funded by $4,080,000 cash payments (including $1,232,000 for transition costs previously accrued for fiscal 1997 acquisitions) $2,000,000 of common units issued, $867,000 of noncompete notes and $488,000 of other costs. During the nine months ended April 30, 1998, the Partnership made growth and maintenance capital expenditures of $15,267,000 consisting primarily of the following: 1) relocating and upgrading district plant facilities, 2) additions to Partnership-owned customer tanks and cylinders, 3) vehicle lease buyouts, and 4) 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 Partnership's principal physical assets, are generally long. 11 The Partnership maintains its vehicle and transportation equipment fleet by leasing light and medium duty trucks and tractors. The General Partner believes vehicle leasing is a cost effective method for meeting the Partnership's transportation equipment needs. 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. The Partnership does not have any material commitments of funds for capital expenditures other than to support the current level of operations. In fiscal 1998, the Partnership expects growth and maintenance capital expenditures to increase over fiscal 1997 levels. Financing Activities. During the nine months ended April 30, 1998, the Partnership repaid $4,685,000 to its Credit Facility as it related to working capital, business acquisitions, and capital expenditure needs. At April 30, 1998, $81,850,000 of borrowings were outstanding under the revolving portion of the Credit Facility. Letters of credit outstanding, used primarily to secure obligations under certain insurance arrangements, totaled $27,535,000. At April 30, 1998, the Operating Partnership had $95,615,000 available for general corporate, acquisition and working capital purposes under the Credit Facility. On May 19, 1998, the Operating Partnership declared a cash distribution of $23,542,550 to its limited partners, payable June 12, 1998. The distribution will fund Ferrellgas Partners, L.P.'s cash distribution to its unitholders and the $7,500,000 interest payment on its Senior Subordinated Notes. The interest payment on the Notes covers the period from December 15, 1997 to June 14, 1998. The next interest payment on the Notes will take place on December 15, 1998. The Operating Partnership is currently negotiating the issuance of debt that will effectively refinance its $200,000,000 of 10% Fixed Rate Senior Notes ("Notes") and balances outstanding under its Credit Facility. If consummated, the Operating Partnership will pay a call premium of five percent of the Notes in anticipation of an overall reduced borrowing rate. Adoption of New Accounting Standards. The Financial Accounting Standards Board recently issued the following new accounting standards: SFAS No. 130 "Reporting Comprehensive Income" and SFAS No. 131 "Disclosures About Segments of an Enterprise and Related Information." SFAS Nos. 130 and 131 are required to be adopted by the Partnership for the fiscal year ended July 31, 1999. The American Institute of Certified Public Accountants has issued Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use" and is effective for financial statements for fiscal years beginning after December 15, 1998. This SOP requires that entities capitalize certain internal-use software costs once certain capitalization requirements are met. The Partnership does not expect that the implementation of these rules will have a material effect on the Partnership's financial position or results of operations. 12 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 3.1 Amended and Restated Agreement of Limited Partnership of Ferrellgas, L.P., dated as of April 23, 1996 (Incorporated by reference to Exhibit 3 to the Partnership's Quarterly Report on Form 10-Q filed June 12, 1996.) 3.2 Articles of Incorporation for Ferrellgas Finance Corp. (Incorporated by reference to the same numbered Exhibitt the Partnership's Quarterly Report on Form 10-Q filed December 13, 1996.) 27.1 Financial Data Schedule - Ferrellgas, L.P. (filed in electronic format only) 27.2 Financial Data Schedule - Ferrellgas Finance Corp. (filed in electronic format only) (b) Reports on Form 8-K None. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FERRELLGAS, L.P. By Ferrellgas, Inc. (General Partner) Date: June 15, 1998 By /s/ Danley K. Sheldon Danley K. Sheldon President and Chief Financial Officer (Principal Financial and Accounting Officer) FERRELLGAS FINANCE CORP. Date: June 15, 1998 By /s/ Danley K. Sheldon Danley K. Sheldon Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) EX-27 2 FDS OLP EX 27.1
5 THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM FERRELLGAS, L.P. AND SUBSIDIARIES BALANCE SHEET ON APRIL 30, 1998 AND THE STATEMENT OF EARNINGS ENDED APRIL 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 0000922359 FERRELLGAS,L.P. 1000 US Dollars 9-mos JUL-31-1998 AUG-01-1997 APR-30-1998 1 9054 0 70667 0 26916 114594 622878 224330 622367 76813 338437 0 0 0 194335 622367 545110 577183 303213 498637 0 0 25208 42290 0 42290 0 0 0 42290 0 0
EX-27 3 FDS FFC EX 27.2
5 THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM FERRELLGAS FINANCE CORP. BALANCE SHEET ON APRIL 30, 1998 AND THE STATEMENT OF EARNINGS ENDED APRIL 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 0000922360 FERRELLGAS FINANCE COPR. 1 US Dollars 9-mos JUL-31-1998 AUG-01-1997 APR-30-1998 1 1000 0 0 0 0 1000 0 0 1000 0 0 1000 0 0 0 1000 0 0 0 0 0 0 0 (221) 0 (221) 0 0 0 (221) 0 0
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