EX-99.2 3 a18-18155_1ex99d2.htm EX-99.2

 Exhibit 99.2

 

FERRELLGAS PARTNERS, L.P.

INDEX TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

 

 

Page

Unaudited Pro Forma Condensed Consolidated Balance Sheet as of April 30, 2018

F-1

 

 

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the nine months ended April 30, 2018

F-2

 

 

Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended July 31, 2017

F-3

 

 

Notes to Unaudited Pro Forma Consolidated Condensed Financial Information

F-4

 


 

FERRELLGAS PARTNERS, L.P.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

 

On July 31, 2018, Ferrellgas Partners L.P. (“Ferrellgas Partners”) and Ferrellgas, L.P. (“the operating partnership”) completed the sale of a subsidiary and a group of assets (the “Disposition”), all of which had been included in Ferrellgas Partners’ and the operating partnership’s Midstream segment, for approximately $57.0 million in cash, subject to customary post-closing adjustments to working capital. The subsidiary sold was Bridger Environmental LLC, which encompasses all saltwater disposal operations previously operated by Ferrellgas Partners. The group of assets sold includes all assets associated with the crude oil trucking operations previously operated by Ferrellgas Partners. Additionally, the Disposition included the sale of two crude oil injection terminals.

 

The accompanying unaudited pro forma condensed consolidated financial information of Ferrellgas Partners has been prepared in accordance with Article 11 of Regulation S-X. The accompanying unaudited pro forma condensed consolidated balance sheet as of April 30, 2018, includes adjustments in the column “Midstream disposition” to give pro forma effect to the Disposition as if it had occurred on April 30, 2018. The accompanying unaudited pro forma condensed consolidated statements of operations for the nine months ended April 30, 2018 and the year ended July 31, 2017 include adjustments in the column “Midstream disposition” to give pro forma effect to the Disposition as if it occurred August 1, 2016. The terms “we”, “our”, “us”, and similar language used in this unaudited pro forma condensed consolidated financial information refer to Ferrellgas Partners and its subsidiaries.

 

This unaudited pro forma condensed consolidated financial information has been derived from our historical financial statements, which are included in our quarterly report on Form 10-Q for the quarter ended April 30, 2018, and our annual report on Form 10-K for the year ended July 31, 2017.

 

This unaudited pro forma condensed consolidated financial information is provided for illustrative purposes only and does not purport to represent what our actual results of operations would have been if the Disposition had occurred on the dates indicated, nor is it necessarily indicative of our future operating results or financial position.  However, the pro forma adjustments included in this unaudited pro forma condensed consolidated financial information reflect estimates and assumptions that we believe to be reasonable.

 

Although pro forma adjustments for the following transactions were not required under Article 11 of Regulation S-X, we have included adjustments to give pro forma effect to the following transactions in our unaudited pro forma condensed consolidated financial information:

 

·                  In January 2018, we sold Bridger Energy, LLC for an $8.5 million secured promissory note due in May 2020. Adjustments to remove the historical results of operations for this disposition have been included in the column “Other Midstream dispositions” in the unaudited pro forma condensed consolidated statements of operations as if the disposition had occurred on August 1, 2016.

 

·                  During the third quarter of fiscal 2018, we sold 1,292 rail cars for approximately $51.3 million. The proceeds from the disposal were used to repay debt. Adjustments to remove the historical results of operations for this disposition have been included in the column “Other Midstream dispositions” in the unaudited pro forma condensed consolidated statements of operations as if the disposition had occurred on August 1, 2016.

 

·                  On May 4, 2018, the operating partnership executed a new $575.0 million senior secured credit facility to replace the previous $575.0 million senior secured credit facility that was scheduled to mature in October 2018. This new facility consists of a $300 million revolving line of credit, as well as a $275 million term loan, both priced at LIBOR + 5.75% and maturing May 4, 2023. Adjustments have been included in the unaudited pro forma condensed consolidated balance

 


 

sheet as if the refinancing had occurred on April 30, 2018 and in the unaudited pro forma condensed consolidated statements of operations as if the refinancing had occurred on August 1, 2016.

 

·                  On July 31, 2018, we sold certain crude oil terminal assets previously included in our Midstream segment for approximately $8.0 million in cash. Adjustments to remove the historical assets, liabilities and results of operations for this disposition have been included in the column “Other Midstream dispositions” in the unaudited pro forma condensed consolidated balance sheet as if the disposition had occurred on April 30, 2018 and in the unaudited pro forma condensed consolidated statements of operations as if the disposition had occurred on August 1, 2016.

 

·                  On July 27, 2018, we sold a group of assets encompassing an immaterial reporting unit within our Propane operations segment for approximately $26.6 million in cash, subject to customary post-closing adjustments to working capital. The reporting unit was engaged in the sale of certain lower margin equipment to large retailers. Adjustments to remove the historical assets, liabilities and results of operations for this disposition have been included in the column “Global Products disposition” in the unaudited pro forma condensed consolidated balance sheet as if the disposition had occurred on April 30, 2018 and in the unaudited pro forma condensed consolidated statements of operations as if the disposition had occurred on August 1, 2016.

 


 

FERRELLGAS PARTNERS, L.P.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

AS OF APRIL 30, 2018

(in thousands)

(unaudited)

 

 

 

Ferrellgas
Partners, L.P.
Historical

 

Midstream
Disposition

 

Other Midstream
Dispositions

 

Global Products
Disposition

 

Pro Forma
Adjustments

 

Ferrellgas
Partners, L.P. Pro
Forma

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

9,499

 

$

—

 

$

—

 

$

(50

)

$

48,932

(B)

$

144,881

 

 

 

 

 

 

 

 

 

 

 

 

86,500

(A)

 

 

 

Accounts and notes receivable

 

202,727

 

(2,033

)

(754

)

(17,706

)

—

 

182,234

 

Inventories

 

85,062

 

(103

)

(110

)

(11,701

)

—

 

73,148

 

Prepaid expenses and other current assets

 

44,090

 

(7,421

)

(52

)

(4,020

)

—

 

32,597

 

Total Current Assets

 

341,378

 

(9,557

)

(916

)

(33,477

)

135,432

 

432,860

 

 

 

 

 

 

 

 

 

 

 

—

 

 

 

Property, plant and equipment, net

 

637,688

 

(67,189

)

(16,743

)

(1,205

)

—

 

552,551

 

Goodwill, net

 

246,098

 

—

 

—

 

—

 

—

 

246,098

 

Intangible assets, net

 

235,318

 

(95,493

)

—

 

(16,648

)

—

 

123,177

 

Other assets, net

 

72,094

 

(447

)

—

 

(915

)

15,064

(B)

85,796

 

Total Assets

 

$

1,532,576

 

$

(172,686

)

$

(17,659

)

$

(52,245

)

$

150,496

 

$

1,440,482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND PARTNERS’ CAPITAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

52,472

 

$

(110

)

$

(365

)

$

—

 

$

—

 

$

51,997

 

Other current liabilities

 

158,875

 

(264

)

(231

)

(1,565

)

—

 

156,815

 

Other Note payables to 3rd party

 

104,000

 

—

 

—

 

—

 

—

 

104,000

 

Total Current Liabilities

 

315,347

 

(374

)

(596

)

(1,565

)

—

 

312,812

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

1,995,608

 

—

 

—

 

—

 

65,000

(B)

2,060,608

 

Other liabilities

 

34,225

 

(210

)

—

 

(4,400

)

—

 

29,615

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Partners’ Capital

 

(830,276

)

—

 

—

 

—

 

(148,945

)(A)

(980,225

)

 

 

 

 

 

 

 

 

 

 

(1,004

)(B)

 

 

Accumulated other comprehensive income

 

17,672

 

—

 

—

 

—

 

—

 

17,672

 

Total Partners’ Capital

 

(812,604

)

—

 

—

 

—

 

(149,949

)

(962,553

)

Total Liabilities and Partners’ Capital

 

$

1,532,576

 

$

(584

)

$

(596

)

$

(5,965

)

$

(84,949

)

$

1,440,482

 

 

F-1


 

FERRELLGAS PARTNERS, L.P.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED APRIL 30, 2018

(in thousands, except per share data)

(unaudited)

 

 

 

Ferrellgas
Partners, L.P.
Historical

 

Midstream
Disposition

 

Other Midstream
Dispositions

 

Global Products
Disposition

 

Pro Forma
Adjustments

 

Ferrellgas
Partners, L.P. Pro
Forma

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Propane and other gas liquids sales

 

$

1,346,299

 

$

—

 

$

—

 

$

—

 

$

—

 

$

1,346,299

 

Midstream revenues and other

 

260,631

 

(68,826

)

(191,571

)

—

 

—

 

234

 

Other

 

118,691

 

—

 

—

 

(60,301

)

—

 

58,390

 

Total revenues

 

1,725,621

 

(68,826

)

(191,571

)

(60,301

)

 

 

1,404,923

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product sold - propane/gas liquids

 

802,852

 

—

 

—

 

—

 

—

 

802,852

 

Cost of product sold - Midstream

 

229,710

 

(47,707

)

(179,817

)

—

 

—

 

2,186

 

Cost of product sold - other

 

54,339

 

—

 

—

 

(47,238

)

—

 

7,101

 

Operating expenses

 

350,757

 

(18,668

)

(739

)

(7,938

)

—

 

323,412

 

Depreciation and amortization

 

76,565

 

(15,664

)

(2,876

)

(1,837

)

—

 

56,188

 

General and administrative

 

39,733

 

—

 

(3,647

)

(900

)

—

 

35,186

 

Equipment leases

 

20,828

 

—

 

(251

)

(22

)

—

 

20,555

 

ESOP expense

 

10,731

 

—

 

—

 

—

 

—

 

10,731

 

Goodwill Impairment

 

10,005

 

—

 

—

 

(10,005

)

—

 

—

 

Loss on disposal of fixed assets

 

46,414

 

(2,174

)

—

 

(45

)

—

 

44,195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

83,687

 

15,387

 

(4,241

)

7,684

 

—

 

102,517

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(123,855

)

—

 

—

 

—

 

(4,572

)(C)

(128,427

)

Other income, net

 

1,422

 

—

 

(921

)

(11

)

—

 

490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income tax exp

 

(38,746

)

15,387

 

(5,162

)

7,673

 

(4,572

)

(25,420

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

282

 

—

 

(5

)

(82

)

—

 

195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

(39,028

)

15,387

 

(5,157

)

7,755

 

(4,572

)

(25,615

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to noncontrolling interest

 

(131

)

155

 

(52

)

78

 

(46

)

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable Ferrellgas Partners, L.P.

 

(38,897

)

15,232

 

(5,105

)

7,677

 

(4,526

)

(25,619

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: General partner’s interest in net loss

 

(389

)

152

 

(51

)

77

 

(45

)

(256

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common unitholders’ interest in net loss

 

$

(38,508

)

$

15,080

 

$

(5,054

)

$

7,600

 

$

(4,481

)

$

(25,363

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common unitholders’ interest

 

$

(0.40

)

 

 

 

 

 

 

 

 

$

(0.26

)

 

F-2


 

FERRELLGAS PARTNERS, L.P.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JULY 31, 2017

(in thousands, except per share data)

(unaudited)

 

 

 

Ferrellgas
Partners, L.P.
Historical

 

Midstream
Disposition

 

Other Midstream
Dispositions

 

Global Products
Disposition

 

Pro Forma
Adjustments

 

Ferrellgas
Partners, L.P.
Pro Forma

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Propane and other gas liquids sales

 

$

1,318,412

 

$

—

 

$

—

 

$

—

 

$

—

 

$

1,318,412

 

Midstream revenues and other

 

466,703

 

(88,421

)

(376,267

)

—

 

—

 

2,015

 

Other

 

145,162

 

—

 

—

 

(75,382

)

—

 

69,780

 

Total revenues

 

1,930,277

 

(88,421

)

(376,267

)

(75,382

)

—

 

1,390,207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product sold - propane/gas liquids

 

694,155

 

—

 

—

 

—

 

—

 

694,155

 

Cost of product sold - Midstream

 

429,439

 

(58,588

)

(367,192

)

—

 

—

 

3,659

 

Cost of product sold - other

 

67,267

 

—

 

—

 

(58,972

)

—

 

8,295

 

Operating expenses

 

432,413

 

(22,543

)

(3,644

)

(12,001

)

—

 

394,225

 

Depreciation and amortization

 

103,351

 

(22,471

)

(5,647

)

(2,065

)

—

 

73,168

 

General and administrative

 

49,617

 

—

 

(3,463

)

(1,200

)

—

 

44,954

 

Equipment leases

 

29,123

 

—

 

(529

)

(35

)

—

 

28,559

 

ESOP expense

 

15,088

 

—

 

—

 

—

 

—

 

15,088

 

Loss on disposal of fixed assets

 

14,457

 

(5,259

)

—

 

—

 

—

 

9,198

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

95,367

 

20,440

 

4,208

 

(1,109

)

—

 

118,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(152,485

)

—

 

—

 

—

 

(9,034

)(C)

(161,519

)

Other income, net

 

1,474

 

—

 

(1,646

)

1,022

 

—

 

850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income tax expense

 

(55,644

)

20,440

 

2,562

 

(87

)

(9,034

)

(41,763

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

(1,143

)

—

 

(24

)

1,390

 

—

 

223

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

(54,501

)

20,440

 

2,586

 

(1,477

)

(9,034

)

(41,986

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

(294

)

206

 

26

 

(15

)

(91

)

(167

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable Ferrellgas Partners, L.P.

 

(54,207

)

20,234

 

2,560

 

(1,462

)

(8,943

)

(41,819

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: General partner’s interest in net loss

 

(542

)

202

 

26

 

(15

)

(89

)

(418

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common unitholders’ interest in net loss

 

$

(53,665

)

$

20,032

 

$

2,534

 

$

(1,447

)

$

(8,854

)

$

(41,401

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common unitholders’ interest

 

$

(0.55

)

 

 

 

 

 

 

 

 

$

(0.43

)

 

F-3


 

FERRELLGAS PARTNERS, L.P.

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(Unaudited)

 

Note A — Basis of presentation

 

The unaudited pro forma condensed consolidated balance sheet as of April 30, 2018, and the unaudited pro forma condensed consolidated statements of operations for the nine months ended April 30, 2018, and for the year ended July 31, 2017, are based on the historical financial statements of Ferrellgas Partners, L.P. (“Ferrellgas Partners”).

 

This unaudited pro forma condensed consolidated financial information is provided for illustrative purposes only and does not purport to represent what our actual results of operations would have been if the various transactions had occurred on the dates indicated, nor is it necessarily indicative of our future operating results or financial position.  However, the pro forma adjustments included in this unaudited pro forma condensed consolidated financial information reflect estimates and assumptions that we believe to be reasonable.

 

Preparation of the unaudited pro forma condensed consolidated financial information was based on assumptions considered appropriate by Ferrellgas Partners’ management. The unaudited pro forma condensed consolidated financial information is unaudited and is not necessarily indicative of the results which would have occurred if the various dispositions and the refinancing of our senior secured credit facility described above had been consummated on August 1, 2016 for the unaudited pro forma condensed consolidated statements of operations and on April 30, 2018 for the unaudited pro forma condensed consolidated balance sheet, nor does it purport to represent the future financial position and the results of operations for future periods. In management’s opinion, all adjustments necessary to reflect the pro forma effects of the various dispositions and the refinancing of our senior secured credit facility have been made.

 

Note B — Pro forma adjustments

 

The following is a description of the pro forma adjustments to the historical condensed consolidated financial statements:

 

(A)            Adjustments related to the various dispositions to reflect the estimated net cash proceeds received and unaudited pro forma pre-tax losses based on the carrying values as of April 30, 2018, including (in millions):

 

Description of disposition

 

Proceeds

 

Pro forma pre-tax loss

 

Sale of saltwater disposal well operations, crude oil trucking operations, and two crude oil injection terminals

 

$

57.0

 

$

115.1

 

Sale of crude oil terminal assets

 

 

8.0

 

 

9.1

 

Sale of an immaterial reporting unit within our Propane operations segment

 

 

26.6

 

 

19.7

 

Transaction fees and other associated costs

 

 

(5.1

)

 

5.1

 

Total

 

$

86.5

 

$

149.0

 

 

(B)            Adjustment to reflect the refinancing of Ferrellgas Partners’ credit facility on May 4, 2018, which included: (i) the issuance of a $275.0 million term loan; (ii) the repayment of $210.0 million of borrowings under the old senior secured credit facility as of April 30, 2018; (iii) payment of approximately $15.1 million in financing costs; and (iv) receipt of approximately $48.9 million in cash.

 

(C)            Adjustment to reflect increase in interest expense following the refinancing of Ferrellgas Partners’ credit facility on May 4, 2018.

 

F-4