OREANDA-NEWS. Ferrellgas Partners, L.P. (NYSE:FGP) (“Ferrellgas” or the “Company”) today announced financial results for its fiscal year ended July 31, 2017. The Company reported net loss attributable to Ferrellgas Partners, L.P. of $54.2 million, compared to net loss of $665.4 million for the same period in 2016.

Adjusted EBITDA was $230.1 million compared to $344.7 million in the prior year period primarily due to decreased contributions from the midstream operations segment.

“Weather for fiscal 2017 was a stunning 18% warmer than normal, and significantly affected our financial results,” said James E. Ferrell, the Company’s interim President and Chief Executive Officer. “Our strategy is to increase market share as reflected in our 2% increase in retail gallons sold, exceeding those of prior year on an absolute and weather adjusted basis. Overall gross margin was lower than the prior year period due to customer mix and an increase in the overall wholesale cost of propane.”

Propane gallons sold were 791.1 million gallons, compared to 778.9 million gallons in the prior year. Operating income generated by the propane operations and related equipment sales segment was $187.9 million, compared to $204.9 million in the prior year period.

Our midstream operations segment generated an operating loss of $26.3 million this year compared to $648.3 million in fiscal 2016 primarily due to the impairment charge of $658.1 million recorded last year.

About Ferrellgas

Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., and subsidiaries, serves propane customers in all 50 states, the District of Columbia, and Puerto Rico, and provides midstream services to major energy companies in the United States. Ferrellgas employees indirectly own 22.8 million common units of the partnership, through an employee stock ownership plan. Ferrellgas Partners, L.P. filed a Form 10-K with the Securities and Exchange Commission on September 28, 2017. Investors can request a hard copy of this filing free of charge and obtain more information about the partnership online at www.ferrellgas.com.

 

 

 
FERRELLGAS PARTNERS, L.P.  AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
         
ASSETS   July 31, 2017   July 31, 2016
         
Current Assets:        
Cash and cash equivalents   $ 5,760     $ 4,965  
Accounts and notes receivable, net (including $109,407 and $106,464 of        
accounts receivable pledged as collateral at July 31, 2017 and        
July 31, 2016, respectively and net of allowance for doubtful accounts of        
$1,976 and $5,067 at 2017 and 2016, respectively)     165,084       149,583  
Inventories     92,552       90,594  
Prepaid expenses and other current assets     33,388       39,973  
Total Current Assets     296,784       285,115  
         
Property, plant and equipment, net     731,923       774,680  
Goodwill     256,103       256,103  
Intangible assets, net     251,102       280,185  
Other assets, net     74,057       87,223  
Total Assets   $ 1,609,969     $ 1,683,306  
         
         
LIABILITIES AND PARTNERS' DEFICIT        
         
Current Liabilities:        
Accounts payable   $ 85,561     $ 67,928  
Short-term borrowings     59,781       101,291  
Collateralized note payable     69,000       64,000  
Other current liabilities     126,224       128,958  
Total Current Liabilities     340,566       362,177  
         
Long-term debt (a)     1,995,795       1,941,335  
Other liabilities     31,118       31,574  
Contingencies and commitments        
         
Partners Deficit:         
Common unitholders (97,152,665 and 98,002,665 units outstanding at        
July 31, 2017 and July 31, 2016)     (701,188 )     (570,754 )
General partner unitholder (989,926 units outstanding at July 31, 2017 and July 31, 2016)     (66,991 )     (65,835 )
Accumulated other comprehensive income (loss)     14,601       (10,468 )
Total Ferrellgas Partners, L.P. Partners' Deficit     (753,578 )     (647,057 )
Noncontrolling Interest     (3,932 )     (4,723 )
Total Partners' Deficit     (757,510 )     (651,780 )
Total Liabilities and Partners' Deficit   $ 1,609,969     $ 1,683,306  
         
         
         
(a) The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $357 million of 8.625% notes
which are liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.
 
 
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
(in thousands, except per unit data)
(unaudited)
    Three months ended    Twelve months ended 
    July 31   July 31
      2017       2016       2017       2016  
Revenues:                
Propane and other gas liquids sales   $ 269,201     $ 241,282     $ 1,318,412     $ 1,202,368  
Midstream operations     135,196       137,811       466,703       625,238  
Other     28,979       30,418       145,162       211,761  
Total revenues     433,376       409,511       1,930,277       2,039,367  
                 
Cost of sales:                
Propane and other gas liquids sales     142,427       115,592       694,155       564,433  
Midstream operations     129,006       97,335       429,439       471,234  
Other     14,054       14,812       67,267       126,237  
                 
Gross profit      147,889       181,772       739,416       877,463  
                 
Operating expense     109,477       111,326       431,751       457,910  
Depreciation and amortization expense     25,805       37,815       103,351       150,513  
General and administrative expense     13,091       11,923       46,980       48,579  
Equipment lease expense     7,089       7,279       29,124       28,833  
Non-cash employee stock ownership plan compensation charge     3,692       9,220       15,088       27,595  
Non-cash stock-based compensation charge (a)     -       2,567       3,298       9,324  
Asset impairments     -       628,802       -       658,118  
Loss on asset sales and disposal     5,596       7,615       14,457       30,835  
                 
Operating income (loss)     (16,861 )     (634,775 )     95,367       (534,244 )
                 
Interest expense     (40,378 )     (35,048 )     (152,485 )     (137,937 )
Other income (expense), net     41       199       1,474       110  
                 
Loss before income taxes     (57,198 )     (669,624 )     (55,644 )     (672,071 )
                 
Income tax benefit     (949 )     (1,482 )     (1,143 )     (36 )
                 
Net loss     (56,249 )     (668,142 )     (54,501 )     (672,035 )
                 
Net loss attributable to noncontrolling interest (b)     (481 )     (6,708 )     (294 )     (6,620 )
                 
Net loss attributable to Ferrellgas Partners, L.P.     (55,768 )     (661,434 )     (54,207 )     (665,415 )
                 
Less: General partner's interest in net loss     (558 )     (6,614 )     (542 )     (6,654 )
                 
Common unitholders' interest in net loss   $ (55,210 )   $ (654,820 )   $ (53,665 )   $ (658,761 )
                 
Loss Per Common Unit                
Basic and diluted net loss per common unitholders' interest   $ (0.57 )   $ (6.68 )   $ (0.55 )   $ (6.68 )
                 
Weighted average common units outstanding - basic     97,152.7       98,002.7       97,229.5       98,682.8  
                 
                 
Supplemental Data and Reconciliation of Non-GAAP Items:
                 
    Three months ended    Twelve months ended 
    July 31   July 31
      2017       2016       2017       2016  
                 
                 
Net loss attributable to Ferrellgas Partners, L.P.   $ (55,768 )   $ (661,434 )   $ (54,207 )   $ (665,415 )
Income tax benefit     (949 )     (1,482 )     (1,143 )     (36 )
Interest expense     40,378       35,048       152,485       137,937  
Depreciation and amortization expense     25,805       37,815       103,351       150,513  
EBITDA     9,466       (590,053 )     200,486       (377,001 )
Non-cash employee stock ownership plan compensation charge     3,692       9,220       15,088       27,595  
Non-cash stock based compensation charge (a)     -       2,567       3,298       9,324  
Asset impairments     -       628,802       -       658,118  
Loss on asset sales and disposal     5,596       7,615       14,457       30,835  
Other (income) expense, net     (41 )     (199 )     (1,474 )     (110 )
Change in fair value of contingent consideration (included in operating expense)     -       -       -       (100 )
Severance expense $414 included in operating expense for the twelve months ended period July 31, 2017                
and $1,545 included in general and administrative expense for the twelve months ended July 31, 2017.                
Also includes $128 and $1,329 in operating expense for the three and twelve months ended July 31, 2017                
and $124 general and administrative expense for the twelve months ended July 31, 2017.     -       128       1,959       1,453  
Unrealized (non-cash) losses (gains) on changes in fair value of derivatives $1,751, and $540                
included in cost of sales for the three and twelve months ended July 31, 2017, respectively, and                
$(1,849) and $(448) for the three and twelve months ended July 31, 2016, respectively. Also includes $(759) and                
$(3,997) included in operating expense for the three and twelve months ended July 31, 2017, respectively, and                
$(7) and $1,585 for the three and twelve months ended July 31, 2016, respectively.     992       (1,856 )     (3,457 )     1,137  
Acquisition and transition expenses (included in general and administrative expense)     -       -       -       99  
Net loss attributable to noncontrolling interest (b)     (481 )     (6,708 )     (294 )     (6,620 )
Adjusted EBITDA (c)     19,224       49,516       230,063       344,730  
Net cash interest expense (d)     (38,118 )     (33,604 )     (143,588 )     (132,860 )
Maintenance capital expenditures (e)     (6,417 )     (3,549 )     (16,935 )     (17,137 )
Cash paid for taxes     (282 )     (345 )     (310 )     (777 )
Proceeds from asset sales     3,789       51       7,952       6,023  
Distributable cash flow attributable to equity investors (f)     (21,804 )     12,069       77,182       199,979  
Distributable cash flow attributable to general partner and non-controlling interest     (436 )     241       1,544       4,000  
Distributable cash flow attributable to common unitholders     (21,368 )     11,828       75,638       195,979  
Less: Distributions paid to common unitholders     9,715       50,226       78,936       202,119  
Distributable cash flow shortage   $ (31,083 )   $ (38,398 )   $ (3,298 )   $ (6,140 )
                 
Propane gallons sales                
Retail - Sales to End Users     91,778       87,625       564,872       552,771  
Wholesale - Sales to Resellers     56,218       56,129       226,251       226,121  
Total propane gallons sales     147,996       143,754       791,123       778,892  
                 
Midstream operations barrels                
Crude oil hauled     12,700       14,587       49,249       79,411  
Crude oil sold     2,242       1,891       7,470       6,860  
                 
(a)  Non-cash stock-based compensation charges consist of the following:                
                 
    Three months ended   Twelve months ended
    July 31   July 31
      2017       2016       2017       2016  
Operating expense   $ -     $ 385     $ 661     $ 1,268  
General and administrative expense     -       2,182       2,637       8,056  
Total   $ -     $ 2,567     $ 3,298     $ 9,324  
             
             
(b)  Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.
(c)  Adjusted EBITDA is calculated as net loss attributable to Ferrellgas Partners, L.P., less the sum of the following: income tax benefit, interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, non-cash stock-based compensation charge, asset impairments, loss on asset sales and disposal, other (income) expense, net, change in fair value of contingent consideration, severance expense, unrealized (non-cash) losses (gains) on changes in fair value of derivatives, acquisition and transition expenses and net loss attributable to noncontrolling interest.  Management believes the presentation of this measure is relevant and useful, because it allows investors to view the partnership's performance in a manner similar to the method management uses, adjusted for items management believes makes it easier to compare its results with other companies that have different financing and capital structures. This method of calculating Adjusted EBITDA may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(d)  Net cash interest expense is the sum of interest expense less non-cash interest expense and other expense, net. This amount includes interest expense related to the accounts receivable securitization facility.
(e)  Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment.
(f)  Distributable cash flow attributable to equity investors is calculated as Adjusted EBITDA minus net cash interest, maintenance capital expenditures, cash paid for taxes, and proceeds from asset sales. Management considers distributable cash flow attributable to equity investors a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to equity investors. Distributable cash flow attributable to equity investors, as management defines it, may not be comparable to distributable cash flow attributable to equity investors or similarly titled measurements used by other corporations and partnerships. Items added into our calculation of distributable cash flow attributable to equity investors that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to equity investors may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(g)  Distributable cash flow attributable to common unitholders is calculated as Distributable cash flow attributable to equity investors minus distributable cash flow attributable to general partner and noncontrolling interests. Management considers distributable cash flow attributable to common unitholders a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to common unitholders. Distributable cash flow attributable to common unitholders, as management defines it, may not be comparable to distributable cash flow attributable to common unitholders or similarly titled measurements used by other corporations and partnerships. Items added to our calculation of distributable cash flow attributable to common unit holders that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to common unitholders may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.