For a more detailed description of these and other risk factors please see the section entitled “Item 1. Business – Risk factors” of our Annual Report on Form 10-K for our fiscal year ended July 31, 2004, as filed with the SEC on October 13, 2004.
Statements included in this report include forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. These statements often use words such as “anticipate,” “believe,” “intend,” “plan,” “projection,” “forecast,” “strategy,” “position,” “continue,” “estimate,” “expect,” “may,” “will,” or the negative of those terms or other variations of them or comparable terminology. These statements often discuss plans, strategies, events or developments that we expect or anticipate will or may occur in the future and are based upon the beliefs and assumptions of our management and on the information currently available to them. In particular, statements, express or implied, concerning future operating results, or our ability to generate sales, income or cash flow are forward-looking statements.
Forward-looking statements are not guarantees of future performance. You should not put undue reliance on any forward-looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially from those expressed in or implied by these forward-looking statements. Many of the factors that will affect our future results are beyond our ability to control or predict.
For a more detailed description of these and other forward-looking statements, see the section entitled “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for our fiscal year ended July 31, 2004.
When considering any forward-looking statement, you should also keep in mind the risk factors set forth in the sections entitled “Item 1. Business - Risk Factors” of our Annual Report on Form 10-K for our fiscal year ended July 31, 2004 and “Risk Factors” of our Quarterly Report on Form 10-Q for our fiscal quarter ended October 31, 2004. Any of these risks could impair our business, financial condition or results of operation. Any such impairment may affect our ability to make distributions to our unitholders or pay interest on the principal of any of our debt securities. In addition, the trading price, if any, of our securities could decline as a result of any such impairment.
Except for our ongoing obligations to disclose material information as required by federal securities laws, we undertake no obligation to update any forward-looking statements or risk factors after the date of this current report.
In addition, the classification of Ferrellgas Partners and the operating partnership as partnerships for federal income tax purposes means that we do not generally pay federal income taxes. We do, however, pay taxes on the income of our subsidiaries that are corporations. We rely on a legal opinion from our counsel, and not a ruling from the Internal Revenue Service, as to our proper classification for federal income tax purposes. See the section entitled “Item 1. Business—Risk Factors Risk Factors—Tax Risks—The IRS could treat us as a corporation for tax purposes, which would substantially reduce the
cash available for distribution to our unitholders of our Annual Report on Form 10-K for our fiscal year ended July 31, 2004.
Results of Operations
Overview
We are a leading distributor of propane and related equipment and supplies to customers primarily in the United States. We believe that we are the second largest retail marketer of propane in the United States including the largest national provider of propane by portable tank exchange as measured by our pro forma propane sales volumes in fiscal 2004. We serve more than one million residential, industrial/commercial, propane tank exchange, agricultural andother customers in all 50 states, Puerto Rico, the U.S. Virgin Islands and Canada. Our operations primarily include the distribution and sale of propane and related equipment and supplies with concentrations in the Midwest, Southeast, Southwest and Northwest regions of the country. Weather conditions have a significant impact on demand for propane for heating purposes. Accordingly, the volume of propane sold for this purpose is directly affected by the severity of the winter weather in the regions we serve and can vary substantially from year to year. In any given area, sustained warmer-than-normal temperatures will tend to result in reduced propane use, while sustained colder-than-normal temperatures will tend to result in greater use.
The market for propane is seasonal because of increased demand during the winter months primarily for the purpose of providing heating in residential and commercial buildings. Consequently, sales and operating profits are concentrated in our second and third fiscal quarters, which are during the winter heating season of November through March. However, the contributions of Blue Rhino, completed in April 2004, provides increased operating profits during the first and fourth fiscal quarters due to its counter-seasonal business activities and provides the operating partnership the ability to better utilize its seasonal resources at the retail distribution locations. Other factors affecting our results of operations include competitive conditions, energy commodity prices, demand for propane, timing of acquisitions and general economic conditions in the United States.
Our gross profit from the distribution of propane is primarily based on margins; that is the cents-per-gallon difference between our costs to purchase and distribute propane and the sale prices we charge our customers. Our residential customers and portable tank exchange customers typically provide us a greater margin and tend to be more stable customer base and less sensitive to price changes than our industrial/commercial, agricultural and other customers. The wholesale propane price per gallon is subject to various market conditions and may fluctuate based on changes in demand, supply and other energy commodity prices. We employ risk management activities that attempt to mitigate risks related to the purchasing, storing and transporting of propane.
We continue to pursue the following business strategies: | |
• | use technology to improve operations; | |
• | capitalize on our national presence and economies of scale; | |
• | employ a disciplined acquisition strategy and achieving internal growth; and |
• | align employee interests with our investors | |
| | | | | |
We have developed new technology to improve our routing and scheduling of customer deliveries, customer administration and operational workflow. We expect to deploy this new technology initiative to all of our retail distribution outlets during the first quarter of fiscal 2006.
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Three months ended April 30, 2005 compared to April 30, 2004
(amounts in thousands) Three months ended April 30, | 2005 | 2004 | | Favorable (unfavorable) variance |
Propane sales volumes (gallons) | 251,393 | 249,424 | | 1,969 | 0.8% |
| | | | | |
Propane and other gas liquids sales | $467,664 | $368,264 | | $99,400 | 27.0% |
Gross profit | 180,565 | 155,816 | | 24,749 | 15.9% |
Operating income | 43,011 | 45,804 | | (2,793) | (6.1)% |
Interest expense | 22,611 | 17,998 | | (4,613) | (25.6)% |
Propane sales volumes during the three months ended April 30, 2005 were consistent with the prior period. Increases in volume due to acquisitions completed during the three months ended April 30, 2004 and in subsequent periods were offset by decreased propane sales volumes due to warmer than normal temperatures. Heating degree days as reported by the National Oceanic and Atmospheric Administration (“NOAA”) were 5% warmer than normal during the three months ended April 30, 2005 and were 7% warmer than normal during the three months ended April 30, 2004.
The average sales price per gallon increased due to the effect of a significant increase in the wholesale cost of propane during the three months ended April 30, 2005 as compared to the prior year period. The wholesale market price at one of the major supply points, Mt. Belvieu, Texas, averaged $0.83 per gallon during the three months ended April 30, 2005 compared to an average price of $0.70 per gallon in the prior year period. Other major supply points in the United States also experienced comparable increases during the three months ended April 30, 2005.
Propane and other gas liquids sales increased $56.1 million compared to the prior fiscal year period due to an increase in the average propane sales price per gallon and $43.3 million due to an increase in propane sales volumes primarily due to acquisitions completed during the three months ended April 30, 2004 and in subsequent periods. This increase in propane sales volumes was partially offset by sales decreases in retail sales volumes primarily caused by the warmer temperatures as discussed above.
Gross profit increased $24.7 million primarily due to acquisitions completed during the three months ended April 30, 2004 and in subsequent periods and, to a lesser extent, increased cents per gallon margins. The increase in gross profit was partially offset by a lower contribution from our risk management trading activities.
Operating income decreased $2.8 million reflecting the previously mentioned increase in gross profit, offset by increases in operating expense, depreciation and amortization expense and, to a lesser extent, general and administrative expense. Operating expense increased primarily due to the Blue Rhino contribution completed in April 2004. Depreciation and amortization expense increased primarily due to assets related to acquisitions completed during the three months ended April 30, 2004 and in subsequent periods. General and administrative expense increased primarily due to the Blue Rhino contribution and, to a lesser extent, additional expenses related to the continuing roll-out of our technology initiative to our retail distribution outlets.
Interest expense increased 25.6% primarily due to increased borrowings used to finance acquisitions completed during the three months ended April 30, 2004 and in subsequent periods and to a lesser extent, rising variable interest rates.
Interest expense of the operating partnership
Interest expense increased 26.9% primarily due to increased borrowings used to finance acquisitions completed during the three months ended April 30, 2004 and in subsequent periods and to a lesser extent, rising variable interest rates.
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Nine months ended April 30, 2005 compared to April 30, 2004
(amounts in thousands) Nine months ended April 30, | 2005 | 2004 | | Favorable (unfavorable) variance |
Propane sales volumes (gallons) | 767,553 | 743,763 | | 23,790 | 3.2% |
| | | | | |
Propane and other gas liquids sales | $1,400,519 | $1,057,751 | | $342,768 | 32.4% |
Gross profit | 517,527 | 446,863 | | 70,664 | 15.8% |
Operating income | 110,506 | 128,092 | | (17,586) | (13.7)% |
Interest expense | 68,670 | 52,083 | | (16,587) | (31.8)% |
Propane sales volumes during the nine months ended April 30, 2005 increased primarily due to acquisitions completed during the three months ended April 30, 2004 and in subsequent periods. This increase was partially offset by decreased propane sales volumes due to warmer than normal temperatures. Heating degree days as reported by the NOAA were 7% warmer than normal during the nine months ended April 30, 2005 compared to 5% warmer than normal during the nine months ended April 30, 2004.
The average sales price per gallon increased due to the effect of a significant increase in the wholesale cost of propane during the nine months ended April 30, 2005 as compared to the prior year. The wholesale market price at one of the major supply points, Mt. Belvieu, Texas, averaged $0.82 per gallon during the nine months ended April 30, 2005 compared to an average price of $0.60 per gallon in the prior year period. Other major supply points in the United States also experienced comparable increases during the nine months ended April 30, 2005.
Propane and other gas liquids sales increased $196.4 million compared to the prior fiscal year period due to an increase in the average propane sales price per gallon and $146.4 million due to an increase in propane sales volumes primarily due to acquisitions completed during the three months ended April 30, 2004 and in subsequent periods. This increase in propane sales volumes was partially offset by decreases in retail sales volumes primarily caused by the warmer temperatures as discussed above.
Gross profit increased $70.7 million primarily due to acquisitions completed during the three months ended April 30, 2004 and in subsequent periods and, to a lesser extent, increased cents per gallon margins. The increase in gross profit was partially offset by a lower contribution from risk management trading activities.
Operating income decreased $17.6 million reflecting the previously mentioned increase in gross profit, offset by increases in operating expense, depreciation and amortization expense and, to a lesser extent, general and administrative expense. Operating expense increased primarily due to the Blue Rhino contribution completed in April 2004. Depreciation and amortization expense increased primarily due to assets related to acquisitions completed during the three months ended April 30, 2004 and in subsequent periods and, to a lesser extent, assets related to our technology initiative that were depreciated beginning in October 2003. General and administrative expense increased primarily due to the Blue Rhino contribution and, to a lesser extent, additional expenses related to the continuing roll-out of our technology initiative to our retail distribution outlets.
Interest expense increased 31.8% primarily due to increased borrowings used to finance acquisitions completed during the three months ended April 30, 2004 and in subsequent periods and to a lesser extent, rising variable interest rates.
Interest expense of the operating partnership
Interest expense increased 35.5% primarily due to increased borrowings used to finance acquisitions completed during the three months ended April 30, 2004 and in subsequent periods and to a lesser
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extent, rising variable interest rates.
Forward-looking statements
We expect the following factors to impact our statement of earnings in the last quarter of fiscal 2005 compared to the same period during fiscal 2004:
• | revenues and cost of product sold will increase due to our assumption that propane prices during the remainder of fiscal 2005 will be higher than those during the same period in fiscal 2004; and |
• | our assumption that interest rates will remain relatively stable during the remainder of fiscal 2005. |
We expect that higher commodity prices experienced during the first nine months of fiscal 2005 will continue to have an unfavorable impact on our results of operations during the remainder of fiscal 2005.
Liquidity and Capital Resources
General
Our cash requirements include working capital requirements, debt service payments, the required quarterly senior unit distribution, the minimum quarterly common unit distribution, capital expenditures and acquisitions. The minimum quarterly distribution of $0.50 expected to be paid on June 14, 2005 to all common units that were outstanding on June 3, 2005, represents the forty-third consecutive minimum quarterly distribution paid to our common unitholders dating back to October 1994. Working capital requirements are subject to the price of propane, the weather and other changes in the demand for propane. Relatively colder weather or higher propane prices during the winter heating season increase our working capital requirements.
Our ability to satisfy our obligations is dependent upon our future performance, which will be subject to prevailing economic, financial, business and weather conditions and other factors, many of which are beyond our control. Due to the seasonality of the retail propane distribution business, a significant portion of our cash flow from operations is generated during the winter heating season that occurs during our second and third fiscal quarters. Our net cash provided by operating activities primarily reflect earnings from our business activities adjusted for depreciation and amortization and changes in our working capital accounts. Historically, we generate significantly lower net cash from operating activities in our first and fourth fiscal quarters as compared to the second and third fiscal quarters because fixed costs generally exceed gross profit during the non-peak heating season. Subject to meeting the financial tests discussed below, our general partner believes that the operating partnership will have sufficient funds available to meet its obligations, and to distribute to Ferrellgas Partners sufficient funds to permit Ferrellgas Partners to meet its obligations for the remainder of fiscal 2005 and in 2006. In addition, our general partner believes that the operating partnership will have sufficient funds available to distribute to Ferrellgas Partners sufficient cash to pay the required quarterly distribution on the senior units and the minimum quarterly distribution on all of its common units for fiscal 2005 and in fiscal 2006.
Our bank credit facility, public debt, private debt and accounts receivable securitization facility contain several financial tests and covenants restricting our ability to pay distributions, incur debt and engage in certain other business transactions. In general, these tests are based on our debt to cash flow ratio and cash flow to interest expense ratio.Our general partner currently believes that the most restrictive of these tests are debt incurrence limitations under the terms of our bank credit and accounts receivable securitization facilities and limitations on the payment of distributions within our 8.75% senior notes due 2012. The bank credit and accounts receivable securitization facilities generally limit the operating partnership’s ability to incur debt if it exceeds prescribed ratios of either debt to cash flow or cash flow to interest expense. Our 8.75% senior notes restrict payments if a minimum ratio of cash flow to interest expense is not met, assuming certain exceptions to this ratio limit have previously been exhausted. This restriction places limitations on our ability to make restricted payments such as the payment of cash distributions to our unitholders. The cash flow used to determine these financial tests generally is based upon our most recent cash flow performance giving pro forma effect for acquisitions and divestitures
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made during the test period. Our bank credit facility, public debt, private debt and accounts receivable securitization facility do not contain early repayment provisions related to a potential decline in our credit rating. As of April 30, 2005, we met all the required quarterly financial tests and covenants. Based upon current estimates of our cash flow, our general partner believes that we will be able to continue to meet all of the required quarterly financial tests and covenants for fiscal 2005 and in fiscal 2006. However, we may not meet the applicable financial tests in future quarters if we were to experience:
• | continued significantly warmer than normal winter temperatures; |
• | continued volatile energy commodity cost environment; | |
• | an unexpected downturn in business operations; or | |
• | a general economic downturn in the United States. | |
| | | | |
This failure could have a materially adverse effect on our operating capacity and cash flows and could restrict our ability to incur debt or to make cash distributions to our unitholders, even if sufficient funds were available. Depending on the circumstances, we may consider alternatives to permit the incurrence of debt or the continued payment of the quarterly cash distribution to our unitholders. No assurances can be given, however, that such alternatives can or will be implemented with respect to any given quarter.
We expect our future capital expenditures and working capital needs to be provided by a combination of cash generated from future operations, existing cash balances, the bank credit facility or the accounts receivable securitization facility. See additional information about the accounts receivable securitization facility in “Operating Activities – Accounts receivable securitization.” In order to reduce existing indebtedness, fund future acquisitions and expansive capital projects, we may obtain funds from our facilities, we may issue additional debt to the extent permitted under existing financing arrangements or we may issue additional equity securities, including, among others, common units.
Toward this purpose, in June 2003, a shelf registration statement was declared effective by the SEC for the periodic sale by Ferrellgas Partners, the operating partnership, Ferrellgas Partners Finance Corp. and Ferrellgas Finance Corp. of up to $500 million of equity and/or debt securities. The securities related to this registration statement are available to us for sale from time to time in the future to fund acquisitions, the reduction of indebtedness, the redemption of senior units and for general partnership purposes subject to acceptable market conditions. As of May 31, 2005, we had $151.4 million available under the shelf registration statement.
We also maintain a shelf registration statement with the SEC for the issuance of up to 2.0 million common units. We may issue these common units in connection with our acquisition of other businesses, properties or securities in business combination transactions.
Operating Activities
Net cash provided by operating activities was $58.9 million for the nine months ended April 30, 2005, compared to net cash provided by operating activities of $74.4 million for the prior fiscal year period. This decrease in cash provided by operating activities is primarily due to increased cash used to fund working capital offset by increased utilization of the accounts receivable securitization facility. Cash required to fund working capital during the nine months ended April 30, 2005 increased $100.8 million compared to $42.2 million for the prior year fiscal period. This use of working capital is primarily due to the timing of cash received from our customers’ accounts receivable, cash used to purchase inventory and the effect of increased wholesale propane prices.
Accounts receivable securitization
Cash flows from the accounts receivable securitization facility increased $50.6 million primarily due to increased working capital needs related to increased propane wholesale prices, the timing of inventory purchases and receipts of customer payments. We received net funding of $38.3 million from this facility during the nine months ended April 30, 2005 as compared to having remitted to the facility $12.3 million in the prior fiscal year period.
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Our general strategy for obtaining liquidity at the lowest cost of capital is to initially utilize the accounts receivable securitization facility before borrowing under the operating partnership’s bank credit facility. See additional discussion about the operating partnership’s bank credit facility in “Financing Activities – Bank credit facility.” Our utilization of the accounts receivable securitization facility is limited by the amount of accounts receivable that we are permitted to transfer. We renewed this facility effective September 21, 2004, for a 364-day commitment with Banc One, NA. We increased our use of the accounts receivable securitization facility during the winter heating season when our working capital needs and our accounts receivable balances increased significantly. At April 30, 2005, we did not have any remaining capacity to transfer additional trade accounts receivable to the accounts receivable securitization facility. The renewal of the facility provided us with the ability to transfer increased amounts of accounts receivable during the fiscal 2005 winter heating season. As our trade accounts receivable increased during the winter heating season, the securitization facility permits us to transfer additional trade accounts receivable to the facility, thereby providing additional cash for working capital needs. In accordance with SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities,” this transaction is reflected in our condensed consolidated financial statements as a sale of accounts receivable and a retained interest in transferred accounts receivable. On June 7, 2005, we renewed this facility for an additional 364-day commitment with JP Morgan Chase Bank, N.A.
The operating partnership
Net cash provided by operating activities was $71.7 million for the nine months ended April 30, 2005, compared to net cash provided by operating activities of $84.2 million for the prior fiscal year period. This decrease in cash provided by operating activities is primarily due to increased cash used to fund working capital partially offset by increased utilization of the accounts receivable securitization facility to meet increased working capital needs related to the effect of increased wholesale propane prices.
Investing Activities
During the nine months ended April 30, 2005, net cash used in investing activities was $55.1 million, compared to $406.8 million used in investing activities for the prior fiscal year period. This decrease in cash used in investing activities is primarily due to reduced acquisition activity during fiscal 2005 partially offset by increased capital expenditures during fiscal 2005.
Blue Rhino Contribution
On April 20, 2004, we paid $343.4 million in cash as payment of obligations that were assumed in connection with the Blue Rhino contribution. See Note F - “Business combinations” - in our condensed consolidated financial statements for further discussion about the Blue Rhino contribution.
Acquisitions
During the nine months ended April 30, 2005, we used $22.9 million in cash and $7.0 million of common unit issuances for the acquisition of propane companies as compared to $37.4 million in cash and $0.7 million of common unit issuances in the prior year period.
Capital expenditures
We made cash capital expenditures of $41.0 million during the nine months ended April 30, 2005 as compared to $25.2 million in the prior fiscal year period primarily due to increased capital expenditures required for our technology initiative and distribution of propane by portable tank exchange operations acquired in April, 2004. Capital expenditures during the nine months ended April 30, 2005 consisted primarily of expenditures for betterment and replacement of district facilities, distribution of propane by portable tank exchange, our technology initiative, and vehicle and equipment lease buyouts.
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Financing Activities
During the nine months ended April 30, 2005, net cash provided by financing activities was $0.6 million compared to net cash provided by financing activities of $342.3 million for the prior fiscal year period. This decrease in cash provided by financing activities was primarily due to proceeds received during fiscal 2004 related to debt and equity issued primarily to finance the assumed Blue Rhino merger obligation related to the Blue Rhino contribution.
Various equity transactions and equity structure modifications
Our senior units are owned by an entity beneficially owned by our general partner’s Chairman, Chief Executive Officer and President, Mr. Ferrell. We pay the senior units a quarterly cash distribution equivalent to 10 percent per annum of the liquidating value, currently $1 per quarter. We can redeem the senior units at any time, in whole or in part, upon payment in cash of the liquidating value of the senior units, currently $40 per unit, plus the amount of any accrued and unpaid distributions. The holder of the senior units has the right, subject to various events and conditions, to convert any outstanding senior units into common units beginning on the earlier of December 31, 2005 or upon the occurrence of a material event as defined by our partnership agreement. The number of common units issuable upon conversion of a senior unit is equal to the senior unit liquidation value, divided by the then current market price of a common unit. Generally, a material event includes (1) a change of control; (2) the treatment of Ferrellgas Partners as an association taxable as a corporation for federal income tax purposes; Ferrellgas Partners’ failure to use the aggregate cash proceeds from equity issuances, other than issuances of equity pursuant to an exercise of any common unit options, to redeem a portion of its senior units other than up to $20.0 million of cash proceeds from equity issuances used to reduce Ferrellgas Partners’ indebtedness; or (3) Ferrellgas Partners’ failure to pay the senior unit distribution in full for any fiscal quarter. Such conversion rights are contingent upon us not previously redeeming such securities.
On March 7, 2005, Ferrellgas Partners amended its partnership agreement to reflect the extension of the existing agreement with Ferrell Companies involving the priority of quarterly distribution payments on common units held publicly. The existing provision in the partnership agreement, originally scheduled to expire December 31, 2005, was extended to April 30, 2010. This provision allows Ferrellgas Partners to defer distributions on the common units held by Ferrell Companies up to an aggregate outstanding amount of $36.0 million.
August Common Unit offering
During August 2004, we issued, in a public offering, 2.9 million common units at a price of $20.00 per unit, less commissions and underwriting expenses. After commissions and underwriting expenses, we received net proceeds of $54.9 million for the issuance of these common units. We used the net proceeds, together with contributions made by our general partner of $1.1 million to maintain its effective 2% general partnership interest in us, to reduce long-term borrowings outstanding under the bank credit facility of the operating partnership.
November Common Unit offering
During November 2004, we received net proceeds of $39.8 million pursuant to our issuance of 2.1 million common units in a private offering to a single unaffiliated purchaser. We used the net proceeds, together with contributions made by our general partner of $0.8 million to maintain its effective 2% general partner interest in us, to reduce borrowings outstanding under the bank credit facility of the operating partnership.
Distributions
Ferrellgas Partners paid the required quarterly distributions on the senior units and the minimum quarterly distribution on all common units, as well as the related general partner distributions, totaling $86.7 million during the nine months ended April 30, 2005 in connection with the distributions declared for
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the three months ended July 31, 2004, October 31, 2004, and January 31, 2005. The required quarterly distribution on the senior units, the minimum quarterly distribution on all common units and the related general partner distributions for the three months ended April 30, 2005 of $29.3 million are expected to be paid on June 14,2005 to holders of record on June 3, 2005. See related disclosure about the distributions of senior units in “Disclosures about Effects of Transactions with Related Parties.”
Bank credit facility
On April 22, 2005 Ferrellgas refinanced its $307.5 million bank credit facility with a $330.0 million credit facility maturing April 22, 2010, unless extended or renewed. At April 30, 2005, $87.3 million of borrowings and $58.6 million of letters of credit were outstanding under our unsecured $330.0 million bank credit facility. Letters of credit are currently used to cover obligations primarily relating to requirements for insurance coverage and, and to a lesser extent, risk management activities and product purchases. At April 30, 2005, we had $184.1 million available for working capital, acquisition, capital expenditure and general partnership purposes under the $330.0 million bank credit facility.
All borrowings under our $330.0 million bank credit facility bear interest, at our option, at a rate equal to either:
• a base rate, which is defined as the higher of the federal funds rate plus 0.50% or Bank of America’s prime rate (as of April 30, 2005, the federal funds rate and Bank of America’s prime rate were 2.97% and 5.75%, respectively); or
• the Eurodollar Rate plus a margin varying from 1.50% to 2.50% (as of April 30, 2005, the one-month Eurodollar Rate was 3.02%).
In addition, an annual commitment fee is payable on the daily unused portion of our $330.0 million bank credit facility at a per annum rate varying from 0.375% to 0.500% (as of April 30, 2005, the commitment fee per annum rate was 0.375%).
We believe that the liquidity available from our $330.0 million bank credit facility and the accounts receivable securitization facility will be sufficient to meet our future working capital needs for the remainder of fiscal 2005 and all of fiscal 2006. See “Operating Activities” for discussion about our accounts receivable securitization facility. However, if we were to experience an unexpected significant increase in working capital requirements, our working capital needs could exceed our immediately available resources. Events that could cause increases in working capital borrowings or letter of credit requirements include, but are not limited to the following:
• | a significant increase in the wholesale cost of propane; | |
• | a significant delay in the collections of accounts receivable; | |
• | increased volatility in energy commodity prices related to risk management activities; |
• | increased liquidity requirements imposed by insurance providers; | |
• | a significant downgrade in our credit rating; | |
• | decreased trade credit; or | |
• | a significant acquisition. | |
| | | | | | | |
If one or more of these or other events caused a significant use of available funding, we may consider alternatives to provide increased working capital funding. No assurances can be given, however, that such alternatives would be available, or, if available, could be implemented.
The operating partnership
The financing activities discussed above also apply to the operating partnership except for cash flows related to distributions, as discussed below.
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Distributions
The operating partnership paid cash distributions of $99.4 million during the nine months ended April 30, 2005. The operating partnership expects to make cash distributions of $41.7 million on June 14, 2005.
Contributions received by the operating partnership
In August 2004, the operating partnership received cash contributions of $55.4 million and $0.6 million from its limited partner, Ferrellgas Partners, and its general partner, respectively, in connection with the issuance by Ferrellgas Partners of 2.9 million common units. The operating partnership used aggregate net proceeds from these contributions to reduce borrowings outstanding under its bank credit facility.
In November 2004, the operating partnership received cash contributions of $40.4 million and $0.4 million from Ferrellgas Partners and its general partner, respectively, in connection with the issuance by Ferrellgas Partners of 2.1 million common units. The operating partnership used aggregate net proceeds from these contributions to reduce borrowings outstanding under its bank credit facility.
Disclosures about Risk Management Activities Accounted for at Fair Value
The following table summarizes the change in the unrealized fair value of contracts from our risk management trading activities for the three and nine months ended April 30, 2005:
(in thousands) | For the three months ended April 30, 2005 | | For the nine months ended April 30, 2005 |
Unrealized (losses) gains in fair value of contracts outstanding at beginning of period | $(1,762) | | $ 424 |
Other unrealized losses recognized | (1,147) | | (8,130) |
Less: realized losses recognized | (2,917) | | (7,714) |
Unrealized gains in fair value of contracts outstanding at April 30, 2005 | $ 8 | | $ 8 |
The following table summarizes the maturity of contracts from our risk management trading activities for the valuation methodologies we utilized as of April 30, 2005:
(in thousands) | | Fair value of contracts at period-end |
Source of fair value | | Maturity less than 1 year |
Prices actively quoted | | $ (614) |
Prices provided by other external sources | | 622 |
Prices based on models and other valuation methods | | - |
Unrealized gains in fair value of contracts outstanding at April 30, 2005 | | $ 8 |
See additional discussion about market, counterparty credit and liquidity risks related to our risk management trading activities and other risk management activities in “Item 3. Quantitative and Qualitative Disclosures about Market Risk.”
Disclosures about Effects of Transactions with Related Parties
We have no employees and are managed and controlled by our general partner. Pursuant to our partnership agreement, our general partner is entitled to reimbursement for all direct and indirect
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expenses incurred or payments it makes on our behalf, and all other necessary or appropriate expenses allocable to us or otherwise reasonably incurred by our general partner in connection with operating our business. These reimbursable costs, which totaled $178.7 million for the nine months ended April 30, 2005, include compensation and benefits paid to employees of our general partner who perform services on our behalf, as well as related general and administrative costs.
Ferrell Companies is the sole shareholder of our general partner and owns 17.8 million of our common units. FCI Trading Corp. is wholly-owned by Ferrell Companies and owns 0.2 million of our common units. Ferrell Propane, Inc. is wholly-owned by our general partner and owns 0.1 million common units. JEF Capital Management, Inc. (“JEF Capital”) is beneficially owned by James E. Ferrell, the Chairman, President and Chief Executive Officer of our general partner, and thus is an affiliate. JEF Capital is the holder of all of Ferrellgas Partners’ issued and outstanding senior units.
During the nine months ended April 30, 2005, Ferrellgas Partners paid common unit distributions of $26.7 million, $0.3 million and $0.1 million to Ferrell Companies, FCI Trading Corp. and Ferrell Propane, Inc., respectively, in connection with the distributions declared by Ferrellgas Partners for the three months ended July 31, 2004, October 31, 2004 and January 31, 2005. Also during the nine months ended April 30, 2005, Ferrellgas Partners paid the general partner distributions of $0.9 million for the three months ended July 31, 2004, October 31, 2004 and January 31, 2005. We paid JEF Capital $6.0 million in senior unit distributions during the nine months ended April 30, 2005 in connection with the distributions declared for the three months ended July 31, 2004, October 31, 2004, and January 31, 2005. On April 30, 2005, we accrued a senior unit distribution of $2.0 million for the three months ended April 30, 2005 that we expect to pay to JEF Capital on June 14, 2005.
Ferrellgas Partners’ partnership agreement generally provides that it use the cash proceeds of any offering of common units to redeem a portion of the outstanding senior units, otherwise a “Material Event” would be deemed to have occurred and JEF Capital, as the holder of the senior units, would thereafter have specified rights, such as the right to convert the senior units into common units or the right to register the senior units. See “Financing Activities – Various equity transactions and equity structure modifications.”
Ferrell International Limited (“Ferrell International”) is beneficially owned by Mr. Ferrell and thus is an affiliate. We enter into transactions with Ferrell International in connection with our risk management activities and do so at market prices in accordance with our affiliate trading policy approved by our general partner’s Board of Directors. These transactions include forward, option and swap contracts and are all reviewed for compliance with the policy. During the nine months ended April 30, 2005, we recognized net purchases from sales, purchases or commodity derivative transactions of $2.7 million. These net purchases, sales and commodity derivatives transactions with Ferrell International are classified as cost of product sold on our condensed consolidated statements of earnings. We provide limited accounting services to Ferrell International. During the nine months ended April 30, 2005, we recognized net receipts from providing limited accounting services of $30 thousand.
See “Financing Activities” for additional information regarding transactions with related parties. |
We believe these related party transactions were under terms that were no less favorable to us than those available with third parties.
We have had no material changes in our contractual obligations since our disclosure in our Annual Report on Form 10-K for the fiscal year ended 2004.
See Note O – “Adoption of new accounting standards” – in our condensed consolidated financial statements for discussion regarding the adoption of new accounting standards in the current fiscal year.
We have had no material changes to our critical accounting policies and estimates since our disclosure in our Annual Report on Form 10-K for the fiscal year ended 2004.
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ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Our risk management activities primarily attempt to mitigate risks related to the purchasing, storing and transporting of propane. We generally purchase propane in the contract and spot markets from major domestic energy companies on a short-term basis. Our costs to purchase and distribute propane fluctuate with the movement of market prices. This fluctuation subjects us to potential price risk, which we attempt to minimize through the use of risk management activities.
Our risk management activities include the use of energy commodity forward contracts, swaps and options traded on the over-the-counter financial markets and futures and options traded on the New York Mercantile Exchange. These risk management activities are conducted primarily to offset the effect of market price fluctuations on propane inventory and purchase commitments and to mitigate the price and inventory risk on sale commitments to our customers.
Our risk management activities are intended to generate a profit, which we then apply to reduce our cost of product sold. The results of our risk management activities directly related to the delivery of propane to our customers, which include our supply procurement, storage and transportation activities, are presented in our discussion of margins and are accounted for at cost. The results of our other risk management activities are presented separately in our discussion of gross profit found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations” as risk management trading activities and are accounted for at fair value.
Market risks associated with energy commodities are monitored daily by senior management for compliance with our commodity risk management policy. This policy includes an aggregate dollar loss limit and limits on the term of various contracts. We also utilize volume limits for various energy commodities and review our positions daily where we remain exposed to market risk, so as to manage exposures to changing market prices.
Market, Credit and Liquidity Risk. New York Mercantile Exchange traded futures and options are guaranteed by the New York Mercantile Exchange and have nominal credit risk. We are exposed to credit risk associated with over-the-counter traded forwards, swaps and option transactions in the event of nonperformance by counterparties. For each counterparty, we analyze its financial condition prior to entering into an agreement, establish a credit limit and monitor the appropriateness of the limit. The change in market value of Exchange-traded futures contracts requires daily cash settlement in margin accounts with brokers. Over-the-counter instruments are generally settled at the expiration of the contract term. In order to minimize the liquidity risk of cash, margin or collateral requirements of counterparties for over-the-counter instruments, we attempt to balance maturities and positions with individual counterparties. Historically, our risk management activities have not experienced significant credit-related losses in any year or with any individual counterparty. Our risk management contracts do not contain material repayment provisions related to a potential decline in our credit rating.
Sensitivity Analysis. We have prepared a sensitivity analysis to estimate the exposure to market risk of our energy commodity positions. Forward contracts, futures, swaps and options outstanding as of April 30, 2005, that were used in our risk management activities were analyzed assuming a hypothetical 10% adverse change in prices for the delivery month for all energy commodities. The potential loss in future earnings regarding these positions from a 10% adverse movement in market prices of the underlying energy commodities were estimated at $0.3 million for other risk management activities as of April 30, 2005. The preceding hypothetical analysis is limited because changes in prices may or may not equal 10%, thus actual results may differ.
For other risk management activities, our sensitivity analysis includes designated hedging and the anticipated transactions associated with these hedging transactions. These hedging transactions are anticipated to be 100% effective, therefore, there is no effect on our sensitivity analysis for other risk management activities from these hedging transactions. To the extent option contracts are used as hedging instruments for anticipated transactions, we have included the offsetting effect of the anticipated transactions only to the extent the option contracts are in the money, or would become in the money as a
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result of the 10% hypothetical movement in prices. All other anticipated transactions for other risk management activities have been excluded from our sensitivity analysis.
At April 30, 2005, we had $87.3 million in variable rate bank credit facility borrowings. Thus, assuming a one percent increase in our variable interest rate, our interest rate risk related to the borrowings on our variable rate bank credit facility would result in a loss in future earnings of $0.9 million for the twelve months ending April 30, 2006. The preceding hypothetical analysis is limited because changes in interest rates may or may not equal one percent, thus actual results may differ.
ITEM 4. CONTROLS AND PROCEDURES
An evaluation was performed with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as such terms are defined in Rule 13a-15(e) or 15d-15(e) of the Exchange Act). Based on that evaluation, our management, including our principal executive officer and principal financial officer, concluded that such disclosure controls and procedures were designed to be and were effective as of April 30, 2005 to reasonably ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.
It should be noted that any system of disclosure controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any system of disclosure controls and procedures is based in part upon assumptions about the likelihood of future events. Because of these and other inherent limitations of any such system, there can be no assurance that any system, no matter how well designed or implemented, will always succeed in achieving its stated goals under all potential future conditions, regardless of how remote and furthermore, because of potential changes in future conditions, the effectiveness of our disclosure controls and procedures may vary over time.
Due to the implementation of our new technology initiative during fiscal year 2005, we modified our internal controls over financial reporting during the quarter ended April 30, 2005. This modification of internal controls over financial reporting was made to align our internal controls with the implementation of our new technology initiative. This implementation is being conducted in phases by geographical areas and is scheduled to be completed in the first quarter of fiscal 2006. This new technology initiative has been designed to improve various aspects of our operations including routing and scheduling of customer deliveries, customer administration and operational workflow related to our retail sale and delivery of bulk propane.
PART II - OTHER INFORMATION
Our operations are subject to all operating hazards and risks normally incidental to handling, storing, transporting and otherwise providing for use by consumers of combustible liquids such as propane. As a result, at any given time, we are threatened with or named as a defendant in various lawsuits arising in the ordinary course of business. Currently, we are not a party to any legal proceedings other than various claims and lawsuits arising in the ordinary course of business. It is not possible to determine the ultimate disposition of these matters; however, management is of the opinion that there are no known claims or contingent claims that are reasonably expected to have a material adverse effect on our financial condition, results of operations and cash flows.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | |
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. | |
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ITEM 6. EXHIBITS
The exhibits listed below are furnished as part of this Quarterly Report on Form 10-Q. Exhibits required by Item 601 of Regulation S-K of the Securities Act, which are not listed, are not applicable.
| Exhibit Number | Description |
| | | 2.1 | Contribution Agreement dated February 8, 2004, by and among FCI Trading Corp., Ferrellgas, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P. Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed February 12, 2004. | |
| | | | | |
| | | 3.1 | Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P., dated as of February 18, 2003. Incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed February 18, 2003. | |
| | | | | |
| | | 3.2 | First Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P., dated as of February 18, 2003. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed March 8, 2005. | |
| | | | | |
| | | 3.3 | Certificate of Incorporation for Ferrellgas Partners Finance Corp. Incorporated by reference to the same numbered Exhibit to our Quarterly Report on Form 10-Q filed June 13, 1997. | |
| | | | | |
| | | 3.4 | Bylaws of Ferrellgas Partners Finance Corp. Incorporated by reference to the same numbered Exhibit to our Quarterly Report on Form 10-Q filed June 13, 1997. | |
| | | | | |
| | | 3.5 | Third Amended and Restated Agreement of Limited Partnership of Ferrellgas, L.P., dated as of April 7, 2004. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed April 22, 2004. | |
| | | | | |
| | | 3.6 | Certificate of Incorporation of Ferrellgas Finance Corp. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Ferrellgas Partners, L.P. filed February 18, 2003. | |
| | | | | |
| | | 3.7 | Bylaws of Ferrellgas Finance Corp. Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Ferrellgas Partners, L.P. filed February 18, 2003. | |
| | | | | |
| | | 4.1 | Specimen Certificate evidencing Common Units representing Limited Partner Interests (contained in Exhibit 3.1 hereto as Exhibit A thereto). | |
| | | | | |
| | | 4.2 | Indenture, dated as of September 24, 2002, with form of Note attached, among Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., and U.S. Bank National Association, as trustee, relating to 8 3/4% Senior Notes due 2012. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed September 24, 2002. | |
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| | 4.3 | Indenture, dated as of April 20, 2004, with form of Note attached, among Ferrellgas Escrow LLC and Ferrellgas Finance Escrow Corporation and U.S. Bank National Association, as trustee, relating to 6 ¾% Senior Notes due 2014. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed April 22, 2004. |
| | 4.4 | Ferrellgas, L.P., Note Purchase Agreement, dated as of July 1, 1998, relating to: $109,000,000 6.99% Senior Notes, Series A, due August 1, 2005, $37,000,000 7.08% Senior Notes, Series B, due August 1, 2006, $52,000,000 7.12% Senior Notes, Series C, due August 1, 2008, $82,000,000 7.24% Senior Notes, Series D, due August 1, 2010, and $70,000,000 7.42% Senior Notes, Series E, due August 1, 2013. Incorporated by reference to Exhibit 4.4 to our Annual Report on Form 10-K filed October 29, 1998. |
| | | |
| | 4.5 | Ferrellgas, L.P., Note Purchase Agreement, dated as of February 28, 2000, relating to: $21,000,000 8.68% Senior Notes, Series A, due August 1, 2006, $70,000,000 8.78% Senior Notes, Series B, due August 1, 2007, and $93,000,000 8.87% Senior Notes, Series C, due August 1, 2009. Incorporated by reference to Exhibit 4.2 to our Quarterly Report on Form 10-Q filed March 16, 2000. |
| | | |
| | 4.6 | Registration Rights Agreement, dated as of December 17, 1999, by and between Ferrellgas Partners, L.P. and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed December 29, 2000. |
| | | |
| | 4.7 | First Amendment to the Registration Rights Agreement, dated as of March 14, 2000, by and between Ferrellgas Partners, L.P. and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q filed March 16, 2000. |
| | | |
| | 4.8 | Second Amendment to the Registration Rights Agreement, dated as of April 6, 2001, by and between Ferrellgas Partners, L.P. and The Williams Companies, Inc. Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed April 6, 2001. |
| | | |
| | 4.9 | Representations Agreement, dated as of December 17, 1999, by and among Ferrellgas Partners, L.P., Ferrellgas, Inc., Ferrellgas, L.P. and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 2.3 to our Current Report on Form 8-K filed December 29, 1999. |
| | | |
| | 4.10 | First Amendment to Representations Agreement, dated as of April 6, 2001, by and among Ferrellgas Partners, L.P., Ferrellgas, Inc., Ferrellgas, L.P. and The Williams Companies, Inc. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed April 6, 2001. |
| | | |
| | 4.11 | Waiver and Acknowledgement of No Material Event dated November 20, 2003, by and among Ferrellgas Partners, L.P., Ferrellgas, L.P., Ferrellgas, Inc. and JEF Capital Management, Inc. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed November 24, 2003. |
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| | | |
| | 4.12 | Extension of Waiver and Acknowledgement of No Material Event dated February 25, 2004, by and among Ferrellgas Partners, L.P., Ferrellgas, L.P., Ferrellgas, Inc. and JEF Capital Management, Inc. |
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| | | |
| | 10.1 | Fourth Amended and Restated Credit Agreement, dated as of December 10, 2002, by and among Ferrellgas, L.P., Ferrellgas, Inc., Bank of America National Trust and Savings Association, as agent, and the other financial institutions party. Incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q filed December 11, 2002. |
| | | |
| | 10.2 | First Amendment to the Fourth Amended and Restated Credit Agreement, dated as of March 9, 2004, by and among Ferrellgas, L.P., Ferrellgas, Inc., Bank of America National Trust and Savings Association, as agent, and the other financial institutions party. Incorporated by reference to Exhibit 99.3 to our Current Report on Form 8-K/A filed April 2, 2004. |
| | | |
| | 10.3 | Second Amendment to the Fourth Amended and Restated Credit Agreement, dated as of September 3, 2004, by and among Ferrellgas, L.P., Ferrellgas, Inc., Bank of America National Trust and Savings Association, as agent, and the lenders party to the original agreement. Incorporated by reference to Exhibit 10.3 to our Annual Report of Form 10-K filed October 13, 2004. |
| | | |
| | 10.4 | Third Amendment to the Fourth Amended and Restated Credit Agreement, dated October 26, 2004, among Ferrellgas, L.P., Ferrellgas, Inc., Bank of America National Trust and Savings Association, as agent, and the lenders party to the original agreement. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed November 5, 2004. |
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* | | 10.5 | Fifth Amended and Restated Credit Agreement dated as of April 22, 2005, by and among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America N.A., as administrative agent and swing line lender, and the lenders and L/C issuers party hereto. |
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| | 10.6 | Receivable Interest Sale Agreement, dated as of September 26, 2000, by and between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, L.L.C., as buyer. Incorporated by reference to Exhibit 10.17 to our Annual Report on Form 10-K filed October 26, 2000. |
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| | 10.7 | First Amendment to the Receivable Interest Sale Agreement dated as of January 17, 2001, by and between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, L.L.C., as buyer. Incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q filed March 14, 2001. |
| | | |
| | 10.8 | Amendment No. 2 to the Receivable Interest Sale Agreement dated November 1, 2004 between Ferrellgas, L.P., as Originator, and Ferrellgas Receivables, L.L.C., as buyer. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed November 5, 2004. |
| | | |
* | | 10.9 | Amendment No. 3 to the Receivable Interest Sale Agreement dated June 7, 2005 between Ferrellgas, L.P., as Originator, and Ferrellgas Receivables, L.L.C., as buyer. |
| | | |
| | 10.10 | Receivables Purchase Agreement, dated as of September 26, 2000, by and among Ferrellgas Receivables, L.L.C., as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, and Bank One, NA, main office Chicago, as agent. Incorporated by reference to Exhibit 10.18 to our Annual Report on Form 10-K filed October 26, 2000. |
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| | | |
| | 10.11 | First Amendment to the Receivables Purchase Agreement, dated as of January 17, 2001, by and among Ferrellgas Receivables, L.L.C., as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, and Bank One, N.A., main office Chicago, as agent. Incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q filed March 14, 2001. |
| | | |
| | 10.12 | Second Amendment to the Receivables Purchase Agreement dated as of September 25, 2001, by and among Ferrellgas Receivables, L.L.C., as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, and Bank One, N.A., main office Chicago, as agent. Incorporated by reference to Exhibit 10.29 to our Annual Report on Form 10-K filed October 25, 2001. |
| | | |
| | 10.13 | Third Amendment to the Receivables Purchase Agreement, dated as of September 24, 2002, by and among Ferrellgas Receivables, L.L.C., as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, and Bank One, NA, main office Chicago, as agent. Incorporated by reference to Exhibit 10.11 to our Annual Report on Form 10-K filed October 23, 2002. |
| | | |
| | 10.14 | Fourth Amendment to the Receivables Purchase Agreement, dated as of September 23, 2003, by and among Ferrellgas Receivables, L.L.C., as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, and Bank One, NA, main office Chicago, as agent. Incorporated by reference to Exhibit 10.8 to our Annual Report on Form 10-K filed October 21, 2003. |
| | | |
| | 10.15 | Fifth Amendment to the Receivables Purchase Agreement, dated as of September 21, 2004, by and among Ferrellgas Receivables, L.L.C., as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, and Bank One, NA, main office Chicago, as agent. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed September 24, 2004. |
| | | |
* | | 10.16 | Sixth Amendment to the Receivables Purchase Agreement, dated as of June 7, 2005, by and among Ferrellgas Receivables, L.L.C., as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, and Bank One, NA, main office Chicago, as agent. |
| | | |
| | 10.17 | Purchase Agreement, dated as of November 7, 1999, by and among Ferrellgas Partners, L.P., Ferrellgas, L.P and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed November 12, 1999. |
| | | |
| | 10.18 | First Amendment to Purchase Agreement, dated as of December 17, 1999, by and among Ferrellgas Partners, L.P., Ferrellgas, L.P., and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 2.2 to our Current Report on Form 8-K filed December 29, 1999. |
| | | |
| | 10.19 | Second Amendment to Purchase Agreement, dated as of March 14, 2000, by and among Ferrellgas Partners, L.P., Ferrellgas L.P., and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 2.1 to our Quarterly Report on Form 10-Q filed March 16, 2000. |
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| | | |
| | 10.20 | Third Amendment to Purchase Agreement dated as of April 6, 2001, by and among Ferrellgas Partners, L.P., Ferrellgas L.P. and The Williams Companies, Inc. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed April 6, 2001. |
| | | |
| | 10.21 | Agreement and Plan of Merger dated as of February 8, 2004, by and among Blue Rhino Corporation, FCI Trading Corp., Diesel Acquisition, LLC and Ferrell Companies, Inc. Incorporated by reference to Exhibit 99.2 to our Current Report on Form 8-K filed February 12, 2004. |
| | | |
| | 10.22 | First amendment to the Agreement and Plan of Merger, dated as of March 16, 2004, by and among Blue Rhino Corporation, FCI Trading Corp., Diesel Acquisition, LLC, and Ferrell Companies, Inc. Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed April 2, 2004. |
| | | |
| | 10.23 | Real Property Contribution Agreement, dated February 8, 2004, between Ferrellgas Partners, L.P. and Billy D. Prim. |
| | | |
| | 10.24 | Unit Purchase Agreement, dated February 8, 2004, between Ferrellgas Partners, L.P. and Billy D. Prim. Incorporated by reference to Exhibit 4.5 to our Form S-3 filed May 21, 2004. |
| | | |
| | 10.25 | Unit Purchase Agreement dated February 8, 2004, between Ferrellgas Partners, L.P. and James E. Ferrell. Incorporated by reference to Exhibit 99.3 to our Current Report on Form 8-K filed February 12, 2004. |
| | | |
# | | 10.26 | Ferrell Companies, Inc. Supplemental Savings Plan, restated January 1, 2000. Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed February 18, 2003. |
| | | |
# | | 10.27 | Second Amended and Restated Ferrellgas Unit Option Plan. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed June 5, 2001. |
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# | | 10.28 | Ferrell Companies, Inc. 1998 Incentive Compensation Plan, as amended and restated effective October 11, 2004. Incorporated by reference to Exhibit 10.23 to our Annual Report on Form 10-K filed October 13, 2004. |
| | | |
# | | 10.29 | Employment agreement between James E. Ferrell and Ferrellgas, Inc., dated July 31, 1998. Incorporated by reference to Exhibit 10.13 to our Annual Report on Form 10-K filed October 29, 1998. |
| | | |
# | | 10.30 | Amended and Restated Employment Agreement, dated October 11, 2004, by and among Ferrellgas, Inc., Ferrell Companies, Inc. and Billy D. Prim. Incorporated by reference to Exhibit 10.25 to our Annual Report on Form 10-K filed October 13, 2004. |
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# | | 10.31 | Arrangement dated June 4, 2003, between Ron M. Logan, Jr. and Ferrellgas, Inc. Incorporated by reference to Exhibit 10.26 to our Annual Report on Form 10-K filed October 13, 2004. |
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# | | 10.32 | Arrangement dated February 6, 2004, between Timothy E. Scronce and Ferrellgas, Inc. Incorporated by reference to Exhibit 10.27 to our Annual Report on Form 10-K filed October 13, 2004. |
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* | | 31.1 | Certification of Ferrellgas Partners, L.P. pursuant to Rule 13a-14(a) / Rule 15d-14(a) of the Exchange Act. |
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* | | 31.2 | Certification of Ferrellgas Partners Finance Corp. pursuant to Rule 13a-14(a) / Rule 15d-14(a) of the Exchange Act. |
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* | | 31.3 | Certification of Ferrellgas, L.P. pursuant to Rule 13a-14(a) / Rule 15d-14(a) of the Exchange Act. |
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* | | 31.4 | Certification of Ferrellgas Finance Corp. pursuant to Rule 13a-14(a) / Rule 15d-14(a) of the Exchange Act. |
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* | | 32.1 | Certification of Ferrellgas Partners, L.P. pursuant to 18 U.S.C. 1350. |
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* | | 32.2 | Certification of Ferrellgas Partners Finance Corp. pursuant to 18 U.S.C. 1350. |
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* | | 32.3 | Certification of Ferrellgas, L.P. pursuant to 18 U.S.C. 1350. |
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* | | 32.4 | Certification of Ferrellgas Finance Corp. pursuant to 18 U.S.C. 1350. |
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| * | Filed herewith |
| # | Management contracts or compensatory plans. |
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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 PARTNERS, L.P. |
By Ferrellgas, Inc. (General Partner) |
Date: | June 8, 2005 | By | /s/ Kevin T. Kelly | |
| Kevin T. Kelly | |
| Senior Vice President and Chief | |
| Financial Officer (Principal | |
| Financial and Accounting Officer) |
| | | | | | | | |
FERRELLGAS PARTNERS FINANCE CORP. |
Date: | June 8, 2005 | By | /s/ Kevin T. Kelly | |
| Kevin T. Kelly | |
| Senior Vice President and Chief | |
| Financial Officer (Principal | |
| Financial and Accounting Officer) |
| | | | | | | | |
By Ferrellgas, Inc. (General Partner) |
Date: | June 8, 2005 | By | /s/ Kevin T. Kelly | |
| Kevin T. Kelly | |
| Senior Vice President and Chief | |
| Financial Officer (Principal | |
| Financial and Accounting Officer) |
| | | | | | | | |
Date: | June 8, 2005 | By | /s/ Kevin T. Kelly | |
| Kevin T. Kelly | |
| Senior Vice President and Chief | |
| Financial Officer (Principal | |
| Financial and Accounting Officer) |
| | | | | | | | |
56
