Exhibit 99.15
Ferrellgas, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
As of January 31, 2006 and July 31, 2005
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FERRELLGAS, INC. AND SUBSIDIARIES
Table of Contents
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
| Condensed Consolidated Balance Sheets – January 31, 2006 and July 31, 2005 |
| Notes to Condensed Consolidated Balance Sheets |
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FERRELLGAS, INC. AND SUBSIDIARIES
(a wholly-owned subsidiary of Ferrell Companies, Inc.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
| January 31, | July 31, | |||||||
| ASSETS | 2006 | 2005 | ||||||
Current assets: | ||||||||
| Cash and cash equivalents | $ | 30,790 | $ | 21,023 | ||||
| Accounts and notes receivable, net | 118,705 | 107,778 | ||||||
| Inventories | 138,267 | 97,743 | ||||||
| Prepaid expenses and other current assets | 15,811 | 12,861 | ||||||
Total current assets | 303,573 | 239,405 | ||||||
| Property, plant and equipment, net | 797,237 | 819,230 | ||||||
| Goodwill | 468,013 | 468,350 | ||||||
| Intangible assets, net | 254,474 | 255,277 | ||||||
| Other assets, net | 12,807 | 13,930 | ||||||
Total assets | $ | 1,836,104 | $ | 1,796,192 | ||||
LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIENCY) | ||||||||
Current liabilities: | ||||||||
| Accounts payable | $ | 148,907 | $ | 108,667 | ||||
| Short-term borrowings | 22,167 | 19,800 | ||||||
| Other current liabilities | 74,032 | 72,208 | ||||||
Total current liabilities | 245,106 | 200,675 | ||||||
| Long-term debt | 961,473 | 948,977 | ||||||
| Deferred income taxes | 3,016 | 3,432 | ||||||
| Other liabilities | 20,120 | 19,798 | ||||||
| Contingencies and commitments (Note E) | — | — | ||||||
| Minority interest | 503,478 | 511,882 | ||||||
| Parent investment in subsidiary | 180,446 | 187,272 | ||||||
Stockholder’s equity (deficiency): | ||||||||
| Common stock, $1 par value; | ||||||||
| 10,000 shares authorized; 990 shares issued | 1 | 1 | ||||||
| Additional paid-in-capital | 18,925 | 18,654 | ||||||
| Note receivable from parent | (146,731 | ) | (147,378 | ) | ||||
| Retained earnings | 51,828 | 53,491 | ||||||
| Accumulated other comprehensive loss | (1,558 | ) | (612 | ) | ||||
Total stockholder’s equity (deficiency) | (77,535 | ) | (75,844 | ) | ||||
Total liabilities and stockholder’s equity (deficiency) | $ | 1,836,104 | $ | 1,796,192 | ||||
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FERRELLGAS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED BALANCE SHEETS
January 31, 2006
(Dollars in thousands, unless otherwise designated)
(unaudited)
| A. | Organization and formation |
The accompanying consolidated balance sheets and related notes present the consolidated financial position of Ferrellgas, Inc. (the “Company”), its subsidiaries, which include its partnership interest in Ferrellgas Partners, L.P. (“Ferrellgas Partners”) and subsidiaries. The Company is a wholly-owned subsidiary of Ferrell Companies, Inc. (the “Parent” or “Ferrell”).
The condensed consolidated balance sheets of the Company reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the interim periods presented. All adjustments to the condensed consolidated balance sheets were of a normal, recurring nature. The information included in this report should be read in conjunction with the consolidated financial statements and accompanying notes as set forth in the Company’s consolidated financial statements for fiscal 2005.
B. Summary of significant accounting policies
(1) Nature of operations:
The Company is a holding entity that conducts no operations and has three subsidiaries, Ferrellgas Partners, Ferrellgas, L.P. (the “operating partnership”) and Ferrellgas Acquisition Company, LLC (“Ferrellgas Acquisitions Company”). The Company owns a 1% general partnership interest in Ferrellgas Partners and a 1.0101% general partnership interest in the operating partnership. The operating partnership is the only operating subsidiary of Ferrellgas Partners. The Company owns a 100% equity interest in Ferrellgas Acquisitions Company. Limited operations are conducted by or through Ferrellgas Acquisitions Company, whose only purpose is to acquire the tax liabilities of acquirees of Ferrellgas Partners.
(2) Accounting estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from these estimates. Significant estimates impacting the consolidated balance sheets include accruals that have been established for contingent liabilities, pending claims and legal actions arising in the normal course of business, useful lives of property, plant and equipment assets, residual values of tanks, amortization methods of intangible assets and valuation methods of derivative commodity contracts.
(3) New accounting standards:
Statement of Financial Accounting Standards (“SFAS”) No. 123(R ), “Share-Based Payment” (“SFAS 123(R )”), is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”) and supersedes Accounting Principles Board No. 25 “Accounting for Stock issued to Employees” (“APB 25”) and its related implementation guidance. This statement requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. The Company adopted this standard on August 1, 2005.
Emerging Issues Task Force EITF 04-13, “Accounting for Purchases and Sales of Inventory with the Same Counterparty” addresses the accounting for an entity’s sale of inventory to another entity from which it also purchases inventory to be sold in the same line of business. EITF 04-13 concludes that two or more inventory transactions with the same counterparty should be accounted for as a single non-monetary transaction at fair value or recorded amounts based on inventory classifications. EITF 04-13 is effective for new arrangements entered into, and modifications or renewals of existing arrangements, beginning in the first interim or annual reporting period beginning after March 15, 2006. The Company is evaluating the potential impact of EITF 04-13 and does not believe it will have a material effect on its financial position.
C. Accounts receivable securitization
The Company transfers certain of its trade accounts receivable to Ferrellgas Receivables, LLC (“Ferrellgas Receivables”), a wholly-owned unconsolidated, special purpose entity, and retains an interest in a portion of these transferred receivables. As these transferred receivables are subsequently collected and the funding from the accounts receivable securitization facility is reduced, the Company’s retained interest in these receivables is reduced. The accounts receivable securitization facility consisted of the following:
| January 31, | July 31, | |||||||
| 2006 | 2005 | |||||||
| Retained interest | $ | 36,475 | $ | 15,710 | ||||
| Accounts receivable transferred | $ | 193,750 | $ | 82,500 | ||||
The retained interest was classified as accounts receivable on the condensed consolidated balance sheets. The operating partnership had the ability to transfer, at its option, an additional $6.3 million of its trade accounts receivable at January 31, 2006.
D. Supplemental balance sheet information
Inventories consist of:
| January 31, | July 31, | |||||||
| 2006 | 2005 | |||||||
| Propane gas and related products | $ | 111,898 | $ | 70,380 | ||||
| Appliances, parts and supplies | 26,369 | 27,363 | ||||||
| $ | 138,267 | $ | 97,743 | |||||
In addition to inventories on hand, the Company enters into contracts primarily to buy propane for supply procurement purposes. Nearly all of these contracts have terms of less than one year and call for payment based on market prices at the date of delivery. All fixed price contracts have terms of fewer than 18 months. As of January 31, 2006, the Company had committed, for supply procurement purposes, to take net delivery of approximately 4.2 million gallons of propane at a fixed price.
| Goodwill and intangible assets, net consist of: |
| January 31, 2006 | July 31, 2005 | |||||||||||||||||||||||
| Gross | Gross | |||||||||||||||||||||||
| carrying | Accumulated | carrying | Accumulated | |||||||||||||||||||||
| amount | amortization | Net | amount | amortization | Net | |||||||||||||||||||
| GOODWILL, NET | $ | 468,013 | — | $ | 468,013 | $ | 468,350 | — | $ | 468,350 | ||||||||||||||
| INTANGIBLE ASSETS, NET | ||||||||||||||||||||||||
| Amortized intangible assets | ||||||||||||||||||||||||
| Customer lists | $ | 343,991 | $ | (163,644 | ) | $ | 180,347 | $ | 335,557 | $ | (155,281 | ) | $ | 180,276 | ||||||||||
| Non-compete agreements | 36,126 | (24,641 | ) | 11,485 | 34,270 | (21,803 | ) | 12,467 | ||||||||||||||||
| Other | 5,303 | (1,709 | ) | 3,594 | 5,470 | (2,010 | ) | 3,460 | ||||||||||||||||
| 385,420 | (189,994 | ) | 195,426 | 375,297 | (179,094 | ) | 196,203 | |||||||||||||||||
| Unamortized intangible assets | ||||||||||||||||||||||||
| Tradenames & trademarks | 59,048 | — | 59,048 | 59,074 | — | 59,074 | ||||||||||||||||||
| Total intangibles assets, net | $ | 444,468 | $ | (189,994 | ) | $ | 254,474 | $ | 434,371 | $ | (179,094 | ) | $ | 255,277 | ||||||||||
Other current liabilities consist of:
| January 31, | July 31, | |||||||
| 2006 | 2005 | |||||||
| Accrued interest | $ | 24,419 | $ | 24,328 | ||||
| Accrued payroll | 15,164 | 13,816 | ||||||
| Accrued insurance | 9,178 | 8,627 | ||||||
| Other | 25,271 | 25,437 | ||||||
| $ | 74,032 | $ | 72,208 | |||||
E. Contingencies and commitments
The Company’s 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, the Company is threatened with or named as a defendant in various lawsuits arising in the ordinary course of business. Currently, the Company is 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 the condensed consolidated financial condition of the Company.
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