Ferrellgas L P (FGP) 8-K Ferrellgas Partners Reports Third-Quarter Results; Provides Guidance for Full-Year Adjusted EBITDA

For Immediate Release

Contact:

Tom Colvin, Investor Relations, 913-661-1530
Scott Brockelmeyer, Media Relations, 913-661-1830

Ferrellgas Partners Reports Third-Quarter Results;
Provides Guidance for Full-Year Adjusted EBITDA

     OVERLAND PARK, Kan., June 6, 2008 — Ferrellgas Partners, L.P. (NYSE: FGP), one of the nation’s largest propane distributors, today reported for the third fiscal quarter ended April 30 Adjusted EBITDA of $85.1 million, down from the record $95.1 million for the same quarter in the prior fiscal year. Net earnings were $35.2 million, or $0.55 per unit, compared with a record $43.7 million, or $0.69 per unit, the year before. The decreases continued to reflect sharply higher propane costs that pressured margins and triggered customer conservation. Partially offsetting these factors were higher fee income and an ongoing tight rein on expenses.

     Propane sales volume in the third fiscal quarter decreased to 252 million gallons from 271 million gallons in the prior-year’s third quarter, mirroring similar trends from the first half of the fiscal year.

     Chairman and Chief Executive Officer James Ferrell pointed out, “In light of the hurdles we had to clear, which included a 44-percent increase in the cost of propane, we achieved Adjusted EBITDA that approached our budget for the quarter. Our operating platform’s efficiencies contributed to that performance as operating expense declined 4 percent on a year-over-year basis. General and administrative expense decreased more than 7 percent.”

     Ferrell pointed out, “In this current, challenging environment, our team performed remarkably well and deserves a lot of credit. We continue to believe that we have in place the fundamentals that will lead to improved operations.”

     President and Chief Operating Officer Steve Wambold reported, “Our Blue Rhino brand had a solid third quarter, reaching its volume goals, while successfully implementing price increases with its customers. Moreover, Blue Rhino is off to an excellent start in the fourth quarter, having added 2,500 selling locations over the past year and having recently secured a commitment for more than 1,000 additional locations from an existing customer to be installed prior to the end of July.”

     Wambold pointed out, “Based on Blue Rhino’s positive momentum and our well-established expense control efforts, we expect meaningful improvement in our Adjusted EBITDA results in the fourth quarter over year-earlier results. We expect that this performance will result in Adjusted EBITDA for the full fiscal year in the range of $225.0 million to $230.0 million.”

     Third quarter revenues rose to $712.1 million from $624.2 million in the year-earlier period, with higher wholesale propane commodity prices and additional fee income contributing to the increase. Gross profit decreased to $194.9 million from $210.5 million. Operating expense was $93.3 million versus $97.4 million a year ago while general and administrative expense was $10.9 million compared with $11.8 million. Equipment lease expenses also declined, to $6.0 million from $6.7 million.

     Comparable figures for the nine months were as follows: Revenues of $1.87 billion and $1.66 billion a year ago; gross profit, $537.3 million and $565.0 million; propane sales volume, 699 million gallons and 755 million gallons; operating expense, $274.8 million and $287.2 million; general and administrative expense, $33.9 million and $32.9 million; equipment lease expense, $18.5 million and $19.8 million; Adjusted EBITDA, $211.5 million and $226.3 million; and net earnings $63.5 million, or $1.00 per unit and $73.4 million and $1.16 per unit.

     Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., serves approximately one million customers in all 50 states, the District of Columbia, and Puerto Rico. Ferrellgas employees indirectly own more than 20 million common units of the partnership through an employee stock ownership plan. More information about the partnership can be found online atwww.ferrellgas.com.

Statements in this release concerning expectations for the future are forward-looking statements. A variety of known and unknown risks, uncertainties, and other factors could cause results, performance, and expectations to differ materially from anticipated results, performance, and expectations. These risks, uncertainties, and other factors are discussed in the Form 10-K of Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2007, and other documents filed from time to time by these entities with the Securities and Exchange Commission.

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)

	April 30, 2008			July 31, 2007
ASSETS
Current Assets:
Cash and cash equivalents	$	20,864		$	20,685
Accounts and notes receivable, net		162,580			118,320
Inventories		121,833			113,807
Price risk management assets		17,228			5,097
Prepaid expenses and other current assets		14,690			11,675
Total Current Assets		337,195			269,584
Property, plant and equipment, net		693,742			720,190
Goodwill		248,877			249,481
Intangible assets, net		230,449			246,283
Other assets, net		20,032			17,865
Total Assets	$	1,530,295		$	1,503,403
LIABILITIES AND PARTNERS’ CAPITAL
Current Liabilities:
Accounts payable	$	75,674		$	62,103
Short term borrowings		71,025			57,779
Other current liabilities (a)		100,844			107,199
Total Current Liabilities		247,543			227,081
Long-term debt (a)		1,028,518			1,011,751
Other liabilities		24,041			22,795
Contingencies and commitments		—			—
Minority interest		4,968			5,119
Partners’ Capital:
Common unitholders (62,961,674 and 62,957,674 units outstanding at April 2008 and July 2007, respectively)		268,399			289,075
General partner unitholder (635,977 and 635,936 units outstanding at April 2008 and July 2007, respectively)		(57,361	)		(57,154	)
Accumulated other comprehensive income		14,187			4,736
Total Partners’ Capital		225,225			236,657
Total Liabilities and Partners’ Capital	$	1,530,295		$	1,503,403

(a) The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $268 million of 8 3/4% notes which are liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE, NINE AND TWELVE MONTHS ENDED April 30, 2008 AND 2007
(in thousands, except per unit data)
(unaudited)

	Three months ended						Nine months ended						Twelve months ended
	April 30,						April 30,						April 30,
	2008			2007			2008			2007			2008			2007
Revenues:
Propane and other gas liquids sales	$	621,343		$	531,816		$	1,664,734		$	1,458,732		$	1,963,425		$	1,756,041
Other		90,747			92,346			206,240			204,616			236,641			238,585
Total revenues		712,090			624,162			1,870,974			1,663,348			2,200,066			1,994,626
Cost of product sold:
Propane and other gas liquids sales		455,375			341,593			1,212,418			956,288			1,403,299			1,145,839
Other		61,850			72,118			121,232			142,039			136,416			162,701
Gross profit		194,865			210,451			537,324			565,021			660,351			686,086
Operating expense		93,349			97,369			274,828			287,224			368,442			380,173
Depreciation and amortization expense		21,443			22,245			63,883			65,936			85,330			87,025
General and administrative expense		10,947			11,829			33,855			32,877			45,848			45,773
Equipment lease expense		5,990			6,675			18,484			19,773			24,853			26,370
Employee stock ownership plan compensation charge		3,447			2,721			9,693			8,301			12,617			11,057
Loss on disposal of assets and other		2,662			3,097			8,729			9,592			9,959			11,613
Operating income		57,027			66,515			127,852			141,318			113,302			124,075
Interest expense		(21,214	)		(21,534	)		(66,351	)		(66,243	)		(88,061	)		(87,585	)
Interest income		350			981			1,348			2,871			1,622			3,452
Earnings before income taxes and minority interest		36,163			45,962			62,849			77,946			26,863			39,942
Income tax expense — current		243			2,087			600			3,486			575			3,892
Income tax expense (benefit) — deferred (h)		329			(335	)		(2,052	)		148			899			295
Minority interest (a)		420			507			832			933			499			604
Net earnings		35,171			43,703			63,469			73,379			24,890			35,151
Net earnings available to general partner		352			1,860			635			734			249			352
Net earnings available to common unitholders	$	34,819		$	41,843		$	62,834		$	72,645		$	24,641		$	34,799
Earnings Per Unit
Basic and diluted net earnings available per common unit	$	0.55		$	0.66		$	1.00		$	1.16		$	0.39		$	0.56
Dilutive effect of EITF 03-6 (b)		—			0.03			—			—			—			—
Adjusted net earnings per unit available to common unitholders	$	0.55		$	0.69		$	1.00		$	1.16		$	0.39		$	0.56
Weighted average common units outstanding		62,958.9			62,950.4			62,958.7			62,688.2			62,958.1			62,211.1

Supplemental Data and Reconciliation of Non-GAAP Items:

	Three months ended						Nine months ended						Twelve months ended
	April 30,						April 30,						April 30,
	2008			2007			2008			2007			2008			2007
Net earnings	$	35,171		$	43,703		$	63,469		$	73,379		$	24,890		$	35,151
Income tax expense (benefit)		572			1,752			(1,452	)		3,634			1,474			4,187
Interest expense		21,214			21,534			66,351			66,243			88,061			87,585
Depreciation and amortization expense		21,443			22,245			63,883			65,936			85,330			87,025
Interest income		(350	)		(981	)		(1,348	)		(2,871	)		(1,622	)		(3,452	)
EBITDA		78,050			88,253			190,903			206,321			198,133			210,496
Employee stock ownership plan compensation charge		3,447			2,721			9,693			8,301			12,617			11,057
Unit and stock-based compensation charge (c)		483			499			1,383			1,165			1,107			1,447
Loss on disposal of assets and other		2,662			3,097			8,729			9,592			9,959			11,613
Minority interest		420			507			832			933			499			604
Adjusted EBITDA (d)		85,062			95,077			211,540			226,312			222,315			235,217
Net cash interest expense (e)		(22,098	)		(22,451	)		(68,196	)		(66,723	)		(90,493	)		(88,155	)
Maintenance capital expenditures (f)		(5,590	)		(4,026	)		(15,058	)		(13,745	)		(18,248	)		(17,290	)
Cash paid for taxes		(48	)		(1,112	)		(1,327	)		(2,877	)		(2,192	)		(2,268	)
Proceeds from asset sales		2,415			1,563			8,665			7,069			11,426			10,285
Distributable cash flow to equity investors (g)	$	59,741		$	69,051		$	135,624		$	150,036		$	122,808		$	137,789
Propane gallons sales
Retail — Sales to End Users		204,683			220,654			567,247			611,156			658,808			705,408
Wholesale — Sales to Resellers		47,427			50,768			131,412			144,234			176,350			194,919
Total propane gallons sales		252,110			271,422			698,659			755,390			835,158			900,327

(a)	Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.
(b)	Emerging Issues Task Force (“EITF”) 03-6 “Participating Securities and the Two-Class Method under FASB Statement No. 128, Earnings per Share,” requires the calculation of net earnings per limited partner unit for each period presented according to distributions declared and participation rights in undistributed earnings, as if all of the earnings for the period had to be distributed. In periods with undistributed earnings above certain levels, the calculation according to the two-class method results in an increased allocation of undistributed earnings to the general partner and a dilution of earnings to the limited partners. Due to the seasonality of the propane business, the dilution effect of EITF 03-6 on net earnings per limited partner unit will typically only impact the three months ending January 31. EITF 03-6 did not have a dilutive effect on the three, nine and twelve months ended April 30, 2008 and and the nine and twelve months ended April 30, 2007.
(c)	Statement of Financial Accounting Standards (“SFAS”) No. 123( R), “Share-Based Payment” requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. Share-based payment transactions resulted in a non-cash compensation charge of $0.1 million and $0.2 million to operating expense, for the three months ended April 30, 2008 and 2007, respectively, and $0.4 million and $0.3 million to operating expense for the nine months ended April 30, 2008 and 2007, respectively. A non-cash compensation charge of $0.3 million and $0.3 million was recorded to general and administrative expense for the three months ended April 30, 2008 and 2007, respectively, and $1.0 million and $0.9 million for the nine months ended April 31, 2008 and 2007, respectively. A non-cash charge of $0.4 million and $0.4 million was recorded to operating expense for the twelve months ended April 30, 2008 and 2007, respectively. A non-cash charge of $0.7 and $1.1 was recorded to general and administrative expense for the twelve months ended April 30, 2008 and 2007, respectively.
(d)	Management considers Adjusted EBITDA to be a chief measurement of the partnership’s overall economic performance and return on invested capital. Adjusted EBITDA is calculated as earnings before interest, income taxes, depreciation and amortization, employee stock ownership plan compensation charge, unit and stock-based compensation charge, loss on disposal of assets and other, minority interest, and other non-cash and non-operating charges. 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 are unusual or non-recurring, and makes it easier to compare its results with other companies that have different financing and capital structures. In addition, management believes this measure is consistent with the manner in which the partnership’s lenders and investors measure its overall performance and liquidity, including its ability to pay quarterly equity distributions, service its long- term debt and other fixed obligations and fund its capital expenditures and working capital requirements. 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.
(e)	Net cash interest expense is the sum of interest expense less non-cash interest expense and interest income. This amount also includes interest expense related to the accounts receivable securitization facility.
(f)	Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment.
(g)	Management considers Distributable cash flow to equity investors a meaningful non-GAAP measure of the partnership’s ability to declare and pay quarterly distributions to common unitholders. Distributable cash flow to equity investors, as management defines it, may not be comparable to distributable cash flow or similarly titled measures used by other corporations and partnerships.
(h)	During the fourth quarter of fiscal 2007 the governor of the state of Michigan signed into law a new Michigan Business Tax. The passing of this new tax law caused Ferrellgas to recognize a one time deferred tax expense of $2.8 million during fiscal 2007. During fiscal 2008 a credit for this deferred tax expense was created by a new Michigan tax law. The passing of this new tax law caused Ferrellgas to recognize a one time deferred tax credit during fiscal 2008.