Exhibit 99.2
Financial results for the nine months ended April 30, 2015 (unaudited)
Ferrellgas, L.P.’s consolidated financial statements for the nine months ended April 30, 2015 are not yet available to be filed with the SEC. Our current expectations with respect to our unaudited results for this period are based upon management estimates. The preliminary estimates presented below are subject to the completion of our financial closing procedures. Accordingly, these estimates may change and those changes may be material. You should not place undue reliance on these estimates. For additional information regarding the various risks and uncertainties inherent in estimates of this type, see “Forward-looking statements” elsewhere in this offering memorandum. We do not expect to file our consolidated financial statements and related notes as of and for the nine months ended April 30, 2015 with the SEC until our next quarterly report on Form 10-Q.
The preliminary estimates have been prepared by, and are the responsibility of, our management and have not been reviewed or audited or subject to any other procedures by our independent registered public accounting firm. Accordingly, our independent registered public accounting firm does not express an opinion or any other form of assurance with respect to these preliminary estimates.
We are providing the following preliminary estimates of our financial results and operating metrics for the nine months ended April 30, 2015:
| | Nine months ended | |
| | April 30, | |
(in thousands) | | 2015 | | 2014 | |
Revenues: | | | | | |
Propane and other gas liquids sales | | $ | 1,400,895 | | $ | 1,796,786 | |
Other | | 240,984 | | 210,044 | |
Total revenues | | 1,641,879 | | 2,006,830 | |
Cost of product sold: | | | | | |
Propane and other gas liquids sales | | 849,190 | | 1,232,516 | |
Other | | 153,736 | | 131,443 | |
Gross profit | | 638,953 | | 642,871 | |
Operating expense | | 316,830 | | 333,677 | |
Depreciation and amortization expense | | 70,576 | | 61,771 | |
General and administrative expense | | 29,701 | | 35,070 | |
Equipment lease expense | | 17,674 | | 12,978 | |
Non-cash employee stock ownership plan compensation charge | | 16,728 | | 10,389 | |
Non-cash stock-based compensation charge (a) | | 19,701 | | 16,182 | |
Loss on disposal of assets | | 4,578 | | 3,426 | |
Operating income | | 163,165 | | 169,378 | |
Interest expense | | (59,695 | ) | (52,242 | ) |
Loss on extinguishment of debt | | — | | (21,202 | ) |
Other income (expense), net | | (415 | ) | 498 | |
Earnings before income taxes | | 103,055 | | 96,432 | |
Income tax expense | | 1,379 | | 2,346 | |
Net earnings | | $ | 101,676 | | $ | 94,086 | |
Supplemental Data and Reconciliation of Non-GAAP Items:
| | Nine months ended | |
| | April 30, | |
(in thousands) | | 2015 | | 2014 | |
Net earnings | | $ | 101,676 | | $ | 94,086 | |
Income tax expense | | 1,379 | | 2,346 | |
Interest expense | | 59,695 | | 52,242 | |
Depreciation and amortization expense | | 70,576 | | 61,771 | |
EBITDA | | 233,326 | | 210,445 | |
Loss on extinguishment of debt | | — | | 21,202 | |
Non-cash employee stock ownership plan compensation charge | | 16,728 | | 10,389 | |
Non-cash stock-based compensation charge (a) | | 19,701 | | 16,182 | |
Loss on disposal of assets | | 4,578 | | 3,426 | |
Other expense (income), net | | 415 | | (498 | ) |
| | | | | | | |
Change in fair value of contingent consideration (included in operating expense) | | (6,300 | ) | — | |
Litigation accrual and related legal fees associated with a class action lawsuit (included in operating expense) | | 806 | | 1,422 | |
Unrealized (non-cash) gain on changes in fair value of non-hedged derivatives | | (1,609 | ) | — | |
Adjusted EBITDA (b) | | $ | 267,645 | | $ | 262,568 | |
Propane gallons sales | | | | | |
Retail - Sales to End Users | | 518,726 | | 558,142 | |
Wholesale - Sales to Resellers | | 211,068 | | 233,664 | |
Total propane gallons sales | | 729,794 | | 791,806 | |
Midstream operations (barrels processed) | | 13,234 | | — | |
| | | | | | | |
(a) Non-cash stock-based compensation charges consist of the following:
| | Nine months ended | |
| | April 30, | |
| | 2015 | | 2014 | |
Operating expense | | $ | 4,233 | | $ | 3,503 | |
General and administrative expense | | 15,468 | | 12,679 | |
Total | | $ | 19,701 | | $ | 16,182 | |
(b) Adjusted EBITDA is calculated as net earnings, income tax expense, interest expense, depreciation and amortization expense, loss on extinguishment of debt, non-cash employee stock ownership plan compensation charge, non-cash stock-based compensation charge, loss on disposal of assets, other income (expense), net, change in fair value of contingent consideration, litigation accrual and related legal fees associated with a class action lawsuit and unrealized (non-cash) gain on changes in fair value of non-hedged derivatives. Management believes the presentation of this measure is relevant and useful, because it allows investors to view the partnership’s performance in a manner similar to the method management uses, adjusted for items management believes makes it easier to compare its results with other companies that have different financing and capital structures. This method of calculating Adjusted EBITDA may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.
