For immediate release
Contact:
Ryan VanWinkle, Investor Relations, 816-792-7998
Ferrellgas Partners, L.P.
Reports Record Third Quarter Earnings
Liberty, MO (May 29, 2003)--Ferrellgas Partners, L.P. (NYSE:FGP), the
nation's second largest retail marketer of propane, today reported record net
earnings of $39.4 million for the third quarter ended April 30, 2003.
Third quarter retail propane sales volumes were 251 million gallons, an
increase of 4 percent compared to the third quarter of 2002. These strong sales
volumes reflect the impact of acquisitions and national temperatures that were 2
percent colder than the same period last year, as reported by the National
Oceanic and Atmospheric Administration.
Gross profit and operating expense for the quarter were $161.4 million and
$79.1 million, respectively, an increase of $8.9 million and $4.4 million,
respectively, compared to the same period last year. These increases were
primarily attributable to higher retail sales volumes. General and
administrative expense for the quarter was $7.2 million, down $0.9 million from
the same quarter last year. Third quarter equipment lease expense was $5.0
million, down $0.8 million from the prior year's quarter, partially reflecting
the partnership's second quarter refinancing of certain operating tank lease
obligations. EBITDA, as adjusted, was a record $70.1 million for the third
quarter, an increase of 10 percent as compared to $63.9 million in the prior
year's record quarter. Third quarter net earnings were a record $39.4 million,
an increase of 8 percent as compared to previous record net earnings of $36.6
million realized in the third quarter of last year.
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Ferrellgas
Page 2 of 2
"Our continued focus on improving our operations and the return of more
normal winter weather has had a positive impact on our sales and profitability
this year," said James E. Ferrell, Ferrellgas' Chairman and Chief Executive
Officer. "We are pleased to once again demonstrate our ability to deliver strong
financial results and returns to our investors, despite recent challenges from
the economy, weather and other external factors."
For the nine months ended April 30, 2003, retail propane sales volumes and
gross profit were 783 million gallons and $463.8 million, respectively, and
operating and general and administrative expenses were $227.2 million and $21.9
million, respectively. Equipment lease expense for the nine-month period was
$16.5 million. As is typically the case, year-to-date results were primarily
impacted by the seasonal performance experienced in our second and third fiscal
quarters. EBITDA, as adjusted, and net earnings for the nine-month period were
$198.2 million and $101.5 million, respectively, compared to $174.7 million and
$91.3 million, respectively, for the same period last year. Net earnings for the
nine-month period include special charges of $7.1 million related to the early
extinguishment of debt and $2.8 million related to a cumulative effect of a
change in accounting principle.
Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas,
L.P., currently serves more than one million customers in 45 states. Ferrellgas
employees indirectly own more than 17 million common units of the partnership
through an employee stock ownership plan. Ferrellgas trades on the New York
Stock Exchange under the ticker symbol FGP.
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 actual results,
performance and expectations to differ materially from anticipated
results, performance or expectations. These risks, uncertainties and
other factors are discussed in the partnership's Form 10-K for the
fiscal year ended July 31, 2002, as amended, and other documents filed
from time to time with the Securities and Exchange Commission.
###
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
Unaudited Audited
ASSETS April 30, 2003 July 31, 2002
- ----------------------------------------------------------------------------- ------------------- -------------------
Current Assets:
Cash and cash equivalents $ 14,104 $ 19,781
Accounts and notes receivable, net 85,015 74,274
Inventories 48,949 48,034
Prepaid expenses and other current assets 7,763 10,724
------------------- -------------------
Total Current Assets 155,831 152,813
Property, plant and equipment, net 684,126 506,531
Goodwill 124,190 124,190
Intangible assets, net 99,908 98,170
Other assets, net 8,900 3,424
------------------- -------------------
Total Assets $ 1,072,955 $ 885,128
=================== ===================
LIABILITIES AND PARTNERS' CAPITAL
- -----------------------------------------------------------------------------
Current Liabilities:
Accounts payable $ 50,521 $ 54,316
Other current liabilities (1) 83,367 89,061
------------------- -------------------
Total Current Liabilities 133,888 143,377
Long-term debt (1) 853,327 703,858
Other liabilities 17,701 14,861
Contingencies and commitments - -
Minority interest 3,050 1,871
Partners' Capital:
Senior unitholder (2,743,020 and 2,782,211 units outstanding at April 2003
and July 2002, respectively - liquidation preference $109,721 and $111,288
at April 2003 and July 2002, respectively) 109,721 111,288
Common unitholders (36,213,803 and 36,081,203 units outstanding
at April 2003 and July 2002, respectively) 16,552 (28,320)
General partner unitholder (393,510 and 392,556 units outstanding
at April 2003 and July 2002, respectively) (58,664) (59,035)
Accumulated other comprehensive loss (2,620) (2,772)
------------------- -------------------
Total Partners' Capital 64,989 21,161
------------------- -------------------
Total Liabilities and Partners' Capital $ 1,072,955 $ 885,128
=================== ===================
<FN>
(1) The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $218 million of
8 3/4% notes and a $10 million short-term note payable, which are liabilities of Ferrellgas Partners, L.P. and not of
Ferrellgas, L.P.
</FN>
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 2003 AND 2002
(in thousands, except per unit data)
(Unaudited)
Three months ended April 30 Nine months ended April 30
--------------------------- ---------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Revenues:
Propane and other gas liquids sales $ 351,338 $ 269,825 $ 985,539 $ 825,239
Other 18,027 17,336 64,606 62,903
----------- ----------- ----------- -----------
Total revenues 369,365 287,161 1,050,145 888,142
Cost of product sold 207,934 134,640 586,324 461,178
----------- ----------- ----------- -----------
Gross profit 161,431 152,521 463,821 426,964
Operating expense 79,121 74,686 227,226 212,186
Depreciation and amortization expense 10,563 10,625 30,719 32,844
General and administrative expense 7,202 8,117 21,863 21,574
Equipment lease expense 4,990 5,825 16,510 18,456
Employee stock ownership plan compensation charge 1,619 1,273 4,653 3,856
Loss on disposal of assets and other 1,985 552 3,781 1,830
----------- ----------- ----------- -----------
Operating income 55,951 51,443 159,069 136,218
Interest expense (16,548) (14,717) (47,328) (45,039)
Interest income 424 323 850 1,194
Early extinguishment of debt expense (a) - - (7,052) -
----------- ----------- ----------- -----------
Earnings before minority interest and cumulative
effect of change in accounting principle 39,827 37,049 105,539 92,373
Minority interest (b) 454 414 1,276 1,052
----------- ----------- ----------- -----------
Earnings before cumulative effect of change in
accounting principle 39,373 36,635 104,263 91,321
Cumulative effect of change in accounting principle,
net of minority interest of $28 (c) - - (2,754) -
----------- ----------- ----------- -----------
Net earnings 39,373 36,635 101,509 91,321
Distribution to senior unitholder 2,775 2,786 8,300 8,390
Net earnings available to general partner 366 338 932 829
----------- ------------ ----------- ------------
Net earnings available to common unitholders $ 36,232 $ 33,511 $ 92,277 $ 82,102
=========== ============ =========== ============
Basic earnings per common unit:
Earnings before cumulative effect of change in
accounting principle (d) $ 1.00 $ 0.93 $ 2.62 $ 2.28
Net earnings available to common unitholders $ 1.00 $ 0.93 $ 2.55 $ 2.28
Weighted average common units outstanding 36,197.3 36,072.0 36,142.5 36,003.3
Supplemental Data and Reconciliation of Non-GAAP Item:
Three months ended April 30 Nine months ended April 30
--------------------------- ---------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
Retail gallons 250,620 240,385 783,034 720,690
=========== =========== =========== ===========
Net earnings $ 39,373 $ 36,635 $ 101,509 $ 91,321
Interest expense 16,548 14,717 47,328 45,039
Depreciation and amortization expense 10,563 10,625 30,719 32,844
Early extinguishment of debt expense (a) - - 7,052 -
Employee stock ownership plan compensation charge 1,619 1,273 4,653 3,856
Cumulative effect of change in accounting principle (c) - - 2,754 -
Loss on disposal of assets and other 1,985 552 3,781 1,830
Minority interest (b) 454 414 1,276 1,052
Interest income (424) (323) (850) (1,194)
----------- ----------- ----------- -----------
EBITDA, as adjusted (e) $ 70,118 $ 63,893 $ 198,222 $ 174,748
=========== =========== =========== ===========
<FN>
(a) Expenses related to the refinancing of the $160 million Ferrellgas Partners, L.P. senior secured debt in September 2002.
(b) Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.
(c) Amount related to recognition of liabilities for future retirements of underground storage facilities, as required by the
recently issued SFAS No. 143.
(d) Amount calculated as 99% of the earnings before cumulative effect of change in accounting principle less distribution to senior
unitholder; the result then divided by the weighted average common units outstanding.
(e) EBITDA, as adjusted, is calculated as earnings before interest, taxes, depreciation, amortization, early extinguishment of debt
expense and non-cash items such as employee stock ownership plan compensation charge, cumulative effect of change in accounting
principle, loss on disposal of assets and other and minority interest. EBITDA, as adjusted, is not intended to represent cash
flow and does not represent the measure of cash available for distribution and is not intended as an alternative to operating
income or net earnings. EBITDA, as adjusted, is a non-GAAP measure, but provides our management with additional information
for evaluating our operating performance and is a factor in determining our compliance with debt covenants. Our calculation of
EBITDA, as adjusted, may differ from similarly titled items reported by other companies. EBITDA, as adjusted, for the periods
described herein is calculated in the same manner as presented by the Partnership in the past, and is intended to allow
investors to compare performance with prior periods.
</FN>