Exhibit 99.5
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The unaudited pro forma condensed combined balance sheet as of January 31,
2004, was prepared by combining Ferrellgas, L.P.'s balance sheet at January 31,
2004 with Blue Rhino Corporation's balance sheet at January 31, 2004, giving
effect to the Blue Rhino LLC contribution as though it had been completed on
January 31, 2004. The unaudited pro forma condensed combined statements of
earnings for the periods presented were prepared by combining Ferrellgas L.P.'s
statements of earnings for the six months ended January 31, 2004, and the year
ended July 31, 2003, with Blue Rhino Corporation's statements of operations for
the six months ended January 31, 2004, and the year ended July 31, 2003,
respectively, giving effect to the Blue Rhino LLC contribution as though it had
occurred on August 1, 2002. These unaudited pro forma condensed combined
financial statements do not give effect to any restructuring costs or to any
potential cost savings or other operating efficiencies that could result from
the integration of Blue Rhino LLC with the operations of Ferrellgas, L.P.
The following unaudited pro forma condensed combined financial statements
give effect to the Blue Rhino LLC contribution under the purchase method of
accounting. These pro forma statements are presented for illustrative purposes
only. The pro forma adjustments are based upon available information and
assumptions that management believes are reasonable. These unaudited pro forma
condensed combined financial statements do not purport to represent what the
results of operations or financial position of Ferrellgas, L.P. would actually
have been if the Blue Rhino LLC contribution had in fact occurred on such dates,
nor do they purport to project the results of operations or financial position
of Ferrellgas, L.P. for any future period or as of any date. Under the purchase
method of accounting, tangible and identifiable intangible assets acquired and
liabilities assumed are recorded at their estimated fair values. The excess of
the purchase price, including estimated fees and expenses related to the Blue
Rhino LLC contribution, over the fair value of the net assets acquired is
classified as goodwill in the accompanying unaudited pro forma condensed
combined balance sheet. The estimated fair values and useful lives of assets
acquired and liabilities assumed are based on a preliminary valuation and are
subject to final valuation adjustments. Ferrellgas, L.P. intends to continue its
analysis of the net assets of Blue Rhino LLC to determine the final allocation
of the total purchase price to the various assets acquired and the liabilities
assumed.
Ferrellgas, L.P.'s consolidated historical financial statements for the
year ended July 31, 2003, are derived from its audited consolidated financial
statements contained in its Form 10-K as filed with the SEC on October 21, 2003.
Ferrellgas, L.P.'s unaudited condensed consolidated historical financial
statements for the six months ended January 31, 2004, are derived from its
unaudited condensed consolidated financial statements contained in its Form 10-Q
as filed with the SEC on March 10, 2004. The historical financial statements of
Blue Rhino Corporation for the year ended July 31, 2003, are derived from the
audited consolidated financial statements contained in Blue Rhino Corporation's
Form 10-K as filed with the SEC on October 21, 2003. The unaudited condensed
historical financial statements of Blue Rhino Corporation for the six months
ended January 31, 2004, are derived from the unaudited condensed financial
statements contained in Blue Rhino Corporation's Form 10-Q as filed with the SEC
on March 11, 2004.
You should read the financial information in this section together with
Ferrellgas, L.P.'s historical consolidated financial statements and accompanying
notes contained in its prior SEC filings, and Blue Rhino Corporation's
historical consolidated financial statements and accompanying notes contained in
its prior SEC filings or in this current report.
1
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET(1)
January 31, 2004
(in thousands)
Ferrellgas, Blue Rhino
L.P. Corporation Pro Forma Pro Forma
ASSETS Historical (2) Historical (2) Adjustments (3) Combined
- ------------------------------------------------ ---------------- --------------- ------------- -----------
Current assets:
Cash and cash equivalents................. $ 20,896 $ 2,351 $ - $ 23,247
Accounts and notes receivable, net........ 157,581 14,351 - 171,932
Inventories............................... 83,976 26,561 - 110,537
Prepaid expenses and other current assets. 8,043 9,362 (2,077) (4) 15,328
---------------- --------------- ------------- -----------
Total current assets.................... 270,496 52,625 (2,077) 321,044
Property, plant and equipment, net.......... 698,457 85,499 (9,229) (5) 774,727
Goodwill.................................... 124,190 61,867 58,484 (6) 244,541
Intangible assets, net...................... 110,067 1,254 175,028 (7) 286,349
Other assets................................ 4,305 1,064 5,605 (8) 10,974
---------------- --------------- ------------- -----------
Total assets............................ $1,207,515 $202,309 $227,811 $1,637,635
================ =============== ============= ===========
LIABILITIES AND PARTNERS' CAPITAL
- ------------------------------------------------
Current liabilities:
Accounts payable.......................... $ 116,536 $ 17,689 $ - $ 134,225
Other current liabilities................. 67,043 11,995 (5,250) (9) 73,788
Short-term borrowings..................... 42,700 - (16,136) (10) 26,564
---------------- --------------- ------------- -----------
Total current liabilities............... 226,279 29,684 (21,386) 234,577
Long-term debt.............................. 680,915 33,357 185,691 (11) 899,963
Other liabilities and deferred credits...... 19,728 5,042 (3,032) (12) 21,738
Contingencies and commitments............... - - - -
Stockholders' equity
Common stock.............................. 18 (18) (13) -
Capital in excess of par.................. 133,062 (133,062) (13) -
Retained earnings......................... 538 (538) (13) -
Accumulated other comprehensive income.... 608 (608) (13) -
--------------- -------------
Total stockholders' equity.............. 134,226 (134,226)
--------------- -------------
Total liabilities and stockholders' equity $202,309
===============
Partners' capital: -
Limited partner........................... 279,553 198,737 (14) 478,290
General partner........................... 2,853 2,027 (15) 4,880
Accumulated other comprehensive loss...... (1,813) - (1,813)
---------------- ------------- -----------
Total partners' capital................. 280,593 200,764 481,357
---------------- ------------- -----------
Total liabilities and partners' capital. $1,207,515 $227,811 $1,637,635
================ ============= ===========
See Accompanying Notes to Unaudited Pro Forma
Condensed Combined Financial Statements.
2
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS(1)
Six Months Ended January 31, 2004
(in thousands)
Ferrellgas, Blue Rhino
L.P. Corporation Pro Forma Pro Forma
Historical (2) Historical (2) Adjustments (3) Combined
---------------- --------------- ------------- -----------
Revenues......................................... $737,195 $108,512 $ - $845,707
Cost of product sold (exclusive of depreciation,
shown with amortization below)................. 446,148 84,507 (3,200) (16) 527,455
---------------- --------------- ------------- -----------
Gross profit..................................... 291,047 24,005 3,200 318,252
Operating expense................................ 152,151 - - 152,151
Depreciation and amortization expense............ 23,860 5,132 10,854 (16) 39,846
(17)
General and administrative expense............... 15,873 14,846 - 30,719
Equipment lease expense.......................... 9,243 - - 9,243
Employee stock ownership plan compensation charge 3,948 - - 3,948
Loss on disposal of assets and other............. 3,552 145 - 3,697
---------------- --------------- ------------- -----------
Operating income................................. 82,420 3,882 (7,654) 78,648
Interest expense................................. (24,304) (1,261) (6,705) (18) (32,270)
Interest income.................................. 801 13 - 814
---------------- --------------- ------------- -----------
Earnings before income taxes..................... 58,917 2,634 (14,359) 47,192
Income taxes..................................... - 1,028 (1,759) (19) (731)
---------------- --------------- ------------- -----------
Earnings from continuing operations.............. $58,917 $ 1,606 $(12,600) $ 47,923
================ =============== ============= ===========
See Accompanying Notes to Unaudited Pro Forma
Condensed Combined Financial Statements.
3
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS (1)
Fiscal Year Ended July 31, 2003
(in thousands)
Ferrellgas, Blue Rhino
L.P. Corporation Pro Forma Pro Forma
Historical (2) Historical (2) Adjustments (3) Combined
---------------- --------------- ------------- -----------
Revenues......................................... $1,221,639 $258,222 $ - $1,479,861
Cost of product sold (exclusive of depreciation,
shown with amortization below)................. 690,969 196,084 (12,300) (16) 874,753
---------------- --------------- ------------- -----------
Gross profit..................................... 530,670 62,138 12,300 605,108
Operating expense................................ 297,535 - - 297,535
Depreciation and amortization expense............ 40,779 9,261 19,607 (16) 69,647
(20)
General and administrative expense............... 28,024 28,404 - 56,428
Equipment lease expense.......................... 20,640 - - 20,640
Employee stock ownership plan compensation
charge.......................................... 6,778 - - 6,778
(Gain) loss on disposal of assets and other ..... 6,679 (2,372) - 4,307
---------------- --------------- ------------- -----------
Operating income................................. 130,235 26,845 (7,307) 149,773
Interest expense................................. (45,318) (7,784) (7,961) (21) (61,063)
Interest income.................................. 1,281 141 - 1,422
Loss on investee................................. - (455) - (455)
---------------- --------------- ------------- -----------
Earnings before income taxes..................... 86,198 18,747 (15,268) 89,677
Income taxes..................................... - 2,217 (2,152) (19) 65
---------------- --------------- ------------- -----------
Earnings from continuing operations.............. $ 86,198 $ 16,530 $(13,116) $ 89,612
=============== =============== ============= ============
See Accompanying Notes to Unaudited Pro Forma
Condensed Combined Financial Statements.
4
FERRELLGAS, L.P.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. Presentation. The Blue Rhino LLC contribution was completed on April 21,
2004. These unaudited pro forma condensed combined financial statements do
not give effect to any restructuring costs, potential cost savings or other
operating efficiencies that are expected to result from the Blue Rhino LLC
contribution (see also footnote 22). The unaudited pro forma financial data
is not necessarily indicative of the operating results or financial
position that would have occurred had the Blue Rhino LLC contribution been
completed at the dates indicated, nor is it necessarily indicative of
future operating results or financial position. The purchase accounting
adjustments made in connection with the development of these unaudited pro
forma condensed combined financial statements are preliminary and have been
made solely for purposes of developing such pro forma financial
information.
2. The columns represent Ferrellgas, L.P.'s unaudited condensed historical
financial position and results of operations, as well as those of Blue
Rhino Corporation. Ferrellgas, L.P.'s unaudited condensed balance sheet
data reported on the unaudited pro forma condensed combined balance sheet
was derived from the information included in its Form 10-Q as filed with
the SEC on March 10, 2004. The Blue Rhino Corporation unaudited condensed
balance sheet data reported on the unaudited pro forma condensed combined
balance sheet was derived from the information included in Blue Rhino
Corporation's Form 10-Q as filed with the SEC on March 11, 2004.
Ferrellgas, L.P.'s unaudited condensed income statement data reported on
the unaudited pro forma condensed combined statement of earnings for the
six months ended January 31, 2004, and the year ended July 31, 2003, was
derived from the information included in its Form 10-Q as filed with the
SEC on March 10, 2004, and its Form 10-K as filed with the SEC on October
21, 2003, respectively. The Blue Rhino Corporation unaudited condensed
income statement data reported on the unaudited pro forma condensed
combined statement of earnings for the six months ended January 31, 2004,
and the year ended July 31, 2003, was derived from the information included
in Blue Rhino Corporation's Form 10-Q as filed with the SEC on March 11,
2004, and in Blue Rhino Corporation's Form 10-K as filed with the SEC on
October 21, 2003, respectively.
3. Ferrellgas, L.P. has assumed for purposes of the unaudited pro forma
condensed combined balance sheet that the following transactions occurred
on January 31, 2004, and for purposes of the unaudited pro forma condensed
combined statements of earnings, that the following transactions occurred
on August 1, 2002:
a) The Blue Rhino LLC contribution and ancillary transactions.
On April 20, 2004, FCI Trading Corp., an affiliate of Ferrellgas, Inc., the
general partner of Ferrellgas, L.P., acquired all of the outstanding common
stock of Blue Rhino Corporation in an all-cash merger. Pursuant to an
Agreement and Plan of Merger dated February 8, 2004, a subsidiary of FCI
Trading merged with and into Blue Rhino Corporation whereby the then
current stockholders of Blue Rhino Corporation were granted the right to
receive a payment from FCI Trading of $17.00 in cash for each share of Blue
Rhino Corporation common stock outstanding on April 20, 2004. FCI Trading
thereafter became the sole stockholder of Blue Rhino Corporation and
immediately after the merger, FCI Trading converted Blue Rhino Corporation
into a limited liability company, Blue Rhino LLC.
Pursuant to a Contribution Agreement dated February 8, 2004, FCI Trading
contributed on April 21, 2004 all of the membership interests in Blue Rhino
LLC to Ferrellgas, L.P. through a series of transactions and Ferrellgas,
L.P. assumed FCI Trading's obligation under the Agreement and Plan Of
Merger to pay the $17.00 per share to the former stockholders of Blue Rhino
Corporation together with other specific obligations. In consideration of
this contribution, Ferrellgas Partners issued 195,686 common units to FCI
Trading. Ferrellgas Partners, Ferrellgas, L.P. and FCI Trading have agreed
to indemnify our general partner from any damages incurred by our general
partner in connection with the assumption of any of the obligations
described above. Also on April 21, 2004, subsequent to the contribution
described above, Blue Rhino LLC merged with and into Ferrellgas, L.P. The
contribution of the membership interests in Blue Rhino LLC to Ferrellgas,
L.P. is not expected to be taxable for U.S. Federal income tax purposes.
In addition to the payment of $17.00 per share to the former stockholders
of Blue Rhino Corporation, each vested stock option and warrant that
permits its holder to purchase common stock of Blue Rhino Corporation that
was outstanding immediately prior to the merger was converted into the
right to receive a cash payment from Blue Rhino Corporation equal to the
difference between $17.00 per share and the applicable exercise price of
the stock option or warrant. Unvested options and warrants not otherwise
subject to automatic accelerated vesting upon a change in control vested on
a pro rata basis through April 19, 2004, based on their original vesting
date. The total payment to the former Blue Rhino Corporation stockholders
for all common stock outstanding on April 20, 2004 and for those Blue Rhino
Corporation options and warrants then outstanding was approximately
$343million. A press release regarding the merger and contribution was
issued by us on April 20, 2004 and is filed as Exhibit 99.2 to this Current
Report and is hereby incorporated by reference into this description.
5
The consideration paid and preliminary purchase price allocation based upon
estimated fair values for the Blue Rhino LLC contribution are as follows
(in thousands):
Pro forma purchase price--
Assumption of liability for cash settlement of merger
obligation.................................................. $318,443
Assumption of obligation related to stock option and
warrant plan of Blue Rhino LLC.............................. 24,971
Limited partner and general partner interests issued
in exchange for contribution of membership interests
of Blue Rhino LLC to Ferrellgas Partners and
Ferrellgas, L.P. (see footnotes b, c and d below)........... 8,700
Assumption of liability related to replacement of
Mr. Prim's employment agreement............................. 2,500
Estimated acquisition-related costs and expenses,
including fees for consultants, attorneys,
accountants and other out-of-pocket costs................... 1,700
Assumption of Blue Rhino LLC debt outstanding on
bank credit facility........................................ 37,900
---------
Total pro forma purchase price...................... $394,214
=========
Allocation of purchase price--
Net working capital.......................................... $ 26,114
Property, plant and equipment................................ 73,120
Identifiable intangible assets, including customer lists,
trademarks, patents, and non-compete agreements............. 176,282
Goodwill..................................................... 120,351
Other assets................................................. 1,064
Long-term debt............................................... (707)
Other liabilities and deferred credits....................... (2,010)
----------
Total pro forma allocation of purchase price......... $ 394,214
==========
The foregoing pro forma purchase price is based upon the actual amounts to
be paid, fair values of liabilities to be assumed and estimated remaining
transaction-related costs. The preliminary purchase price allocation is
based on available information and certain assumptions that management
considers reasonable. The pro forma allocation of purchase price will be
based upon a final determination of the fair market value of the net assets
contributed at closing as determined by valuations and other studies that
are not yet complete. The final purchase price allocation may differ from
the preliminary allocation.
b. Contribution of $2.0 million by the general partner to Ferrellgas,
L.P. - At closing, the general partner will contribute its membership
interests in Blue Rhino LLC to maintain its required 1.0101% general
partnership interest in Ferrellgas, L.P.
c. Contribution of $2.0 million by the limited partner to Ferrellgas,
L.P. - At closing, the limited partner will contribute to Ferrellgas,
L.P. its membership interests in Blue Rhino LLC.
d. Issuance of $4.7 million of a limited partner interest to the limited
partner for the contribution to Ferrellgas, L.P. of its membership
interests in Blue Rhino LLC.
4. The pro forma adjustment to prepaid expenses and other current assets
reflect the elimination of the deferred income tax asset on Blue Rhino LLC
assets contributed to Ferrellgas, L.P. The remaining deferred income tax
asset is related to Blue Rhino LLC assets contributed to a taxable
subsidiary of Ferrellgas, L.P.
6
5. The pro forma adjustment to property, plant and equipment (in thousands):
Allocation of purchase price to property,
plant and equipment.......................................... $ 73,120
Contribution of land from limited partner..................... 3,150
Elimination of historical cost of property,
plant and equipment of Blue Rhino LLC........................ (85,499)
---------
Pro forma adjustment................................. $ (9,229)
=========
6. The pro forma adjustment to goodwill (in thousands):
Goodwill associated with Blue Rhino LLC contribution.......... $120,351
Elimination of historical cost of goodwill of
Blue Rhino LLC............................................... (61,867)
---------
Pro forma adjustment................................. $ 58,484
=========
7. The pro forma adjustment to intangible assets, net (in thousands):
Intangible asset - trademarks associated with
Blue Rhino LLC contribution.................................. $83,800
Intangible asset - customer list associated with
Blue Rhino LLC contribution.................................. 75,644
Intangible asset - patents associated with
Blue Rhino LLC contribution.................................. 7,377
Intangible asset - noncompete agreements
associated with Blue Rhino LLC contribution.................. 3,707
Intangible asset - other intangible assets
associated with Blue Rhino LLC contribution.................. 5,754
Elimination of historical cost of intangibles
of Blue Rhino LLC............................................ (1,254)
---------
Pro forma adjustment................................. $175,028
=========
8. The pro forma adjustment to other assets reflects the debt issuance costs
incurred related to the $250 million senior notes (described in footnote
11).
9. The pro forma adjustment to other current liabilities reflects the
repayment of some of Blue Rhino LLC's other current liabilities with
proceeds remaining from Ferrellgas Partners' issuance of common units.
10. The pro forma adjustment to short-term borrowings reflects the reduction in
borrowings with the proceeds remaining from Ferrellgas Partners' issuance
of common units.
11. The pro forma adjustment to long-term debt (in thousands):
Issuance of the $250 million senior notes
net of discount.............................................. $249,093
Elimination of Blue Rhino LLC debt with
proceeds from the issuance by Ferrellgas Partners of
common units................................................. (32,650)
Reduction of Ferrellgas, L.P.'s credit facility
borrowings classified as long-term with proceeds
from the issuance by Ferrellgas Partners of common units..... (30,752)
---------
Pro forma adjustment................................. $185,691
=========
12. The pro forma adjustment to other liabilities and deferred credits reflect
the elimination of some of the deferred income tax liability on Blue Rhino
LLC assets contributed to Ferrellgas L.P. The remaining deferred income tax
liability is related to Blue Rhino LLC assets contributed to a taxable
subsidiary of Ferrellgas, L.P.
13. The pro forma adjustments reflect the elimination of Blue Rhino
Corporation's stockholders' equity accounts.
7
14. The pro forma adjustments to the limited partner's capital (in thousands):
Blue Rhino LLC contribution................................... $192,064
Limited partner interest issued in exchange for
contributed membership interests of Blue Rhino LLC........... 6,673
---------
Pro forma adjustments................................ $198,737
=========
15. The pro forma adjustments to the general partner's capital reflects the
contribution from the general partner of its membership interests in Blue
Rhino LLC (described in footnote 3).
16. The pro forma adjustment to cost of goods sold reflects the change in
accounting policy for the purchase of cylinders and associated valves. Blue
Rhino Corporation's accounting policy expensed the cost of upgrading
cylinder valves and classified it as cost of goods sold. Blue Rhino
Corporation capitalized the cost of purchased cylinders and depreciated
cylinders over 25 years. Ferrellgas L.P.'s accounting policy will result in
the capitalization of such valve costs and their depreciation over 2 years.
The cost of purchased cylinders will be depreciated over 20 years.
17. The pro forma adjustment to depreciation and amortization expense for the
six months ended January 31, 2004 (in thousands):
Elimination of historical depreciation and
amortization expense of Blue Rhino LLC....................... $(5,132)
Additional depreciation and amortization
expense reflecting the preliminary
allocation of purchase price:
Depreciation of amount allocated to
property, plant and equipment........................... 3,482
Depreciation of amount allocated to
cylinders and associated valves......................... 6,400
Amortization of amount allocated to
customer list (15 year life)............................ 2,251
Amortization of amount allocated to
patents (5 year life)................................... 738
Amortization of amount allocated to
noncompete agreements (6 year life)..................... 309
Amortization of amount allocated to
other intangible assets (3-6 year life)................. 2,536
---------
Pro forma adjustment................................. $10,854
=========
18. The pro forma adjustment to interest expense for the six months ended
January 31, 2004 (in thousands):
Elimination of Blue Rhino LLC interest expense................ $1,261
Elimination of interest related to repayment of
a portion of the Ferrellgas, L.P. credit facility
at the existing average 3.4% interest rate................... 797
Additional interest expense related to--
Issuance of $250 million senior notes net
of discount............................................. (8,483)
Amortization of debt issuance costs related
to the $250 million senior notes........................ (280)
--------
Pro forma adjustment................................. $(6,705)
========
The elimination of interest expense related to the Ferrellgas, L.P. credit
facility was determined based on:
o repayment of $46.9 million of existing indebtedness from proceeds of
Ferrellgas Partners' issuance of common units; and
o an average interest rate of 3.4%.
19. The pro forma adjustment to the provision for income taxes reflects that
Ferrellgas, L.P. is not subject to income tax and the contribution of some
of the assets of Blue Rhino LLC into a taxable subsidiary of Ferrellgas,
L.P.
8
20. The pro forma adjustment to depreciation and amortization expense for the
fiscal year ended July 31, 2003 (in thousands):
Elimination of historical depreciation and
amortization expense of Blue Rhino LLC................... $(9,261)
Additional depreciation and amortization
expense reflecting the preliminary allocation
of purchase price:
Depreciation of amount allocated to
property, plant and equipment...................... 6,959
Depreciation of amount allocated to
cylinders and associated valves.................... 9,700
Amortization of amount allocated to
customer list (15 year life)....................... 5,043
Amortization of amount allocated to
patents (5 year life).............................. 1,475
Amortization of amount allocated to
noncompete agreements (6 year life)................ 618
Amortization of amount allocated to
other intangible assets (3-6 year life)............ 5,073
---------
Pro forma adjustment................................. $19,607
=========
21. The pro forma adjustment to interest expense for the fiscal year ended July
31, 2003 (in thousands):
Elimination of Blue Rhino LLC interest expense............ $7,784
Elimination of interest related to repayment
of a portion of the Ferrellgas, L.P. credit
facility at an average interest rate of 3.8%............. 1,782
Additional interest expense related to--
Issuance of $250 million senior notes net
of discount........................................... (16,966)
Amortization of debt issuance costs related
to the senior notes................................... (561)
--------
Pro forma adjustment................................. $(7,961)
========
The elimination of interest expense related to the Ferrellgas, L.P. credit
facility was determined based on
o repayment of $46.9 million of existing indebtedness from proceeds of
Ferrellgas Partners' issuance of common units; and
o an average interest rate of 3.8%.
22. The following forecast information has not been included in these unaudited
pro forma condensed combined financial statements but is presented as
follows to provide additional information about the Blue Rhino LLC
contribution.
Ferrellgas, LP. believes that:
o Blue Rhino LLC's counter-seasonal business activities and anticipated
future growth will provide Ferrellgas, L.P. with the ability to better
utilize its seasonal resources;
o its over 600 retail locations will provide Blue Rhino LLC with a
network that complements its existing distributor network;
o it will achieve cost savings from the elimination of duplicative
general and administrative expenses, specifically insurance costs and
expenses related to Blue Rhino LLC's former status as a publicly-held
company; and
o Blue Rhino LLC will achieve savings by Ferrellgas, L.P.'s provision of
propane procurement, storage and transportation logistics.
Ferrellgas L.P. believes that these cost saving opportunities can eliminate
approximately $3 million of annual operating expense and $4 million of general
and administrative expense from the operations of Blue Rhino LLC based on the
fiscal year used in the unaudited pro forma condensed combined statement of
earnings.
9