UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended January 31, 1995
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from.................. to................
Commission file number 1-11331
Ferrellgas Partners, L.P.
(Exact name of registrants as specified in their charters)
Delaware 43-1675728
(States or other jurisdictions of (I.R.S. Employer Identification Nos.)
incorporation or organization)
One Liberty Plaza, Liberty, Missouri 64068
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code (816) 792-1600
Indicate by check mark whether the registrants (1) have filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrants were required to
file such reports), and (2) have been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of March 15, 1995:
Ferrellgas Partners, L.P. - 14,398,942 Common Units
16,593,721 Subordinated Units
FERRELLGAS PARTNERS, L.P.
FERRELLGAS, L.P.
FERRELLGAS FINANCE CORP.
Table of Contents
Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Ferrellgas Partners, L.P. and Subsidiary
Consolidated Balance Sheet -
January 31, 1995, and July 31, 1994 1
Consolidated Statement of Earnings -
Three months and six months ended January 31, 1995 and
Pro Forma January 31, 1994 2
Consolidated Statement of Partners' Capital -
Six months ended January 31, 1995 3
Consolidated Statement of Cash Flows -
Six months ended January 31, 1995 4
Notes to Consolidated Financial Statements 5
Ferrellgas, L.P. and Subsidiaries
Consolidated Balance Sheet -
January 31, 1995, and July 31, 1994 8
Consolidated Statement of Earnings -
Three months and six months ended
January 31, 1995 and Pro Forma January 31, 1994 9
Consolidated Statement of Partners' Capital -
Six months ended January 31, 1995 10
Consolidated Statement of Cash Flows -
Six months ended January 31, 1995 11
Notes to Consolidated Financial Statements 12
Ferrellgas Finance Corp.
Balance Sheet -
January 31, 1995, and July 31, 1994 14
Statement of Operations -
Three months and six months ended
January 31, 1995 15
Statement of Cash Flows -
Six months ended January 31, 1995 16
Notes to Financial Statements 17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 18
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 21
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
January 31, July 31,
ASSETS 1995 1994
- ------- ---------- --------
(unaudited)
Current Assets:
Cash and cash equivalents $ 30,817 $14,535
Accounts and notes receivable, net 100,756 50,780
Inventories 50,641 43,562
Prepaid expenses and other current assets 3,879 2,042
Receivable from general partner and
affiliate 410 -
--------- ---------
Total Current Assets 186,503 110,919
Property, plant and equipment, net 355,789 294,765
Intangible assets, net 68,444 63,291
Other assets, net 8,607 8,218
--------- ---------
Total Assets $619,343 $477,193
========= =========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Current Liabilities:
Accounts payable $96,079 $46,368
Other current liabilities 37,281 26,590
Short-term borrowing - 3,000
Payable to general partner - 13
-------- --------
Total Current Liabilities 133,360 75,971
Long-term debt 327,793 267,062
Other liabilities 11,913 11,528
Minority interest 1,479 1,239
Partners' Capital Common unitholders
(14,398,942 and 14,100,000 units
outstanding in 1995 and 1994, respectively) 96,520 84,532
Subordinated unitholders (16,593,721 units
outstanding in 1995 and 1994) 105,691 99,483
General partner (57,413) (62,622)
--------- ---------
Total Partners' Capital 144,798 121,393
--------- ---------
Total Liabilities and Partners' Capital $619,343 $477,193
========= =========
<FN>
See notes to consolidated financial statements.
</FN>
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF EARNINGS
(in thousands, except unit data)
(unaudited)
Three Months Ended Six Months Ended
----------------------- -----------------------
January 31, January 31, January 31, January 31,
1995 1994 1995 1994
----------- ----------- ----------- ----------
(Pro Forma) (Pro Forma)
Revenues:
Gas liquids and related
product sales $208,685 $185,835 $320,469 $289,795
Other 9,976 8,087 17,605 14,341
--------- --------- --------- ---------
Total revenues 218,661 193,922 338,074 304,136
--------- --------- --------- ---------
Costs and expenses:
Cost of product sold 122,889 95,464 190,300 155,979
Operating 44,646 41,665 79,697 74,941
Depreciation and
amortization 8,265 7,255 15,412 14,778
General and administrative 2,934 2,664 5,248 5,107
Vehicle leases 1,107 1,039 2,147 2,144
--------- --------- --------- ---------
Total costs and expenses 179,841 148,087 292,804 252,949
--------- --------- --------- ---------
Operating income 38,820 45,835 45,270 51,187
Interest expense (8,217) (7,173) (15,315) (14,403)
Interest income 345 200 514 350
Loss on disposal of assets (109) (196) (303) (410)
Minority interest (312) (391) (305) (371)
--------- ---------- --------- ---------
Net earnings $30,527 $38,275 $29,861 $36,353
======== ========== ========= =========
Net earnings per limited
partner unit (before
special allocation-note D) $0.98 $1.23 $0.96 $1.17
===== ===== ===== =====
Weighted average number of
units outstanding 30,956,016 30,693,721 30,824,868 30,693,721
========== ========== ========== ==========
<FN>
See notes to consolidated financial statements.
</FN>
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
(in thousands, except unit data)
(unaudited)
Total
Number of units General partners'
Common Subordinated Common Subordinated partner capital
------ ------------ ------ ------------ ------- --------
Balance August 1, 1994 14,100,000 16,593,721 $84,532 $99,483 ($62,622) $121,393
Special allocation of
prior year operating
loss (note D) - - (2,312) (2,664) 4,976 -
Contributed capital (note H) - - 3,324 3,830 72 7,226
Common units issued in
connection with acquisitions 298,942 - 6,600 - 66 6,666
First quarter distribution - - (9,358) (10,786) (204) (20,348)
Net earnings - - 13,734 15,828 299 29,861
---------- ---------- -------- --------- --------- --------
Balance January 31, 1995 14,398,942 16,593,721 $96,520 $105,691 ($57,413) $144,798
========== ========== ======= ======== ========= =========
<FN>
See notes to consolidated financial statements.
</FN>
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
Six Months
Ended
January 31, 1995
----------------
Cash Flows From Operating Activities:
Net earnings $29,861
Reconciliation of net earnings to net
cash from operating activities:
Depreciation and amortization 15,412
Other 1,514
Changes in operating assets and liabilities
net of effect from business acquisitions:
Accounts and notes receivable (43,304)
Inventories 837
Prepaid expenses and other current assets (1,492)
Accounts payable 43,287
Accrued interest expense 11,945
Other current liabilities (7,664)
Other liabilities 71
---------
Net cash provided by operating activities 50,467
---------
Cash Flows From Investing Activities:
Business acquisitions (15,693)
Capital expenditures (9,216)
Proceeds from asset sales 704
Net additions to other assets (655)
---------
Net cash used by investing activities (24,860)
---------
Cash Flows From Financing Activities:
Reductions of short-term borrowing (3,000)
Additions to long-term debt 60,000
Reductions of long-term debt (45,784)
Distributions (20,348)
Minority activity 164
Contribution from general partner 66
Net advances to general partner and affiliate (423)
---------
Net cash used by financing activities (9,325)
---------
Increase in cash and cash equivalents 16,282
Cash and cash equivalents - beginning of period 14,535
---------
Cash and cash equivalents - end of period $30,817
=========
<FN>
See notes to consolidated financial statements.
</FN>
[FN]
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 1995 AND 1994
(unaudited)
A. Reference should be made to the Notes to Consolidated
Financial Statements for the period ending July 31, 1994,
(specifically Notes A and N regarding organization and
formation and pro forma earnings) included in the Ferrellgas
Partners, L.P. and Subsidiary (the "Partnership") annual
financial statements on Form 10-K (Commission File No. 1-
11331) filed with the SEC.
B. The financial statements reflect all adjustments which are,
in the opinion of management, necessary for a fair statement
of the interim periods presented. All adjustments to the
financial statements were of a normal, recurring nature.
C. The propane industry is seasonal in nature with peak
activity during the winter months. Therefore, the results of
operations for the periods ended January 31, 1995 and pro
forma January 31, 1994, are not necessarily indicative of the
results to be expected for a full year.
D. The Agreement of Limited Partnership of Ferrellgas Partners,
L.P. (the "Partnership Agreement") contains specific
provisions for the allocation of net income and loss to each
of the partners for purposes of maintaining the partner
capital accounts. In addition, the Partnership Agreement
contains a special provision to allocate the first year's
operating loss ($5,026,000) 100% to the general partner and
reallocate, based on ownership percentages, an amount equal to
99% of this net loss ($4,976,000) to the limited partners in
the following year. The special allocation of the prior year
operating loss to the limited partners resulted in a loss per
limited partner unit of $.16 for the year ended July 31, 1994.
E. The Partnership is threatened with or named as a defendant
in various lawsuits which, among other items, claim damages
for product liability. It is not possible to determine the
ultimate disposition of these matters; however, after taking
into consideration the Partnership's insurance coverage and
its existing reserves, management is of the opinion that there
are no known uninsured claims or known contingent claims that
are likely to have a material adverse effect on the results of
operations or financial condition of the Partnership.
In connection with the formation of the Partnership, the
General Partner contributed certain assets including customer
relationships and customer tanks. The Internal Revenue
Service ("IRS") has examined the General Partner's
consolidated income tax returns for the years ended July 31,
1987 and 1986, and has proposed certain adjustments which
relate to these contributed assets. If the IRS was
successful, the amount of amortization and depreciation
available to the General Partner could be adversely affected.
At this time, it is not possible to determine the ultimate
resolution of this matter and the impact, if any, to the
consolidated financial statements of the Partnership.
F. The financial information summarized below reflects the
operations of Ferrellgas, Inc., the predecessor company.
Three months ended Six months ended
January 31, 1994 January 31, 1994
(unaudited; in thousands) (unaudited; in thousands)
------------------------- -------------------------
Total Revenues $193,922 $304,136
Total costs and expenses 147,962 252,699
--------- ---------
Operating income 45,960 51,437
Loss on disposal of assets (196) (410)
Interest income 934 1,693
Interest expense (14,917) (29,824)
Income tax expense (12,201) (8,853)
--------- ---------
Net earnings $19,580 $14,043
========= =========
G. On October 14, 1994, the General Partner adopted the
Ferrellgas, Inc. Unit Option Plan (the "Unit Option Plan"),
which authorizes the issuance of options (the "Unit Options")
covering up to 750,000 Subordinated Units to certain officers
and employees of the General Partner, of which 696,500 options
were issued and outstanding at January 31, 1995. The Unit
Options granted have an exercise price of $16.80 per unit
(which is an estimate of the fair market value of the
Subordinated Units at the time of grant), will vest over a
three to five year period (depending on the employee), are
exercisable beginning after July 31, 1999 and will expire on
the tenth anniversary of the date of grant. Upon conversion
of 100% of the Subordinated Units held by the General Partner
and its affiliates, the Unit Options granted will convert to
Common Unit Options.
H. On November 1, 1994, the General Partner purchased all of
the capital stock of Vision Energy Resources, Inc. ("Vision")
for a cash purchase price of $45 million. Immediately
following the closing of the purchase of Vision, the General
Partner (i) caused Vision and each of its subsidiaries to be
merged into the General Partner (except for a trucking
subsidiary which dividended substantially all of its assets to
the General Partner) and (ii) contributed all of the assets of
Vision and its subsidiaries to Ferrellgas, L.P. (the
"Operating Partnership"). As a result of the contribution, the Operating
Partnership assumed substantially all of the liabilities,
whether known or unknown, associated with Vision and its
subsidiaries (excluding income tax liabilities), including
obligations of the General Partner under a $45,000,000 loan
agreement under which the General Partner borrowed funds to
pay the purchase price for Vision. In consideration of the
retention by the General Partner of certain income tax
liabilities, the Partnership issued 138,392 Common Units to the
General Partner. The Operating Partnership
repaid the loan immediately after the transfer of assets with
funds borrowed under its Credit Facility. The Operating
Partnership received a contribution of $7,300,000 from
the General Partner, representing the excess of the value
of the assets over the liabilities conveyed and
the units issued to the General Partner. This
contribution is allocated to each partner based on their
relative ownership percentages following the closing of the
Vision acquisition. The total assets contributed to the
Operating Partnership was approximately $57,400,000 and was
allocated as follows (i) working capital of $2,347,000
(ii) property, plant and equipment of $47,863,000, and (iii)
intangible assets of $7,190,000. The contribution has been
accounted for similar to purchase accounting and, accordingly,
the results of operations of Vision have been included in the
consolidated financial statements from the date of contribution.
The following pro forma financial information assumes the
acquisition of Vision occurred at the beginning of each of the
periods presented and also assumes the formation of the
Partnership as of August 1, 1993:
Six months ended January 31
---------------------------
1995 1994
---------- ----------
(unaudited; in thousands except per unit data)
Total revenues $353,865 $345,738
Net earnings 30,428 39,765
Net earnings per unit 0.98 1.28
I. During the six months ended January 31, 1995, the Partnership
made acquisitions and received contributions of businesses
totaling $67,293,000. This total consists of $45,000,000 for
Vision (Note H), cash paid of $15,693,000 and issuance of
Partnership units of $6,600,000.
J. On November 14, 1994, the Partnership filed Amendment No. 1
to Registration Statement on Form S-1 with the Securities and
Exchange Commission to register 2,400,000 Common Units
representing limited partner interests in the Partnership.
The registration statement was declared effective November 15,
1994. The Common Units may be issued from time to time by the
Partnership in exchange for other businesses, properties or
securities in business combination transactions.
K. On November 18, 1994, the Partnership declared an initial
cash distribution of $0.65 per unit, payable December 14,
1994. This initial distribution covers the period from July
5, 1994, when the Partnership began operations, to October 31,
1994, the end of the first full fiscal quarter. The
distribution was, accordingly, prorated.
L. On February 17, 1995, the Partnership declared its second-
quarter cash distribution of $0.50 per unit, payable March 14,
1995.
FERRELLGAS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands)
January 31, July 31,
ASSETS 1995 1994
- ------- ----------- -------
(unaudited)
Current Assets:
Cash and cash equivalents $30,817 $14,535
Accounts and notes receivable, net 100,756 50,780
Inventories 50,641 43,562
Prepaid expenses and other current assets 3,879 2,042
Receivable from general partner and
affiliate 410 -
--------- ---------
Total Current Assets 186,503 110,919
Property, plant and equipment, net 355,789 294,765
Intangible assets, net 68,444 63,291
Other assets, net 8,607 8,218
--------- ---------
Total Assets $619,343 $477,193
========= =========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Current Liabilities:
Accounts payable $96,079 $46,368
Other current liabilities 37,280 26,590
Short-term borrowing - 3,000
Payable to general partner - 13
--------- ---------
Total Current Liabilities 133,359 75,971
Long-term debt 327,793 267,062
Other liabilities 11,913 11,528
Partners' Capital
Limited partner 144,799 121,393
General partner 1,479 1,239
--------- ---------
Total Partners' Capital 146,278 122,632
--------- ---------
Total Liabilities and Partners' Capital $619,343 $477,193
========= =========
<FN>
See notes to consolidated financial statements.
</FN>
FERRELLGAS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
------------------------- ------------------------
January 31, January 31, January 31, January 31,
1995 1994 1995 1994
----------- ----------- ----------- -----------
(Pro Forma) (Pro Forma)
Revenues:
Gas liquids and
related product
sales $208,685 $185,835 $320,469 $289,795
Other 9,976 8,087 17,605 14,341
--------- --------- --------- ---------
Total revenues 218,661 193,922 338,074 304,136
--------- --------- --------- ---------
Costs and expenses:
Cost of product sold 122,889 95,464 190,300 155,979
Operating 44,645 41,665 79,696 74,941
Depreciation and
amortization 8,265 7,255 15,412 14,778
General and
administrative 2,934 2,664 5,248 5,107
Vehicle leases 1,107 1,039 2,147 2,144
--------- --------- --------- ---------
Total costs and
expenses 179,840 148,087 292,803 252,949
--------- --------- --------- ---------
Operating income 38,821 45,835 45,271 51,187
Interest expense (8,217) (7,173) (15,315) (14,403)
Interest income 345 200 514 350
Loss on disposal of
assets (109) (196) (303) (410)
--------- --------- --------- ---------
Net earnings $30,840 $38,666 $30,167 $36,724
========= ========= ========= =========
<FN>
See notes to consolidated financial statements.
</FN>
FERRELLGAS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
(in thousands)
(unaudited)
Total
Limited General partners'
partner partner capital
------- ------- ---------
Balance August 1, 1994 $121,393 $1,239 $122,632
Contributed capital (note F) 7,226 74 7,300
Additions to capital in
connection with acquisitions 6,666 69 6,735
First quarter distribution (20,348) (208) (20,556)
Net earnings 29,862 305 30,167
-------- ------- --------
Balance January 31, 1995 $144,799 $1,479 $146,278
========= ======= =========
<FN>
See notes to consolidated financial statements.
</FN>
FERRELLGAS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
Six Months
Ended
January 31,
1995
-----------
Cash Flows From Operating Activities:
Net earnings $30,167
Reconciliation of net earnings to net
cash from operating activities:
Depreciation and amortization 15,412
Other 1,514
Changes in operating assets and liabilities
net of effects from business acquisitions:
Accounts and notes receivable (43,304)
Inventories 837
Prepaid expenses and other current assets (1,492)
Accounts payable 43,287
Other current liabilities (7,665)
Accrued interest expense 11,945
Other liabilities 71
--------
Net cash provided by operating activities 50,772
--------
Cash Flows From Investing Activities:
Business acquisitions (15,693)
Capital expenditures (9,216)
Proceeds from asset sales 704
Net additions to other assets (655)
--------
Net cash used by investing activities (24,860)
--------
Cash Flows From Financing Activities:
Reductions of short-term borrowing (3,000)
Additions to long-term debt 60,000
Reductions of long-term debt (45,784)
Distributions (20,556)
Contributions from partners 133
Net advances to general partner and affiliate (423)
---------
Net cash used by financing activities (9,630)
---------
Increase in cash and cash equivalents 16,282
Cash and cash equivalents - beginning of period 14,535
---------
Cash and cash equivalents - end of period $30,817
=========
<FN>
See notes to consolidated financial statements
</FN>
[FN]
FERRELLGAS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 1995 AND 1994
(unaudited)
A. Reference should be made to the Notes to Consolidated
Financial Statements for the period ending July 31, 1994,
(specifically Notes A and M regarding organization and
formation and pro forma earnings) included in the Ferrellgas,
L.P. and Subsidiaries (the " Operating Partnership") annual
financial statements on Form 10-K (Commission File No. 1-
11331) filed with the SEC.
B. The financial statements reflect all adjustments which are,
in the opinion of management, necessary for a fair statement
of the interim periods presented. All adjustments to the
financial statements were of a normal, recurring nature.
C. The propane industry is seasonal in nature with peak
activity during the winter months. Therefore, the results of
operations for the periods ended January 31, 1995 and pro
forma January 31, 1994, are not necessarily indicative of the
results to be expected for a full year.
D. The Operating Partnership is threatened with or named as a
defendant in various lawsuits which, among other items, claim
damages for product liability. It is not possible to
determine the ultimate disposition of these matters; however,
after taking into consideration the Operating Partnership's
insurance coverage and its existing reserves, management is of
the opinion that there are no known uninsured claims or known
contingent claims that are likely to have a material adverse
effect on the results of operations or financial condition of
the Operating Partnership.
In connection with the formation of the Operating Partnership,
the General Partner contributed certain assets including
customer relationships and customer tanks. The Internal
Revenue Service ("IRS") has examined the General Partner's
consolidated income tax returns for the years ended July 31,
1987 and 1986, and has proposed certain adjustments which
relate to these contributed assets. If the IRS was
successful, the amount of amortization and depreciation
available to the General Partner could be adversely affected.
At this time, it is not possible to determine the ultimate
resolution of this matter and the impact, if any, to the
consolidated financial statements of the Operating
Partnership.
E. The financial information summarized below reflects the
operations of Ferrellgas, Inc., the predecessor company.
Three months ended Six months ended
January 31, 1994 January 31, 1994
(unaudited; in thousands) (unaudited; in thousands)
------------------------- -------------------------
Total Revenues $193,922 $304,136
Total costs and expenses 147,962 252,699
--------- ---------
Operating income 45,960 51,437
Loss on disposal of assets (196) (410)
Interest income 934 1,693
Interest expense (14,917) (29,824)
Income tax expense (12,201) (8,853)
--------- ---------
Net earnings $19,580 $14,043
========= =========
F. On November 1, 1994, the General Partner purchased all of
the capital stock of Vision Energy Resources, Inc. ("Vision")
for a cash purchase price of $45 million. Immediately
following the closing of the purchase of Vision, the General
Partner (i) caused Vision and each of its subsidiaries to be
merged into the General Partner (except for a trucking
subsidiary which dividended substantially all of its assets to
the General Partner) and (ii) contributed all of the assets of
Vision and its subsidiaries to the Operating Partnership. As
a result of the contribution, the Operating Partnership assumed
substantially all of the liabilities, whether known or unknown,
associated with Vision and its subsidiaries (excluding income tax
liabilities), including obligations of the General Partner
under a $45,000,000 loan agreement under which the General
Partner borrowed funds to pay the purchase price for Vision.
In consideration of the retention by the General Partner of
certain income tax liabilities, the Partnership issued 138,392
Common Units to the General Partner. The Operating Partnership
repaid the loan immediately after the transfer of assets with
funds borrowed under its Credit Facility. The Operating
Partnership received a contribution of $7,300,000 from
the General Partner, representing the excess of the value of
the assets over the liabilities conveyed and the units issued
to the General Partner. This contribution is allocated
to each partner based on their relative ownership percentages
following the closing of the Vision acquisition. The total
assets contributed to the Operating Partnership was approximately
$57,400,000 and was allocated as follows (i) working capital
of $2,347,000 (ii) property, plant and equipment of $47,863,000,
and (iii) intangible assets of $7,190,000. The contribution
has been accounted for similar to purchase accounting and,
accordingly, the results of operations of Vision have been
included in the consolidated financial statements from the
date of contribution.
The following pro forma financial information assumes the
acquisition of Vision occurred at the beginning of each of the
periods presented and also assumes the formation of the
Operating Partnership as of August 1, 1993:
Six months ended January 31
---------------------------
1995 1994
---------- ----------
(unaudited; in thousands except per unit data)
Total revenues $353,865 $345,738
Net earnings 30,428 39,765
G. During the six months ended January 31, 1995, the Operating
Partnership made acquisitions and received contributions of businesses
totaling $67,293,000. This total consists of $45,000,000 for
Vision (Note F), cash paid of $15,693,000 and contribution from
the Partnership of $6,600,000 in connection with the
issuance of units for businesses.
H. On November 18, 1994, the Operating Partnership declared an
initial cash distribution of $20,556,000, payable December 14,
1994.
I. On February 17, 1995, the Operating Partnership declared its
second-quarter cash distribution of $15,813,000, payable March
14, 1995.
FERRELLGAS FINANCE CORP.
(a wholly owned subsidiary of Ferrellgas, L.P.)
BALANCE SHEET
January 31, July 31,
1995 1994
----------- --------
(unaudited)
ASSETS
- -------
Cash $960 $1,000
---- ------
Total Assets $960 $1,000
==== ======
STOCKHOLDER'S EQUITY
- --------------------
Common stock, $1.00 par value; 2,000 shares
authorized; 1,000 shares issued and
outstanding $1,000 $1,000
Accumulated deficit (40) -
------- -------
Total Stockholder's Equity $960 $1,000
======= =======
<FN>
See notes to financial statements.
</FN>
FERRELLGAS FINANCE CORP.
(a wholly owned subsidiary of Ferrellgas, L.P.)
STATEMENT OF OPERATIONS
(unaudited)
Three Months Six Months
Ended Ended
January 31, January 31,
1995 1995
----------- ----------
Revenues $ - $ -
General and administrative expense - 40
----- ------
Net loss $ - ($40)
===== ======
<FN>
See notes to financial statements.
</FN>
FERRELLGAS FINANCE CORP.
(a wholly owned subsidiary of Ferrellgas, L.P.)
STATEMENT OF CASH FLOWS
(unaudited)
Six Months
Ended
January 31,
1995
-----------
Cash Flows From Operating Activities: -----
Cash used by operating activities ($40)
-----
Cash Flows From Investing Activities: -----
Cash provided by investing activities -
-----
Cash Flows From Financing Activities: -----
Cash provided by financing activities -
-----
Decrease in Cash (40)
Cash - beginning of period 1,000
-----
Cash - end of period $960
=====
<FN>
See notes to financial statements.
</FN>
[FN]
FERRELLGAS FINANCE CORP.
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 1995
(unaudited)
A. Reference should be made to the Notes to Financial
Statements for the period ending July 31, 1994, included in
the Ferrellgas Finance Corp. annual financial statements on
Form 10-K (Commission File No. 1-11331) filed with the SEC.
B. The financial statements reflect all adjustments which are,
in the opinion of management, necessary for a fair statement
of the interim periods presented. All adjustments to the
financial statements were of a normal, recurring nature.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of the historical and pro
forma results of operations of the Operating Partnership and
liquidity and capital resources of the Partnership. Since the
Operating Partnership accounts for all of the consolidated
assets, sales and earnings of the Partnership, a separate
discussion of the results of operations of the Partnership is not
presented.
Ferrellgas Finance Corp. has nominal assets and does not
conduct any operations. Accordingly, a discussion of the results
of operations and liquidity and capital resources is not
presented.
Results of Operations (Operating Partnership)
The propane industry is seasonal in nature with peak
activity during the winter months. Due to the seasonality of the
business, results of operations for the three months and six
months ended January 31, 1995, are not necessarily indicative of
the results to be expected for a full year. Other factors
affecting the results of operations include competitive
conditions, demand for product, variations in weather and
fluctuations in propane prices.
Three Months Ended January 31, 1995 vs. Pro Forma January 31,
1994
Total Revenues. Total revenues increased 12.8% to
$218,661,000 as compared to $193,922,000 for the prior period.
The increase is attributable to acquisitions of propane
businesses during the three months ended January 31, 1995, and to
revenues from other operations (net trading operations, wholesale
propane marketing and chemical feedstocks marketing) increasing
109.9% to $47,528,000. These increases were offset by a decrease
in revenues from existing retail operations due to warmer
temperatures as compared to normal and to the prior period that
have affected the majority of the Operating Partnership's areas
of operation. To date, fiscal 1995 winter temperatures, as
reported by the American Gas Association, are 12.3% warmer than
normal and 15.4% warmer than the same period last year.
The increase in revenues from other operations is primarily
due to an increase in chemical feedstocks marketing due to an
increase in sales volume and selling price. Both volume and
price increased as a result of increased availability of product
from refineries and increased demand from petrochemical
companies.
Gross Profit. Gross profit decreased 2.7% to $95,772,000 as
compared with $98,458,000 for the prior period. The
decrease is primarily attributable to a decrease in retail
operations gross profit. Retail operations results declined due
to a decrease in gallons sold to 208,361,000 gallons as compared
to 213,185,000 for the prior period along with a decrease in
retail margins. The decrease in gallons and margins is
attributable to unfavorable weather as previously noted. Other
operations gross profit increased slightly.
Operating Expenses. Operating expenses increased 7.2% to
$44,645,000 as compared to $41,665,000 for the prior period. The
increase is primarily attributable to acquisitions of propane
businesses as well as general increases in various components of
operating expenses. Vehicle expenses increased due to increased
emphasis on completing planned preventive maintenance and repairs
as compared to the prior period. The increase in operating
expenses was offset by a reduction in incentive compensation
accruals as compared to the prior period.
Depreciation and Amortization. Depreciation and amortization
expense increased 13.9% to $8,265,000 as compared to $7,255,000 for
the prior period due primarily to acquisitions of propane businesses.
Net Earnings. Net earnings decreased to $30,840,000 as
compared to $38,666,000 for the prior period primarily due to the
decrease in gross profit and increases in operating expenses,
depreciation and amortization, general and administrative and
vehicle lease expenses.
Six Months Ended January 31, 1995 vs. Pro Forma January 31, 1994
Total Revenues. Total revenues increased 11.2% to
$338,074,000 as compared to $304,136,000 for the prior period.
The increase is attributable to acquisitions of propane
businesses during the three months ended January 31, 1995, and
to revenues from other operations (net trading operations,
wholesale propane marketing and chemical feedstocks marketing)
increasing 84.0% to $74,021,000. These increases were offset by a
decrease in revenues from existing retail operations due to
warmer temperatures as compared to normal and to the prior period
that have affected the majority of the Operating Partnership's
areas of operation. To date, fiscal 1995 winter temperatures, as
reported by the American Gas Association, are 12.3% warmer than
normal and 15.4% warmer than the same period last year. Total
retail operations revenues increased slightly when including
acquisitions.
The increase in revenues from other operations is primarily
due to an increase in chemical feedstocks marketing due to an
increase in sales volume and selling price. Both volume and
price increased as a result of increased availability of product
from refineries and increased demand from petrochemical
companies.
Gross Profit. Gross profit decreased 0.3% to $147,774,000
as compared with $148,157,000 for the prior period. The decrease
is attributable to a slight decrease in retail operations gross
profit offset by an increase in other operations gross profit.
Retail operations results decreased due to a decrease in gallons
sold to 330,670,000 gallons as compared to 333,261,000 for the prior
period along with a slight decrease in retail margins. The decrease
in gallons and margins is attributable to unfavorable weather
as previously noted. Retail operations gross profit was favorably
impacted by the acquisition of propane businesses. Other operations
gross profit increased primarily due to stronger margins and increased
sales volume due to an active market for trading operations and an
increase in sales volumes for chemical feedstocks operations as
previously discussed.
Operating Expenses. Operating expenses increased 6.3% to
$79,696,000 as compared to $74,941,000 for the prior period. The
increase is primarily attributable to acquisitions of propane
businesses as well as general increases in various components of
operating expenses. Vehicle expenses increased due to increased
emphasis on completing planned preventive maintenance and repairs
as compared to the prior period. The increase in operating
expenses was offset by a reduction in incentive compensation
accruals as compared to the prior period.
Depreciation and Amortization. Depreciation and amortization
expense increased 4.3% to $15,412,000 as compared to $14,778,000 for
the prior period due primarily to acquisitions of propane businesses.
Net Earnings. Net earnings decreased to $30,167,000 as
compared to $36,724,000 for the prior period primarily due to the
decrease in gross profit and increases in operating expenses,
depreciation and amortization, general and administrative and
vehicle lease expenses.
Liquidity and Capital Resources (The Partnership)
Cash Flows From Operating Activities. Cash provided by
operating activities was $50,467,000 for the six months ended
January 31, 1995. This cash was provided by earnings from
operating activities and an increase in accounts payable and
other current liabilities offset by an increase in accounts
receivable.
Cash Flows From Investing Activities. On November 1, 1994,
the General Partner completed the acquisition of Vision Energy
Resources, Inc. ("Vision") for a cash purchase price of $45
million. Following the closing of the acquisition, the General
Partner transferred the net assets (excluding income tax
liabilities) of Vision to the Operating Partnership. During the
three months ended January 31, 1995, the Partnership also
completed the acquisition of other propane businesses that were
not individually significant.
During the six months ended January 31, 1995, the
Partnership made business acquisitions totaling $60,693,000 and
made other growth and maintenance capital expenditures of
$9,216,000. The Partnership maintains its vehicle and
transportation equipment fleet by leasing light and medium duty
trucks and tractors. The General Partner believes vehicle
leasing is a cost effective method for financing transportation
equipment. Capital requirements for repair and maintenance of
property, plant and equipment are relatively low since
technological change is limited and the useful lives of propane
tanks and cylinders, the Partnership's principal physical assets,
are generally long.
Cash Flows From Financing Activities. On November 14, 1994,
the Partnership filed Amendment No. 1 to Form S-1 Registration
Statement with the Securities and Exchange Commission to register
2,400,000 Common Units representing limited partner interests in
the Partnership. The registration statement was declared
effective November 15, 1994. The Common Units may be issued from
time to time by the Partnership in exchange for other businesses,
properties or securities in business combination transactions.
During the six months ended January 31, 1995, the Partnership
issued 298,942 Common Units in connection with the acquisition of
propane businesses.
On November 18, 1994, the Partnership declared an initial
cash distribution of $0.65 per unit, payable December 14, 1994.
This initial distribution covers the period from July 5, 1994,
when the Partnership began operations, to October 31, 1994, the
end of the first full fiscal quarter.
On February 17, 1995, the Partnership declared its second-
quarter cash distribution of $0.50 per unit, payable March 14,
1995.
During the six months ended January 31, 1995, the
Partnership borrowed $60,000,000 from its Credit Facility. These
borrowings, along with cash provided by operations, were used to
fund acquisitions of propane businesses, repayment of debt
and make other capital expenditures.
Effects of Inflation. In the past the Company has been able
to adjust its sales price of product in response to market
demand, cost of product, competitive factors and other industry
trends. Consequently, changing prices as a result of
inflationary pressures has not had a material adverse effect on
profitability although revenues may be affected. Inflation has
not materially impacted the results of operations and the Company
does not believe normal inflationary pressures will have a
material adverse effect on the profitability of the Company in
the future.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule (filed in electronic format
only)
(b) Reports on Form 8-K.
The registrants filed the following reports on Form 8-K
during the quarter ended January 31, 1995:
(a) Form 8-K/A dated November 10, 1994, reporting under
Item 7 the consolidated financial statements of Vision Energy
Resources, Inc. and unaudited pro forma consolidated financial
statements of Ferrellgas Partners, L.P. and Vision Energy
Resources, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrants have duly caused this report to be
signed on their behalf by the undersigned thereunto duly
authorized.
FERRELLGAS PARTNERS, L.P.
By: Ferrellgas, Inc. (General Partner)
Date: March 15, 1995 /s/ Danley K. Sheldon
By: Danley K. Sheldon
Senior Vice President/
Chief Financial Officer
(Principal Financial and
Accounting Officer)