þ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware Delaware Delaware Delaware |
43-1698480 43-1742520 43-1698481 14-1866671 |
|
(States or other jurisdictions of incorporation or organization) |
(I.R.S. Employer Identification Nos.) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Ferrellgas Partners, L.P. and Ferrellgas, L.P.
|
Yes o No þ | |
Ferrellgas Partners Finance Corp. and Ferrellgas Finance Corp.
|
Yes þ No o |
Ferrellgas Partners, L.P. |
63,192,503 | Common Units | ||
Ferrellgas Partners Finance Corp. |
1,000 | Common Stock | ||
Ferrellgas, L.P. |
n/a | n/a | ||
Ferrellgas Finance Corp. |
1,000 | Common Stock |
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EX-10.35 | ||||||||
EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-31.3 | ||||||||
EX-31.4 | ||||||||
EX-32.1 | ||||||||
EX-32.2 | ||||||||
EX-32.3 | ||||||||
EX-32.4 |
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 19,319 | $ | 16,614 | ||||
Accounts and notes receivable, net |
126,657 | 145,081 | ||||||
Inventories |
161,232 | 152,301 | ||||||
Price risk management assets |
2,649 | 26,086 | ||||||
Prepaid expenses and other current assets |
23,145 | 10,924 | ||||||
Total current assets |
333,002 | 351,006 | ||||||
Property, plant and equipment, net |
683,789 | 685,328 | ||||||
Goodwill |
248,939 | 248,939 | ||||||
Intangible assets, net |
224,201 | 225,273 | ||||||
Other assets, net |
20,259 | 18,685 | ||||||
Total assets |
$ | 1,510,190 | $ | 1,529,231 | ||||
LIABILITIES AND PARTNERS CAPITAL (DEFICIT) |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 98,868 | $ | 71,348 | ||||
Short-term borrowings |
105,419 | 125,729 | ||||||
Price risk management liabilities |
122,158 | 7,336 | ||||||
Other current liabilities |
120,379 | 100,518 | ||||||
Total current liabilities |
446,824 | 304,931 | ||||||
Long-term debt |
1,052,886 | 1,034,719 | ||||||
Other liabilities |
22,870 | 23,237 | ||||||
Contingencies and commitments (Note I) |
| | ||||||
Minority interest |
3,873 | 4,220 | ||||||
Partners capital (deficit): |
||||||||
Common unitholders (63,192,503 and 62,961,674 units
outstanding at October 31, 2008 and July 31, 2008, respectively) |
161,900 | 201,618 | ||||||
General partner (638,308 and 635,977 units outstanding at
October 31, 2008 and July 31, 2008, respectively) |
(58,438 | ) | (58,036 | ) | ||||
Accumulated other comprehensive income (loss) |
(119,725 | ) | 18,542 | |||||
Total partners capital (deficit) |
(16,263 | ) | 162,124 | |||||
Total liabilities and partners capital (deficit) |
$ | 1,510,190 | $ | 1,529,231 | ||||
1
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Revenues: |
||||||||
Propane and other gas liquids sales |
$ | 436,888 | $ | 358,935 | ||||
Other |
44,031 | 35,981 | ||||||
Total revenues |
480,919 | 394,916 | ||||||
Costs and expenses: |
||||||||
Cost of product sold propane and other gas liquids sales |
318,590 | 252,519 | ||||||
Cost of product sold other |
16,814 | 10,960 | ||||||
Operating expense |
96,217 | 90,459 | ||||||
Depreciation and amortization expense |
21,316 | 21,365 | ||||||
General and administrative expense |
9,086 | 11,793 | ||||||
Equipment lease expense |
5,355 | 6,351 | ||||||
Employee stock ownership plan compensation charge |
1,749 | 3,174 | ||||||
Loss on disposal of assets and other |
2,582 | 2,387 | ||||||
Operating income (loss) |
9,210 | (4,092 | ) | |||||
Interest expense |
(23,670 | ) | (22,286 | ) | ||||
Other income (expense), net |
(818 | ) | 817 | |||||
Loss before income taxes and minority interest |
(15,278 | ) | (25,561 | ) | ||||
Income tax benefit |
(301 | ) | (2,488 | ) | ||||
Minority interest |
(90 | ) | (173 | ) | ||||
Net loss |
(14,887 | ) | (22,900 | ) | ||||
Net loss available to general partner unitholder |
(149 | ) | (229 | ) | ||||
Net loss available to common unitholders |
$ | (14,738 | ) | $ | (22,671 | ) | ||
Basic and diluted net loss available per common unit |
$ | (0.23 | ) | $ | (0.36 | ) | ||
2
Accumulated other | ||||||||||||||||||||||||||||||||
Number of units | comprehensive income (loss) | |||||||||||||||||||||||||||||||
General | General | Currency | Total | |||||||||||||||||||||||||||||
Common | partner | Common | partner | Risk | translation | Pension | partners | |||||||||||||||||||||||||
unitholders | unitholder | unitholders | unitholder | management | adjustments | liability | capital (deficit) | |||||||||||||||||||||||||
July 31, 2008 |
62,961.7 | 636.0 | $ | 201,618 | $ | (58,036 | ) | $ | 18,749 | $ | 26 | $ | (233 | ) | $ | 162,124 | ||||||||||||||||
Contributions in
connection with
ESOP and
stock-based
compensation
charges |
| | 2,036 | 20 | | | | 2,056 | ||||||||||||||||||||||||
Common unit
distribution |
| | (31,481 | ) | (318 | ) | | | | (31,799 | ) | |||||||||||||||||||||
Common units
issued in
connection with
acquisition |
230.8 | 2.3 | 4,465 | 45 | | | | 4,510 | ||||||||||||||||||||||||
Comprehensive
income (loss): |
||||||||||||||||||||||||||||||||
Net loss |
| | (14,738 | ) | (149 | ) | | | | (14,887 | ) | |||||||||||||||||||||
Other
comprehensive
income (loss): |
||||||||||||||||||||||||||||||||
Net loss on
risk
management
derivatives |
| | | | (131,989 | ) | | | ||||||||||||||||||||||||
Reclassification of
derivatives
to earnings |
| | | | (6,269 | ) | | | ||||||||||||||||||||||||
Foreign
currency
translation
adjustment |
| | | | | (12 | ) | | ||||||||||||||||||||||||
Tax effect
on foreign
currency
translation
adjustment |
| | | | | 3 | | (138,267 | ) | |||||||||||||||||||||||
Comprehensive loss |
(153,154 | ) | ||||||||||||||||||||||||||||||
October 31, 2008 |
63,192.5 | 638.3 | $ | 161,900 | $ | (58,438 | ) | $ | (119,509 | ) | $ | 17 | $ | (233 | ) | $ | (16,263 | ) | ||||||||||||||
3
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (14,887 | ) | $ | (22,900 | ) | ||
Reconciliation of net loss to net cash provided by (used in)
operating activities: |
||||||||
Depreciation and amortization expense |
21,316 | 21,365 | ||||||
Employee stock ownership plan compensation charge |
1,749 | 3,174 | ||||||
Stock-based compensation charge |
328 | 450 | ||||||
Loss on disposal of assets |
1,273 | 1,103 | ||||||
Minority interest |
(90 | ) | (173 | ) | ||||
Loss on transfer of accounts receivable related to the
accounts receivable securitization |
2,053 | 1,868 | ||||||
Deferred tax benefit |
(32 | ) | (2,177 | ) | ||||
Other |
3,632 | 1,933 | ||||||
Changes in operating assets and liabilities, net of effects
from business acquisitions: |
||||||||
Accounts and notes receivable, net of securitization |
(16,385 | ) | (20,884 | ) | ||||
Inventories |
(8,931 | ) | (64,949 | ) | ||||
Prepaid expenses and other current assets |
(12,131 | ) | (10,617 | ) | ||||
Accounts payable |
28,080 | 12,178 | ||||||
Accrued interest expense |
9,877 | 2,564 | ||||||
Other current liabilities |
10,221 | 12,650 | ||||||
Other liabilities |
(360 | ) | 100 | |||||
Accounts receivable securitization: |
||||||||
Proceeds from new accounts receivable securitizations |
51,000 | 17,000 | ||||||
Proceeds from collections reinvested in revolving
period accounts receivable securitizations |
272,439 | 242,512 | ||||||
Remittances of amounts collected as servicer of
accounts receivable securitizations |
(290,439 | ) | (246,512 | ) | ||||
Net cash provided by (used in) operating activities |
58,713 | (51,315 | ) | |||||
Cash flows from investing activities: |
||||||||
Business acquisitions, net of cash acquired |
(190 | ) | (190 | ) | ||||
Capital expenditures |
(17,010 | ) | (3,912 | ) | ||||
Proceeds from sale of assets |
2,318 | 2,938 | ||||||
Other |
(1,143 | ) | 1,225 | |||||
Net cash provided by (used in) investing activities |
(16,025 | ) | 61 | |||||
Cash flows from financing activities: |
||||||||
Distributions |
(31,799 | ) | (31,797 | ) | ||||
Proceeds from increase in long-term debt |
183,031 | 92,066 | ||||||
Reductions in long-term debt |
(167,378 | ) | (91,128 | ) | ||||
Net additions to (reductions in) short-term borrowings |
(20,310 | ) | 78,834 | |||||
Cash paid for financing costs |
(3,191 | ) | | |||||
Minority interest activity |
(324 | ) | (325 | ) | ||||
Proceeds from exercise of common unit options |
| 19 | ||||||
Net cash provided by (used in) financing activities |
(39,971 | ) | 47,669 | |||||
Effect of exchange rate changes on cash |
(12 | ) | (9 | ) | ||||
Increase (decrease) in cash and cash equivalents |
2,705 | (3,594 | ) | |||||
Cash and cash equivalents beginning of year |
16,614 | 20,685 | ||||||
Cash and cash equivalents end of period |
$ | 19,319 | $ | 17,091 | ||||
4
A. | Partnership organization and formation | |
Ferrellgas Partners, L.P. (Ferrellgas Partners) is a publicly traded limited partnership, owning an approximate 99% limited partner interest in Ferrellgas, L.P. (the operating partnership). Ferrellgas Partners and the operating partnership are collectively referred to as Ferrellgas. Ferrellgas, Inc. (the general partner), a wholly-owned subsidiary of Ferrell Companies, Inc. (Ferrell Companies), has retained a 1% general partner interest in Ferrellgas Partners and also holds an approximate 1% general partner interest in the operating partnership, representing an effective 2% general partner interest in Ferrellgas on a combined basis. As general partner, it performs all management functions required by Ferrellgas. At October 31, 2008 Ferrell Companies beneficially owned 20.3 million of Ferrellgas Partners outstanding common units. | ||
The condensed consolidated financial statements of Ferrellgas reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the interim periods presented. All adjustments to the condensed consolidated financial statements were of a normal, recurring nature. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with (i) the section entitled Managements Discussion and Analysis of Financial Condition and Results of Operations and (ii) the consolidated financial statements and accompanying notes, each as set forth in Ferrellgas Annual Report on Form 10-K for fiscal 2008. | ||
B. | Summary of significant accounting policies | |
(1) Nature of operations: Ferrellgas Partners is a holding entity that conducts no operations and has two subsidiaries, Ferrellgas Partners Finance Corp. and the operating partnership. Ferrellgas Partners owns a 100% equity interest in Ferrellgas Partners Finance Corp., whose only business activity is to act as the co-issuer and co-obligor of any debt issued by Ferrellgas Partners. The operating partnership is the only operating subsidiary of Ferrellgas Partners. |
||
The operating partnership is engaged primarily in the distribution of propane and related equipment and supplies in the United States. The propane distribution market is seasonal because propane is used primarily for heating in residential and commercial buildings. Therefore, the results of operations for the three months ended October 31, 2008 and 2007 are not necessarily indicative of the results to be expected for a full fiscal year. The operating partnership serves approximately one million residential, industrial/commercial, portable tank exchange, agricultural and other customers in all 50 states, the District of Columbia and Puerto Rico. | ||
(2) Accounting estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from these estimates. Significant estimates impacting the condensed consolidated financial statements include accruals that have been established for contingent liabilities, pending claims and legal actions arising in the normal course of business, useful lives of property, plant and equipment assets, residual values of tanks, capitalization of customer tank installation costs, amortization methods of intangible assets, valuation methods used to value sales returns and allowances, allowance for doubtful accounts, financial derivative contracts and stock and unit-based compensation calculations. |
5
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
CASH PAID FOR: |
||||||||
Interest |
$ | 15,440 | $ | 19,206 | ||||
Income taxes |
8 | 1,211 | ||||||
NON-CASH INVESTING ACTIVITIES: |
||||||||
Issuance of common units in connection
with acquisitions |
$ | 4,515 | $ | | ||||
Issuance of liabilities in connection
with acquisitions |
1,002 | | ||||||
Property, plant and equipment additions |
1,375 | 1,140 |
6
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Current benefit |
$ | (269 | ) | $ | (311 | ) | ||
Deferred benefit |
(32 | ) | (2,177 | ) | ||||
Income tax benefit |
$ | (301 | ) | $ | (2,488 | ) | ||
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Deferred tax assets |
$ | 4,133 | $ | 4,065 | ||||
Deferred tax liabilities |
(4,721 | ) | (4,689 | ) | ||||
Net deferred tax liability |
$ | (588 | ) | $ | (624 | ) | ||
C. | Supplemental financial statement information | |
Inventories consist of: |
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Propane gas and related products |
$ | 138,133 | $ | 128,776 | ||||
Appliances, parts and supplies |
23,099 | 23,525 | ||||||
Inventories |
$ | 161,232 | $ | 152,301 | ||||
7
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Accrued interest |
$ | 29,752 | $ | 19,875 | ||||
Accrued payroll |
10,991 | 12,621 | ||||||
Accrued insurance |
9,573 | 10,987 | ||||||
Customer deposits and advances |
33,198 | 25,065 | ||||||
Other |
36,865 | 31,970 | ||||||
Other current liabilities |
$ | 120,379 | $ | 100,518 | ||||
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Loss on disposal of assets |
$ | 1,273 | $ | 1,103 | ||||
Loss on transfer of accounts receivable related to the
accounts receivable securitization |
2,053 | 1,868 | ||||||
Service income related to the accounts
receivable securitization |
(744 | ) | (584 | ) | ||||
Loss on disposal of assets and other |
$ | 2,582 | $ | 2,387 | ||||
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Operating expense |
$ | 43,152 | $ | 36,450 | ||||
Depreciation and amortization expense |
1,233 | 1,296 | ||||||
Equipment lease expense |
4,951 | 5,845 | ||||||
$ | 49,336 | $ | 43,591 | |||||
D. | Accounts receivable securitization | |
The operating partnership transfers certain of its trade accounts receivable to Ferrellgas Receivables, LLC (Ferrellgas Receivables), a wholly-owned unconsolidated, special purpose entity, and retains an interest in a portion of these transferred receivables. As these transferred receivables are subsequently collected and the funding from the accounts receivable securitization facility is reduced, the operating partnerships retained interest in these receivables is reduced. The accounts receivable securitization facility consisted of the following: |
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Retained interest
|
$ | 33,588 | $ | 22,753 | ||||
Accounts receivable transferred
|
141,333 | 97,333 |
8
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Net non-cash activity
|
$ | 1,309 | $ | 1,284 | ||||
Bad debt expense
|
250 | |
E. | Long-term debt | |
Long-term debt consists of: |
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Senior notes |
||||||||
Fixed rate, Series D-E, ranging from 7.24% to 7.42% due 2010-2013 |
$ | 152,000 | $ | 204,000 | ||||
Fixed rate, 8.75%, due 2012, net of unamortized premium of $1,376
and $1,471 at October 31, 2008 and July 31, 2008, respectively |
269,376 | 269,471 | ||||||
Fixed rate, Series C, 8.87%, due 2009 |
73,000 | 73,000 | ||||||
Fixed rate, 6.75% due 2014, net of unamortized discount of $29,226
and $518 at October 31, 2008 and July 31, 2008, respectively |
420,774 | 249,482 | ||||||
Credit facilities, variable interest rates, expiring 2009 and 2010 (net
of $105.4 million and $125.7 million classified as short-term
borrowings at October 31, 2008 and July 31, 2008, respectively) |
133,781 | 235,270 | ||||||
Notes payable, 7.9% weighted average interest rate in 2008 due
2009 to 2016, net of unamortized discount of $1,256 and $1,160 at
October 31, 2008 and July 31, 2008, respectively |
6,113 | 5,864 | ||||||
Capital lease obligations |
25 | 29 | ||||||
1,055,069 | 1,037,116 | |||||||
Less: current portion, included in other current liabilities on
the condensed consolidated balance sheets |
2,183 | 2,397 | ||||||
Long-term debt |
$ | 1,052,886 | $ | 1,034,719 | ||||
9
F. | Partners capital (deficit) | |
Partnership distributions paid | ||
Ferrellgas Partners has paid the following distributions: |
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Public common unit holders |
$ | 19,150 | $ | 19,170 | ||||
Ferrell Companies (1) |
10,040 | 10,040 | ||||||
FCI Trading Corp. (2) |
98 | 98 | ||||||
Ferrell Propane, Inc. (3) |
26 | 26 | ||||||
James E. Ferrell (4) |
2,167 | 2,146 | ||||||
General partner |
318 | 317 | ||||||
$ | 31,799 | $ | 31,797 | |||||
(1) | Ferrell Companies is the owner of the general partner and a 32% owner of Ferrellgas common units and thus a related party. | |
(2) | FCI Trading Corp. (FCI Trading) is an affiliate of the general partner and thus a related party. | |
(3) | Ferrell Propane, Inc. (Ferrell Propane) is controlled by the general partner and thus a related party. | |
(4) | James E. Ferrell is the Chairman and Chief Executive Officer of the general partner and thus a related party. |
On November 25, 2008, Ferrellgas Partners declared a cash distribution of $0.50 per common unit for the three months ended October 31, 2008, which is expected to be paid on December 15, 2008. Included in this cash distribution are the following amounts expected to be paid to related parties: |
Ferrell Companies |
$ | 10,040 | ||
FCI Trading Corp. |
98 | |||
Ferrell Propane, Inc. |
26 | |||
James E. Ferrell |
2,167 | |||
General partner |
319 |
10
G. | Derivatives | |
Ferrellgas is exposed to price risk related to the purchase, storage, transport and sale of propane generally in the contract and spot markets from major domestic energy companies on a short-term basis. Ferrellgas costs fluctuate with the movement of market prices. This fluctuation subjects Ferrellgas to potential price risk, which Ferrellgas may attempt to minimize through the use of financial derivative instruments. Ferrellgas monitors its price exposure and utilizes financial derivative instruments to mitigate the risk of future price fluctuations. | ||
Ferrellgas may use a combination of financial derivative instruments including, but not limited to, price swaps, options, futures and basis swaps to manage our exposure to market fluctuations in propane prices. Ferrellgas enters into these financial derivative instruments directly with third parties in the over-the-counter (OTC) market and with brokers who are clearing members with the New York Mercantile Exchange (NYMEX). | ||
Ferrellgas enters into forecasted propane sales transactions with a portion of its customers and also enters into forecasted propane purchase contracts with suppliers. Both of these transaction types qualify for the normal purchase normal sales exception within SFAS 133 and are therefore not recorded on our financial statements. Ferrellgas also uses financial derivative instruments to hedge a portion of these transactions. These financial derivative instruments are designated as cash flow hedges, thus the effective portions of changes in the fair value of the financial derivatives are recorded in OCI prior to settlement and are subsequently recognized in the condensed consolidated statements of earnings when the forecasted propane sales transaction impacts earnings. The fair value of financial derivative instruments is classified on the condensed consolidated balance sheets as either Price risk management assets or Price risk management liabilities. | ||
As of October 31, 2008 and 2007, Ferrellgas had the following cash flow hedge activity included in OCI in the condensed consolidated statements of partners capital: |
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Fair value gain (loss) adjustment classified as OCI
|
$ | (119,509 | ) | $ | 3,206 | |||
Reclassification of net gains to statement of earnings
|
6,269 | 3,765 |
11
| Level 1 Quoted prices available in active markets for identical assets or liabilities. | ||
| Level 2 Pricing inputs not quoted in active markets but either directly or indirectly observable. | ||
| Level 3 Significant inputs to pricing that have little or no transparency with inputs requiring significant management judgment or estimation. |
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Derivatives Price risk management assets
|
$ | 2,649 | $ | 26,086 | ||||
Derivatives Price risk management liabilities
|
122,158 | 7,336 |
H. | Transactions with related parties | |
Reimbursable costs | ||
Ferrellgas has no employees and is managed and controlled by its general partner. Pursuant to Ferrellgas partnership agreements, the general partner is entitled to reimbursement for all direct and indirect expenses incurred or payments it makes on behalf of Ferrellgas and all other necessary or appropriate expenses allocable to Ferrellgas or otherwise reasonably incurred by its general partner in connection with operating Ferrellgas business. These costs primarily include compensation and benefits paid to employees of the general partner who perform services on Ferrellgas behalf and are reported in the condensed consolidated statements of earnings as follows: |
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Operating expense
|
$ | 48,873 | $ | 45,429 | ||||
General and administrative expense
|
5,666 | 6,996 |
I. | Contingencies | |
Ferrellgas operations are subject to all operating hazards and risks normally incidental to handling, storing, transporting and otherwise providing for use by consumers of combustible liquids such as propane. As a result, at any given time, Ferrellgas is threatened with or named as a defendant in |
12
various lawsuits arising in the ordinary course of business. Currently, Ferrellgas is not a party to any legal proceedings other than various claims and lawsuits arising in the ordinary course of business. It is not possible to determine the ultimate disposition of these matters; however, management is of the opinion that there are no known claims or contingent claims that are reasonably expected to have a material adverse effect on the condensed consolidated financial condition, results of operations and cash flows of Ferrellgas. | ||
J. | Loss per common unit | |
Below is a calculation of the basic and diluted net loss available per common unit in the condensed consolidated statements of earnings for the periods indicated. In accordance with EITF 03-6, Participating Securities and the Two-Class Method under FASB Statement No. 128, Earnings per Share (EITF 03-6), Ferrellgas calculates 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 been 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 the earnings to the limited partners. Due to the seasonality of the propane business, the dilution effect of EITF 03-6 typically impacts only the three months ending January 31. There was not a dilutive effect of EITF 03-6 on basic and diluted net loss per common unit for the three months ended October 31, 2008 and 2007. | ||
In periods with year-to-date net losses, the allocation of the net losses to the limited partners and the general partner will be determined based on the same allocation basis specified in the Ferrellgas Partners partnership agreement that would apply to periods in which there were no undistributed earnings. Ferrellgas typically incurs net losses in the three month period ended October 31. |
For the three months | ||||||||
Ended October 31, | ||||||||
2008 | 2007 | |||||||
Net loss available to common unitholders |
$ | (14,738 | ) | $ | (22,671 | ) | ||
Weighted average common units
outstanding (in thousands) |
63,052.0 | 62,958.7 | ||||||
Dilutive securities |
| | ||||||
Weighted average common units outstanding plus
dilutive securities |
63,052.0 | 62,958.7 | ||||||
Basic and diluted net loss available per common unit |
$ | (0.23 | ) | $ | (0.36 | ) |
13
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
ASSETS |
||||||||
Cash |
$ | 1,000 | $ | 1,000 | ||||
Total assets |
$ | 1,000 | $ | 1,000 | ||||
STOCKHOLDERS EQUITY |
||||||||
Common stock, $1.00 par value; 2,000 shares
authorized; 1,000 shares issued and outstanding |
$ | 1,000 | $ | 1,000 | ||||
Additional paid in capital |
5,194 | 5,149 | ||||||
Accumulated deficit |
(5,194 | ) | (5,149 | ) | ||||
Total stockholders equity |
$ | 1,000 | $ | 1,000 | ||||
For the three months ended | ||||||||
October 31, | ||||||||
2008 | 2007 | |||||||
General and administrative expense |
$ | 45 | $ | 45 | ||||
Net loss |
$ | (45 | ) | $ | (45 | ) | ||
14
For the three months ended | ||||||||
October 31, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (45 | ) | $ | (45 | ) | ||
Cash used in operating activities |
(45 | ) | (45 | ) | ||||
Cash flows from financing activities: |
||||||||
Capital contribution |
45 | 45 | ||||||
Cash provided by financing activities |
45 | 45 | ||||||
Change in cash |
| | ||||||
Cash beginning of period |
1,000 | 1,000 | ||||||
Cash end of period |
$ | 1,000 | $ | 1,000 | ||||
Ferrellgas Partners Finance Corp. (the Finance Corp.), a Delaware corporation, was formed on March 28, 1996, and is a wholly-owned subsidiary of Ferrellgas Partners, L.P (the Partnership). | ||
The condensed financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the interim periods presented. All adjustments to the condensed financial statements were of a normal, recurring nature. | ||
The Finance Corp. has nominal assets, does not conduct any operations, has no employees and serves as co-issuer and co-obligor for debt securities of the Partnership. |
15
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 19,255 | $ | 16,545 | ||||
Accounts and notes receivable, net |
126,657 | 145,081 | ||||||
Inventories |
161,232 | 152,301 | ||||||
Price risk management assets |
2,649 | 26,086 | ||||||
Prepaid expenses and other current assets |
22,472 | 10,251 | ||||||
Total current assets |
332,265 | 350,264 | ||||||
Property, plant and equipment, net |
683,789 | 685,328 | ||||||
Goodwill |
248,939 | 248,939 | ||||||
Intangible assets, net |
224,201 | 225,273 | ||||||
Other assets, net |
18,465 | 16,817 | ||||||
Total assets |
$ | 1,507,659 | $ | 1,526,621 | ||||
LIABILITIES AND PARTNERS CAPITAL |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 98,868 | $ | 71,348 | ||||
Short-term borrowings |
105,419 | 125,729 | ||||||
Price risk management liabilities |
122,158 | 7,336 | ||||||
Other current liabilities |
111,265 | 97,454 | ||||||
Total current liabilities |
437,710 | 301,867 | ||||||
Long-term debt |
783,510 | 765,248 | ||||||
Other liabilities |
22,870 | 23,237 | ||||||
Contingencies and commitments (Note I) |
| | ||||||
Partners capital |
||||||||
Limited partner |
379,421 | 413,507 | ||||||
General partner |
3,873 | 4,220 | ||||||
Accumulated other comprehensive income (loss) |
(119,725 | ) | 18,542 | |||||
Total partners capital |
263,569 | 436,269 | ||||||
Total liabilities and partners capital |
$ | 1,507,659 | $ | 1,526,621 | ||||
16
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Revenues: |
||||||||
Propane and other gas liquids sales |
$ | 436,888 | $ | 358,935 | ||||
Other |
44,031 | 35,981 | ||||||
Total revenues |
480,919 | 394,916 | ||||||
Costs and expenses: |
||||||||
Cost of product sold propane and
other gas liquids sales |
318,590 | 252,519 | ||||||
Cost of product sold other |
16,814 | 10,960 | ||||||
Operating expense |
96,143 | 90,396 | ||||||
Depreciation and amortization expense |
21,316 | 21,365 | ||||||
General and administrative expense |
9,086 | 11,793 | ||||||
Equipment lease expense |
5,355 | 6,351 | ||||||
Employee stock ownership plan
compensation charge |
1,749 | 3,174 | ||||||
Loss on disposal of assets and other |
2,582 | 2,387 | ||||||
Operating income (loss) |
9,284 | (4,029 | ) | |||||
Interest expense |
(17,744 | ) | (16,360 | ) | ||||
Other income (expense), net |
(818 | ) | 817 | |||||
Loss before income taxes |
(9,278 | ) | (19,572 | ) | ||||
Income tax benefit |
(330 | ) | (2,488 | ) | ||||
Net loss |
$ | (8,948 | ) | $ | (17,084 | ) | ||
17
Accumulated other | ||||||||||||||||||||||||
comprehensive income (loss) | ||||||||||||||||||||||||
Currency | Total | |||||||||||||||||||||||
Limited | General | Risk | translation | Pension | partners | |||||||||||||||||||
partner | partner | management | adjustments | liability | capital | |||||||||||||||||||
July 31, 2008 |
$ | 413,507 | $ | 4,220 | $ | 18,749 | $ | 26 | $ | (233 | ) | $ | 436,269 | |||||||||||
Contributions in
connection with
ESOP and stock-based
compensation charges |
2,056 | 21 | | | | 2,077 | ||||||||||||||||||
Contributions in
connection with
acquisitions |
4,515 | 46 | | | | 4,561 | ||||||||||||||||||
Quarterly distribution |
(31,799 | ) | (324 | ) | | | | (32,123 | ) | |||||||||||||||
Comprehensive income
(loss): |
||||||||||||||||||||||||
Net loss |
(8,858 | ) | (90 | ) | | | | (8,948 | ) | |||||||||||||||
Other comprehensive
income (loss): |
||||||||||||||||||||||||
Net loss on risk
management
derivatives |
| | (131,989 | ) | | | ||||||||||||||||||
Reclassification of
derivatives to
earnings |
| | (6,269 | ) | | | ||||||||||||||||||
Foreign currency
translation
adjustment |
| | | (12 | ) | | ||||||||||||||||||
Tax effect on
foreign currency
translation
adjustment |
| | | 3 | | (138,267 | ) | |||||||||||||||||
Comprehensive loss |
(147,215 | ) | ||||||||||||||||||||||
October 31, 2008 |
$ | 379,421 | $ | 3,873 | $ | (119,509 | ) | $ | 17 | $ | (233 | ) | $ | 263,569 | ||||||||||
18
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (8,948 | ) | $ | (17,084 | ) | ||
Reconciliation of net loss to net cash provided by (used
in) operating activities: |
||||||||
Depreciation and amortization expense |
21,316 | 21,365 | ||||||
Employee stock ownership plan compensation charge |
1,749 | 3,174 | ||||||
Stock-based compensation charge |
328 | 450 | ||||||
Loss on disposal of assets |
1,273 | 1,103 | ||||||
Loss on transfer of accounts receivable related to the
accounts receivable securitization |
2,053 | 1,868 | ||||||
Deferred tax benefit |
(32 | ) | (2,177 | ) | ||||
Other |
3,653 | 1,869 | ||||||
Changes in operating assets and liabilities, net of effects
from business acquisitions: |
||||||||
Accounts and notes receivable, net of securitization |
(16,385 | ) | (20,884 | ) | ||||
Inventories |
(8,931 | ) | (64,949 | ) | ||||
Prepaid expenses and other current assets |
(12,131 | ) | (10,617 | ) | ||||
Accounts payable |
28,080 | 12,178 | ||||||
Accrued interest expense |
4,014 | (3,299 | ) | |||||
Other current liabilities |
10,039 | 12,643 | ||||||
Other liabilities |
(360 | ) | 100 | |||||
Accounts receivable securitization: |
||||||||
Proceeds from new accounts receivable securitizations |
51,000 | 17,000 | ||||||
Proceeds from collections reinvested in revolving
period accounts receivable securitizations |
272,439 | 242,512 | ||||||
Remittances of amounts collected as servicer of
accounts receivable securitizations |
(290,439 | ) | (246,512 | ) | ||||
Net cash provided by (used in) operating activities |
58,718 | (51,260 | ) | |||||
Cash flows from investing activities: |
||||||||
Business acquisitions, net of cash acquired |
(190 | ) | (190 | ) | ||||
Capital expenditures |
(17,010 | ) | (3,912 | ) | ||||
Proceeds from asset sales |
2,318 | 2,938 | ||||||
Other |
(1,143 | ) | 1,225 | |||||
Net cash provided by (used in) investing activities |
(16,025 | ) | 61 | |||||
Cash flows from financing activities: |
||||||||
Distributions |
(32,123 | ) | (32,122 | ) | ||||
Contributions from partners |
| | ||||||
Proceeds from increase in long-term debt |
183,031 | 92,066 | ||||||
Reductions in long-term debt |
(167,378 | ) | (91,128 | ) | ||||
Net additions (reductions) to short-term borrowings |
(20,310 | ) | 78,834 | |||||
Cash paid for financing costs |
(3,191 | ) | | |||||
Net cash provided by (used in) financing activities |
(39,971 | ) | 47,650 | |||||
Effect of exchange rate changes on cash |
(12 | ) | (9 | ) | ||||
Increase (decrease) in cash and cash equivalents |
2,710 | (3,558 | ) | |||||
Cash and cash equivalents beginning of period |
16,545 | 20,407 | ||||||
Cash and cash equivalents end of period |
$ | 19,255 | $ | 16,849 | ||||
19
A. | Partnership organization and formation | |
Ferrellgas, L.P. is a limited partnership that owns and operates propane distribution and related assets. Ferrellgas Partners, L.P. (Ferrellgas Partners), a publicly traded limited partnership, owns an approximate 99% limited partner interest in, and consolidates, Ferrellgas, L.P., Ferrellgas, Inc. (the general partner), a wholly-owned subsidiary of Ferrell Companies, Inc. (Ferrell Companies), holds an approximate 1% general partner interest in Ferrellgas, L.P. and performs all management functions required by Ferrellgas, L.P. | ||
Ferrellgas, L.P. owns a 100% equity interest in Ferrellgas Finance Corp. whose only business activity is to act as the co-issuer and co-obligor of any debt issued by Ferrellgas, L.P. | ||
The condensed consolidated financial statements of Ferrellgas, L.P. and subsidiaries reflect all adjustments, that are, in the opinion of management, necessary for a fair presentation of the interim periods presented. All adjustments to the condensed consolidated financial statements were of a normal, recurring nature. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with (i) the section entitled Managements Discussion and Analysis of Financial Condition and Results of Operations and (ii) the consolidated financial statements and accompanying notes, each as set forth in Ferrellgas, L.P.s Annual Report on Form 10-K for fiscal 2008. | ||
B. | Summary of significant accounting policies |
20
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
CASH PAID FOR: |
||||||||
Interest |
$ | 15,440 | $ | 19,206 | ||||
Income taxes |
| 1,200 | ||||||
NON-CASH INVESTING ACTIVITIES: |
||||||||
Assets contributed from Ferrellgas
Partners in connection with acquisitions |
$ | 4,515 | $ | | ||||
Issuance of liabilities in connection
with acquisitions |
1,002 | | ||||||
Property, plant and equipment additions |
1,375 | 1,140 |
21
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Current benefit |
$ | (298 | ) | $ | (311 | ) | ||
Deferred benefit |
(32 | ) | (2,177 | ) | ||||
Income tax benefit |
$ | (330 | ) | $ | (2,488 | ) | ||
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Deferred tax assets |
$ | 4,133 | $ | 4,065 | ||||
Deferred tax liabilities |
(4,721 | ) | (4,689 | ) | ||||
Net deferred tax liability |
$ | (588 | ) | $ | (624 | ) | ||
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Propane gas and related products |
$ | 138,133 | $ | 128,776 | ||||
Appliances, parts and supplies |
23,099 | 23,525 | ||||||
Inventories |
$ | 161,232 | $ | 152,301 | ||||
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Accrued interest |
$ | 20,893 | $ | 16,879 | ||||
Accrued payroll |
10,991 | 12,621 | ||||||
Accrued insurance |
9,573 | 10,987 | ||||||
Customer deposits and advances |
33,198 | 25,065 | ||||||
Other |
36,610 | 31,902 | ||||||
Other current liabilities |
$ | 111,265 | $ | 97,454 | ||||
22
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Loss on disposal of assets |
$ | 1,273 | $ | 1,103 | ||||
Loss on transfer of accounts receivable
related to the accounts receivable
securitization |
2,053 | 1,868 | ||||||
Service income related to the accounts
receivable securitization |
(744 | ) | (584 | ) | ||||
Loss on disposal of assets and other |
$ | 2,582 | $ | 2,387 | ||||
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Operating expense |
$ | 43,152 | $ | 36,450 | ||||
Depreciation and amortization expense |
1,233 | 1,296 | ||||||
Equipment lease expense |
4,951 | 5,845 | ||||||
$ | 49,336 | $ | 43,591 | |||||
D. | Accounts receivable securitization | |
Ferrellgas, L.P. transfers certain of its trade accounts receivable to Ferrellgas Receivables, LLC (Ferrellgas Receivables), a wholly-owned unconsolidated, special purpose entity, and retains an interest in a portion of these transferred receivables. As these transferred receivables are subsequently collected and the funding from the accounts receivable securitization facility is reduced, Ferrellgas, L.P.s retained interest in these receivables is reduced. The accounts receivable securitization facility consisted of the following: |
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Retained interest |
$ | 33,588 | $ | 22,753 | ||||
Accounts receivable transferred |
141,333 | 97,333 |
The retained interest was classified as accounts and notes receivable on the condensed consolidated balance sheets. Ferrellgas, L.P. had the ability to transfer, at its option, an additional $11.8 million of its trade accounts receivable at October 31, 2008. |
Other accounts receivable securitization disclosures consist of the following items: |
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Net non-cash activity |
$ | 1,309 | $ | 1,284 | ||||
Bad debt expense |
250 | |
The net non-cash activity reported in the condensed consolidated statements of earnings approximates the financing cost of issuing commercial paper backed by these accounts receivable plus an allowance for doubtful accounts associated with the outstanding receivables transferred to Ferrellgas Receivables. The weighted average discount rate used to value the retained interest in the |
23
transferred receivables was 5.2% and 4.7% as of October 31, 2008 and July 31, 2008, respectively. |
E. | Long-term debt |
Long-term debt consists of: |
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Senior notes |
||||||||
Fixed rate, Series D-E, ranging from 7.24% to 7.42% due 2010-2013 |
$ | 152,000 | $ | 204,000 | ||||
Fixed rate, Series C, 8.87%, due 2009 |
73,000 | 73,000 | ||||||
Fixed rate, 6.75% due 2014, net of unamortized discount of
$29,226 and $518 at October 31, 2008 and July 31, 2008,
respectively |
420,774 | 249,482 | ||||||
Credit facilities, variable interest rates, expiring 2009 and 2010
(net of $105.4 million and $125.7 million classified as short-term
borrowings at October 31, 2008 and July 31, 2008, respectively) |
133,781 | 235,270 | ||||||
Notes payable, 7.9% weighted average interest rate in 2008 due
2009 to 2016, net of unamortized discount of $1,256 and $1,160 at
October 31, 2008 and July 31, 2008, respectively. |
6,113 | 5,864 | ||||||
Capital lease obligations |
25 | 29 | ||||||
785,693 | 767,645 | |||||||
Less: current portion, included in other current liabilities
on the condensed consolidated balance sheets |
2,183 | 2,397 | ||||||
Long-term debt |
$ | 783,510 | $ | 765,248 | ||||
On August 1, 2008, Ferrellgas, L.P. made scheduled principal payments of $52.0 million on the 7.12% Series C senior notes using proceeds from borrowings on the unsecured credit facility due 2010. | ||
On August 4, 2008, Ferrellgas, L.P. issued $200.0 million in aggregate principal amount of its 6.75% senior notes due 2014 at an offering price equal to 85% of par. The proceeds from this offering were used to reduce outstanding indebtedness under our unsecured credit facility due 2010. | ||
Unsecured credit facilities | ||
On October 15, 2008, Ferrellgas, L.P. executed a second amendment to its Fifth Amended and Restated Credit Agreement due 2010 which increased the letter of credit sublimit from $90.0 million to $200.0 million through February 28, 2009 and to $150.0 million thereafter. The letter of credit sublimit is part of, and not in addition to, the aggregate credit facility commitment. The amendment also requires Ferrellgas, L.P. to cash collateralize any outstanding letter of credit obligations in an amount equal to the pro rata share of any defaulting lender. | ||
As of October 31, 2008, Ferrellgas, L.P. had total borrowings outstanding under its two unsecured credit facilities of $239.2 million. Ferrellgas, L.P. classified $105.4 million of this amount as short-term borrowings since it was used to fund working capital needs that management intends to pay down within the next 12 months. These borrowings have a weighted average interest rate of 4.0%. As of July 31, 2008, Ferrellgas, L.P. had total borrowings outstanding under its two unsecured credit facilities of $361.0 million. Ferrellgas, L.P. classified $125.7 million of this amount as short-term borrowings since it was used to fund working capital needs that management had intended to pay down within the following 12 months. These borrowings had a weighted average interest rate of 4.72%. |
24
Letters of credit outstanding at October 31, 2008 totaled $163.2 million and were used primarily to secure margin calls under certain risk management activities, and to a lesser extent, product purchases and insurance arrangements. Letters of credit outstanding at July 31, 2008 totaled $42.3 million and were used primarily for insurance arrangements. At October 31, 2008, Ferrellgas, L.P. had available letter of credit capacity of $36.8 million. Ferrellgas, L.P. incurred commitment fees of $0.2 million and $0.1 million in the three months ended October 31, 2008 and 2007, respectively. |
F. | Partners capital | |
Partnership distributions paid | ||
Ferrellgas, L.P. has paid the following distributions: |
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Ferrellgas Partners |
$ | 31,799 | $ | 31,797 | ||||
General partner |
324 | 325 | ||||||
$ | 32,123 | $ | 32,122 | |||||
On November 25, 2008, Ferrellgas, L.P. declared distributions to Ferrellgas Partners and the general partner of $43.7 million and $0.4 million, respectively, which is expected to be paid on December 15, 2008. | ||
See additional discussions about transactions with related parties in Note H Transactions with related parties. | ||
Other comprehensive income (OCI) | ||
See Note G Derivatives for details regarding changes in fair value on risk management derivatives recorded within OCI for the three months ended October 31, 2008. | ||
G. | Derivatives | |
Ferrellgas, L.P. is exposed to price risk related to the purchase, storage, transport and sale of propane generally in the contract and spot markets from major domestic energy companies on a short-term basis. Ferrellgas, L.P.s costs fluctuate with the movement of market prices. This fluctuation subjects Ferrellgas, L.P. to potential price risk, which Ferrellgas may attempt to minimize through the use of financial derivative instruments. Ferrellgas monitors its price exposure and utilizes financial derivative instruments to mitigate the risk of future price fluctuations. | ||
Ferrellgas, L.P. may use a combination of financial derivative instruments including, but not limited to, price swaps, options, futures and basis swaps to manage our exposure to market fluctuations in propane prices. Ferrellgas, L.P. enters into these financial derivative instruments directly with third parties in the over-the-counter (OTC) market and with brokers who are clearing members with the New York Mercantile Exchange (NYMEX). | ||
Ferrellgas, L.P. enters into forecasted propane sales transactions with a portion of its customers and also enters into forecasted propane purchase contracts with suppliers. Both of these transaction types qualify for the normal purchase normal sales exception within SFAS 133 and are therefore not recorded on our financial statements. Ferrellgas, L.P. also uses financial derivative instruments to hedge a portion of these transactions. These financial derivative instruments are designated as cash flow hedges, thus the effective portions of changes in the fair value of the financial derivatives are recorded in OCI prior to settlement and are subsequently recognized in the condensed consolidated statements of earnings when the forecasted propane sales transaction impacts earnings. The fair |
25
value of financial derivative instruments is classified on the condensed consolidated balance sheets as either Price risk management assets or Price risk management liabilities. | ||
As of October 31, 2008 and 2007, Ferrellgas, L.P. had the following cash flow hedge activity included in OCI in the condensed consolidated statements of partners capital: |
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Fair value gain (loss) adjustment classified as OCI |
$ | (119,509 | ) | $ | 3,206 | |||
Reclassification of net gains to statement of earnings |
6,269 | 3,765 |
The fair value (loss) reported above relates to the recent significant decrease in wholesale propane prices. Assuming a minimal change in future market prices, Ferrellgas, L.P. expects to reclassify net losses of approximately $118.0 million to earnings during the next 12 months. These net losses are expected to be offset by unrecorded gains from propane sales commitments Ferrellgas, L.P. has with its customers that qualify for the normal purchase normal sales exception under SFAS 133. | ||
Changes in the fair value of cash flow hedges due to hedge ineffectiveness, if any, are recognized in Cost of product sold propane and other gas liquids sales. During the three months ended October 31, 2008 and 2007, Ferrellgas, L.P. did not recognize any gain or loss in earnings related to hedge ineffectiveness and did not exclude any component of the financial derivative contract gain or loss from the assessment of hedge effectiveness related to these cash flow hedges. Additionally, Ferrellgas, L.P. had no reclassifications to earnings resulting from discontinuance of any cash flow hedges arising from the probability of the original forecasted transactions not occurring within the originally specified period of time defined within the hedging relationship. | ||
In accordance with SFAS 157, Ferrellgas, L.P. determines the fair value of our assets and liabilities subject to fair value measurement by using the highest possible Level as defined within SFAS 157. The three levels defined by the SFAS 157 hierarchy are as follows: |
| Level 1 Quoted prices available in active markets for identical assets or liabilities. | ||
| Level 2 Pricing inputs not quoted in active markets but either directly or indirectly observable. | ||
| Level 3 Significant inputs to pricing that have little or no transparency with inputs requiring significant management judgment or estimation. |
Ferrellgas, L.P. considers over-the-counter derivative instruments entered into directly with third parties as Level 2 valuation since the values of these derivatives are quoted by third party brokers and are on an exchange for similar transactions. The market prices used to value our derivatives have been determined using independent third party prices, readily available market information, broker quotes, and appropriate valuation techniques. Ferrellgas, L.P. had the following recurring fair values based on inputs used to derive its fair values in accordance with SFAS 157: |
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Derivatives Price Risk Management Assets |
$ | 2,649 | $ | 26,086 | ||||
Derivatives Price Risk Management Liabilities |
122,158 | 7,336 |
At October 31, 2008 and July 31, 2008 all derivative assets and liabilities qualified for classification as Level 2 other observable inputs as defined within SFAS 157. All financial derivatives assets and liabilities were non-trading positions. |
26
H. | Transactions with related parties | |
Reimbursable costs | ||
Ferrellgas, L.P. has no employees and is managed and controlled by its general partner. Pursuant to Ferrellgas, L.P.s partnership agreement, the general partner is entitled to reimbursement for all direct and indirect expenses incurred or payments it makes on behalf of Ferrellgas, L.P., and all other necessary or appropriate expenses allocable to Ferrellgas, L.P. or otherwise reasonably incurred by its general partner in connection with operating Ferrellgas, L.P.s business. These costs primarily include compensation and benefits paid to employees of the general partner who perform services on Ferrellgas, L.P.s behalf and are reported in the condensed consolidated statements of earnings as follows: |
For the three months | ||||||||
ended October 31, | ||||||||
2008 | 2007 | |||||||
Operating expense |
$ | 48,873 | $ | 45,429 | ||||
General and administrative expense |
5,666 | 6,996 |
During the three months ended October 31, 2008 and 2007, Ferrellgas, L.P. received payments totaling $45 thousand and $0, respectively, for services provided to and sublease revenue receipts from Samson Dental Practice Management, LLC, a company wholly-owned by James E. Ferrell. | ||
See additional discussions about transactions with related parties in Note F Partners capital | ||
I. | Contingencies | |
Ferrellgas, L.P.s operations are subject to all operating hazards and risks normally incidental to handling, storing, transporting and otherwise providing for use by consumers of combustible liquids such as propane. As a result, at any given time, Ferrellgas, L.P. is threatened with or named as a defendant in various lawsuits arising in the ordinary course of business. Currently, Ferrellgas, L.P. is not a party to any legal proceedings other than various claims and lawsuits arising in the ordinary course of business. It is not possible to determine the ultimate disposition of these matters; however, management is of the opinion that there are no known claims or contingent claims that are reasonably expected to have a material adverse effect on the condensed consolidated financial condition, results of operations and cash flows of Ferrellgas, L.P. |
27
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
ASSETS |
||||||||
Cash |
$ | 1,100 | $ | 1,100 | ||||
Total assets |
$ | 1,100 | $ | 1,100 | ||||
STOCKHOLDERS EQUITY |
||||||||
Common stock, $1.00 par value; 2,000 shares
authorized; 1,000 shares issued and outstanding |
$ | 1,000 | $ | 1,000 | ||||
Additional paid in capital |
3,312 | 3,312 | ||||||
Accumulated deficit |
(3,212 | ) | (3,212 | ) | ||||
Total stockholders equity |
$ | 1,100 | $ | 1,100 | ||||
For the three months ended | ||||||||
October 31, | ||||||||
2008 | 2007 | |||||||
General and administrative expense |
$ | | $ | | ||||
Net loss |
$ | | $ | | ||||
28
For the three months ended | ||||||||
October 31, | ||||||||
2008 | 2007 | |||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | | $ | | ||||
Cash used in operating activities |
| | ||||||
Cash flows from financing activities: |
||||||||
Capital contribution |
| | ||||||
Cash provided by financing activities |
| | ||||||
Change in cash |
| | ||||||
Cash beginning of period |
1,100 | 1,000 | ||||||
Cash end of period |
$ | 1,100 | $ | 1,000 | ||||
A. Formation | ||
Ferrellgas Finance Corp. (the Finance Corp.), a Delaware corporation, was formed on January 16, 2003 and is a wholly-owned subsidiary of Ferrellgas, L.P (the Partnership). | ||
The condensed financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the interim periods presented. All adjustments to the condensed financial statements were of a normal, recurring nature. | ||
The Finance Corp. has nominal assets, does not conduct any operations, has no employees and serves as co-issuer and co-obligor for debt securities of the Partnership. |
29
| us, we, our, ours, or consolidated are references exclusively to Ferrellgas Partners, L.P. together with its consolidated subsidiaries, including Ferrellgas Partners Finance Corp., Ferrellgas, L.P. and Ferrellgas Finance Corp., except when used in connection with common units, in which case these terms refer to Ferrellgas Partners, L.P. without its consolidated subsidiaries; | |
| Ferrellgas Partners refers to Ferrellgas Partners, L.P. itself, without its consolidated subsidiaries; | |
| the operating partnership refers to Ferrellgas, L.P., together with its consolidated subsidiaries, including Ferrellgas Finance Corp.; | |
| our general partner refers to Ferrellgas, Inc.; | |
| Ferrell Companies refers to Ferrell Companies, Inc., the sole shareholder of our general partner; | |
| unitholders refers to holders of common units of Ferrellgas Partners; | |
| customers refers to customers other than our wholesale customers or our other bulk propane distributors or marketers; | |
| retail sales refers to Propane and other gas liquid sales: Retail Sales to End Users or the volume of propane sold primarily to our residential, industrial/commercial and agricultural customers; | |
| wholesale sales refers to Propane and other gas liquid sales: Wholesale Sales to Resellers or the volume of propane sold primarily to our portable tank exchange customers and bulk propane sold to wholesale customers; | |
| other gas sales refers to Propane and other gas liquid sales: Other Gas Sales or primarily the volume of bulk propane sold to other third party propane distributors or marketers; | |
| propane sales volume refers to the volume of propane sold to our retail sales and wholesale sales customers; and | |
| Notes refers to the notes of the condensed consolidated financial statements of Ferrellgas Partners or the operating partnership, as applicable. |
30
| because Ferrellgas Partners has issued $268.0 million in aggregate principal amount of 8.75% senior notes due fiscal 2012, the two partnerships incur different amounts of interest expense on their outstanding indebtedness; see the statements of earnings in their respective condensed consolidated financial statements and Note E Long-term debt in the respective notes to their condensed consolidated financial statements; and |
| Ferrellgas Partners issued common units during fiscal 2008 and the first quarter of fiscal 2009. |
31
| maximize operating efficiencies through utilization of our technology platform; |
| capitalize on our national presence and economies of scale; |
| expand our operations through disciplined acquisitions and internal growth; and |
32
| align employee interests with our investors through significant employee ownership. |
| whether the operating partnership will have sufficient funds to meet its obligations, including its obligations under its debt securities, and to enable it to distribute to Ferrellgas Partners sufficient funds to permit Ferrellgas Partners to meet its obligations with respect to its existing debt and equity securities; |
| whether Ferrellgas Partners and the operating partnership will continue to meet all of the quarterly financial tests required by the agreements governing their indebtedness; and |
| our expectation that Gross margin propane and other gas liquids, Operating income and Net earnings during the remainder of fiscal 2009 will be higher than the same period during fiscal 2008. |
33
Favorable | ||||||||||||||||
(Unfavorable) | ||||||||||||||||
Three months ended October 31, | 2008 | 2007 | Variance | |||||||||||||
Propane sales volumes (gallons): |
||||||||||||||||
Retail Sales to End Users |
126,533 | 119,175 | 7,358 | 6 | % | |||||||||||
Wholesale Sales to Resellers |
45,676 | 36,708 | 8,968 | 24 | % | |||||||||||
172,209 | 155,883 | 16,326 | 10 | % | ||||||||||||
Revenues - |
||||||||||||||||
Propane and other gas liquids sales: |
||||||||||||||||
Retail Sales to End Users |
$ | 297,669 | $ | 232,746 | $ | 64,923 | 28 | % | ||||||||
Wholesale Sales to Resellers |
118,562 | 85,313 | 33,249 | 39 | % | |||||||||||
Other Gas Sales |
20,657 | 40,876 | (20,219 | ) | (49 | %) | ||||||||||
$ | 436,888 | $ | 358,935 | $ | 77,953 | 22 | % | |||||||||
Gross margin |
||||||||||||||||
Propane and other gas liquids sales: (a) |
||||||||||||||||
Retail Sales to End Users |
$ | 88,886 | $ | 74,282 | $ | 14,604 | 20 | % | ||||||||
Wholesale Sales to Resellers |
29,796 | 30,852 | (1,056 | ) | (3 | %) | ||||||||||
Other Gas Sales |
(384 | ) | 1,282 | (1,666 | ) | NM | ||||||||||
$ | 118,298 | $ | 106,416 | $ | 11,882 | 11 | % | |||||||||
Operating income (loss) |
$ | 9,210 | $ | (4,092 | ) | $ | 13,302 | NM | ||||||||
Interest expense |
23,670 | 22,286 | (1,384 | ) | (6 | %) | ||||||||||
Interest expense operating partnership |
17,744 | 16,360 | (1,384 | ) | (8 | %) |
NM Not meaningful | ||
(a) | Gross margin from propane and other gas liquids sales represents Propane and other gas liquids sales less Cost of product sold propane and other gas liquids sales. |
34
| our assumption that interest rates will remain relatively stable during the remainder of fiscal 2009; and | |
| our assumption that weather will remain close to normal during the remainder of fiscal 2009. |
35
36
| significantly warmer than normal winter temperatures; |
| a continued volatile energy commodity cost environment; |
| an unexpected downturn in business operations; or |
| a sustained general economic downturn in the United States. |
| a shelf registration statement for the periodic sale of common units, debt securities and/or other securities; Ferrellgas Partners Finance Corp. may, at our election, be the co-issuer and co-obligor on any debt securities issued by Ferrellgas Partners under this shelf registration statement; |
| an acquisition shelf registration statement for the periodic sale of up to $250.0 million of common units to fund acquisitions; as of October 31, 2008 we had $235.5 million available under this shelf agreement; and |
| a shelf registration statement for the periodic sale of up to $200.0 million of common units in connection with the Ferrellgas Partners direct purchase and distribution reinvestment plan; as of October 31, 2008 we had $200.0 million available under this shelf agreement. |
37
38
October 31, | July 31, | |||||||
2008 | 2008 | |||||||
Total borrowing capacity |
$ | 598,000 | $ | 598,000 | ||||
Less: Letters of credit outstanding |
(163,168 | ) | (42,312 | ) | ||||
Cash borrowings outstanding |
(239,200 | ) | (361,000 | ) | ||||
Credit facilities availability |
$ | 195,632 | $ | 194,688 | ||||
| a base rate, which is defined as the higher of the federal funds rate plus 0.5% or Bank of Americas prime rate (as of October 31, 2008, the federal funds rate and Bank of Americas prime rate were 0.22% and 4.0%, respectively); or |
| the Eurodollar Rate plus a margin varying from 1.5% to 2.5% (as of October 31, 2008, the one-month and three-month Eurodollar Rates were 3.25% and 4.5%, respectively). |
39
| a significant increase in the wholesale cost of propane; |
| a significant delay in the collections of accounts receivable; |
| increased volatility in energy commodity prices related to risk management activities; |
| increased liquidity requirements imposed by insurance providers; |
| a significant downgrade in our credit rating leading to decreased trade credit; or |
| a significant acquisition. |
40
Common unit | Distributions paid during | |||||||
ownership at | the three months ended | |||||||
October 31, 2008 | October 31, 2008 | |||||||
Ferrell Companies (1) |
20,081 | $ | 10,040 | |||||
FCI Trading Corp. (2) |
196 | 98 | ||||||
Ferrell Propane, Inc. (3) |
51 | 26 | ||||||
James E. Ferrell (4) |
4,333 | 2,167 |
(1) | Ferrell Companies is the sole shareholder of our general partner. | |
(2) | FCI Trading Corp. is an affiliate of the general partner and is wholly-owned by Ferrell Companies. | |
(3) | Ferrell Propane, Inc. is wholly-owned by our general partner. | |
(4) | James E. Ferrell is the Chairman and Chief Executive Officer of our general partner. |
41
42
43
44
45
Exhibit | ||||||
Number | Description | |||||
3.1 | Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P., dated as of February 18, 2003. Incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed February 18, 2003. | |||||
3.2 | First Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P., dated as of March 8, 2005. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed March 8, 2005. | |||||
3.3 | Second Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P., dated as of June 29, 2005. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed June 30, 2005. | |||||
3.4 | Third Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. dated as of October 11, 2006. Incorporated by reference to Exhibit 3.4 to our Annual Report on Form 10-K filed October 12, 2006. | |||||
3.5 | Certificate of Incorporation for Ferrellgas Partners Finance Corp. Incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q filed December 16, 1996. | |||||
3.6 | Bylaws of Ferrellgas Partners Finance Corp. Incorporated by reference to Exhibit 3.3 to our Quarterly Report on Form 10-Q filed June 13, 1997. | |||||
3.7 | Third Amended and Restated Agreement of Limited Partnership of Ferrellgas, L.P., dated as of April 7, 2004. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed April 22, 2004. | |||||
3.8 | Certificate of Incorporation of Ferrellgas Finance Corp. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Ferrellgas Partners, L.P. filed February 18, 2003. | |||||
3.9 | Bylaws of Ferrellgas Finance Corp. Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Ferrellgas Partners, L.P. filed February 18, 2003. | |||||
4.1 | Specimen Certificate evidencing Common Units representing Limited Partner Interests. Incorporated by reference to Exhibit A of Exhibit 4.3 to the Current Report on Form 8-K of Ferrellgas Partners, L.P. filed February 18, 2003. | |||||
4.2 | Indenture dated as of September 24, 2002, with form of Note attached, among Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., and U.S. Bank National Association, as trustee, relating to $170,000,000 aggregate principal amount of the Registrants 8 3/4% Senior Notes due 2012. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed September 24, 2002. |
46
Exhibit | ||||||
Number | Description | |||||
4.3 | Indenture dated as of April 20, 2004, with form of Note attached, among Ferrellgas Escrow LLC and Ferrellgas Finance Escrow Corporation and U.S. Bank National Association, as trustee, relating to 6 3/4% Senior Notes due 2014. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed April 22, 2004. | |||||
4.4 | Ferrellgas, L.P. Note Purchase Agreement, dated as of July 1, 1998, relating to: | |||||
$109,000,000 6.99% Senior Notes, Series A, due August 1, 2005, $37,000,000 7.08% Senior Notes, Series B, due August 1, 2006, $52,000,000 7.12% Senior Notes, Series C, due August 1, 2008, $82,000,000 7.24% Senior Notes, Series D, due August 1, 2010, and $70,000,000 7.42% Senior Notes, Series E, due August 1, 2013. Incorporated by reference to Exhibit 4.4 to our Annual Report on Form 10-K filed October 29, 1998. | ||||||
4.5 | Ferrellgas, L.P. Note Purchase Agreement, dated as of February 28, 2000, relating to: $21,000,000 8.68% Senior Notes, Series A, due August 1, 2006, $90,000,000 8.78% Senior Notes, Series B, due August 1, 2007, and $73,000,000 8.87% Senior Notes, Series C, due August 1, 2009. | |||||
Incorporated by reference to Exhibit 4.2 to our Quarterly Report on Form 10-Q filed March 16, 2000. | ||||||
4.6 | Indenture dated as of August 4, 2008, with form of Note attached, among Ferrellgas, L.P., Ferrellgas Finance Corp. and U.S. Bank National Association, as trustee, relating to 6 3/4% Senior Notes due 2014. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed August 5, 2008. | |||||
4.7 | Registration Rights Agreement dated as of August 4, 2008, by and between Ferrellgas, L.P., Ferrellgas Finance Corp. and the initial purchasers named therein. Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed August 5, 2008. | |||||
4.8 | Registration Rights Agreement dated as of December 17, 1999, by and between Ferrellgas Partners, L.P. and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed December 29, 1999. | |||||
4.9 | First Amendment to the Registration Rights Agreement dated as of March 14, 2000, by and between Ferrellgas Partners, L.P. and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q filed March 16, 2000. | |||||
4.10 | Second Amendment to the Registration Rights Agreement dated as of April 6, 2001, by and between Ferrellgas Partners, L.P. and The Williams Companies, Inc. Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed April 6, 2001. | |||||
4.11 | Third Amendment to the Registration Rights Agreement dated as of June 29, 2005, by and between JEF Capital Management, Inc. and Ferrellgas Partners, L.P. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed June 30, 2005. |
47
Exhibit | ||||||
Number | Description | |||||
10.1 | Fifth Amended and Restated Credit Agreement dated as of April 22, 2005, by and among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America N.A., as administrative agent and swing line lender, and the lenders and L/C issuers party hereto. Incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q filed June 8, 2005. | |||||
10.2 | First Amendment to Fifth Amended and Restated Credit Agreement dated as of April 11, 2008, by and among Ferrellgas, L.P., a Delaware limited partnership (the Borrower), Ferrellgas Inc., a Delaware corporation and sole general partner of the Borrower (the General Partner), Bank of America, N.A., as Administrative Agent (in such capacity, the Administrative Agent), Swing Line Lender and L/C Issuer, and the Lenders party hereto. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed April 14, 2008. | |||||
10.3 | Second Amendment to Fifth Amended and Restated Credit Agreement dated as of October 15, 2008, by and among Ferrellgas, L.P., a Delaware limited partnership (the Borrower), Ferrellgas Inc., a Delaware corporation and sole general partner of the Borrower (the General Partner), Bank of America, N.A., as Administrative Agent (in such capacity, the Administrative Agent), Swing Line Lender and L/C Issuer, and the Lenders party hereto. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed October 16, 2008. | |||||
10.4 | Credit Agreement dated as of May 1, 2007, by and among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America N.A., as administrative agent. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed May 4, 2007. | |||||
10.5 | Lender Addendum dated as of June 6, 2006, by and among Deutsche Bank Trust Company Americas as the new lender, Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. and Bank of America, N.A., as Administrative Agent. Incorporated by reference to Exhibit 10.2 to our Annual Report on Form 10-K filed October 12, 2006. | |||||
10.6 | Commitment Increase Agreement dated as of August 28, 2006, by and among Fifth Third Bank as the lender, Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. and Bank of America, N.A. as Administrative Agent. Incorporated by reference to Exhibit 10.3 to our Annual Report on Form 10-K filed October 12, 2006. | |||||
10.7 | Amended and Restated Receivable Interest Sale Agreement dated June 7, 2005 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, L.L.C., as buyer. Incorporated by reference to Exhibit 10.9 to our Quarterly Report on Form 10-Q filed June 8, 2005. | |||||
10.8 | Amendment No. 1 to the Amended and Restated Receivable Interest Sale Agreement and Subordinated Note dated June 6, 2006 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, LLC, as buyer. Incorporated by reference to Exhibit 10.11 to our Quarterly Report on Form 10-Q filed on June 8, 2006. | |||||
10.9 | Amendment No. 2 to the Amended and Restated Receivable Interest Sale Agreement dated June 6, 2006 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, LLC, as buyer. Incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K filed October 12, 2006. |
48
Exhibit | ||||||
Number | Description | |||||
10.10 | Amendment No. 3 to the Amended and Restated Receivable Interest Sale Agreement dated May 31, 2007 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, LLC, as buyer. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K Filed June 1, 2007. | |||||
10.11 | Amendment No. 4 to the Amended and Restated Receivable Interest Sale Agreement dated May 5, 2008 between Ferrellgas, L.P., as originator, and Ferrellgas Receivables, LLC, as buyer. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K Filed May 6, 2008. | |||||
10.12 | Second Amended and Restated Receivables Purchase Agreement dated as of June 6, 2006, by and among Ferrellgas Receivables, L.L.C., as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, Fifth Third Bank and JPMorgan Chase Bank, NA, as agent. Incorporated by reference to Exhibit 10.19 to our Quarterly Report on Form 10-Q filed June 8, 2006. | |||||
10.13 | Amendment No. 1 to Second Amended and Restated Receivables Purchase Agreement dated August 18, 2006, by and among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, Fifth Third Bank and JPMorgan Chase Bank, NA, as agent. Incorporated by reference to Exhibit 99.2 to our Current Report on Form 8-K filed August 18, 2006. | |||||
10.14 | Amendment No. 2 to Second Amended and Restated Receivables Purchase Agreement dated May 31, 2007, by and among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, Fifth Third Bank and JPMorgan Chase Bank, NA, as agent. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed June 1, 2007. | |||||
10.15 | Amendment No. 3 to Second Amended and Restated Receivables Purchase Agreement dated May 5, 2008, by and among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization Corporation, the financial institutions from time to time party hereto, Fifth Third Bank and JPMorgan Chase Bank, NA, as agent. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed May 6, 2008. | |||||
#
|
10.16 | Ferrell Companies, Inc. Supplemental Savings Plan, restated January 1, 2000. Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed February 18, 2003. | ||||
#
|
10.17 | First Amendment to the Ferrell Companies, Inc. Supplemental Savings Plan, dated as of September 26, 2008. Incorporated by reference to Exhibit 10.32 to our Annual Report on Form 10-K filed September 29, 2008. | ||||
#
|
10.18 | Second Amended and Restated Ferrellgas Unit Option Plan. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed June 5, 2001. | ||||
#
|
10.19 | Ferrell Companies, Inc. 1998 Incentive Compensation Plan, as amended and restated effective October 11, 2004. Incorporated by reference to Exhibit 10.23 to our Annual Report on Form 10-K filed October 13, 2004. | ||||
#
|
10.20 | Employment Agreement between James E. Ferrell and Ferrellgas, Inc., dated July 31, 1998. Incorporated by reference to Exhibit 10.13 to our Annual Report on Form 10-K filed October 29, 1998. |
49
Exhibit | ||||||
Number | Description | |||||
#
|
10.21 | Waiver to Employment, Confidentiality, and Non-Compete Agreement by and among Ferrell Companies, Inc., Ferrellgas, Inc., James E. Ferrell and Greatbanc Trust Company, dated as of December 19, 2006. Incorporated by reference to Exhibit 10.19 to our Quarterly Report on Form 10-Q filed March 9, 2007. | ||||
#
|
10.22 | Amended and Restated Employment Agreement dated October 11, 2004, by and among Ferrellgas, Inc., Ferrell Companies, Inc. and Billy D. Prim. Incorporated by reference to Exhibit 10.25 to our Annual Report on Form 10-K filed October 13, 2004. | ||||
#
|
10.23 | Agreement and Release dated as of August 15, 2006 by and among Kenneth A. Heinz, Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P. Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed August 18, 2006. | ||||
#
|
10.24 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Stephen L. Wambold and Ferrellgas, Inc. Incorporated by reference to exhibit 10.21 to our Quarterly Report on Form 10-Q filed March 7, 2008. | ||||
#
|
10.25 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Eugene D. Caresia and Ferrellgas, Inc. Incorporated by reference to exhibit | ||||
10.22 to our Quarterly Report on Form 10-Q filed March 7, 2008. | ||||||
#
|
10.26 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between George L. Koloroutis and Ferrellgas, Inc. Incorporated by reference to exhibit 10.24 to our Quarterly Report on Form 10-Q filed March 7, 2008. | ||||
#
|
10.27 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Patrick J. Walsh and Ferrellgas, Inc. Incorporated by reference to exhibit 10.25 to our Quarterly Report on Form 10-Q filed March 7, 2008. | ||||
#
|
10.28 | Amended and Restated Change In Control Agreement dated as of March 5, 2008 by and between Tod D. Brown and Ferrellgas, Inc. Incorporated by reference to exhibit 10.26 to our Quarterly Report on Form 10-Q filed March 7, 2008. | ||||
#
|
10.29 | Change In Control Agreement dated as of March 5, 2008 by and between J. Ryan VanWinkle and Ferrellgas, Inc. Incorporated by reference to exhibit 10.27 to our Quarterly Report on Form 10-Q filed March 7, 2008. | ||||
#
|
10.30 | Change In Control Agreement dated as of March 5, 2008 by and between Richard V. Mayberry and Ferrellgas, Inc. Incorporated by reference to exhibit 10.28 to our Quarterly Report on Form 10-Q filed March 7, 2008. | ||||
#
|
10.31 | Change In Control Agreement dated as of October 9, 2006 by and between James E. Ferrell and Ferrellgas, Inc. Incorporated by reference to Exhibit 10.30 to our Annual Report on Form 10-K filed October 12, 2006. |
50
Exhibit | ||||||
Number | Description | |||||
#
|
10.32 | Agreement and release dated as of December 4, 2007 by and among Brian J. Kline, Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners L.P. and Ferrellgas L.P. Incorporated by reference to Exhibit 10.33 to our Quarterly Report on Form 10-Q filed December 6, 2007. | ||||
#
|
10.33 | Agreement and release dated as of March 28, 2008 by and among Kevin T. Kelly, Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners L.P. and Ferrellgas, L.P. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed March 28, 2008. | ||||
#
|
10.34 | Services Agreement dated as of September 26, 2008 by and between Samson Dental Practice Management, LLC and Ferrellgas, L.P. Incorporated by reference to Exhibit 10.33 to our Annual Report on Form 10-K filed September 29, 2008. | ||||
* #
|
10.35 | Change In Control Agreement dated as of December 8, 2008 by and between Jennifer A. Boren and Ferrellgas, Inc. | ||||
*
|
31.1 | Certification of Ferrellgas Partners, L.P. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. | ||||
*
|
31.2 | Certification of Ferrellgas Partners Finance Corp. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. | ||||
*
|
31.3 | Certification of Ferrellgas, L.P. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. | ||||
*
|
31.4 | Certification of Ferrellgas Finance Corp. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. | ||||
*
|
32.1 | Certification of Ferrellgas Partners, L.P. pursuant to 18 U.S.C. Section 1350. | ||||
*
|
32.2 | Certification of Ferrellgas Partners Finance Corp. pursuant to 18 U.S.C. Section 1350. | ||||
*
|
32.3 | Certification of Ferrellgas, L.P. pursuant to 18 U.S.C. Section 1350. | ||||
*
|
32.4 | Certification of Ferrellgas Finance Corp. pursuant to 18 U.S.C. Section 1350. |
* | Filed herewith | |
# | Management contracts or compensatory plans. |
51
FERRELLGAS PARTNERS, L.P. By Ferrellgas, Inc. (General Partner) |
||||
Date: December 9, 2008 | By | /s/ J. Ryan VanWinkle | ||
J. Ryan VanWinkle | ||||
Chief Financial Officer (Principal Financial and Accounting Officer) | ||||
FERRELLGAS PARTNERS FINANCE CORP. |
||||
Date: December 9, 2008 | By | /s/ J. Ryan VanWinkle | ||
J. Ryan VanWinkle | ||||
Chief Financial Officer and Sole Director | ||||
FERRELLGAS, L.P. | ||||
By Ferrellgas, Inc. (General Partner) |
||||
Date: December 9, 2008 | By | /s/ J. Ryan VanWinkle | ||
J. Ryan VanWinkle | ||||
Chief Financial Officer (Principal Financial and Accounting Officer) | ||||
FERRELLGAS FINANCE CORP. |
||||
Date: December 9, 2008 | By | /s/ J. Ryan VanWinkle | ||
J. Ryan VanWinkle | ||||
Chief Financial Officer and Sole Director | ||||
52