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Ferrellgas Partners Reports Strong First Quarter; Reaffirms Fiscal 2015 Earnings Guidance

OVERLAND PARK, Kan., Dec. 10, 2014 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (NYSE:FGP) today reported results for fiscal 2015's first quarter ended October 31, 2014.

Gross profit grew 8% to a record $154.7 million on improved retail propane margins and contributions from recently acquired midstream operations. Adjusted EBITDA climbed nearly 30% to $34.4 million reflecting the aforementioned gross profit contributions. These results produced trailing 12-month distributable cash flow coverage to equity investors of 1.18x, providing the partnership $30 million of excess cash flow to fund organic and acquired growth.

President and Chief Executive Officer Steve Wambold commented, "Fiscal 2015 is off to an excellent start with operations delivering first-quarter results in line with our expectations. November, the start of our second quarter, also looks to be in line with our expectations as seasonably cold temperatures boosted the demand for propane consumption. We remain comfortable with our previous guidance of Adjusted EBITDA in the range of $300 million to $320 million for fiscal 2015."

The partnership previously reported record Adjusted EBITDA for fiscal 2014 of $288.1 million. For the trailing 12 months ended October 31, the partnership produced Adjusted EBITDA of $296.1 million.

Propane sales for the quarter were 186.1 million gallons compared to 191.0 million gallons sold in the year-earlier quarter. Retail sales volumes nearly matched prior-year levels despite nationwide temperatures that were 20% warmer than normal.

"During the first quarter, we remained focused on operational efficiency and were very pleased with the results," Wambold pointed out. "Both operating expense and general and administrative expense were practically unchanged at $102.9 million and $10.8 million, respectively, despite acquired midstream and retail propane operations in 2014."

Interest expense increased to $23.9 million from $22.1 million primarily reflecting debt attributable to merger and acquisition activity.

"Our focus remains on the profitable growth of the partnership, both through acquisition and organic means," Wambold explained. "We have identified a range of possibilities that would further our diversification initiative and we continue to selectively expand our propane footprint. Further, Blue Rhino's sales volumes continue to grow through same-store sales and increased selling locations that now exceed 46,500 nationwide."

Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., and subsidiaries, serves propane customers in all 50 states, the District of Columbia and Puerto Rico, and provides midstream services to major energy companies in the United States. Ferrellgas employees indirectly own more than 22 million common units of the partnership through an employee stock ownership plan. More information about the partnership can be found online at www.ferrellgas.com.

Statements in this release concerning expectations for the future are forward-looking statements. A variety of known and unknown risks, uncertainties and other factors could cause results, performance and expectations to differ materially from anticipated results, performance and expectations. These risks, uncertainties and other factors are discussed in the Form 10-K of Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2014 and in other documents filed from time to time by these entities with the Securities and Exchange Commission.

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND TWELVE MONTHS ENDED OCTOBER 31, 2014 AND 2013
(in thousands, except per unit data)
(unaudited)
Three months ended Twelve months ended
October 31 October 31
2014 2013 2014 2013
Revenues:
Propane and other gas liquids sales $ 394,361 $ 382,223 $ 2,159,481 $ 1,786,209
Other 48,994 32,807 274,704 241,379
Total revenues 443,355 415,030 2,434,185 2,027,588
Cost of product sold:
Propane and other gas liquids sales 264,814 258,754 1,462,448 1,137,358
Other 23,860 13,346 168,666 148,605
Gross profit 154,681 142,930 803,071 741,625
Operating expense (including $(1,800) and $3,300 of change in fair value of contingent consideration for the three and twelve month period ended October 31, 2014) 102,883 102,966 446,110 416,591
Depreciation and amortization expense 23,309 20,215 87,296 82,684
General and administrative expense 10,828 10,781 46,030 44,034
Equipment lease expense 5,532 4,066 19,211 16,126
Non-cash employee stock ownership plan compensation charge 4,374 3,043 23,120 16,410
Non-cash stock-based compensation charge (a) 16,112 4,431 36,189 14,884
Loss on disposal of assets 961 357 7,090 10,507
Operating income (loss) (9,318) (2,929) 138,025 140,389
Interest expense (23,912) (22,093) (88,321) (88,803)
Loss on extinguishment of debt -- (301) (20,901) (301)
Other income (expense), net (449) 216 (1,144) 690
Earnings (loss) before income taxes (33,679) (25,107) 27,659 51,975
Income tax expense (benefit) (510) (50) 2,056 2,069
Net earnings (loss) (33,169) (25,057) 25,603 49,906
Net earnings (loss) attributable to noncontrolling interest (b) (294) (214) 424 665
Net earnings (loss) attributable to Ferrellgas Partners, L.P. (32,875) (24,843) 25,179 49,241
Less: General partner's interest in net earnings (loss) (329) (248) 252 492
Common unitholders' interest in net earnings (loss) $ (32,546) $ (24,595) $ 24,927 $ 48,749
Earnings (loss) Per Unit
Basic and diluted net earnings (loss) per common unitholders' interest $ (0.40) $ (0.31) $ 0.31 $ 0.62
Weighted average common units outstanding 82,179.7 79,075.8 80,433.5 78,338.3
Supplemental Data and Reconciliation of Non-GAAP Items:
Three months ended Twelve months ended
October 31 October 31
2014 2013 2014 2013
Net earnings (loss) attributable to Ferrellgas Partners, L.P. $ (32,875) $ (24,843) $ 25,179 $ 49,241
Income tax expense (benefit) (510) (50) 2,056 2,069
Interest expense 23,912 22,093 88,321 88,803
Depreciation and amortization expense 23,309 20,215 87,296 82,684
EBITDA 13,836 17,415 202,852 222,797
Loss on extinguishment of debt -- 301 20,901 301
Non-cash employee stock ownership plan compensation charge 4,374 3,043 23,120 16,410
Non-cash stock based compensation charge (a) 16,112 4,431 36,189 14,884
Loss on disposal of assets 961 357 7,090 10,507
Other income (expense), net 449 (216) 1,144 (690)
Change in fair value of contingent consideration (1,800) -- 3,200 --
Litigation accrual and related legal fees associated with a class action lawsuit 723 1,325 1,147 2,205
Net earnings (loss) attributable to noncontrolling interest (b) (294) (214) 424 665
Adjusted EBITDA (c) 34,361 26,442 296,067 267,079
Net cash interest expense (d) (22,890) (20,586) (85,990) (83,006)
Maintenance capital expenditures (e) (5,088) (4,137) (18,624) (14,932)
Cash paid for taxes (260) -- (1,076) (532)
Proceeds from asset sales 1,417 1,317 4,624 6,526
Distributable cash flow to equity investors (f) 7,540 3,036 195,001 175,135
Distributable cash flow attributable to general partner and non-controlling interest 151 61 3,900 3,503
Distributable cash flow attributable to common unitholders 7,389 2,975 191,101 171,632
Less: Distributions paid to common unitholders 41,356 39,536 161,136 158,115
Distributable cash flow excess/(shortage) $ (33,967) $ (36,561) $ 29,965 $ 13,517
Propane gallons sales
Retail - Sales to End Users 124,147 125,252 650,253 638,292
Wholesale - Sales to Resellers 61,935 65,779 291,368 274,671
Total propane gallons sales 186,082 191,031 941,621 912,963
Midstream operations (barrels processed) 3,997 -- 6,497 --
(a) Non-cash stock-based compensation charges consist of the following:
Three months ended Twelve months ended
October 31 October 31
2014 2013 2014 2013
Operating expense $ 3,545 $ 798 $ 8,082 $ 2,478
General and administrative expense 12,567 3,633 28,107 12,406
Total $ 16,112 $ 4,431 $ 36,189 $ 14,884
(b) Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.
(c) Adjusted EBITDA is calculated as net earnings (loss) attributable to Ferrellgas Partners, L.P., income tax expense (benefit), interest expense, depreciation and amortization expense, loss on extinguishment of debt, non-cash employee stock ownership plan compensation charge, non-cash stock-based compensation charge, loss on disposal of assets, other income (expense), net, change in fair value of contingent consideration, litigation accrual and related legal fees associated with a class action lawsuit and net earnings (loss) attributable to noncontrolling interest. Management believes the presentation of this measure is relevant and useful, because it allows investors to view the partnership's performance in a manner similar to the method management uses, adjusted for items management believes makes it easier to compare its results with other companies that have different financing and capital structures. This method of calculating Adjusted EBITDA may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(d) Net cash interest expense is the sum of interest expense less non-cash interest expense and other income (expense), net. This amount includes interest expense related to the accounts receivable securitization facility.
(e) Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment.
(f) Management considers distributable cash flow to equity investors a meaningful non-GAAP measure of the partnership's ability to declare and pay quarterly distributions to equity investors. Distributable cash flow to equity investors, as management defines it, may not be comparable to distributable cash flow to equity investors or similarly titled measurements used by other corporations and partnerships. Items added into our calculation of distributable cash flow to equity investors that will not occur on a continuing basis may have associated cash payments. Distributable cash flow to equity investors may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.
FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS October 31, 2014 July 31, 2014
Current Assets:
Cash and cash equivalents $ 9,869 $ 8,289
Accounts and notes receivable, net (including $161,715 and $159,003 of accounts receivable pledged as collateral at October 31, 2014 and July 31, 2014, respectively) 180,556 178,602
Inventories 177,558 145,969
Prepaid expenses and other current assets 44,602 32,071
Total Current Assets 412,585 364,931
Property, plant and equipment, net 618,302 611,787
Goodwill 285,658 273,210
Intangible assets, net 316,634 276,171
Other assets, net 47,256 46,171
Total Assets $ 1,680,435 $ 1,572,270
LIABILITIES AND PARTNERS' DEFICIT
Current Liabilities:
Accounts payable $ 74,847 $ 69,360
Short-term borrowings 122,230 69,519
Collateralized note payable 105,000 91,000
Other current liabilities 147,649 125,161
Total Current Liabilities 449,726 355,040
Long-term debt (a) 1,332,089 1,292,214
Other liabilities 37,373 36,662
Contingencies and commitments
Partners' Deficit:
Common unitholders (82,711,820 and 81,228,237 units outstanding at October 31, 2014 and July 31, 2014, respectively) (69,770) (57,893)
General partner unitholder (835,473 and 820,487 units outstanding at October 31, 2014 and July 31, 2014, respectively) (60,775) (60,654)
Accumulated other comprehensive income (loss) (8,692) 6,181
Total Ferrellgas Partners, L.P. Partners' Deficit (139,237) (112,366)
Noncontrolling Interest 484 720
Total Partners' Deficit (138,753) (111,646)
Total Liabilities and Partners' Deficit $ 1,680,435 $ 1,572,270
(a) The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $182 million of 8.625% notes which are liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.

CONTACT: Alan Heitmann, Investor Relations alheitmann@ferrellgas.com or (816) 792-6879 Scott Brockelmeyer, Media Relations scottbrockelmeyer@ferrelllgas.com or (913) 661-1830Source:Ferrellgas Partners, L.P.