Ferrellgas Partners Reports Record Fourth-Quarter Results; Balanced Gross Profit Improvement With Significant Expense Savings Driving Performance

OVERLAND PARK, Kan., Oct. 1, 2012 /PRNewswire/ -- Ferrellgas Partners, L.P. (NYSE: FGP), one of the nation's largest distributors of propane, today reported record fiscal fourth quarter results for the period ended July 31, 2012. The partnership's Adjusted EBITDA rose 78% to a record $18.1 million from $10.1 million in the year-earlier quarter.

Propane sales increased modestly to 150.9 million gallons from 150.5 million gallons while gross profit increased 3% to a near record $130.0 million, as compared to $126.3 million achieved in the year ago period. The results were achieved despite temperatures in the fiscal quarter that were 38% warmer than experienced in the prior year period.

President and Chief Executive Officer Steve Wambold explained, "Our fourth-quarter results highlight our ongoing efforts to both drive profitable growth and manage expenses in this highly competitive operating environment. We remain committed to driving significant cost savings throughout our operations providing both the opportunity to be more competitive for new business and provide immediate financial returns for investors." Wambold indicated that the previously announced cost savings goal of $20 million would likely be surpassed by the end of fiscal 2013.

As expected, fourth-quarter revenues declined to $341.8 million from $449.7 million the year before attributable primarily to sharply lower wholesale propane costs. General and administrative expense declined nearly 35% to $8.4 million from $12.9 million the year before while operating expense was practically unchanged at $100.0 million on modestly increased sales volumes. Equipment lease expense rose slightly to $3.8 million from $3.6 million while interest expense improved nearly 6% to $22.4 million from $23.7 million. The fourth-quarter seasonal net loss improved to $35.9 million, or $0.45 per common unit from $41.3 million, or $0.53 per common unit in the prior year quarter.

Commenting further on the outlook for fiscal 2013, Wambold noted, "We expect a continuation of our organic gallon growth. In addition, the opportunities for acquisitions seem to be heating up after a lull." Last month Ferrellgas strengthened its presence in California with the acquisition of Capitol City Propane in Sacramento.

For the fiscal year, propane sales volumes declined 2% to 878 million gallons sold despite temperatures that were 18% warmer than experienced in fiscal 2011. Revenues totaled $2.3 billion, compared with $2.4 billion in fiscal 2011 while gross profit declined 7% to $641.9 million on lesser sales volumes and margins. General and administrative decreased 29% to $37.1 million (including a $10.0 million litigation reserve recorded in the prior year quarter) while operating expenses decreased 2% to $399.0 million, matching prior year distribution costs on a cent per gallon sold basis. Equipment lease expense of $14.6 million was materially unchanged from year-ago levels. Interest expense declined more than 8% to $93.3 million. The net loss for the fiscal year improved to $10.9 million, or $0.14 per unit, versus $43.8 million, or $0.60 per unit.

Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., serves approximately one million customers in all 50 states, the District of Columbia and Puerto Rico. Ferrellgas employees indirectly own 21.7 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, 2012, and other documents filed from time to time by these entities with the Securities and Exchange Commission.

Contact:
Tom Colvin, Investor Relations, [phone]
Scott Brockelmeyer, Media Relations, [phone]

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND TWELVE MONTHS ENDED JULY 31, 2012 AND 2011
(in thousands, except per unit data)
(unaudited)
		Three months ended		Twelve months ended
		July 31		July 31
		2012		2011		2012		2011
Revenues:
Propane and other gas liquids sales		$ 310,515		$ 421,746		$ 2,160,945		$ 2,212,257
Other		31,260		27,912		178,147		210,958
Total revenues		341,775		449,658		2,339,092		2,423,215
Cost of product sold:
Propane and other gas liquids sales		196,643		310,341		1,601,886		1,609,344
Other		15,112		13,038		95,323		124,470
Gross profit		130,020		126,279		641,883		689,401
Operating expense (including $126 and $626 of non-recurring severance
charges for the three and twelve month periods ended July 31, 2012, respectively)		100,006		100,646		398,980		407,281
Depreciation and amortization expense		21,002		22,091		83,841		82,486
General and administrative expense (including $166 and $429 of non-recurring
severance charges for the three and twelve month periods ended July 31, 2012, respectively)		8,445		12,889		37,116		52,160
Equipment lease expense		3,802		3,593		14,648		14,435
Non-cash employee stock ownership plan compensation charge		2,721		2,190		9,440		10,157
Non-cash stock and unit-based compensation charge (b)		3,976		(221)		8,843		13,488
Loss on disposal of assets and other		3,983		2,799		6,035		3,633
Operating income (loss)		(13,915)		(17,708)		82,980		105,761
Interest expense		(22,350)		(23,680)		(93,254)		(101,885)
Loss on extinguishment of debt		-		-		-		(46,962)
Other income, net		258		58		506		567
Loss before income taxes		(36,007)		(41,330)		(9,768)		(42,519)
Income tax expense (benefit)		(157)		(47)		1,128		1,241
Net loss		(35,850)		(41,283)		(10,896)		(43,760)
Net earnings (loss) attributable to noncontrolling interest (a)		(321)		(376)		56		(112)
Net loss attributable to Ferrellgas Partners, L.P.		(35,529)		(40,907)		(10,952)		(43,648)
Less: General partner's interest in net loss		(356)		(409)		(110)		(436)
Common unitholders' interest in net loss		$ (35,173)		$ (40,498)		$ (10,842)		$ (43,212)
Loss Per Unit
Basic and diluted net loss per common unitholders' interest		$ (0.45)		$ (0.53)		$ (0.14)		$ (0.60)
Weighted average common units outstanding		78,992.0		75,907.6		77,572.4		72,313.6
Supplemental Data and Reconciliation of Non-GAAP Items:
		Three months ended		Twelve months ended
		July 31		July 31
		2012		2011		2012		2011
Net loss attributable to Ferrellgas Partners, L.P.		$ (35,529)		$ (40,907)		$ (10,952)		$ (43,648)
Income tax expense (benefit)		(157)		(47)		1,128		1,241
Interest expense		22,350		23,680		93,254		101,885
Depreciation and amortization expense		21,002		22,091		83,841		82,486
EBITDA		7,666		4,817		167,271		141,964
Loss on extinguishment of debt		-		-		-		46,962
Non-cash employee stock ownership plan compensation charge		2,721		2,190		9,440		10,157
Non-cash stock and unit-based compensation charge (b)		3,976		(221)		8,843		13,488
Loss on disposal of assets and other		3,983		2,799		6,035		3,633
Other income, net		(258)		(58)		(506)		(567)
Nonrecurring severance costs		292		-		1,055		-
Nonrecurring litigation reserve and related legal fees		-		987		892		12,120
Net earnings (loss) attributable to noncontrolling interest		(321)		(376)		56		(112)
Adjusted EBITDA (c)		18,059		10,138		193,086		227,645
Net cash interest expense (d)		(20,827)		(21,960)		(87,600)		(93,353)
Maintenance capital expenditures (e)		(4,526)		(3,516)		(16,044)		(15,437)
Cash paid for taxes		(664)		(557)		(764)		(591)
Proceeds from asset sales		1,428		1,721		5,742		5,994
Distributable cash flow to equity investors (f)		$ (6,530)		$ (14,174)		$ 94,420		$ 124,258
Propane gallons sales
Retail - Sales to End Users		95,031		95,611		619,318		655,408
Wholesale - Sales to Resellers		55,841		54,902		258,812		244,275
Total propane gallons sales		150,872		150,513		878,130		899,683
(a) Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.
(b) Non-cash stock and unit-based compensation charges consist of the following:
		Three months ended		Twelve months ended
		July 31		July 31
		2012		2011		2012		2011
Operating expense		$ 795		$ (75)		$ 2,747		$ 3,757
General and administrative expense		3,181		(146)		6,096		9,731
Total		$ 3,976		$ (221)		$ 8,843		$ 13,488

(c)	Adjusted EBITDA is calculated as earnings (loss) before 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 and unit-based compensation charge, loss on disposal of assets and other, other income, net, nonrecurring severance costs, nonrecurring litigation reserve and related legal fees 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, 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 common unitholders. Distributable cash flow to equity investors, as management defines it, may not be comparable to distributable cash flow or similarly titled measures used by other corporations and partnerships.

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
ASSETS		July 31, 2012		July 31, 2011
Current Assets:
Cash and cash equivalents		$ 8,429		$ 7,437
Accounts and notes receivable, net (including $121,812 and $112,509 of
accounts receivable pledged as collateral at July 31, 2012
and July 31, 2011, respectively)		124,004		159,532
Inventories		127,598		136,139
Prepaid expenses and other current assets		29,315		23,885
Total Current Assets		289,346		326,993
Property, plant and equipment, net		626,551		642,205
Goodwill		248,944		248,944
Intangible assets, net		189,118		204,136
Other assets, net		43,320		38,308
Total Assets		$ 1,397,279		$ 1,460,586
LIABILITIES AND PARTNERS' CAPITAL(DEFICIT)
Current Liabilities:
Accounts payable		$ 47,824		$ 67,541
Short-term borrowings		95,730		64,927
Collateralized note payable		74,000		61,000
Other current liabilities		122,667		104,813
Total Current Liabilities		340,221		298,281
Long-term debt (a)		1,059,085		1,050,920
Other liabilities		25,499		23,068
Contingencies and commitments		-		-
Partners' Capital(Deficit):
Common unitholders (79,006,619 and 75,966,353 units outstanding at
July 31, 2012 and July 31, 2011, respectively)		43,701		139,614
General partner unitholder (798,047 and 767,337 units outstanding at
July 31, 2012 and July 31, 2011, respectively)		(59,630)		(58,660)
Accumulated other comprehensive income (loss)		(13,159)		4,633
Total Ferrellgas Partners, L.P. Partners' Capital(Deficit)		(29,088)		85,587
Noncontrolling Interest		1,562		2,730
Total Partners' Capital(Deficit)		(27,526)		88,317
Total Liabilities and Partners' Capital(Deficit)		$ 1,397,279		$ 1,460,586

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.

SOURCE Ferrellgas Partners, L.P.