Ferrellgas Partners, L.P. Reports Record Adjusted EBITDA for Fiscal 2015
September 29 2015 - 7:00AM
Ferrellgas Partners, L.P. (NYSE:FGP) today announced record
Adjusted EBITDA of $300.2 million for fiscal 2015, up 4% from the
previous year of $288.1 million despite temperatures that were 8%
warmer than the prior year. Distributable Cash Flow (DCF) to equity
investors for the year was $189.6 million, producing DCF coverage
of 1.12x for the 12-month period.
"We are thrilled to present strong results to our investors
despite weather that was a hindrance to our core propane business,"
said President and Chief Executive Officer Stephen L. Wambold.
"Strong propane margins, operational flexibility, a continued focus
on expense discipline in our retail operations and our focus on our
diversification strategy allowed us to offset the effect of the
warmer nationwide temperatures Mother Nature handed us throughout
the year."
Propane margin cents per gallon benefited from wholesale
commodity prices that were 43% lower than the prior year. Operating
expense of $432.3 million was down more than 3% from the year-ago
level, driven primarily by the company's ability to flex down
variable delivery costs, including personnel and fuel cost, which
more than offset additional operating expenses associated with the
full-year impact our midstream water solutions acquisition in May
of 2014 and the impact of our Bridger Logistics, LLC ("Bridger")
acquisition in the fourth quarter.
Strong margin cents per gallon and lower operating expenses
helped minimize the effect of warmer temperatures in the more
highly concentrated geographic areas we serve. General and
administrative expense rose to $56.4 million from $46.0 million,
primarily attributable to one-time transaction costs associated
with the Bridger acquisition of $16.4 million. Interest expense
increased to $100.4 million from $86.5 million, reflecting
increased borrowings to fund acquisition and growth capital
expenditures. Net earnings for the year were $30.1 million, or
$0.35 per common unit, compared to $33.7 million, or $0.41 per
common unit.
During the fourth quarter Ferrellgas closed on its previously
announced $822.5 million acquisition of Bridger. The Bridger
transaction is a significant step toward Ferrellgas' near-term
diversification goals. Ferrellgas remains dedicated to the
aggressive pursuit of accretive, complementary acquisitions in both
the traditional propane space and midstream.
"Our acquisition of Bridger contributed nearly $8.6 million of
Adjusted EBITDA during the short period of time we've owned these
high-quality assets, and we continue to believe Bridger will meet
or exceed our expectations in fiscal 2016," Wambold said. "We've
made smart business decisions over the last few years and put
ourselves in position to move boldly and decisively on the
acquisition front. Our midstream and propane acquisition pipelines
remain robust, and we remain committed to exploring a wide range of
opportunities that fit our strategic model and our growth
culture."
About Ferrellgas
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 22.8 million common units of
the partnership, or 22.7% of the outstanding units, through an
employee stock ownership plan. Ferrellgas Partners, L.P. filed a
Form 10-K with the Securities and Exchange Commission on September
29, 2015. Investors can request a hard copy of this filing free of
charge and obtain more information about the partnership 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 JULY 31, 2015 AND 2014 |
(in thousands, except
per unit data) |
|
|
|
|
|
|
Three months
ended |
Twelve months
ended |
|
July
31 |
July
31 |
|
2015 |
2014 |
2015 |
2014 |
Revenues: |
|
|
|
|
Propane and other gas liquids
sales |
$ 256,121 |
$ 350,557 |
$ 1,657,016 |
$ 2,147,343 |
Midstream operations |
86,827 |
7,435 |
107,189 |
7,435 |
Other |
39,563 |
41,038 |
260,185 |
251,082 |
Total
revenues |
382,511 |
399,030 |
2,024,390 |
2,405,860 |
|
|
|
|
|
Cost of sales: |
|
|
|
|
Propane and other gas liquids
sales |
128,034 |
223,872 |
977,224 |
1,456,388 |
Midstream operations |
70,526 |
1,970 |
76,590 |
1,970 |
Other |
23,025 |
24,739 |
170,697 |
156,182 |
|
|
|
|
|
Gross profit |
160,926 |
148,449 |
799,879 |
791,320 |
|
|
|
|
|
Operating expense |
115,369 |
112,561 |
432,282 |
446,193 |
Depreciation and amortization expense |
28,003 |
22,431 |
98,579 |
84,202 |
General and administrative expense |
26,730 |
10,913 |
56,431 |
45,983 |
Equipment lease expense |
6,599 |
4,767 |
24,273 |
17,745 |
Non-cash employee stock ownership plan
compensation charge |
7,985 |
11,400 |
24,713 |
21,789 |
Non-cash stock and unit-based compensation
charge (a) |
6,281 |
8,326 |
25,982 |
24,508 |
Loss on disposal of assets |
2,521 |
3,060 |
7,099 |
6,486 |
|
|
|
|
|
Operating income (loss) |
(32,562) |
(25,009) |
130,520 |
144,414 |
|
|
|
|
|
Interest expense |
(28,599) |
(22,130) |
(100,396) |
(86,502) |
Loss on extinguishment of debt |
-- |
-- |
-- |
(21,202) |
Other income (expense), net |
65 |
(977) |
(350) |
(479) |
|
|
|
|
|
Earnings (loss) before income
taxes |
(61,096) |
(48,116) |
29,774 |
36,231 |
|
|
|
|
|
Income tax expense (benefit) |
(1,763) |
125 |
(315) |
2,516 |
|
|
|
|
|
Net earnings (loss) |
(59,333) |
(48,241) |
30,089 |
33,715 |
|
|
|
|
|
Net earnings (loss) attributable to
noncontrolling interest (b) |
(558) |
(446) |
469 |
504 |
|
|
|
|
|
Net earnings (loss) attributable to
Ferrellgas Partners, L.P. |
(58,775) |
(47,795) |
29,620 |
33,211 |
|
|
|
|
|
Less: General partner's interest in net
earnings (loss) |
(588) |
(478) |
296 |
332 |
|
|
|
|
|
Common unitholders' interest in net
earnings (loss) |
$ (58,187) |
$ (47,317) |
$ 29,324 |
$ 32,879 |
|
|
|
|
|
Earnings (loss) Per
Unit |
|
|
|
|
Basic and diluted net earnings (loss) per
common unitholders' interest |
$ (0.64) |
$ (0.58) |
$ 0.35 |
$ 0.41 |
|
|
|
|
|
Weighted average common units
outstanding |
90,908.0 |
81,206.1 |
84,646.2 |
79,651.1 |
|
|
|
|
|
|
|
|
|
|
Supplemental Data and
Reconciliation of Non-GAAP Items: |
|
|
|
|
|
|
Three months
ended |
Twelve months
ended |
|
July
31 |
July
31 |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to
Ferrellgas Partners, L.P. |
$ (58,775) |
$ (47,795) |
$ 29,620 |
$ 33,211 |
Income tax expense
(benefit) |
(1,763) |
125 |
(315) |
2,516 |
Interest expense |
28,599 |
22,130 |
100,396 |
86,502 |
Depreciation and amortization
expense |
28,003 |
22,431 |
98,579 |
84,202 |
EBITDA |
(3,936) |
(3,109) |
228,280 |
206,431 |
Loss on extinguishment of
debt |
-- |
-- |
-- |
21,202 |
Non-cash employee stock
ownership plan compensation charge |
7,985 |
11,400 |
24,713 |
21,789 |
Non-cash stock and unit-based
compensation charge (a) |
6,281 |
8,326 |
25,982 |
24,508 |
Loss on disposal of assets |
2,521 |
3,060 |
7,099 |
6,486 |
Other income (expense),
net |
(65) |
977 |
350 |
479 |
Change in fair value of
contingent consideration (included in operating expense) |
-- |
5,000 |
(6,300) |
5,000 |
Litigation accrual and related
legal fees associated with a class action lawsuit (included in
general and administration expense) |
-- |
327 |
806 |
1,749 |
Unrealized (non-cash) losses
(gains) on changes in fair value of derivatives |
4,021 |
-- |
2,412 |
-- |
Acquisition and transition
expenses (included in general and administration expense) |
16,373 |
-- |
16,373 |
-- |
Net earnings (loss)
attributable to noncontrolling interest (b) |
(558) |
(446) |
469 |
504 |
Adjusted EBITDA (c) |
32,622 |
25,535 |
300,184 |
288,148 |
Net cash interest expense
(d) |
(27,551) |
(22,179) |
(96,150) |
(83,686) |
Maintenance capital
expenditures (e) |
(4,749) |
(4,328) |
(19,612) |
(17,673) |
Cash paid for taxes |
(379) |
(413) |
(712) |
(816) |
Proceeds from asset sales |
1,845 |
1,257 |
5,905 |
4,524 |
Distributable cash flow attributable
to equity investors (f) |
1,788 |
(128) |
189,615 |
190,497 |
Distributable cash flow attributable to
general partner and non-controlling interest |
35 |
(3) |
3,792 |
3,810 |
Distributable cash flow attributable to
common unitholders |
1,753 |
(125) |
185,823 |
186,687 |
Less: Distributions paid to common
unitholders |
41,359 |
40,614 |
165,433 |
159,316 |
Distributable cash flow
excess/(shortage) |
$ (39,606) |
$ (40,739) |
$ 20,390 |
$ 27,371 |
|
|
|
|
|
Propane gallons sales |
|
|
|
|
Retail - Sales to End
Users |
90,055 |
93,216 |
608,781 |
651,358 |
Wholesale - Sales to
Resellers |
58,997 |
61,548 |
270,065 |
295,212 |
Total propane gallons
sales |
149,052 |
154,764 |
878,846 |
946,570 |
|
|
|
|
|
Salt water volumes - Midstream
operations (barrels processed) |
3,801 |
2,500 |
17,035 |
2,500 |
Crude oil hauled - Midstream
operations (barrel) |
10,447 |
-- |
10,447 |
-- |
|
|
|
|
|
(a) Non-cash stock and
unit-based compensation charges consist of the following: |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
Twelve months ended |
|
July 31 |
July 31 |
|
2015 |
2014 |
2015 |
2014 |
Operating expense |
$ 942 |
$ 1,832 |
$ 5,175 |
$ 5,335 |
General and administrative
expense |
5,339 |
6,494 |
20,807 |
19,173 |
Total |
$ 6,281 |
$ 8,326 |
$ 25,982 |
$ 24,508 |
|
|
|
|
|
(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 attributable to Ferrellgas Partners,
L.P., income tax expense, 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, unrealized (non-cash) losses (gains)
on changes in fair value of derivatives, acquisition and transition
expenses and net earnings 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 |
July 31,
2015 |
July 31,
2014 |
|
|
|
Current Assets: |
|
|
Cash and cash equivalents |
$ 7,652 |
$ 8,289 |
Accounts and notes receivable,
net (including $123,791 and $159,003 of accounts receivable pledged
as collateral at July 31, 2015 and July 31, 2014,
respectively) |
196,918 |
178,602 |
Inventories |
96,754 |
145,969 |
Prepaid expenses and other
current assets |
64,285 |
32,071 |
Total
Current Assets |
365,609 |
364,931 |
|
|
|
Property, plant and equipment, net |
965,217 |
611,787 |
Goodwill |
478,747 |
273,210 |
Intangible assets, net |
580,043 |
276,171 |
Other assets, net |
74,440 |
46,171 |
Total
Assets |
$ 2,464,056 |
$ 1,572,270 |
|
|
|
|
|
|
LIABILITIES AND PARTNERS'
CAPITAL (DEFICIT) |
|
|
|
|
|
Current Liabilities: |
|
|
Accounts payable |
$ 83,974 |
$ 69,360 |
Short-term borrowings |
75,319 |
69,519 |
Collateralized note
payable |
70,000 |
91,000 |
Other current liabilities |
180,687 |
125,161 |
Total
Current Liabilities |
409,980 |
355,040 |
|
|
|
Long-term debt (a) |
1,804,392 |
1,292,214 |
Other liabilities |
41,975 |
36,662 |
Contingencies and commitments |
|
|
|
|
|
Partners' Capital
(Deficit): |
|
|
Common unitholders (100,376,789 and
81,228,237 units outstanding at July 31, 2015 and July 31, 2014,
respectively) |
299,730 |
(57,893) |
General partner unitholder (1,013,907 and
820,487 units outstanding at July 31, 2015 and July 31, 2014,
respectively) |
(57,042) |
(60,654) |
Accumulated other comprehensive income
(loss) |
(38,934) |
6,181 |
Total Ferrellgas
Partners, L.P. Partners' Capital (Deficit) |
203,754 |
(112,366) |
Noncontrolling Interest |
3,955 |
720 |
Total Partners' Capital
(Deficit) |
207,709 |
(111,646) |
Total Liabilities and
Partners' Capital (Deficit) |
$ 2,464,056 |
$ 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: Jack Herrold, Investor Relations -
jackherrold@ferrellgas.com or (913) 661-1851
Jim Saladin, Media Relations -
jimsaladin@ferrellgas.com or (913) 661-1833
Scott Brockelmeyer, Media Relations -
scottbrockelmeyer@ferrelllgas.com or (913) 661-1830
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