Company Quick10K Filing
Quick10K
Ferrellgas Partners
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$1.26 97 $122
10-Q 2019-04-30 Quarter: 2019-04-30
10-Q 2019-01-31 Quarter: 2019-01-31
10-Q 2018-10-31 Quarter: 2018-10-31
10-K 2018-07-31 Annual: 2018-07-31
10-Q 2018-04-30 Quarter: 2018-04-30
10-Q 2018-01-31 Quarter: 2018-01-31
10-Q 2017-10-31 Quarter: 2017-10-31
10-K 2017-07-31 Annual: 2017-07-31
10-Q 2017-04-30 Quarter: 2017-04-30
10-Q 2017-01-31 Quarter: 2017-01-31
10-Q 2016-10-31 Quarter: 2016-10-31
10-K 2016-07-31 Annual: 2016-07-31
10-Q 2016-04-30 Quarter: 2016-04-30
10-Q 2016-01-31 Quarter: 2016-01-31
10-Q 2015-10-31 Quarter: 2015-10-31
10-K 2015-07-31 Annual: 2015-07-31
10-Q 2015-04-30 Quarter: 2015-04-30
10-Q 2015-01-31 Quarter: 2015-01-31
10-Q 2014-10-31 Quarter: 2014-10-31
10-K 2014-07-31 Annual: 2014-07-31
10-Q 2014-04-30 Quarter: 2014-04-30
10-Q 2014-01-31 Quarter: 2014-01-31
8-K 2019-06-10 Earnings, Regulation FD, Exhibits
8-K 2019-05-17 Regulation FD
8-K 2019-03-08 Earnings, Regulation FD, Exhibits
8-K 2019-02-14 Regulation FD
8-K 2019-01-10
8-K 2018-12-06 Earnings, Regulation FD, Exhibits
8-K 2018-11-21 Officers, Other Events
8-K 2018-11-16 Regulation FD
8-K 2018-09-27 Earnings, Regulation FD, Exhibits
8-K 2018-09-07 Exhibits
8-K 2018-09-06 Regulation FD
8-K 2018-07-31 M&A, Other Events, Exhibits
8-K 2018-06-25 Other Events
8-K 2018-06-07 Earnings, Regulation FD, Exhibits
8-K 2018-05-18 Regulation FD
8-K 2018-05-14 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-05-04 Enter Agreement, Off-BS Arrangement, Other Events, Exhibits
8-K 2018-05-03 Officers
8-K 2018-02-20 Other Events, Exhibits
8-K 2018-02-16 Regulation FD
8-K 2018-01-16 Other Events, Exhibits
SNE Sony 60,970
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NCBS Nicolet Bankshares 579
RLH Red Lion Hotels 185
PBBI PB Bancorp 82
STAF Staffing 360 Solutions 14
LEVB Level Brands 0
NPWZ Neah Power Systems 0
GMER Good Gaming 0
ASFT Appsoft Technologies 0
FGP 2019-04-30
Part I - Financial Information
Item 1.Financial Statements (Unaudited)
Item 2. Management’S Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.31 fgp-20190430ex1031c8e14.htm
EX-31.1 fgp-20190430ex311a31780.htm
EX-31.2 fgp-20190430ex3122381ac.htm
EX-31.3 fgp-20190430ex3139f9851.htm
EX-31.4 fgp-20190430ex314da491b.htm
EX-32.1 fgp-20190430ex321c53999.htm
EX-32.2 fgp-20190430ex322741863.htm
EX-32.3 fgp-20190430ex3234f74c9.htm
EX-32.4 fgp-20190430ex32471effc.htm

Ferrellgas Partners Earnings 2019-04-30

FGP 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 fgp-20190430x10q.htm fgp_Current Folio_10Q

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10‑Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the quarterly period ended April 30, 2019

 

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the transition period from to

 

Commission file numbers: 001‑11331, 333‑06693, 000‑50182 and 000‑50183

 

Ferrellgas Partners, L.P.

Ferrellgas Partners Finance Corp.

Ferrellgas, L.P.

Ferrellgas Finance Corp.

(Exact name of registrants as specified in their charters)

 

Delaware

 

43‑1698480

Delaware

 

43‑1742520

Delaware

 

43‑1698481

Delaware

 

14‑1866671

(States or other jurisdictions of incorporation or organization)

 

(I.R.S. Employer Identification Nos.)

 

 

 

7500 College Boulevard,
Suite 1000, Overland Park, Kansas

 

66210

(Address of principal executive office)

 

(Zip Code)

 

Registrants’ telephone number, including area code: (913) 661‑1500

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes ☒ No ◻

Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit such files). Yes ☒ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “Large Accelerated Filer,” “Accelerated Filer,” “Smaller Reporting Company,” and “Emerging Growth Company” in Rule 12b‑2 of the Exchange Act.

 

Ferrellgas Partners, L.P.:

 

 

 

Large Accelerated Filer ☐

Accelerated Filer 

Non-accelerated Filer ☐

Smaller Reporting Company ☐

 

 

 

Emerging Growth Company ☐

 

Ferrellgas Partners Finance Corp,  Ferrellgas, L.P. and Ferrellgas Finance Corp.:

 

Large Accelerated Filer ☐

Accelerated Filer ☐

Non-accelerated Filer 

Smaller Reporting Company ☐

 

 

 

Emerging Growth Company ☐

 

If an Emerging Growth Company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Ferrellgas Partners, L.P. and Ferrellgas, L.P. ☐

Ferrellgas Partners Finance Corp.  and Ferrellgas Finance Corp. ☐

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b‑2 of the Exchange Act).

Ferrellgas Partners, L.P. and Ferrellgas, L.P. Yes ☐ No 

Ferrellgas Partners Finance Corp. and Ferrellgas Finance Corp. Yes  No ☐

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

 

 

Title of each class:

    

Trading Symbol

    

Name of each exchange on which registered:

Common Units

 

FGP

 

New York Stock Exchange

At May 31, 2019, the registrants had common units or shares of common stock outstanding as follows:

Ferrellgas Partners, L.P.

97,152,665

Common Units

Ferrellgas Partners Finance Corp.

1,000

Common Stock

Ferrellgas, L.P.

n/a

n/a

Ferrellgas Finance Corp.

1,000

Common Stock

Documents Incorporated by Reference: None

EACH OF FERRELLGAS PARTNERS FINANCE CORP. AND FERRELLGAS FINANCE CORP. MEET THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(A) AND (B) OF FORM 10‑Q AND ARE THEREFORE, WITH RESPECT TO EACH SUCH REGISTRANT, FILING THIS FORM 10‑Q WITH THE REDUCED DISCLOSURE FORMAT.

 

 

 

 

FERRELLGAS PARTNERS, L.P.

FERRELLGAS PARTNERS FINANCE CORP.

FERRELLGAS, L.P.

FERRELLGAS FINANCE CORP.

TABLE OF CONTENTS

 

 

 

Page

PART I - FINANCIAL INFORMATION 

 

ITEM 1. 

FINANCIAL STATEMENTS (unaudited)

 

 

 

 

 

Ferrellgas Partners, L.P. and Subsidiaries

 

 

Condensed Consolidated Balance Sheets – April 30, 2019 and July 31, 2018

3

 

Condensed Consolidated Statements of Operations – Three and nine months ended April 30, 2019 and 2018

4

 

Condensed Consolidated Statements of Comprehensive Loss – Three and nine months ended April 30, 2019 and 2018

5

 

Condensed Consolidated Statement of Partners’ Deficit – Three, six, and nine months ended April 30, 2019

6

 

Condensed Consolidated Statements of Cash Flows – Nine months ended April 30, 2019 and 2018

7

 

Notes to Condensed Consolidated Financial Statements

8

 

 

 

 

Ferrellgas Partners Finance Corp.

 

 

Condensed Balance Sheets – April 30, 2019 and July 31, 2018

25

 

Condensed Statements of Operations – Three and nine months ended April 30, 2019 and 2018

26

 

Condensed Statements of Cash Flows – Nine months ended April 30, 2019 and 2018

27

 

Notes to Condensed Financial Statements

28

 

 

 

 

Ferrellgas, L.P. and Subsidiaries

 

 

Condensed Consolidated Balance Sheets – April 30, 2019 and July 31, 2018

29

 

Condensed Consolidated Statements of Operations – Three and nine months ended April 30, 2019 and 2018

30

 

Condensed Consolidated Statements of Comprehensive Loss – Three and nine months ended April 30, 2019 and 2018

31

 

Condensed Consolidated Statement of Partners’ Deficit – Three, six, and nine months ended April 30, 2019

32

 

Condensed Consolidated Statements of Cash Flows – Nine months ended April 30, 2019 and 2018

33

 

Notes to Condensed Consolidated Financial Statements

34

 

 

 

 

Ferrellgas Finance Corp.

 

 

Condensed Balance Sheets – April 30, 2019 and July 31, 2018

58

 

Condensed Statements of Operations – Three and nine months ended April 30, 2019 and 2018

59

 

Condensed Statements of Cash Flows – Nine months ended April 30, 2019 and 2018

60

 

Notes to Condensed Financial Statements

61

 

 

 

ITEM 2. 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

62

ITEM 3. 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

83

ITEM 4. 

CONTROLS AND PROCEDURES

84

 

 

 

PART II - OTHER INFORMATION 

 

ITEM 1. 

LEGAL PROCEEDINGS

85

ITEM 1A. 

RISK FACTORS

86

ITEM 2. 

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

86

ITEM 3. 

DEFAULTS UPON SENIOR SECURITIES

86

ITEM 4. 

MINE SAFETY DISCLOSURES

86

ITEM 5. 

OTHER INFORMATION

86

ITEM 6. 

EXHIBITS

87

 

2

PART I - FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS (unaudited)

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except unit data)

(unaudited)

 

 

 

 

 

 

 

 

    

April 30, 2019

    

July 31, 2018

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

45,434

 

$

119,311

Accounts and notes receivable, net (including $160,959 and $120,079 of accounts receivable pledged as collateral at April 30, 2019 and July 31, 2018, respectively)

 

 

157,229

 

 

126,054

Inventories

 

 

78,449

 

 

83,694

Prepaid expenses and other current assets

 

 

25,489

 

 

34,862

Total current assets

 

 

306,601

 

 

363,921

 

 

 

  

 

 

  

Property, plant and equipment, net

 

 

603,923

 

 

557,723

Goodwill, net

 

 

247,508

 

 

246,098

Intangible assets (net of accumulated amortization of $411,766 and $399,629 at April 30, 2019 and July 31, 2018, respectively)

 

 

109,634

 

 

120,951

Other assets, net

 

 

62,326

 

 

74,588

Total assets

 

$

1,329,992

 

$

1,363,281

 

 

 

  

 

 

  

LIABILITIES AND PARTNERS' DEFICIT

 

 

  

 

 

  

Current liabilities:

 

 

  

 

 

  

Accounts payable

 

$

41,408

 

$

46,820

Short-term borrowings

 

 

 —

 

 

32,800

Collateralized note payable

 

 

62,000

 

 

58,000

Other current liabilities

 

 

160,507

 

 

142,025

Total current liabilities

 

 

263,915

 

 

279,645

 

 

 

  

 

 

  

Long-term debt

 

 

2,084,506

 

 

2,078,637

Other liabilities

 

 

35,879

 

 

39,476

Contingencies and commitments (Note K)

 

 

 

 

 

 

 

 

 

  

 

 

  

Partners' deficit:

 

 

  

 

 

  

Common unitholders (97,152,665 units outstanding at April 30, 2019 and July 31, 2018)

 

 

(976,902)

 

 

(978,503)

General partner unitholder (989,926 units outstanding at April 30, 2019 and July 31, 2018)

 

 

(69,776)

 

 

(69,792)

Accumulated other comprehensive income (loss)

 

 

(846)

 

 

20,510

Total Ferrellgas Partners, L.P. partners' deficit

 

 

(1,047,524)

 

 

(1,027,785)

Noncontrolling interest

 

 

(6,784)

 

 

(6,692)

Total partners' deficit

 

 

(1,054,308)

 

 

(1,034,477)

Total liabilities and partners' deficit

 

$

1,329,992

 

$

1,363,281

 

See notes to condensed consolidated financial statements.

3

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except unit data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended April 30, 

 

For the nine months ended April 30, 

 

 

    

2019

    

2018

    

2019

    

2018

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Propane and other gas liquids sales

 

$

459,556

 

$

451,302

 

$

1,344,634

 

$

1,346,299

 

Midstream operations

 

 

 —

 

 

22,595

 

 

 —

 

 

260,631

 

Other

 

 

20,069

 

 

41,913

 

 

60,677

 

 

118,691

 

Total revenues

 

 

479,625

 

 

515,810

 

 

1,405,311

 

 

1,725,621

 

 

 

 

  

 

 

  

 

 

  

 

 

  

 

Costs and expenses:

 

 

  

 

 

  

 

 

  

 

 

  

 

Cost of sales - propane and other gas liquids sales

 

 

250,389

 

 

260,419

 

 

766,056

 

 

802,852

 

Cost of sales - midstream operations

 

 

 —

 

 

14,518

 

 

 —

 

 

229,710

 

Cost of sales - other

 

 

2,320

 

 

19,850

 

 

8,789

 

 

54,339

 

Operating expense

 

 

119,991

 

 

116,579

 

 

351,541

 

 

350,757

 

Depreciation and amortization expense

 

 

20,617

 

 

25,348

 

 

59,214

 

 

76,565

 

General and administrative expense

 

 

11,516

 

 

11,678

 

 

42,037

 

 

39,733

 

Equipment lease expense

 

 

8,319

 

 

7,133

 

 

24,597

 

 

20,828

 

Non-cash employee stock ownership plan compensation charge

 

 

(4)

 

 

2,738

 

 

4,688

 

 

10,731

 

Asset impairments

 

 

 —

 

 

 —

 

 

 —

 

 

10,005

 

Loss on asset sales and disposals

 

 

1,683

 

 

6,270

 

 

8,403

 

 

46,414

 

 

 

 

  

 

 

  

 

 

  

 

 

  

 

Operating income

 

 

64,794

 

 

51,277

 

 

139,986

 

 

83,687

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(44,162)

 

 

(40,375)

 

 

(132,931)

 

 

(123,855)

 

Other income, net

 

 

251

 

 

227

 

 

356

 

 

1,422

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

 

20,883

 

 

11,129

 

 

7,411

 

 

(38,746)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

123

 

 

67

 

 

284

 

 

282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

 

20,760

 

 

11,062

 

 

7,127

 

 

(39,028)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to noncontrolling interest

 

 

299

 

 

201

 

 

337

 

 

(131)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to Ferrellgas Partners, L.P.

 

 

20,461

 

 

10,861

 

 

6,790

 

 

(38,897)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: General partner's interest in net earnings (loss)

 

 

205

 

 

109

 

 

68

 

 

(389)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common unitholders' interest in net earnings (loss)

 

$

20,256

 

$

10,752

 

$

6,722

 

$

(38,508)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net earnings (loss) per common unit

 

$

0.21

 

$

0.11

 

$

0.07

 

$

(0.40)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash distributions declared per common unit

 

$

 —

 

$

0.10

 

$

 —

 

$

0.30

 

 

See notes to condensed consolidated financial statements.

4

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended April 30, 

 

For the nine months ended April 30, 

 

 

    

2019

    

2018

    

2019

    

2018

 

Net earnings (loss)

 

$

20,760

 

$

11,062

 

$

7,127

 

$

(39,028)

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in value of risk management derivatives

 

 

1,870

 

 

(159)

 

 

(27,364)

 

 

23,362

 

Reclassification of (gains) losses on derivatives to earnings, net

 

 

6,416

 

 

(6,568)

 

 

5,790

 

 

(20,260)

 

Other comprehensive income (loss)

 

 

8,286

 

 

(6,727)

 

 

(21,574)

 

 

3,102

 

Comprehensive income (loss)

 

 

29,046

 

 

4,335

 

 

(14,447)

 

 

(35,926)

 

Less: Comprehensive income (loss) attributable to noncontrolling interest

 

 

382

 

 

134

 

 

119

 

 

(100)

 

Comprehensive income (loss) attributable to Ferrellgas Partners, L.P.

 

$

28,664

 

$

4,201

 

$

(14,566)

 

$

(35,826)

 

 

See notes to condensed consolidated financial statements.

5

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF PARTNERS’ DEFICIT

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Number of units

    

 

 

    

 

 

    

Accumulated

    

Total Ferrellgas

    

 

 

    

 

 

 

 

 

 

General

 

 

 

 

General

 

other

 

Partner, L.P.

 

 

 

 

 

 

 

 

Common

 

Partner

 

Common

 

Partner

 

comprehensive

 

partners’

 

Non-controlling

 

Total partners’

 

    

unitholders

    

unitholder

    

unitholders

    

unitholder

    

income (loss)

    

deficit

    

interest

    

deficit

Balance at July 31, 2018

 

97,152.7

 

989.9

 

$

(978,503)

 

$

(69,792)

 

$

20,510

 

$

(1,027,785)

 

$

(6,692)

 

$

(1,034,477)

Contributions in connection with non-cash ESOP and stock and unit-based compensation charges

 

 

 

 

2,693

 

 

27

 

 

 

 

2,720

 

 

28

 

 

2,748

Distributions

 

 

 

 

(9,716)

 

 

(98)

 

 

 

 

(9,814)

 

 

(101)

 

 

(9,915)

Net loss

 

 

 

 

(56,445)

 

 

(570)

 

 

 

 

(57,015)

 

 

(493)

 

 

(57,508)

Other comprehensive loss

 

 

 

 

 

 

 

 

(12,460)

 

 

(12,460)

 

 

(127)

 

 

(12,587)

Balance at October 31, 2018

 

97,152.7

 

989.9

 

 

(1,041,971)

 

 

(70,433)

 

 

8,050

 

 

(1,104,354)

 

 

(7,385)

 

 

(1,111,739)

Contributions in connection with non-cash ESOP and stock and unit-based compensation charges

 

 

 

 

1,906

 

 

19

 

 

 

 

1,925

 

 

19

 

 

1,944

Distributions

 

 

 

 

 

 

 

 

 

 

 —

 

 

(157)

 

 

(157)

Net earnings

 

 

 

 

42,911

 

 

433

 

 

 

 

43,344

 

 

531

 

 

43,875

Other comprehensive loss

 

 

 

 

 

 

 

 

(17,099)

 

 

(17,099)

 

 

(174)

 

 

(17,273)

Balance at January 31, 2019

 

97,152.7

 

989.9

 

 

(997,154)

 

 

(69,981)

 

 

(9,049)

 

 

(1,076,184)

 

 

(7,166)

 

 

(1,083,350)

Contributions in connection with non-cash ESOP compensation charges

 

 

 

 

(4)

 

 

 —

 

 

 —

 

 

(4)

 

 

 —

 

 

(4)

Net earnings (loss)

 

 

 

 

20,256

 

 

205

 

 

 —

 

 

20,461

 

 

299

 

 

20,760

Other comprehensive income

 

 

 

 

 

 

 —

 

 

8,203

 

 

8,203

 

 

83

 

 

8,286

Balance at April 30, 2019

 

97,152.7

 

989.9

 

$

(976,902)

 

$

(69,776)

 

$

(846)

 

$

(1,047,524)

 

$

(6,784)

 

$

(1,054,308)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Number of units

    

 

 

    

 

 

    

Accumulated

    

Total Ferrellgas

    

 

 

    

 

 

 

 

 

 

General

 

 

 

 

General

 

other

 

Partner, L.P.

 

 

 

 

 

 

 

 

Common

 

Partner

 

Common

 

Partner

 

comprehensive

 

partners’

 

Non-controlling

 

Total partners’

 

    

unitholders

    

unitholder

    

unitholders

    

unitholder

    

income (loss)

    

deficit

    

interest

    

deficit

Balance at July 31, 2017

 

97,152.7

 

989.9

 

$

(701,188)

 

$

(66,991)

 

$

14,601

 

$

(753,578)

 

$

(3,932)

 

$

(757,510)

Contributions in connection with non-cash ESOP and stock and unit-based compensation charges

 

 

 —

 

 

3,883

 

 

40

 

 

 —

 

 

3,923

 

 

39

 

 

3,962

Distributions

 

 

 —

 

 

(9,715)

 

 

(98)

 

 

 —

 

 

(9,813)

 

 

(100)

 

 

(9,913)

Net loss

 

 

 —

 

 

(47,436)

 

 

(479)

 

 

 —

 

 

(47,915)

 

 

(401)

 

 

(48,316)

Other comprehensive income

 

 

 —

 

 

 —

 

 

 —

 

 

18,314

 

 

18,314

 

 

186

 

 

18,500

Balance at October 31, 2017

 

97,152.7

 

989.9

 

 

(754,456)

 

 

(67,528)

 

 

32,915

 

 

(789,069)

 

 

(4,208)

 

 

(793,277)

Contributions in connection with non-cash ESOP and stock and unit-based compensation charges

 

 

 

 

3,950

 

 

41

 

 

 —

 

 

3,991

 

 

40

 

 

4,031

Distributions

 

 

 

 

(9,716)

 

 

(98)

 

 

 —

 

 

(9,814)

 

 

(257)

 

 

(10,071)

Net earnings (loss)

 

 

 

 

(1,824)

 

 

(19)

 

 

 —

 

 

(1,843)

 

 

69

 

 

(1,774)

Other comprehensive loss

 

 

 

 

 —

 

 

 —

 

 

(8,583)

 

 

(8,583)

 

 

(88)

 

 

(8,671)

Balance at January 31, 2018

 

97,152.7

 

989.9

 

 

(762,046)

 

 

(67,604)

 

 

24,332

 

 

(805,318)

 

 

(4,444)

 

 

(809,762)

Contributions in connection with non-cash ESOP compensation charges

 

 

 

 

2,684

 

 

25

 

 

 —

 

 

2,709

 

 

29

 

 

2,738

Distributions

 

 

 

 

(9,715)

 

 

(98)

 

 

 —

 

 

(9,813)

 

 

(102)

 

 

(9,915)

Net earnings

 

 

 

 

10,752

 

 

109

 

 

 —

 

 

10,861

 

 

201

 

 

11,062

Other comprehensive loss

 

 

 

 

 

 

 —

 

 

(6,660)

 

 

(6,660)

 

 

(67)

 

 

(6,727)

Balance at April 30, 2018

 

97,152.7

 

989.9

 

$

(758,325)

 

$

(67,568)

 

$

17,672

 

$

(808,221)

 

$

(4,383)

 

$

(812,604)

 

See notes to condensed consolidated financial statements.

6

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

For the nine months ended April 30, 

 

    

2019

    

2018

Cash flows from operating activities:

 

 

  

 

 

  

Net earnings (loss)

 

$

7,127

 

$

(39,028)

Reconciliation of net earnings (loss) to net cash provided by operating activities:

 

 

  

 

 

  

Depreciation and amortization expense

 

 

59,214

 

 

76,565

Non-cash employee stock ownership plan compensation charge

 

 

4,688

 

 

10,731

Asset impairments

 

 

 —

 

 

10,005

Loss on asset sales and disposals

 

 

8,403

 

 

46,414

Unrealized gain on derivative instruments

 

 

 —

 

 

(91)

Provision for doubtful accounts

 

 

1,938

 

 

1,906

Deferred income tax expense

 

 

143

 

 

423

Other

 

 

9,266

 

 

6,712

Changes in operating assets and liabilities, net of effects from business acquisitions:

 

 

  

 

 

  

Accounts and notes receivable, net of securitization

 

 

(33,113)

 

 

(46,771)

Inventories

 

 

5,245

 

 

7,755

Prepaid expenses and other current assets

 

 

(5,584)

 

 

(4,070)

Accounts payable

 

 

(5,713)

 

 

(18,429)

Accrued interest expense

 

 

30,216

 

 

31,915

Other current liabilities

 

 

(13,506)

 

 

(1,084)

Other assets and liabilities

 

 

2,453

 

 

(4,642)

Net cash provided by operating activities

 

 

70,777

 

 

78,311

 

 

 

  

 

 

  

Cash flows from investing activities:

 

 

  

 

 

  

Business acquisitions, net of cash acquired

 

 

(11,351)

 

 

(14,862)

Capital expenditures

 

 

(94,660)

 

 

(58,961)

Proceeds from sale of assets

 

 

2,416

 

 

57,802

Net cash used in investing activities

 

 

(103,595)

 

 

(16,021)

 

 

 

  

 

 

  

Cash flows from financing activities:

 

 

  

 

 

  

Distributions

 

 

(9,814)

 

 

(29,440)

Proceeds from issuance of long-term debt

 

 

 —

 

 

23,580

Payments on long-term debt

 

 

(1,656)

 

 

(1,892)

Net reductions in short-term borrowings

 

 

(32,800)

 

 

(84,179)

Net additions to collateralized short-term borrowings

 

 

4,000

 

 

35,000

Cash paid for financing costs

 

 

(531)

 

 

(1,161)

Noncontrolling interest activity

 

 

(258)

 

 

(459)

Net cash used in financing activities

 

 

(41,059)

 

 

(58,551)

 

 

 

  

 

 

  

Net change in cash and cash equivalents

 

 

(73,877)

 

 

3,739

Cash and cash equivalents - beginning of period

 

 

119,311

 

 

5,760

Cash and cash equivalents - end of period

 

$

45,434

 

$

9,499

 

See notes to condensed consolidated financial statements.

 

7

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per unit data, unless otherwise designated)

(unaudited)

A.    Partnership organization and formation

Ferrellgas Partners, L.P. (“Ferrellgas Partners”) was formed April 19, 1994, and 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, collectively referred to as “Ferrellgas,” are both Delaware limited partnerships and are governed by their respective partnership agreements. Ferrellgas Partners was formed to acquire and hold a limited partner interest in the operating partnership. As of April 30, 2019, Ferrell Companies, Inc. ("Ferrell Companies") beneficially owns 22.8 million Ferrellgas Partners common units. Ferrellgas, Inc. (the "general partner"), a wholly-owned subsidiary of Ferrell Companies, has retained an approximate 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. Unless contractually provided for, creditors of the operating partnership have no recourse with regards to Ferrellgas Partners.

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 debt issued by Ferrellgas Partners. The operating partnership is the only operating subsidiary of Ferrellgas Partners.

Ferrellgas is primarily engaged in the retail distribution of propane and related equipment sales. The propane distribution market is seasonal because propane is used primarily for heating in residential and commercial buildings. Ferrellgas serves residential, industrial/commercial, portable tank exchange, agricultural, wholesale and other customers in all 50 states, the District of Columbia, and Puerto Rico.

Due to seasonality, the results of operations for the nine months ended April 30, 2019 are not necessarily indicative of the results to be expected for the full fiscal year ending July 31, 2019.

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. Certain prior period amounts have been reclassified to conform to the current period presentation. The information included in this Quarterly Report on Form 10‑Q should be read in conjunction with (i) the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and (ii) the consolidated financial statements and accompanying notes included in Ferrellgas’ Annual Report on Form 10‑K for fiscal 2018.

 

B.    Summary of significant accounting policies

(1) 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 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,

8

allowance for doubtful accounts, fair value of reporting units, recoverability of long-lived assets, assumptions used to value business combinations, fair values of derivative contracts and stock-based compensation calculations.

(2) New accounting standards:

FASB Accounting Standard Update No. 2014‑09

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update ("ASU") 2014‑09, Revenue from Contracts with Customers (“ASU 2014‑09”). The issuance is part of a joint effort by the FASB and the International Accounting Standards Board ("IASB") to enhance financial reporting by creating common revenue recognition guidance for U.S. GAAP and International Financial Reporting Standards ("IFRS") and, thereby, improving the consistency of requirements, comparability of practices and usefulness of disclosures. Upon adoption, Ferrellgas applied ASU 2014‑09 only to contracts that were not completed, referred to as open contracts.

Ferrellgas adopted ASU 2014‑09 beginning on August 1, 2018 using the modified retrospective method. This method requires that the cumulative effect of initially applying ASU 2014‑09 be recognized in partner’s deficit at the date of adoption, August 1, 2018. ASU 2014‑09 has not materially impacted Ferrellgas’ consolidated financial statements, and as a result there was no cumulative effect to record as of the date of adoption. Results for reporting periods beginning after August 1, 2018 are presented under ASU 2014‑09, while amounts reported for prior periods have not been adjusted and continue to be reported under accounting standards in effect for those periods. See Note G - Revenue from contracts with customers for additional information related to revenues and contract costs, including qualitative and quantitative disclosures required under ASU 2014‑09.

FASB Accounting Standard Update No. 2016‑02

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The new standard requires lessees to apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. An entity may elect the transition relief option in ASU 2018-11, “Leases: Targeted Improvements” which, among other things, provides entities with an option to recognize the cumulative-effect adjustment from the modified retrospective application to the opening balance of retained earnings in the period of adoption and consequently, continue to report comparative periods in compliance with the prior guidance (ASC 840). Ferrellgas expects to elect this additional transition method.

 

Ferrellgas is continuing to evaluate the impact of its pending adoption of ASU 2016-02 on the consolidated financial statements. Ferrellgas has made significant progress in assessing the impact of the standard and planning for the adoption and implementation. The implementation team has completed scoping and the data gathering process of our current lease portfolio. Ferrellgas continues to perform a completeness assessment over the lease population, analyze the financial statement impact of adopting the standards, and evaluate the impact of adoption on our existing accounting policies and disclosures. Further, our implementation team is in the process of determining appropriate changes to our business processes, systems, and controls to support recognition and disclosure under the new standard. Ferrellgas believes that the adoption of this standard, which will be effective for Ferrellgas August 1, 2019, will result in material increases to right of use assets and lease liabilities on our consolidated balance sheet and a corresponding change in classification of certain expenses contained on our consolidated statement of operations.

 

FASB Accounting Standard Update No. 2016‑13

In June 2016, the FASB issued ASU 2016‑13, Financial Instruments - Credit Losses (Topic 326) which requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. Ferrellgas is currently evaluating the impact of its pending adoption of this standard on the consolidated financial statements.

9

FASB Accounting Standard Update No. 2017‑12

In August 2017, the FASB issued ASU 2017‑12, Financial Instruments - Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities which is intended to improve the financial reporting for hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. This standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Ferrellgas is currently evaluating the impact of its pending adoption of this standard on the consolidated financial statements.

FASB Accounting Standard Update No. 2018‑15

In August 2018, the FASB issued ASU 2018‑15, Intangibles - Goodwill and Other - Internal-use Software (Subtopic 350‑40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract which is intended to clarify the accounting for implementation costs related to a cloud computing arrangement that is a service contract. Costs for implementation activities in the application development stage are deferred, depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed. Any deferred costs are amortized over the term of the service contract. The new guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Ferrellgas adopted ASU 2018-15 on a prospective basis to all implementation costs incurred after January 31, 2019 with an immaterial impact on our consolidated results of operations for the three months ended April 30, 2019.

C.    Supplemental financial statement information

Inventories consist of the following:

 

 

 

 

 

 

 

 

    

April 30, 2019