Company Quick10K Filing
Quick10K
Ferrellgas Partners
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$1.21 97 $118
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 2019-03-08 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
COG Cabot Oil & Gas 11,610
GRA WR Grace 5,180
PACW Pacwest Bancorp 4,750
EDN Edenor 766
VSTO Vista Outdoor 483
SNSS Sunesis Pharmaceuticals 88
MXSG Mexus Gold 0
HWH HWH 0
NRU National Rural Utilities Cooperative Finance 0
CFDB Central Federal Bancshares 0
FGP 2019-01-31
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-10.29 fgp-20190131ex1029f995f.htm
EX-10.30 fgp-20190131ex10303793a.htm
EX-31.1 fgp-20190131ex311231cae.htm
EX-31.2 fgp-20190131ex312df8fb3.htm
EX-31.3 fgp-20190131ex31383d225.htm
EX-31.4 fgp-20190131ex31432d213.htm
EX-32.1 fgp-20190131ex32122043b.htm
EX-32.2 fgp-20190131ex322e003aa.htm
EX-32.3 fgp-20190131ex3231f1a78.htm
EX-32.4 fgp-20190131ex3242235b8.htm

Ferrellgas Partners Earnings 2019-01-31

FGP 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 fgp-20190131x10q.htm 10-Q 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 January 31, 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 ☐

At February 28, 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 – January 31, 2019 and July 31, 2018

2

 

Condensed Consolidated Statements of Operations – Three and six months ended January 31, 2019 and 2018

3

 

Condensed Consolidated Statements of Comprehensive Loss – Three and six months ended January 31, 2019 and 2018

4

 

Condensed Consolidated Statement of Partners’ Deficit – Six months ended January 31, 2019

5

 

Condensed Consolidated Statements of Cash Flows – Six months ended January 31, 2019 and 2018

6

 

Notes to Condensed Consolidated Financial Statements

7

 

 

 

 

Ferrellgas Partners Finance Corp.

 

 

Condensed Balance Sheets – January 31, 2019 and July 31, 2018

25

 

Condensed Statements of Operations – Three and six months ended January 31, 2019 and 2018

26

 

Condensed Statements of Cash Flows – Six months ended January 31, 2019 and 2018

27

 

Notes to Condensed Financial Statements

28

 

 

 

 

Ferrellgas, L.P. and Subsidiaries

 

 

Condensed Consolidated Balance Sheets – January 31, 2019 and July 31, 2018

29

 

Condensed Consolidated Statements of Operations – Three and six months ended January 31, 2019 and 2018

30

 

Condensed Consolidated Statements of Comprehensive Loss – Three and six months ended January 31, 2019 and 2018

31

 

Condensed Consolidated Statement of Partners’ Deficit – Six months ended January 31, 2019

32

 

Condensed Consolidated Statements of Cash Flows – Six months ended January 31, 2019 and 2018

33

 

Notes to Condensed Consolidated Financial Statements

34

 

 

 

 

Ferrellgas Finance Corp.

 

 

Condensed Balance Sheets – January 31, 2019 and July 31, 2018

59

 

Condensed Statements of Operations – Three and six months ended January 31, 2019 and 2018

60

 

Condensed Statements of Cash Flows – Six months ended January 31, 2019 and 2018

61

 

Notes to Condensed Financial Statements

62

 

 

 

ITEM 2. 

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

63

ITEM 3. 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

85

ITEM 4. 

CONTROLS AND PROCEDURES

86

 

 

 

PART II - OTHER INFORMATION 

 

ITEM 1. 

LEGAL PROCEEDINGS

87

ITEM 1A. 

RISK FACTORS

88

ITEM 2. 

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

88

ITEM 3. 

DEFAULTS UPON SENIOR SECURITIES

88

ITEM 4. 

MINE SAFETY DISCLOSURES

88

ITEM 5. 

OTHER INFORMATION

88

ITEM 6. 

EXHIBITS

89

 

1


 

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)

 

 

 

 

 

 

 

 

    

January 31, 2019

    

July 31, 2018

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

40,647

 

$

119,311

Accounts and notes receivable, net (including $201,717 and $120,079 of accounts receivable pledged as collateral at January 31, 2019 and July 31, 2018, respectively)

 

 

203,164

 

 

126,054

Inventories

 

 

89,784

 

 

83,694

Prepaid expenses and other current assets

 

 

36,616

 

 

34,862

Total current assets

 

 

370,211

 

 

363,921

 

 

 

  

 

 

  

Property, plant and equipment, net

 

 

584,334

 

 

557,723

Goodwill, net

 

 

247,478

 

 

246,098

Intangible assets (net of accumulated amortization of $407,795 and $399,629 at January 31, 2019 and July 31, 2018, respectively)

 

 

113,558

 

 

120,951

Other assets, net

 

 

72,539

 

 

74,588

Total assets

 

$

1,388,120

 

$

1,363,281

 

 

 

  

 

 

  

LIABILITIES AND PARTNERS' DEFICIT

 

 

  

 

 

  

Current liabilities:

 

 

  

 

 

  

Accounts payable

 

$

63,639

 

$

46,820

Short-term borrowings

 

 

 —

 

 

32,800

Collateralized note payable

 

 

140,000

 

 

58,000

Other current liabilities

 

 

147,253

 

 

142,025

Total current liabilities

 

 

350,892

 

 

279,645

 

 

 

  

 

 

  

Long-term debt

 

 

2,083,031

 

 

2,078,637

Other liabilities

 

 

37,547

 

 

39,476

Contingencies and commitments (Note K)

 

 

 

 

 

 

 

 

 

  

 

 

  

Partners' deficit:

 

 

  

 

 

  

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

 

 

(997,154)

 

 

(978,503)

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

 

 

(69,981)

 

 

(69,792)

Accumulated other comprehensive income (loss)

 

 

(9,049)

 

 

20,510

Total Ferrellgas Partners, L.P. partners' deficit

 

 

(1,076,184)

 

 

(1,027,785)

Noncontrolling interest

 

 

(7,166)

 

 

(6,692)

Total partners' deficit

 

 

(1,083,350)

 

 

(1,034,477)

Total liabilities and partners' deficit

 

$

1,388,120

 

$

1,363,281

 

See notes to condensed consolidated financial statements.

2


 

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except unit data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended January 31, 

 

For the six months ended January 31, 

 

 

    

2019

    

2018

    

2019

    

2018

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Propane and other gas liquids sales

 

$

550,112

 

$

592,239

 

$

885,078

 

$

894,997

 

Midstream operations

 

 

 —

 

 

117,276

 

 

 —

 

 

238,036

 

Other

 

 

23,265

 

 

45,641

 

 

40,608

 

 

76,778

 

Total revenues

 

 

573,377

 

 

755,156

 

 

925,686

 

 

1,209,811

 

 

 

 

  

 

 

  

 

 

  

 

 

  

 

Costs and expenses:

 

 

  

 

 

  

 

 

  

 

 

  

 

Cost of sales - propane and other gas liquids sales

 

 

311,531

 

 

362,918

 

 

515,667

 

 

542,433

 

Cost of sales - midstream operations

 

 

 —

 

 

107,067

 

 

 

 

215,192

 

Cost of sales - other

 

 

3,422

 

 

20,787

 

 

6,469

 

 

34,489

 

Operating expense

 

 

121,219

 

 

123,716

 

 

231,550

 

 

234,178

 

Depreciation and amortization expense

 

 

19,605

 

 

25,485

 

 

38,597

 

 

51,217

 

General and administrative expense

 

 

16,342

 

 

14,891

 

 

30,521

 

 

28,055

 

Equipment lease expense

 

 

8,415

 

 

6,954

 

 

16,278

 

 

13,695

 

Non-cash employee stock ownership plan compensation charge

 

 

1,944

 

 

4,031

 

 

4,692

 

 

7,993

 

Asset impairments

 

 

 —

 

 

10,005

 

 

 —

 

 

10,005

 

Loss on asset sales and disposals

 

 

2,216

 

 

39,249

 

 

6,720

 

 

40,144

 

 

 

 

  

 

 

  

 

 

  

 

 

  

 

Operating income

 

 

88,683

 

 

40,053

 

 

75,192

 

 

32,410

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(44,891)

 

 

(42,673)

 

 

(88,769)

 

 

(83,480)

 

Other income, net

 

 

86

 

 

684

 

 

105

 

 

1,195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

 

43,878

 

 

(1,936)

 

 

(13,472)

 

 

(49,875)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

 

 3

 

 

(162)

 

 

161

 

 

215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

 

43,875

 

 

(1,774)

 

 

(13,633)

 

 

(50,090)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to noncontrolling interest

 

 

531

 

 

69

 

 

38

 

 

(332)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

43,344

 

 

(1,843)

 

 

(13,671)

 

 

(49,758)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

433

 

 

(19)

 

 

(137)

 

 

(498)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common unitholders' interest in net earnings (loss)

 

$

42,911

 

$

(1,824)

 

$

(13,534)

 

$

(49,260)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net earnings (loss) per common unit

 

$

0.44

 

$

(0.02)

 

$

(0.14)

 

$

(0.51)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash distributions declared per common unit

 

$

 —

 

$

0.10

 

$

 —

 

$

0.20

 

 

See notes to condensed consolidated financial statements.

3


 

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended January 31, 

 

For the six months ended January 31, 

 

 

    

2019

    

2018

    

2019

    

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

43,875

 

$

(1,774)

 

$

(13,633)

 

$

(50,090)

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in value of risk management derivatives

 

 

(21,080)

 

 

1,072

 

 

(29,234)

 

 

23,521

 

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

 

 

3,807

 

 

(9,743)

 

 

(626)

 

 

(13,692)

 

Other comprehensive income (loss)

 

 

(17,273)

 

 

(8,671)

 

 

(29,860)

 

 

9,829

 

Comprehensive income (loss)

 

 

26,602

 

 

(10,445)

 

 

(43,493)

 

 

(40,261)

 

Less: Comprehensive income (loss) attributable to noncontrolling interest

 

 

357

 

 

(19)

 

 

(263)

 

 

(234)

 

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

 

$

26,245

 

$

(10,426)

 

$

(43,230)

 

$

(40,027)

 

 

See notes to condensed consolidated financial statements.

4


 

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 compensation charges

 

 

 

 

4,599

 

 

46

 

 

 —

 

 

4,645

 

 

47

 

 

4,692

Distributions

 

 

 

 

(9,716)

 

 

(98)

 

 

 —

 

 

(9,814)

 

 

(258)

 

 

(10,072)

Net earnings (loss)

 

 

 

 

(13,534)

 

 

(137)

 

 

 —

 

 

(13,671)

 

 

38

 

 

(13,633)

Other comprehensive loss

 

 

 

 

 

 

 —

 

 

(29,559)

 

 

(29,559)

 

 

(301)

 

 

(29,860)

Balance at January 31, 2019

 

97,152.7

 

989.9

 

$

(997,154)

 

$

(69,981)

 

$

(9,049)

 

$

(1,076,184)

 

$

(7,166)

 

$

(1,083,350)

 

See notes to condensed consolidated financial statements.

5


 

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

For the six months ended January 31, 

 

    

2019

    

2018

Cash flows from operating activities:

 

 

  

 

 

  

Net loss

 

$

(13,633)

 

$

(50,090)

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

 

 

  

 

 

  

Depreciation and amortization expense

 

 

38,597

 

 

51,217

Non-cash employee stock ownership plan compensation charge

 

 

4,692

 

 

7,993

Asset impairments

 

 

 —

 

 

10,005

Loss on asset sales and disposals

 

 

6,720

 

 

40,144

Unrealized gain on derivative instruments

 

 

 —

 

 

(91)

Provision for doubtful accounts

 

 

1,576

 

 

1,688

Deferred income tax expense

 

 

141

 

 

364

Other

 

 

6,843

 

 

4,482

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

 

 

  

 

 

  

Accounts and notes receivable, net of securitization

 

 

(78,686)

 

 

(102,315)

Inventories

 

 

(6,090)

 

 

(17,275)

Prepaid expenses and other current assets

 

 

(16,351)

 

 

(4,682)

Accounts payable

 

 

16,441

 

 

11,510

Accrued interest expense

 

 

(260)

 

 

304

Other current liabilities

 

 

(8,944)

 

 

13,372

Other assets and liabilities

 

 

(6,164)

 

 

(2,920)

Net cash used in operating activities

 

 

(55,118)

 

 

(36,294)

 

 

 

  

 

 

  

Cash flows from investing activities:

 

 

  

 

 

  

Business acquisitions, net of cash acquired

 

 

(5,069)

 

 

(14,862)

Capital expenditures

 

 

(58,330)

 

 

(35,693)

Proceeds from sale of assets

 

 

1,960

 

 

4,207

Net cash used in investing activities

 

 

(61,439)

 

 

(46,348)

 

 

 

  

 

 

  

Cash flows from financing activities:

 

 

  

 

 

  

Distributions

 

 

(9,814)

 

 

(19,627)

Proceeds from issuance of long-term debt

 

 

 —

 

 

23,580

Payments on long-term debt

 

 

(1,014)

 

 

(1,267)

Net reductions in short-term borrowings

 

 

(32,800)

 

 

(7,879)

Net additions to collateralized short-term borrowings

 

 

82,000

 

 

97,000

Cash paid for financing costs

 

 

(221)

 

 

(395)

Noncontrolling interest activity

 

 

(258)

 

 

(357)

Net cash provided by financing activities

 

 

37,893

 

 

91,055

 

 

 

  

 

 

  

Net change in cash and cash equivalents

 

 

(78,664)

 

 

8,413

Cash and cash equivalents - beginning of period

 

 

119,311

 

 

5,760

Cash and cash equivalents - end of period

 

$

40,647

 

$

14,173

 

See notes to condensed consolidated financial statements.

 

6


 

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 January 31, 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 six months ended January 31, 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.

 

7


 

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, 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 initial scoping and is substantially complete in the data gathering process of our current lease portfolio. Ferrellgas is currently performing a completeness assessment over the lease population, analyzing the financial statement impact of adopting the standards, and evaluating the impact of adoption on our existing accounting policies and disclosures. Ferrellgas believes that the adoption of this standard,

8


 

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.

 

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.

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. This standard is effective for fiscal years beginning after December 15, 2019, 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.

C.    Supplemental financial statement information

Inventories consist of the following:

 

 

 

 

 

 

 

 

    

January 31, 2019

    

July 31, 2018

Propane gas and related products

 

$

74,964

 

$

71,180

Appliances, parts and supplies, and other

 

 

14,820

 

 

12,514

Inventories

 

$

89,784

 

$

83,694

 

In addition to inventories on hand, Ferrellgas enters into contracts to take delivery of propane for supply procurement purposes with terms that generally do not exceed 36 months. Most of these contracts call for payment based on market prices at the date of delivery. As of January 31, 2019, Ferrellgas had committed, for supply procurement purposes, to take delivery of approximately 14 million gallons of propane at fixed prices.

Other assets, net consist of the following:

 

 

 

 

 

 

 

 

    

January 31, 2019

    

July 31, 2018

Notes receivable, less current portion

 

$

27,646

 

$

27,491

Other

 

 

44,893

 

 

47,097

Other assets, net

 

$

72,539

 

$

74,588

 

9


 

Other current liabilities consist of the following:

 

 

 

 

 

 

 

 

    

January 31, 2019

    

July 31, 2018

Accrued interest

 

$

21,963

 

$

22,222

Customer deposits and advances

 

 

26,323

 

 

22,829

Other

 

 

98,967

 

 

96,974

Other current liabilities

 

$

147,253

 

$

142,025

 

Shipping and handling expenses are classified in the following condensed consolidated statements of operations line items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended January 31, 

 

For the six months ended January 31, 

 

 

    

2019

    

2018

    

2019

    

2018

 

Operating expense

 

$

60,279

 

$

54,613

 

$

107,721

 

$

97,928

 

Depreciation and amortization expense

 

 

1,389

 

 

1,123

 

 

2,462

 

 

2,235

 

Equipment lease expense

 

 

7,869

 

 

6,296

 

 

15,388

 

 

12,364

 

 

 

$

69,537

 

$

62,032

 

$

125,571

 

$

112,527

 

 

Certain cash flow and significant non-cash activities are presented below:

 

 

 

 

 

 

 

 

 

For the six months ended January 31, 

 

    

2019

    

2018

Cash paid for:

 

 

  

 

 

  

Interest

 

$

82,941

 

$

78,682

Income taxes

 

$

 2

 

$

12

Non-cash investing and financing activities:

 

 

 

 

 

  

Liabilities incurred in connection with acquisitions

 

$

1,174

 

$

1,508

Change in accruals for property, plant and equipment additions

 

$

2,815

 

$

47

 

 

A.

 

 

D.    Accounts and notes receivable, net and accounts receivable securitization

Accounts and notes receivable, net consist of the following:

 

 

 

 

 

 

 

 

    

January 31, 2019

    

July 31, 2018

Accounts receivable pledged as collateral

 

$

201,717

 

$

120,079

Accounts receivable

 

 

4,651

 

 

8,272

Note receivable - current portion

 

 

126

 

 

132

Other

 

 

27

 

 

26

Less: Allowance for doubtful accounts

 

 

(3,357)

 

 

(2,455)

Accounts and notes receivable, net

 

$

203,164

 

$

126,054

 

At January 31, 2019, $201.7 million of trade accounts receivable were pledged as collateral against $140.0 million of collateralized notes payable due to a commercial paper conduit. At July 31, 2018, $120.1 million of trade accounts receivable were pledged as collateral against $58.0 million of collateralized notes payable due to the commercial paper conduit. These accounts receivable pledged as collateral are bankruptcy remote from the operating partnership. The operating partnership does not provide any guarantee or similar support to the collectability of these accounts receivable pledged as collateral.

As of January 31, 2019, Ferrellgas had received cash proceeds of $140.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds or issue letters of credit. As of July 31, 2018,

10


 

Ferrellgas had received cash proceeds of $58.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. Borrowings under the accounts receivable securitization facility had a weighted average interest rate of 5.3% and 5.2% as of January 31, 2019 and July 31, 2018, respectively.

E.    Debt

Short-term borrowings

Ferrellgas classifies borrowings on the revolving line of credit portion of its Senior Secured Credit Facility as short-term because they are used to fund working capital needs that management intends to pay down within the twelve month period following the balance sheet date. As of January 31, 2019, there were no amounts classified as short-term borrowings. As of July 31, 2018, $32.8 million was classified as short-term borrowings. For further discussion see the secured credit facility section below.

Secured credit facilities

As of January 31, 2019, the operating partnership had borrowings of $275.0 million under the Term Loan at a rate of 8.27%, which was classified as long-term debt, and no borrowings under the Revolving Facility. As of January 31, 2019, the operating partnership had available borrowing capacity under its Revolving Facility of $196.2 million. As of July 31, 2018, the operating partnership had borrowings of $275.0 million under the Term Loan at a rate of 7.86%, which was classified as long-term debt, and $32.8 million under the Revolving Facility at a rate of 9.75%, which was classified as short-term borrowings. As of July 31, 2018, the operating partnership had available borrowing capacity under its Revolving Facility of $159.3 million.

Letters of credit outstanding at January 31, 2019 and July 31, 2018 totaled $103.8 million and $107.9 million, respectively, and were used to secure insurance arrangements, product purchases and commodity hedges. At January 31, 2019, Ferrellgas had available letter of credit remaining capacity of $21.2 million. At July 31, 2018, Ferrellgas had available letter of credit remaining capacity of $17.1 million.

Debt and interest expense reduction and refinancing strategy

Ferrellgas continues to execute on a strategy to further reduce its debt and interest expense. This strategy included entering into the new Senior Secured Credit Facility and amending its accounts receivable securitization facility in May 2018 and certain asset sales during fiscal 2018. Ferrellgas continues to evaluate its options to address its leverage.

Financial covenants

The indenture governing the outstanding notes of Ferrellgas Partners and the agreements governing the operating partnership’s indebtedness contain various covenants that limit Ferrellgas Partners’ ability and the ability of specified subsidiaries to, among other things, make restricted payments and incur additional indebtedness. The general partner believes that the most restrictive of these covenants are those related to the consolidated fixed charge coverage ratio, as defined in the indenture governing the outstanding notes of Ferrellgas Partners, and the consolidated fixed charge coverage ratio, as defined in the indentures governing the outstanding notes of the operating partnership.

Consolidated fixed charge coverage ratio - Ferrellgas Partners, L.P., the master limited partnership

Under the Ferrellgas Partners indenture, before a restricted payment (as defined in the indenture) can be made by Ferrellgas Partners, Ferrellgas Partners must satisfy a consolidated fixed charge coverage ratio requirement or have unused capacity under a limited exception to the ratio requirement. If Ferrellgas Partners is unable to make restricted payments, Ferrellgas Partners will not have the ability to make distributions to Ferrellgas Partners common unitholders.

The restricted payments covenant requires that, for Ferrellgas Partners to make a restricted payment, the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of Ferrellgas Partners be at least 1.75x on a pro forma basis giving effect to the restricted payment and, if applicable, certain other specified events,

11


 

subject to its ability to make restricted payments under the limited exception described below. If this pro forma ratio is below 1.75x, Ferrellgas Partners may make restricted payments of up to $50.0 million in total over a sixteen quarter period. As of January 31, 2019, the ratio was 1.38x. As a result of distributions paid to common unitholders in September 2017, December 2017, March 2018, June 2018, and September 2018, while this ratio was less than 1.75x, Ferrellgas Partners has used substantially all of its capacity under the limited exception and therefore is currently restricted by this covenant from making future restricted payments, including distributions to common unitholders. Accordingly, no distributions were paid to common unitholders in December 2018 for the three months ended October 31, 2018 and no distributions will be paid for the three months ended January 31, 2019. Unless this indenture is amended or replaced, or our consolidated fixed charge coverage ratio improves to at least 1.75x this covenant will continue to restrict us from making common unit distributions.

Consolidated fixed charge coverage ratio - Ferrellgas, L.P., the operating partnership

Under the operating partnership indentures, before a restricted payment (as defined in the indentures) can be made by the operating partnership to Ferrellgas Partners, the operating partnership must satisfy a consolidated fixed charge coverage ratio requirement or have unused capacity under a limited exception to the ratio requirement. If the operating partnership is unable to make restricted payments, Ferrellgas Partners will not have the ability to make distributions to Ferrellgas Partners common unitholders or make interest payments on Ferrellgas Partners’ unsecured senior notes due 2020.

The restricted payment covenants require that, for the operating partnership to make a restricted payment, the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of the operating partnership be at least 1.75x on a pro forma basis giving effect to the restricted payment and, if applicable, certain other specified events, subject to its ability to make restricted payments under the limited exception described below. If this pro forma ratio is below 1.75x, the operating partnership may make restricted payments in limited amounts determined under the indentures. As of January 31, 2019, the ratio was 1.67x. As a result, it’s likely the distribution that will be made by the operating partnership on June 15, 2019 for payment of interest on Ferrellgas Partners’ unsecured senior notes due 2020 will be made from capacity under the limited exception to the ratio requirement. The operating partnership believes that its remaining capacity under the limited exception to the ratio requirement will allow it to make distributions to Ferrellgas Partners sufficient to cover interest payments on Ferrellgas Partners’ unsecured senior notes due 2020 through maturity of those notes.

F.    Partners’ deficit

As of January 31, 2019 and July 31, 2018, Ferrellgas Partners limited partner units, which are listed on the New York Stock Exchange under the symbol “FGP,” were beneficially owned by the following:

 

 

 

 

 

 

    

January 31, 2019

    

July 31, 2018

Public common unitholders

 

69,612,939

 

69,612,939

Ferrell Companies (1)

 

22,529,361

 

22,529,361

FCI Trading Corp. (2)

 

195,686

 

195,686

Ferrell Propane, Inc. (3)

 

51,204

 

51,204

James E. Ferrell (4)

 

4,763,475

 

4,763,475


(1)

Ferrell Companies is the owner of the general partner and is an approximate 23% direct owner of Ferrellgas Partners’ common units and thus a related party. Ferrell Companies also beneficially owns 195,686 and 51,204 common units of Ferrellgas Partners held by FCI Trading Corp. ("FCI Trading") and Ferrell Propane, Inc. ("Ferrell Propane"), respectively, bringing Ferrell Companies’ beneficial ownership to 23.4% at January 31, 2019.

(2)

FCI Trading is an affiliate of the general partner and thus a related party.

(3)

Ferrell Propane is controlled by the general partner and thus a related party.

(4)

James E. Ferrell is the Interim Chief Executive Officer and President of our general partner; and is the Chairman of the Board of Directors of our general partner and a related party. JEF Capital Management owns 4,758,859 of these common units and is owned by the James E. Ferrell Revocable Trust Two and other family trusts, all of which James E. Ferrell and/or his family members are the trustees and beneficiaries. James E. Ferrell holds all voting common stock of JEF Capital Management. The remaining 4,616 common units are held by Ferrell Resources

12


 

Holdings, Inc., which is wholly-owned by the James E. Ferrell Revocable Trust One, for which James E. Ferrell is the trustee and sole beneficiary.

Partnership distributions

Ferrellgas Partners has recognized the following distributions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended January 31, 

 

For the six months ended January 31, 

 

 

    

2019

    

2018

    

2019

    

2018

 

Public common unitholders

 

$

 —

 

$

6,962

 

$

6,962

 

$

13,923

 

Ferrell Companies

 

 

 —

 

 

2,253

 

 

2,253

 

 

4,506

 

FCI Trading Corp.

 

 

 —

 

 

20

 

 

20

 

 

40

 

Ferrell Propane, Inc.

 

 

 —

 

 

 5

 

 

 5

 

 

10

 

James E. Ferrell

 

 

 —

 

 

476

 

 

476

 

 

952

 

General partner

 

 

 —

 

 

98

 

 

98

 

 

196

 

 

 

$

 —

 

$

9,814

 

$

9,814

 

$

19,627

 

 

Ferrellgas Partners paid cash distributions as detailed in the table above. Ferrellgas Partners did not declare a cash distribution related to the three months ended October 31, 2018 or related to the three months ended January 31, 2019. As discussed in Note E – Debt, Ferrellgas Partners was not permitted, pursuant to the consolidated fixed charge coverage ratio under its note indenture, to make restricted payments, including distributions to unitholders.

See additional discussions about transactions with related parties in Note J – Transactions with related parties.

Accumulated other comprehensive income (loss) (“AOCI”)

See Note I – Derivative instruments and hedging activities – for details regarding changes in the fair value of risk management financial derivatives recorded within AOCI for the three and six months ended January 31, 2019 and 2018.

General partner’s commitment to maintain its capital account

Ferrellgas’ partnership agreements allow the general partner to have an option to maintain its effective 2% general partner interest concurrent with the issuance of other additional equity.

During the six months ended January 31, 2019, the general partner made non-cash contributions of $0.1 million to Ferrellgas to maintain its effective 2% general partner interest.

During the six months ended January 31, 2018, the general partner made non-cash contributions of $0.2 million to Ferrellgas to maintain its effective 2% general partner interest.

G.    Revenue from contracts with customers

Ferrellgas adopted ASU 2014‑09 beginning on August 1, 2018 using the modified retrospective method. Ferrellgas earns revenue from contracts with customers primarily through the distribution of propane, as well as through the sale of propane related equipment and supplies. Revenues from propane and other gas liquids sales are comprised of revenue earned from the delivery of propane to tanks on customers’ premises, delivery of propane filled cylinders to customers, or from the sale of portable propane tanks to nationwide and local retailers and end use customers. Other revenues primarily include sales of appliances and other materials as well as other fees charged to customers. Upon adoption, Ferrellgas applied ASU 2014‑09 only to contracts that were not completed.

13


 

Contracts with customers

Ferrellgas’ contracts with customers are principally for the bulk delivery of propane to tanks, delivery of propane filled cylinders or the delivery of portable propane tanks to retailers. Ferrellgas sells propane to a wide variety of customers, including residential, industrial/commercial, portable tank exchange, agricultural, wholesale and others. Ferrellgas’ performance obligations in these contracts are generally limited to the delivery of propane thus revenues from these contracts are earned at the time product is delivered or in the case of some of Ferrellgas’ portable tank exchange retailers who have consignment agreements, at the time the tanks are sold to the end use customer. Payment is generally due within 30 days. Revenues from sales of propane are included in Propane and other gas liquids sales on the consolidated statements of operations.

Typically, Ferrellgas bills customers upon delivery and payment is generally due within 30 days. With its residential customers, Ferrellgas offers customers the ability to spread their annual heating costs over a longer period, typically twelve months. Customers who opt to spread their heating costs over a longer period are referred to as “even-pay” customers.

Ferrellgas charges other amounts to customers associated with the delivery of propane including hazardous materials fees and fuel surcharge fees. In some regions, Ferrellgas also sells appliances and related parts and fittings as well as other retail propane related services. Ferrellgas charges on an annual basis tank and equipment rental charges for customers that are using our equipment to store propane. Other revenues associated with deliveries of propane are earned at the time product is delivered. Revenues associated with sales of appliances and other materials or services are earned at the time of delivery or installation. Revenues associated with tank and equipment rentals are generally recognized on a straight-line basis over one year.

Accounting estimates related to recognition of revenue require that Ferrellgas make estimates and assumptions about various factors including credits issued for completed sales, future returns and total consideration payable in instances where we have customer incentives payable to the customer.

Disaggregation of revenue

Ferrellgas disaggregates revenues based upon the type of customer and on the type of revenue. The following table presents retail propane revenues, wholesale propane revenues and other revenues. Retail revenues result from sales to end use customers, wholesale revenues result from sales to or through resellers and all other revenues include sales of appliances and other materials, other fees charged to customers and equipment rental charges.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

For the three months ended January 31, 

 

For the six months ended January 31, 

 

 

 

2019

    

2018

    

2019

    

2018

 

Retail - Sales to End Users

 

$

415,827

 

$

417,472

 

$

633,591

 

$

601,266

 

Wholesale - Sales to Resellers

 

 

115,392

 

 

128,654

 

 

209,336

 

 

227,083

 

Other Gas Sales

 

 

18,893

 

 

46,113

 

 

42,151

 

 

66,648

 

Other

 

 

23,265

 

 

45,641

 

 

40,608

 

 

76,778

 

Propane and related equipment revenues

 

$

573,377

 

$

637,880

 

$

925,686

 

$

971,775

 

 

Contract assets and liabilities

Ferrellgas’ performance obligations are generally limited to the delivery of propane for our retail and wholesale contracts. Ferrellgas’ performance obligations with respect to sales of appliances and other materials and other revenues are limited to the delivery of the agreed upon good or service. Ferrellgas does not have material performance obligations that are delivered over time, thus all of our revenue is recognized at the time the goods, including propane, are delivered or installed. Ferrellgas offers “even pay” billing programs that can create customer deposits or advances, depending on whether Ferrellgas has delivered more propane than the customer has paid for or whether the customer has paid for more propane than what has been delivered. Revenue is recognized from these customer deposits or advances to customers at

14


 

the time product is delivered. The advance or deposit is considered to be a contract asset or liability. Additionally, from time to time, we have customers that pay in advance for goods or services, and such amounts result in contract liabilities.

Ferrellgas incurs incremental commissions directly related to the acquisition or renewal of customer contracts. The commissions are calculated and paid based upon the number of gallons sold to the acquired or renewed customer. The total amount of commissions that we incur is not material and the commissions are expensed commensurate with the deliveries to which they relate, thus Ferrellgas does not capitalize these costs.

The following table presents the opening and closing balances of our receivables, contract assets, and contract liabilities:

 

 

 

 

 

 

 

 

    

January 31, 2019

    

July 31, 2018

Accounts receivable

 

$

189,151