Ferrellgas Partners, L.P. Reports Results for Second

OVERLAND PARK, Kan., March 10, 2016 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (NYSE:FGP) today announced Adjusted EBITDA of $138.3 million for the second quarter of fiscal 2016 ended January 31, 2016, an increase from $136.9 million in the prior year period.

President and Chief Executive Officer Stephen L. Wambold commented, “Despite this being one of the warmest winters on record, our ongoing midstream diversification efforts allowed us to deliver a year-over-year increase in Adjusted EBITDA. Bridger continues to exceed our expectations and we are carefully controlling costs to help offset the challenging operating environment for our Propane and related equipment sales segment.”

Mr. Wambold continued, “Looking ahead to the second half of our fiscal year, we will maintain focus on operations and strategic execution. Additionally, we will continue to consider value-enhancing organic and external growth initiatives to mitigate the impact of continued warm weather and capitalize on opportunities created by low crude oil prices. We have ample financial flexibility to drive growth without accessing the capital markets, and we are confident that we have the pieces in place to create significant value for all Ferrellgas unitholders.”

Continued strong expense controls in the Propane and related equipment sales segment helped offset the impact of elevated temperatures, which were 19% warmer than normal and 16% warmer than the prior year period.

Adjusted EBITDA from the Midstream - Crude Oil Logistics segment was $28.7 million during the second fiscal quarter, which exceeded management’s expectations. These results reflect the strength of Bridger’s customer relationships amid sustained volatility in commodity pricing, and management’s ability to carefully control expenses and drive efficiencies.

Operating expense for the second fiscal quarter increased to $116.5 million from $107.1 million in the prior year period, due to incremental operating expenses from Bridger and non-cash items related to the changes in fair value of fuel derivatives and contingent consideration in the current year and prior year, respectively.

Interest expense totaled $34.7 million for the second fiscal quarter, compared to $24.4 million a year ago, largely due to $500 million of notes issued in connection with the Bridger acquisition in June 2015.

Net earnings for the quarter was $57.8 million, or $0.58 per common unit, compared to net earnings of $86.4 million, or $1.02 per common unit, in the prior year quarter. The decrease in net earnings is due in part to the increase in interest expense discussed above and warm weather, as well as depreciation and amortization expenses related primarily to the Bridger transaction.

Ferrellgas also today announced that, due to sustained warmer temperatures and the current commodity price environment, it is revising its previously announced estimates for full-year fiscal 2016 Adjusted EBITDA to a range of $360 million to $375 million. Based on the midpoint of the Company’s fiscal 2016 estimates for Adjusted EBITDA, Ferrellgas expects its DCF coverage ratio to increase to above 1.0 by the end of the fiscal year.

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, 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, 2015, in the Form 10-Q of Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P., and Ferrellgas Finance Corp. for the quarters ended October 31, 2015 and January 31, 2016 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 BALANCE SHEETS
(in thousands, except unit data)
(unaudited)





ASSETS	January 31, 2016			July 31, 2015

Current Assets:
Cash and cash equivalents	$	11,754		$	7,652
Accounts and notes receivable, net (including $190,063 and 123,791 of
accounts receivable pledged as collateral at January 31, 2016
and July 31, 2015, respectively)		264,382			196,918
Inventories		92,488			96,754
Prepaid expenses and other current assets		57,134			64,285
Total Current Assets		425,758			365,609

Property, plant and equipment, net		966,995			965,217
Goodwill		445,659			478,747
Intangible assets, net		564,964			580,043
Other assets, net		74,985			74,440
Assets held for sale		3,120			-
Total Assets	$	2,481,481		$	2,464,056


Loss on disposal of assets and other

Current Liabilities:
Accounts payable	$	136,100		$	83,974
Short-term borrowings		86,200			75,319
Collateralized note payable		119,000			70,000
Other current liabilities		150,934			180,687
Total Current Liabilities		492,234			409,980

Long-term debt (a)		1,894,790			1,804,392
Other liabilities		40,335			41,975
Contingencies and commitments

Partners' Capital:
Common unitholders (98,002,665 and 100,376,789 units outstanding at
January 31, 2016 and July 31, 2015)		143,655			299,730
General partner unitholder (989,926 and 1,013,907 units outstanding at
January 31, 2016 and July 31, 2015)		(58,619	)		(57,042	)
Accumulated other comprehensive loss		(33,317	)		(38,934	)
Total Ferrellgas Partners, L.P. Partners' Capital		51,719			203,754
Noncontrolling Interest		2,403			3,955
Total Partners' Capital		54,122			207,709
Total Liabilities and Partners' Capital	$	2,481,481		$	2,464,056



(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.

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE, SIX AND TWELVE MONTHS ENDED JANUARY 31, 2016 AND 2015
(in thousands, except per unit data)
(unaudited)

	Three months ended						Six months ended						Twelve months ended
	January 31						January 31						January 31
		2016			2015			2016			2015			2016			2015
Revenues:
Propane and other gas liquids sales	$	376,856		$	560,867		$	622,157		$	955,228		$	1,323,945		$	1,930,902
Midstream operations		188,333			7,153			382,003			15,069			474,123			22,504
Other		84,049			97,953			116,224			139,031			237,378			277,069
Total revenues		649,238			665,973			1,120,384			1,109,328			2,035,446			2,230,475

Cost of product sold:
Propane and other gas liquids sales		174,829			330,692			296,580			595,506			678,298			1,241,634
Midstream operations		148,443			2,219			302,047			4,187			374,450			6,157
Other		55,774			68,071			70,222			89,963			150,956			184,090

Gross profit		270,192			264,991			451,535			419,672			831,742			798,594

Operating expense		116,463			107,147			231,444			210,030			453,696			436,514
Depreciation and amortization expense		37,367			23,943			74,346			47,252			125,673			90,596
General and administrative expense		12,062			10,621			24,302			21,449			59,284			44,556
Equipment lease expense		7,278			5,795			14,310			11,327			27,256			20,732
Non-cash employee stock ownership plan compensation charge		3,141			3,788			8,397			8,162			24,948			23,272
Non-cash stock-based compensation charge (a)		(2,456	)		318			5,666			16,430			15,218			30,588
Goodwill impairment charge		-			-			29,316			-			29,316			-
Loss on disposal of assets and other		2,524			1,414			17,441			2,375			22,165			7,167

Operating income		93,813			111,965			46,313			102,647			74,186			145,169

Interest expense		(34,730	)		(24,375	)		(68,518	)		(48,287	)		(120,627	)		(90,606	)
Other expense, net		(298	)		(178	)		(420	)		(627	)		(143	)		(1,379	)

Earnings (loss) before income taxes		58,785			87,412			(22,625	)		53,733			(46,584	)		53,184

Income tax expense (benefit)		1,030			1,041			186			531			(660	)		2,333

Net earnings (loss)		57,755			86,371			(22,811	)		53,202			(45,924	)		50,851

Net earnings (loss) attributable to noncontrolling interest (b)		628			913			(145	)		619			(295	)		678

Net earnings (loss) attributable to Ferrellgas Partners, L.P.		57,127			85,458			(22,666	)		52,583			(45,629	)		50,173

Less: General partner's interest in net earnings (loss)		571			11,955			(227	)		526			(456	)		502

Common unitholders' interest in net earnings (loss)	$	56,556		$	73,503		$	(22,439	)	$	52,057		$	(45,173	)	$	49,671

Earnings (loss) Per Unit
Basic and diluted net earnings (loss) per common unitholders' interest	$	0.58		$	0.89		$	(0.23	)	$	0.63		$	(0.48	)	$	0.61
Dilutive effect of two-class method (b)		-			0.13			-			-			-			-
Adjusted net earnings (loss) per unit available to common unitholders	$	0.58		$	1.02		$	(0.23	)	$	0.63		$	(0.48	)	$	0.61

Weighted average common units outstanding		98,334.4			82,716.9			99,355.6			82,448.3			93,169.4			81,337.7


Supplemental Data and Reconciliation of Non-GAAP Items:

	Three months ended						Six months ended						Twelve months ended
	January 31						January 31						January 31
		2016			2015			2016			2015			2016			2015


Net earnings (loss) attributable to Ferrellgas Partners, L.P.	$	57,127		$	85,458		$	(22,666	)	$	52,583		$	(45,629	)	$	50,173
Income tax expense (benefit)		1,030			1,041			186			531			(660	)		2,333
Interest expense		34,730			24,375			68,518			48,287			120,627			90,606
Depreciation and amortization expense		37,367			23,943			74,346			47,252			125,673			90,596
EBITDA		130,254			134,817			120,384			148,653			200,011			233,708
Non-cash employee stock ownership plan compensation charge		3,141			3,788			8,397			8,162			24,948			23,272
Non-cash stock based compensation charge (a)		(2,456	)		318			5,666			16,430			15,218			30,588
Goodwill impairment charge		-			-			29,316			-			29,316			-
Loss on disposal of assets and other		2,524			1,414			17,441			2,375			22,165			7,167
Other expense, net		298			178			420			627			143			1,379
Change in fair value of contingent consideration (included in operating expense)		-			(4,500	)		(100	)		(6,300	)		(100	)		(1,300	)
Severance costs ($805 included in operating costs and $51 included in general and administrative costs)		-			-			856			-			856			-
Litigation accrual and related legal fees associated with a
class action lawsuit (included in general and administrative expense)		-			-			-			723			83			1,147
Unrealized (non-cash) losses on changes in fair value of derivatives		3,870			-			4,908			-			7,320			-
Acquisition and transition expenses (included in general and administrative expense)		70			-			85			-			16,458			-
Net earnings (loss) attributable to noncontrolling interest (b)		628			913			(145	)		619			(295	)		678
Adjusted EBITDA (c)		138,329			136,928			187,228			171,289			316,123			296,639
Net cash interest expense (d)		(33,905	)		(23,287	)		(66,407	)		(46,177	)		(116,380	)		(88,297	)
Maintenance capital expenditures (e)		(3,214	)		(4,624	)		(9,429	)		(9,712	)		(19,329	)		(18,802	)
Cash paid for taxes		(5	)		(6	)		(5	)		(266	)		(451	)		(904	)
Proceeds from asset sales		1,863			1,312			2,876			2,729			6,052			4,771
Distributable cash flow to equity investors (f)		103,068			110,323			114,263			117,863			186,015			193,407
Distributable cash flow attributable to general partner and non-controlling interest		2,061			2,206			2,285			2,357			3,720			3,868
Distributable cash flow attributable to common unitholders		101,007			108,117			111,978			115,506			182,295			189,539
Less: Distributions paid to common unitholders		50,223			41,359			101,666			82,715			184,384			162,922
Distributable cash flow excess/(shortage)	$	50,784		$	66,758		$	10,312		$	32,791		$	(2,089	)	$	26,617

Propane gallons sales
Retail - Sales to End Users		189,460			215,996			300,433			340,143			569,071			619,320
Wholesale - Sales to Resellers		60,781			81,310			111,347			143,245			238,167			276,756
Total propane gallons sales		250,241			297,306			411,780			483,388			807,238			896,076

Salt water volume - Midstream operations (barrels processed)		4,222			4,722			8,956			8,719			17,272			11,219
Crude oil hauled - Midstream operations (barrels)		24,345						48,609						59,056
Crude oil sold - Midstream operations (barrels)		1,593						3,103						3,599

(a) Non-cash stock-based compensation charges consist of the following:

	Three months ended						Six months ended						Twelve months ended
	January 31						January 31						January 31
		2016			2015			2016			2015			2016			2015
Operating expense	$	(466	)	$	67		$	752		$	3,612		$	2,315		$	6,610
General and administrative expense		(1,990	)		251			4,914			12,818			12,903			23,978
Total	$	(2,456	)	$	318		$	5,666		$	16,430		$	15,218		$	30,588


(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 (benefit), interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, non-cash stock-based compensation charge, goodwill impairment charge, loss on disposal of assets, other 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 on changes in fair value of derivatives, acquisition and transition expenses and net earnings (loss) attributable to noncontrolling interest. Management believes the presentation of this measure on changes in fair value of derivatives, acquisition and transition expenses and net earnings (loss) attributable to noncontrolling interest. Management believes the presentation of this measure on changes in fair value of derivatives, acquisition and transition expenses and net earnings (loss) attributable to noncontrolling interest. Management believes the presentation of this measure is relevant and useful, because it allows investors to view the partnership's performance in a manner similar to the method management uses, adjusted for items management believes makes it easier to compare its results with other companies that have different financing and capital structures. This method of calculating Adjusted EBITDA may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.
(d) Net cash interest expense is the sum of interest expense less non-cash interest expense and other 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.

The following table includes a reconciliation of forecasted net earnings attributable to Ferrellgas Partners, L.P. to forecasted Adjusted EBITDA for the fiscal year ending July 31, 2016.

																Forecast
																Fiscal Year
																Ending
																July 31,
																	2016
Net earnings attributable to Ferrellgas Partners, L.P. (estimate) (g)																	(12,500	)
Interest expense (estimate)																	135,000
Income tax expense (estimate)																	1,000
Depreciation and amortization expense (estimate)																	150,000
Non-cash employee stock ownership plan compensation charge (estimate)																	26,000
Non-cash stock based compensation charge (estimate)																	18,000
Loss on disposal of assets (estimate)																	19,900
Change in fair value of contingent consideration (included in operating expense)																	(100	)
Severance costs																	900
Goodwill impairment charge																	29,300
Adjusted EBITDA (h)																	367,500

(g) Represents estimated net earnings attributable to Ferrellgas Partners, L.P. after adjusting for change in fair value of gains and losses on commodity and interest rate derivative instruments not associated with current-period transactions. It is impracticable to determine actual gains and losses on these instruments not associated with current-period transactions that will be reported in GAAP net income as such gains and losses will depend upon future changes in commodity prices and interest rates which cannot be forecasted.

(h) Represents the midpoint of Adjusted EBITDA guidance range for fiscal 2016.

Ferrellgas Partners, L.P. Reports Results for Second Quarter Fiscal 2016

Year-Over-Year Increase in Adjusted EBITDA Reflects Successful Execution of Diversification Strategy

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