Ferrellgas Partners L P : Quarterly report which provides a continuing view of a company's financial position

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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.

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FERRELLGAS PARTNERS, L.P.

FERRELLGAS PARTNERS FINANCE CORP.

FERRELLGAS, L.P.

FERRELLGAS FINANCE CORP.

TABLE OF CONTENTS

	PART I - FINANCIAL INFORMATION	Page
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
	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
ITEM 2.	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
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		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.

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FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except unit data)

(unaudited)

			For the three months		For the nine months ended
			ended April 30,		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.
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FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

		For the three months ended		For the nine months ended
			April 30,					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,
$	28,664	$	4,201		$	(14,566)	$ (35,826)
L.P.

See notes to condensed consolidated financial statements.

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