FERRELLGAS PARTNERS, L.P. References and Defined Terms
In this Item 2 of this Quarterly Report on Form 10-Q, unless the context indicates otherwise:
"us," "we," "our," "ours," "consolidated," or "Ferrellgas" are references to
? including
Units," in which case these terms refer to
its consolidated subsidiaries;
? "
consolidated subsidiaries;
the "operating partnership" refers to
? the context indicates otherwise) with its consolidated subsidiaries, including
? our "general partner" refers to
? "Ferrell Companies" refers to
our general partner;
? "Board of Directors" or "Board" refers to the board of directors of our general
partner;
? "GAAP" refers to accounting principles generally accepted in
"retail sales" refers to Propane and other gas liquid sales: Retail - Sales to
? End Users or the volume of propane sold primarily to our residential,
industrial/commercial and agricultural customers;
"wholesale sales" refers to Propane and other gas liquid sales: Wholesale -
? Sales to Resellers or the volume of propane sold primarily to our portable tank
exchange customers and bulk propane sold to wholesale customers;
"other gas sales" refers to Propane and other gas liquid sales: Other Gas Sales
? or the volume of bulk propane sold to other third-party propane distributors or
marketers and the volume of refined fuel sold;
? "propane sales volume" refers to the volume of propane sold to our retail sales
and wholesale sales customers;
"Class A Units" refers to the Class A Units of
? which was issued for every twenty of
common units in a 1-for-20 reverse unit split effected on
? "Class
? "Preferred Units" refers to the Senior Preferred Units of the operating
partnership;
"Unitholders" or "unitholders" refers to holders of Class A Units, holders of
? Class
requires for each such reference; and
? references to any fiscal year are to the fiscal year ended or ending on
of the applicable year.
Also, the following terms are defined in this Item 2 of this Quarterly Report on Form 10-Q:
? Amended Ferrellgas Partners LPA
? Credit Agreement
? Credit Facility
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? Effective Date
? Ferrellgas Partners Notes
? OpCo LPA Amendment
Cautionary Note Regarding Forward-looking Statements
Statements included in this report include forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. These statements often use words such as "anticipate," "believe," "intend," "plan," "projection," "forecast," "strategy," "position," "continue," "estimate," "expect," "may," "will," or the negative of those terms or other variations of them or comparable terminology. These statements often discuss plans, strategies, events or developments that we expect or anticipate will or may occur in the future and are based upon the beliefs and assumptions of our management and on the information currently available to them. In particular, statements, express or implied, concerning our future operating results or financial position or our ability to generate sales, income or cash flow are forward-looking statements.
Forward-looking statements are not guarantees of performance. You should not put undue reliance on any forward-looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially from those expressed in or implied by these forward-looking statements. Many of the factors that will affect our future results are beyond our ability to control or predict. Some of the risk factors that may affect our business, financial condition or results of operations include:
? the effect of weather conditions on the demand for propane;
? the prices of wholesale propane, motor fuel and crude oil;
? disruptions to the supply of propane;
? competition from other industry participants and other energy sources;
? energy efficiency and technology advances;
? adverse changes in our relationships with our national tank exchange customers;
? significant delays in the collection of accounts or notes receivable;
? customer, counterparty, supplier or vendor defaults;
? changes in demand for, and production of, hydrocarbon products;
? disruptions to railroad operations on the railroads we use;
? increased trucking and rail regulations;
? inherent operating and litigation risks in gathering, transporting, handling
and storing propane;
? our inability to complete acquisitions or to successfully integrate acquired
operations;
? costs of complying with, or liabilities imposed under, environmental, health
and safety laws;
? the impact of pending and future legal proceedings;
? the interruption, disruption, failure or malfunction of our information
technology systems including due to cyber-attack;
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? the impact of changes in tax law that could adversely affect the tax treatment
of
? economic and political instability, particularly in areas of the world tied to
the energy industry;
? disruptions in the capital and credit markets; and
? access to available capital to meet our operating and debt-service
requirements.
When considering any forward-looking statement, you should also keep in mind the
risk factors set forth in "Item 1A. Risk Factors" of our Annual Report on
Form 10-K for fiscal 2021 and in any more recent filings with the
Except for our ongoing obligations to disclose material information as required by federal securities laws, we undertake no obligation to update any forward-looking statements or risk factors after the date of this Quarterly Report on Form 10-Q.
Overview
Our management's discussion and analysis of financial condition and results of
operations relates to
Our Class A Units of
Our general partner performs all management functions for us. The parent of our
general partner,
The operating partnership was formed on
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We file annual, quarterly, and current reports and other information with the
The following is a discussion of our historical financial condition and results of operations and should be read in conjunction with our audited historical consolidated financial statements and accompanying Notes thereto included in our Annual Report on Form 10-K for fiscal 2021 and in our unaudited historical condensed consolidated financial statements and accompanying Notes thereto included elsewhere in this Quarterly Report on Form 10-Q.
The discussions set forth in the "Results of Operations" and "Liquidity and
Capital Resources" sections generally refer to
operating partnership, pursuant to which the operating partnership extended to
principal amount of
20% per annum, and all interest on the term loan will be added to the
? outstanding principal amount of the term loan. The term loan will mature on
of
and accrued interest at
2021, the operating partnership had additional intercompany receivables from
Recent developments COVID-19
The coronavirus disease 2019 (COVID-19), which has been declared by the
How We Evaluate Our Operations
We evaluate our overall business performance based primarily on a metric we
refer to as "Adjusted EBITDA", which is not defined by GAAP and should not be
considered an alternative to earnings measures defined by GAAP. We do not
utilize depreciation, depletion and amortization expense in our key measures
because we focus our performance management on cash flow generation and our
revenue generating assets have long useful lives. For the definition of Adjusted
EBITDA and a reconciliation of Adjusted EBITDA to net loss attributable to
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Based on our propane sales volumes in fiscal 2021, we believe that we are the
second largest retail marketer of propane in
We use information on temperatures to understand how our results of operations
are affected by temperatures that are warmer or colder than normal. Normal
temperatures computed by us are the average of the last 10 years of information
published by the
Weather conditions have a significant impact on demand for propane for heating
purposes primarily during the months of November through March (the "winter
heating season"). Accordingly, the volume of propane used by our customers for
this purpose is directly affected by the severity of the winter weather in the
regions we serve and can vary substantially from year to year. In any given
region, sustained warmer-than-normal temperatures will tend to result in reduced
propane usage, while sustained colder-than-normal temperatures will tend to
result in greater usage. Although there is a strong correlation between weather
and customer usage, general economic conditions in
We employ risk management activities that attempt to mitigate price risks related to the purchase, storage, transport and sale of propane generally in the contract and spot markets from major domestic energy companies. We attempt to mitigate these price risks through the use of financial derivative instruments and forward propane purchase and sales contracts. We enter into propane sales commitments with a portion of our customers that provide for a contracted price agreement for a specified period of time. These commitments can expose us to product price risk if not immediately hedged with an offsetting propane purchase commitment.
Our open financial derivative propane purchase commitments are designated as
hedges primarily for fiscal 2022 and 2023 sales commitments and, as of
Summary Discussion of Results of Operations:
Executive Overview
For the three months ended
During the three months ended
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"Interest expense" for
Distributable cash flow attributable to equity investors increased to
Distributable cash flow excess increased to
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