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Ferrellgas Partners L.P. Common Units Reports Operating Results (10-Q)

December 10, 2009 | About:
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Ferrellgas Partners L.P. Common Units (FGP) filed Quarterly Report for the period ended 2009-10-31.

FERRELLGAS PARTNERS, L.P. is engaged in the sale, distribution, marketing and trading of propane and other natural gas liquids. Ferrellgas Partners L.p. Common Units has a market cap of $1.5 billion; its shares were traded at around $21.65 with a P/E ratio of 28.9 and P/S ratio of 0.7. The dividend yield of Ferrellgas Partners L.p. Common Units stocks is 9.2%.

Highlight of Business Operations:

Other gas sales increased $7.6 million compared to the prior year period. This increase resulted primarily from a $22.0 million increase due to higher propane sales volumes partially offset by a $13.0 million decrease in sales price per gallon.

Operating income decreased $2.9 million compared to the prior year period primarily due to the $9.0 million decrease in gross margin from “Revenues: Other” and a $4.7 million increase in “General and administrative expense”, partially offset by the $8.4 million increase in “Gross margin - Propane and other gas liquids sales” as discussed above and a $1.6 million decrease in “Equipment lease expense.” “Revenues: Other” decreased primarily due to $7.4 million of miscellaneous fees billed to customers in the prior year period that were not repeated during the current year period. “General and administrative expense” increased primarily due to a $2.8 million non-cash stock option issuance expense allocated from Ferrell Companies. “Equipment lease expense” decreased primarily due to a $1.0 million decrease in computer related lease expense.

Interest expense decreased $1.0 million primarily due to a $1.4 million reduction in expense due to decreased borrowings on our unsecured credit facility and a $0.9 million decrease in interest rates on borrowings on our unsecured credit facility. These decreases were partially offset by $1.4 million increase due to the issuance of new senior debt at higher interest rates than the retired senior debt.

Interest expense decreased $1.0 million primarily due to a $1.4 million reduction in expense due to decreased borrowings on our unsecured credit facility and a $0.9 million decrease in interest rates on

During October 2009, we prepaid the outstanding principal amount on our $82.0 million 7.24% series D notes due August 1, 2010 and our $70.0 million 7.42% series E notes due August 1, 2013, and the related prepayment premiums of $17.3 million.

During fiscal 2010, we completed a $300.0 million debt offering, made scheduled principal payments of $73.0 million on the series C senior notes, prepaid the outstanding principal amount of $152.0 million of our series D and E notes and entered into a new secured Credit Agreement (“secured credit facility”). The secured credit facility replaces our existing unsecured credit facility and provides for a $400.0 million revolving credit facility with the entire amount available for loans and with a sublimit of $200.0 million for letters of credit. Additionally, we issued $20.0 million of common units for which the proceeds were used to reduce borrowings on our unsecured credit facility. With these financings and the application of the proceeds, we have addressed all of our significant outstanding debt maturities through 2011 and increased our liquidity to finance ongoing business strategies.

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