FGP » Topics » Financing Activities

These excerpts taken from the FGP 10-K filed Sep 29, 2008.
Financing Activities
 
During fiscal 2008, net cash used in financing activities was $38.8 million compared to net cash used in financing activities of $64.4 million for the prior year period. Cash inflows from the net utilization of long and short-term debt were $71.4 million higher in the current year period compared to the prior year period.
 
This increase was somewhat offset by $44.3 million from the issuance of common units in the prior year period that was not repeated during the current year period.
 
Distributions
 
Ferrellgas Partners paid a $0.50 per unit quarterly distribution on all common units, as well as the related general partner distributions, totaling $127.2 million during fiscal 2008 in connection with the distributions declared for the three months ended July 31, 2007, October 31, 2007, January 31, 2008 and April 30, 2008. The quarterly distribution on all common units and the related general partner distributions for the three months ended July 31, 2008 of $32.1 million were paid on September 12, 2008 to holders of record on September 5, 2008.
 
Credit facilities
 
During April 2008, the operating partnership executed an amendment to its unsecured credit facility due April 22, 2010, increasing its borrowing capacity by $73 million and bringing total borrowing capacity for all unsecured credit facilities to $598 million.
 
At July 31, 2008, $361.0 million of borrowings and $42.3 million of letters of credit were outstanding under our unsecured credit facilities. Of these borrowings, $95.0 million will mature on August 1, 2009 while the remaining $308.3 million of borrowings and letters of credit will mature on April 22, 2010. Letters of credit are currently used to cover obligations primarily relating to requirements for insurance coverage and, to a lesser extent, risk management activities and product purchases. At July 31, 2008, we had $194.7 million of available capacity for working capital, acquisition, capital expenditure and general partnership purposes under these unsecured credit facilities.
 
All borrowings under our unsecured credit facilities bear interest, at our option, at a rate equal to either:
 
  •  a base rate, which is defined as the higher of the federal funds rate plus 0.50% or Bank of America’s prime rate (as of July 31, 2008, the federal funds rate and Bank of America’s prime rate were 2.09% and 5.0%, respectively); or


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  •  the Eurodollar Rate plus a margin varying from 1.50% to 2.50% (as of July 31, 2008, the one-month and three-month Eurodollar Rates were 2.65% and 3.00%, respectively).
 
In addition, an annual commitment fee is payable on the daily unused portion of our unsecured credit facilities at a per annum rate varying from 0.375% to 0.500% (as of July 31, 2008, the commitment fee per annum rate was 0.375%).
 
Debt issuance and repayment
 
During August 2007, we made a scheduled principal payment of $90.0 million of the 8.78% Series B senior notes using proceeds from borrowings on the unsecured credit facility due 2010.
 
During August 2008, the operating partnership made scheduled principal payments of $52.0 million of the 7.12% Series C senior notes using proceeds from borrowings on the unsecured credit facility due 2010.
 
During August 2008, the operating partnership issued $200.0 million in aggregate principal amount of its 6.75% senior notes due 2014 at an offering price equal to 85% of par. The proceeds from this offering were used to reduce outstanding indebtedness under our unsecured credit facility.
 
We believe that the liquidity available from our unsecured credit facilities and the accounts receivable securitization facility will be sufficient to meet our working capital expenditures working capital, debt service and letter of credit requirements for fiscal 2009. See “Operating Activities” for discussion about our accounts receivable securitization facility. However, if we were to experience an unexpected significant increase in these requirements, our needs could exceed our immediately available resources. Events that could cause increases in these requirements include, but are not limited to the following:
 
  •  a significant increase in the wholesale cost of propane;
 
  •  a significant delay in the collections of accounts receivable;
 
  •  increased volatility in energy commodity prices related to risk management activities;
 
  •  increased liquidity requirements imposed by insurance providers;
 
  •  a significant downgrade in our credit rating leading to decreased trade credit; or
 
  •  a significant acquisition.
 
If one or more of these or other events caused a significant use of available funding, we may consider alternatives to provide increased liquidity and capital funding. No assurances can be given, however, that such alternatives would be available, or, if available, could be implemented.
 
The operating partnership
 
The financing activities discussed above also apply to the operating partnership except for cash flows related to distributions, as discussed below.
 
Distributions
 
The operating partnership paid cash distributions of $152.4 million during fiscal 2008. The operating partnership paid cash distributions of $32.1 million on September 12, 2008.


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Financing
Activities



 



During fiscal 2008, net cash used in financing activities was
$38.8 million compared to net cash used in financing
activities of $64.4 million for the prior year period. Cash
inflows from the net utilization of long and short-term debt
were $71.4 million higher in the current year period
compared to the prior year period.


 



This increase was somewhat offset by $44.3 million from the
issuance of common units in the prior year period that was not
repeated during the current year period.


 




Distributions


 



Ferrellgas Partners paid a $0.50 per unit quarterly distribution
on all common units, as well as the related general partner
distributions, totaling $127.2 million during fiscal 2008
in connection with the distributions declared for the three
months ended July 31, 2007, October 31, 2007,
January 31, 2008 and April 30, 2008. The quarterly
distribution on all common units and the related general partner
distributions for the three months ended July 31, 2008 of
$32.1 million were paid on September 12, 2008 to
holders of record on September 5, 2008.


 




Credit
facilities



 



During April 2008, the operating partnership executed an
amendment to its unsecured credit facility due April 22,
2010, increasing its borrowing capacity by $73 million and
bringing total borrowing capacity for all unsecured credit
facilities to $598 million.


 



At July 31, 2008, $361.0 million of borrowings and
$42.3 million of letters of credit were outstanding under
our unsecured credit facilities. Of these borrowings,
$95.0 million will mature on August 1, 2009 while the
remaining $308.3 million of borrowings and letters of
credit will mature on April 22, 2010. Letters of credit are
currently used to cover obligations primarily relating to
requirements for insurance coverage and, to a lesser extent,
risk management activities and product purchases. At
July 31, 2008, we had $194.7 million of available
capacity for working capital, acquisition, capital expenditure
and general partnership purposes under these unsecured credit
facilities.


 



All borrowings under our unsecured credit facilities bear
interest, at our option, at a rate equal to either:


 
















  • 

a base rate, which is defined as the higher of the federal funds
rate plus 0.50% or Bank of America’s prime rate (as of
July 31, 2008, the federal funds rate and Bank of
America’s prime rate were 2.09% and 5.0%,
respectively); or





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  • 

the Eurodollar Rate plus a margin varying from 1.50% to 2.50%
(as of July 31, 2008, the one-month and three-month
Eurodollar Rates were 2.65% and 3.00%, respectively).


 



In addition, an annual commitment fee is payable on the daily
unused portion of our unsecured credit facilities at a per annum
rate varying from 0.375% to 0.500% (as of July 31, 2008,
the commitment fee per annum rate was 0.375%).


 




Debt
issuance and repayment



 



During August 2007, we made a scheduled principal payment of
$90.0 million of the 8.78% Series B senior notes using
proceeds from borrowings on the unsecured credit facility due
2010.


 



During August 2008, the operating partnership made scheduled
principal payments of $52.0 million of the 7.12%
Series C senior notes using proceeds from borrowings on the
unsecured credit facility due 2010.


 



During August 2008, the operating partnership issued
$200.0 million in aggregate principal amount of its
6.75% senior notes due 2014 at an offering price equal to
85% of par. The proceeds from this offering were used to reduce
outstanding indebtedness under our unsecured credit facility.


 



We believe that the liquidity available from our unsecured
credit facilities and the accounts receivable securitization
facility will be sufficient to meet our working capital
expenditures working capital, debt service and letter of credit
requirements for fiscal 2009. See “Operating
Activities” for discussion about our accounts receivable
securitization facility. However, if we were to experience an
unexpected significant increase in these requirements, our needs
could exceed our immediately available resources. Events that
could cause increases in these requirements include, but are not
limited to the following:


 


































































  • 

a significant increase in the wholesale cost of propane;
 
  • 

a significant delay in the collections of accounts receivable;
 
  • 

increased volatility in energy commodity prices related to risk
management activities;
 
  • 

increased liquidity requirements imposed by insurance providers;
 
  • 

a significant downgrade in our credit rating leading to
decreased trade credit; or
 
  • 

a significant acquisition.


 



If one or more of these or other events caused a significant use
of available funding, we may consider alternatives to provide
increased liquidity and capital funding. No assurances can be
given, however, that such alternatives would be available, or,
if available, could be implemented.


 




The
operating partnership



 



The financing activities discussed above also apply to the
operating partnership except for cash flows related to
distributions, as discussed below.


 




Distributions


 



The operating partnership paid cash distributions of
$152.4 million during fiscal 2008. The operating
partnership paid cash distributions of $32.1 million on
September 12, 2008.





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This excerpt taken from the FGP 10-K filed Sep 28, 2007.
Financing Activities
 
During fiscal 2007, net cash used in financing activities was $64.4 million compared to net cash used in financing activities of $45.7 million for the prior year period. This increase in cash used in financing activities was


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primarily due to cash outflows related to net reductions of long-term debt and short-term borrowings which were partially offset by increased cash inflows from the issuance of common units.
 
Common unit issuance
 
During the first quarter of fiscal 2007, we received proceeds of $44.3 million, net of issuance costs, from the issuance of 1.9 million common units to Ferrell Companies pursuant to Ferrellgas Partners’ Direct Investment Plan and general partner contributions. We used the net proceeds to reduce borrowings on our unsecured back credit facility.
 
Distributions
 
We paid the minimum quarterly distributions on all common units, as well as general partner interests, totaling $127.1 million during fiscal 2007 in connection with the distributions declared for the three months ended July 31, 2006, October 31, 2006, January 31, 2007, and April 30, 2007. The minimum quarterly distribution on all common units and related general partner distributions for the three months ended July 31, 2007 of $31.8 million was paid on September 14, 2007 to holders of record on September 7, 2007.
 
On August 1, 2007, Ferrellgas made scheduled principal payments of $90.0 million of the 8.78% Series B Senior Notes using proceeds from borrowings on the unsecured bank credit facilities.
 
Bank credit facilities
 
During August 2006, we executed a Commitment Increase Agreement to our existing unsecured bank credit facility, which will mature April 22, 2010, unless extended or renewed, increasing the borrowing capacity from $365.0 million to $375.0 million.
 
During May 2007, we entered into a new unsecured bank credit facility with additional borrowing capacity of up to $150.0 million which will mature on August 1, 2009, unless extended or renewed.
 
At July 31, 2007, $177.8 million of borrowings and $50.2 million of letters of credit were outstanding under our unsecured bank credit facilities. Letters of credit are currently used to cover obligations primarily relating to requirements for insurance coverage and, to a lesser extent, risk management activities and product purchases. At July 31, 2007, we had $297.0 million available for working capital, acquisition, capital expenditure and general partnership purposes under our unsecured bank credit facilities.
 
All borrowings under our unsecured bank credit facilities bear interest, at our option, at a rate equal to either:
 
  •  a base rate, which is defined as the higher of the federal funds rate plus 0.50% or Bank of America’s prime rate (as of July 31, 2007, the federal funds rate and Bank of America’s prime rate were 5.28% and 8.25%, respectively); or
 
  •  the Eurodollar Rate plus a margin varying from 1.50% to 2.50% (as of July 31, 2007, the one-month and three-month Eurodollar Rate was 5.32% and 5.35%, respectively).
 
In addition, an annual commitment fee is payable on the daily unused portion of our unsecured bank credit facilities at a per annum rate varying from 0.375% to 0.500% (as of July 31, 2007, the commitment fee per annum rate was 0.375%).
 
We believe that the liquidity available from our unsecured bank credit facilities and our accounts receivable securitization facility will be sufficient to meet our future capital expenditures, working capital, debt service and letter of credit requirements for fiscal 2008 and 2009. See “Operating Activities” for discussion about our accounts receivable securitization facility. However, if we were to experience an unexpected significant increase in these requirements, our needs could exceed our immediately available resources. Events that could cause increases in these requirements include, but are not limited to the following:
 
  •  a significant increase in the wholesale cost of propane;
 
  •  a significant delay in the collections of accounts receivable;


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  •  increased volatility in energy commodity prices related to risk management activities;
 
  •  increased liquidity requirements imposed by insurance providers;
 
  •  a significant downgrade in our credit rating;
 
  •  decreased trade credit; or
 
  •  a significant acquisition.
 
If one or more of these or other events caused a significant use of available funding, we may consider alternatives to provide increased liquidity and capital funding. No assurances can be given, however, that such alternatives would be available, or, if available, could be implemented.
 
The operating partnership
 
The financing activities discussed above also apply to the operating partnership except for cash flows related to distributions and contributions received, as discussed below.
 
Distributions paid by the operating partnership
 
The operating partnership paid quarterly distributions totaling $152.1 million during fiscal 2007 to Ferrellgas Partners, L.P. and our general partner. On September 14, 2007, the operating partnership paid a cash distribution to Ferrellgas Partners and our general partner totaling $32.1 million.
 
Contributions received by the operating partnership
 
On August 29, 2006, the operating partnership received cash contributions of $45.6 million and $0.5 million from Ferrellgas Partners and the general partner, respectively, primarily in connection with the issuance by Ferrellgas Partners of 1.9 million common units to Ferrell Companies. These proceeds were used to retire a portion of the $58.0 million borrowed under the unsecured bank credit facility. The common units were issued pursuant to Ferrellgas Partners’ Direct Investment Plan.
 
This excerpt taken from the FGP 10-K filed Oct 12, 2006.
Financing Activities
 
During fiscal 2006, net cash used in financing activities was $45.7 million compared to net cash used in financing activities of $164.1 million for the prior year period. In fiscal 2005, we retired $109.0 million of fixed rate senior notes originally due August 1, 2005.
 
Distributions
 
We paid the minimum quarterly distributions on all common units, as well as general partner interests, totaling $122.2 million during fiscal 2006 in connection with the distributions declared for the three months ended July 31, 2005, October 31, 2005, January 31, 2006, and April 30, 2006. The minimum quarterly distribution on all common units and related general partner distributions for the three months ended July 31, 2006 of $31.7 million was paid on September 14, 2006 to holders of record on September 7, 2006.


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Table of Contents

August 2006 principal payment and common unit offering
 
During August 2006, we made scheduled principal payments of $37.0 million on our 7.08% senior notes and $21.0 million on our 8.68% senior notes using proceeds from borrowings on our unsecured credit facility. On August 29, 2006, we used $46.1 million primarily from the issuance of 1.9 million common units to Ferrell Companies to retire a portion of the $58 million borrowed under the unsecured bank credit facility. The common units were issued pursuant to Ferrellgas Partners’ Direct Investment Plan. See Note R — Subsequent event — for additional discussion about these transactions.
 
Bank credit facility
 
During August 2006, we executed a Commitment Increase Agreement to our existing unsecured bank credit facility, increasing the borrowing capacity from $365.0 million to $375.0 million. See Note R — Subsequent event — to our consolidated financial statements for further discussion.
 
At July 31, 2006, $98.1 million of borrowings and $48.9 million of letters of credit were outstanding under our unsecured bank credit facility, which will mature April 22, 2010, unless extended or renewed. Letters of credit are currently used to cover obligations primarily relating to requirements for insurance coverage and, to a lesser extent, risk management activities and product purchases. At July 31, 2006, we had $218.0 million available for working capital, acquisition, capital expenditure and general partnership purposes under our unsecured bank credit facility.
 
All borrowings under our unsecured bank credit facility bear interest, at our option, at a rate equal to either:
 
  •  a base rate, which is defined as the higher of the federal funds rate plus 0.50% or Bank of America’s prime rate (as of July 31, 2006, the federal funds rate and Bank of America’s prime rate were 5.31% and 8.25%, respectively); or
 
  •  the Eurodollar Rate plus a margin varying from 1.50% to 2.50% (as of July 31, 2006, the one-month and three-month Eurodollar Rate was 5.37% and 5.45%, respectively).
 
In addition, an annual commitment fee is payable on the daily unused portion of our unsecured bank credit facility at a per annum rate varying from 0.375% to 0.500% (as of July 31, 2006, the commitment fee per annum rate was 0.375%).
 
We believe that the liquidity available from our unsecured bank credit facility and our accounts receivable securitization facility will be sufficient to meet our future working capital needs for fiscal 2007 and 2008. See “Operating Activities” for discussion about our accounts receivable securitization facility. However, if we were to experience an unexpected significant increase in working capital requirements, our working capital needs could exceed our immediately available resources. Events that could cause increases in working capital borrowings or letter of credit requirements include, but are not limited to the following:
 
  •  a significant increase in the wholesale cost of propane;
 
  •  a significant delay in the collections of accounts receivable;
 
  •  increased volatility in energy commodity prices related to risk management activities;
 
  •  increased liquidity requirements imposed by insurance providers;
 
  •  a significant downgrade in our credit rating;
 
  •  decreased trade credit; or
 
  •  a significant acquisition.
 
If one or more of these or other events caused a significant use of available funding, we may consider alternatives to provide increased working capital funding. No assurances can be given, however, that such alternatives would be available, or, if available, could be implemented.


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Table of Contents

The operating partnership
 
The financing activities discussed above also apply to the operating partnership except for cash flows related to distributions and contributions received, as discussed below.
 
Distributions paid by the operating partnership
 
The operating partnership paid quarterly distributions totaling $147.4 million during fiscal 2006 to Ferrellgas Partners, L.P. and our general partner. On September 14, 2006, the operating partnership paid a cash distribution to Ferrellgas Partners and our general partner totaling $32.1 million.
 
Contributions received by the operating partnership
 
During December 2005, the operating partnership received cash contributions of $1.5 million and $16 thousand from Ferrellgas Partners and our general partner, respectively. The operating partnership used these contributions to reduce borrowings under its unsecured bank credit facility.
 
During August 2006, the operating partnership made scheduled principal payments of $37.0 million on its 7.08% senior notes and $21.0 million on its 8.68% senior notes using proceeds from borrowings on its unsecured credit facility. On August 29, 2006, the operating partnership received cash contributions of $45.6 million and $0.5 million from Ferrellgas Partners and the general partner, respectively, primarily in connection with the issuance by Ferrellgas Partners of 1.9 million common units to Ferrell Companies. These proceeds were used to retire a portion of the $58 million borrowed under the unsecured bank credit facility. The common units were issued pursuant to Ferrellgas Partners’ Direct Investment Plan. See Note Q — Subsequent event — for additional discussion about these transactions.
 
This excerpt taken from the FGP 10-Q filed Jun 8, 2006.
Financing Activities
 
During the nine months ended April 30, 2006, net cash used in financing activities was $57.9 million compared to net cash provided by financing activities of $0.6 million for the prior year period. This decrease in cash provided by financing activities was primarily due to decreased cash flows from the issuance of common units and decreased borrowings from our $330.0 million bank credit facility compared to borrowings in the prior year period.
 
Distributions
 
Ferrellgas Partners paid the minimum quarterly distribution on all common units, as well as the related general partner distributions, totaling $91.4 million during the nine months ended April 30, 2006 in connection with the distributions declared for the three months ended July 31 and October 31, 2005 and January 31, 2006. The minimum quarterly distribution on all common units and the related general partner distributions for the three months ended April 30, 2006 of $30.8 million are expected to be paid on June 14, 2006 to holders of record on June 7, 2006.
 
Bank credit facility
 
On June 6, 2006, we executed an addendum to the existing unsecured bank credit facility with Bank of America N.A. (the administrative agent) and Deutsche Bank Trust Company Americas to increase the borrowing capacity available under the unsecured bank credit facility from $330.0 million to $365.0 million.
 
At April 30, 2006, $54.4 million of borrowings and $54.5 million of letters of credit were outstanding under our unsecured bank credit facility, which will mature on April 22, 2010. Letters of credit are currently used to cover obligations primarily relating to requirements for insurance coverage and, to a lesser extent, risk management activities and product purchases. At April 30, 2006, we had $221.1 million available for working capital, acquisition, capital expenditure and general partnership purposes under our unsecured bank credit facility.
 
All borrowings under our unsecured bank credit facility bear interest, at our option, at a rate equal to either:
 
  •  a base rate, which is defined as the higher of the federal funds rate plus 0.50% or Bank of America’s prime rate (as of April 30, 2006, the federal funds rate and Bank of America’s prime rate were 4.86% and 7.75%, respectively); or
 
  •  the Eurodollar Rate plus a margin varying from 1.50% to 2.50% (as of April 30, 2006, the one-month and three-month Eurodollar Rates were 5.04% and 5.13%, respectively).
 
In addition, an annual commitment fee is payable on the daily unused portion of our unsecured bank credit facility at a per annum rate varying from 0.375% to 0.500% (as of April 30, 2006, the commitment fee per annum rate was 0.375%).
 
We believe that the liquidity available from our unsecured bank credit facility and the accounts receivable securitization facility will be sufficient to meet our future working capital needs for the remainder of fiscal 2006 and all of fiscal 2007. See “Operating Activities” for discussion about our accounts receivable securitization facility. However, if we were to experience an unexpected significant increase in working capital requirements, our working


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capital needs could exceed our immediately available resources. Events that could cause increases in working capital borrowings or letter of credit requirements include, but are not limited to the following:
 
  •  a significant increase in the wholesale cost of propane;
 
  •  a significant delay in the collections of accounts receivable;
 
  •  increased volatility in energy commodity prices related to risk management activities;
 
  •  increased liquidity requirements imposed by insurance providers;
 
  •  a significant downgrade in our credit rating;
 
  •  decreased trade credit; or
 
  •  a significant acquisition.
 
If one or more of these or other events caused a significant use of available funding, we may consider alternatives to provide increased working capital funding. No assurances can be given, however, that such alternatives would be available, or, if available, could be implemented.
 
The operating partnership
 
The financing activities discussed above also apply to the operating partnership except for cash flows related to distributions, as discussed below.
 
Distributions
 
The operating partnership paid cash distributions of $104.5 million during the nine months ended April 30, 2006. The operating partnership expects to make cash distributions of $42.9 million on June 14, 2006.
 
This excerpt taken from the FGP 10-Q filed Jun 8, 2005.

Financing Activities

 

During the nine months ended April 30, 2005, net cash provided by financing activities was $0.6 million compared to net cash provided by financing activities of $342.3 million for the prior fiscal year period. This decrease in cash provided by financing activities was primarily due to proceeds received during fiscal 2004 related to debt and equity issued primarily to finance the assumed Blue Rhino merger obligation related to the Blue Rhino contribution.

 

Various equity transactions and equity structure modifications

 

Our senior units are owned by an entity beneficially owned by our general partner’s Chairman, Chief Executive Officer and President, Mr. Ferrell. We pay the senior units a quarterly cash distribution equivalent to 10 percent per annum of the liquidating value, currently $1 per quarter. We can redeem the senior units at any time, in whole or in part, upon payment in cash of the liquidating value of the senior units, currently $40 per unit, plus the amount of any accrued and unpaid distributions. The holder of the senior units has the right, subject to various events and conditions, to convert any outstanding senior units into common units beginning on the earlier of December 31, 2005 or upon the occurrence of a material event as defined by our partnership agreement. The number of common units issuable upon conversion of a senior unit is equal to the senior unit liquidation value, divided by the then current market price of a common unit. Generally, a material event includes (1) a change of control; (2) the treatment of Ferrellgas Partners as an association taxable as a corporation for federal income tax purposes; Ferrellgas Partners’ failure to use the aggregate cash proceeds from equity issuances, other than issuances of equity pursuant to an exercise of any common unit options, to redeem a portion of its senior units other than up to $20.0 million of cash proceeds from equity issuances used to reduce Ferrellgas Partners’ indebtedness; or (3) Ferrellgas Partners’ failure to pay the senior unit distribution in full for any fiscal quarter. Such conversion rights are contingent upon us not previously redeeming such securities.

 

On March 7, 2005, Ferrellgas Partners amended its partnership agreement to reflect the extension of the existing agreement with Ferrell Companies involving the priority of quarterly distribution payments on common units held publicly. The existing provision in the partnership agreement, originally scheduled to expire December 31, 2005, was extended to April 30, 2010. This provision allows Ferrellgas Partners to defer distributions on the common units held by Ferrell Companies up to an aggregate outstanding amount of $36.0 million.

 

August Common Unit offering

 

During August 2004, we issued, in a public offering, 2.9 million common units at a price of $20.00 per unit, less commissions and underwriting expenses. After commissions and underwriting expenses, we received net proceeds of $54.9 million for the issuance of these common units. We used the net proceeds, together with contributions made by our general partner of $1.1 million to maintain its effective 2% general partnership interest in us, to reduce long-term borrowings outstanding under the bank credit facility of the operating partnership.

 

November Common Unit offering

 

During November 2004, we received net proceeds of $39.8 million pursuant to our issuance of 2.1 million common units in a private offering to a single unaffiliated purchaser. We used the net proceeds, together with contributions made by our general partner of $0.8 million to maintain its effective 2% general partner interest in us, to reduce borrowings outstanding under the bank credit facility of the operating partnership.

 

Distributions

 

Ferrellgas Partners paid the required quarterly distributions on the senior units and the minimum quarterly distribution on all common units, as well as the related general partner distributions, totaling $86.7 million during the nine months ended April 30, 2005 in connection with the distributions declared for

 

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the three months ended July 31, 2004, October 31, 2004, and January 31, 2005. The required quarterly distribution on the senior units, the minimum quarterly distribution on all common units and the related general partner distributions for the three months ended April 30, 2005 of $29.3 million are expected to be paid on June 14, 2005 to holders of record on June 3, 2005. See related disclosure about the distributions of senior units in “Disclosures about Effects of Transactions with Related Parties.”

 

Bank credit facility

 

On April 22, 2005 Ferrellgas refinanced its $307.5 million bank credit facility with a $330.0 million credit facility maturing April 22, 2010, unless extended or renewed. At April 30, 2005, $87.3 million of borrowings and $58.6 million of letters of credit were outstanding under our unsecured $330.0 million bank credit facility. Letters of credit are currently used to cover obligations primarily relating to requirements for insurance coverage and, and to a lesser extent, risk management activities and product purchases. At April 30, 2005, we had $184.1 million available for working capital, acquisition, capital expenditure and general partnership purposes under the $330.0 million bank credit facility.

 

All borrowings under our $330.0 million bank credit facility bear interest, at our option, at a rate equal to either:

 

         a base rate, which is defined as the higher of the federal funds rate plus 0.50% or Bank of America’s prime rate (as of April 30, 2005, the federal funds rate and Bank of America’s prime rate were 2.97% and 5.75%, respectively); or

         the Eurodollar Rate plus a margin varying from 1.50% to 2.50% (as of April 30, 2005, the one-month Eurodollar Rate was 3.02%).

 

In addition, an annual commitment fee is payable on the daily unused portion of our $330.0 million bank credit facility at a per annum rate varying from 0.375% to 0.500% (as of April 30, 2005, the commitment fee per annum rate was 0.375%).

 

We believe that the liquidity available from our $330.0 million bank credit facility and the accounts receivable securitization facility will be sufficient to meet our future working capital needs for the remainder of fiscal 2005 and all of fiscal 2006. See “Operating Activities” for discussion about our accounts receivable securitization facility. However, if we were to experience an unexpected significant increase in working capital requirements, our working capital needs could exceed our immediately available resources. Events that could cause increases in working capital borrowings or letter of credit requirements include, but are not limited to the following:

 

a significant increase in the wholesale cost of propane;

 

a significant delay in the collections of accounts receivable;

 

increased volatility in energy commodity prices related to risk management activities;

increased liquidity requirements imposed by insurance providers;

 

a significant downgrade in our credit rating;

 

decreased trade credit; or

 

a significant acquisition.

 

 

If one or more of these or other events caused a significant use of available funding, we may consider alternatives to provide increased working capital funding. No assurances can be given, however, that such alternatives would be available, or, if available, could be implemented.

 

The operating partnership

 

The financing activities discussed above also apply to the operating partnership except for cash flows related to distributions, as discussed below.

 

 

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Distributions

 

The operating partnership paid cash distributions of $99.4 million during the nine months ended April 30, 2005. The operating partnership expects to make cash distributions of $41.7 million on June 14, 2005.

 

Contributions received by the operating partnership

 

In August 2004, the operating partnership received cash contributions of $55.4 million and $0.6 million from its limited partner, Ferrellgas Partners, and its general partner, respectively, in connection with the issuance by Ferrellgas Partners of 2.9 million common units. The operating partnership used aggregate net proceeds from these contributions to reduce borrowings outstanding under its bank credit facility.

 

In November 2004, the operating partnership received cash contributions of $40.4 million and $0.4 million from Ferrellgas Partners and its general partner, respectively, in connection with the issuance by Ferrellgas Partners of 2.1 million common units. The operating partnership used aggregate net proceeds from these contributions to reduce borrowings outstanding under its bank credit facility.

 

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