<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: November 10, 1994
Date of Earliest Event Report: November 1, 1994
FERRELLGAS PARTNERS, L.P.
FERRELLGAS, L.P.
FERRELLGAS FINANCIAL CORP.
- - -------------------------------------------------------------------------------
(Exact name of registrants as specified in their charters)
DELAWARE
- - -------------------------------------------------------------------------------
(State or other jurisdictions of incorporation or organization)
1-11331 43-1675728
33-53379 43-1676206
33-53379 43-1677595
- - ------------------------- ------------------------------------
(Commission File Numbers) (I.R.S. Employer Identification Nos.)
One Liberty Plaza, Liberty, Missouri 64068
- - --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(816) 792-1600
- - --------------------------------------------------------------------------------
(Registrants' telephone number, including area code)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
The consolidated financial statements of Vision Energy Resources, Inc. as
of December 31, 1993 and for the fiscal year ended December 31, 1993 (audited),
together with the report of Coopers & Lybrand LLP with respect thereto, and as
of July 31, 1994 and for the seven month period ended July 31, 1994 (unaudited),
are filed as Exhibit 99.2 to this Current Report.
(b) Pro forma financial information.
The unaudited pro forma consolidated financial statements of Ferrellgas
Partners, L.P. and Vision Energy Resources, Inc. as of July 31, 1994 and for
the fiscal year ended July 31, 1994 are filed as Exhibit 99.3 to this Current
Report.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FERRELLGAS PARTNERS, L.P.
By: FERRELLGAS, INC.
By /s/ DANLEY K. SHELDON
-------------------------------
Danley K. Sheldon
Senior Vice President and
Chief Financial Officer
Date: December 1, 1994
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FERRELLGAS, L.P.
BY: FERRELLGAS, INC.
BY: /S/ DANLEY K. SHELDON
------------------------------------
Danley K. Sheldon
Senior Vice President
Chief Financial Officer
DATE: December 1, 1994
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FERRELLGAS FINANCE CORP.
BY /S/ DANLEY K. SHELDON
----------------------------------
Danley K. Sheldon
Senior Vice President and
Chief Financial Officer
DATE: December 1, 1994
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.*
- - ----------- -------------------------- ----------
<S> <C> <C>
99.2 Consolidated financial statements of Vision 7
Energy Resources, Inc. as of December 31,
1994 and for the fiscal year ended December
31, 1993 (audited), together with the report of
Coopers & Lybrand LLP with respect thereto,
and as of July 31, 1994 and for the seven
month period ended July 31, 1994 (unaudited)
99.3 Pro forma consolidated financial statements of 19
Ferrellgas Partners, L.P. and Vision Energy
Resources, Inc. as of July 31, 1994 and for
the fiscal year ended July 31, 1994
(unaudited)
</TABLE>
- - ----------
*This information appears only in the manually signed original of this Current
Report on Form 8-K.
6
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholder and Board of
Directors of Vision Energy Resources, Inc.:
We have audited the accompanying consolidated balance sheet of Vision Energy
Resources, Inc. and Subsidiaries (the "Company"), as of December 31, 1993, and
the related consolidated statement of operations and accumulated deficit and
the consolidated statement of cash flows for the year then ended. These
financial statements are the responsibility of the management of the Company.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the Company as of
December 31, 1993, and the consolidated results of their operations and their
cash flows for the year then ended, in conformity with generally accepted
accounting principles.
As discussed in Note 5 to the financial statements, the Company changed its
method of accounting for income taxes in 1993.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
October 31, 1994
1
<PAGE>
VISION ENERGY RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1993
<TABLE>
<CAPTION>
ASSETS
------
<S> <C>
Current assets:
Accounts receivable, net of allowance for doubtful accounts of
$300,000...................................................... $ 7,853,000
Inventories.................................................... 7,255,000
Current deferred income taxes.................................. 654,000
Prepaid expenses and other current assets...................... 440,000
------------
Total current assets......................................... 16,202,000
Property, plant and equipment, net of accumulated depreciation... 29,099,000
Goodwill......................................................... 22,062,000
Other assets..................................................... 1,397,000
------------
Total assets................................................. $ 68,760,000
============
LIABILITIES AND SHAREHOLDER'S EQUITY
------------------------------------
Current liabilities:
Cash overdraft................................................. $ 577,000
Accounts payable and accrued expenses.......................... 6,661,000
Accrued payroll and related expenses........................... 849,000
Deferred revenue............................................... 2,517,000
Income taxes currently payable................................. 913,000
Due to affiliate............................................... 4,711,000
Note payable................................................... 400,000
------------
Total current liabilities.................................... 16,628,000
Deferred income taxes............................................ 1,041,000
Other liabilities................................................ 3,740,000
------------
Total Liabilities............................................ 21,409,000
Commitments and contingent liabilities
Shareholder's equity:
Common Stock, $1 par value; 1,000 shares authorized, 100 shares
issued and outstanding and additional paid-in capital......... 67,092,000
Accumulated deficit............................................ (19,741,000)
------------
Total shareholder's equity................................... 47,351,000
------------
Total liabilities and shareholder's equity................... $ 68,760,000
============
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
2
<PAGE>
VISION ENERGY RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<S> <C>
Product sales revenues............................................ $ 71,762,000
Cost and expenses:
Cost of product................................................. 46,766,000
Operating expenses.............................................. 16,402,000
General and administrative expenses............................. 5,829,000
Depreciation and amortization................................... 7,239,000
Provision for environmental remediation......................... 2,950,000
------------
79,186,000
------------
Operating loss................................................ (7,424,000)
------------
Other income (expense):
Interest and other income, net.................................. 637,000
Interest expense................................................ (199,000)
------------
Loss from operations before income taxes...................... (6,986,000)
Income tax benefit................................................ 2,256,000
------------
Net loss...................................................... (4,730,000)
Accumulated deficit, beginning of year............................ (15,011,000)
------------
Accumulated deficit, end of year.................................. $(19,741,000)
============
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
3
<PAGE>
VISION ENERGY RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss........................................................ $(4,730,000)
Non-cash items included in loss from operations:
Depreciation and amortization................................. 7,239,000
Change in deferred taxes...................................... (2,130,000)
Provision for environmental clean-up.......................... 2,950,000
Provision for doubtful accounts............................... 263,000
Gain on sale of fixed assets.................................. (137,000)
Provision for inventory obsolescence.......................... 150,000
Changes in assets and liabilities:
Increase in accounts receivable............................... (557,000)
Increase in inventories....................................... (2,580,000)
Decrease in prepaid expenses and other current assets......... 9,000
Increase in accounts payable and accrued expenses............. 4,882,000
Decrease in accrued payroll and related expenses.............. (115,000)
Increase in deferred revenue.................................. 437,000
Increase in income taxes currently payable.................... 812,000
-----------
10,822,000
-----------
Net cash provided by operating activities................... 6,493,000
-----------
Cash flows from investing activities:
Proceeds from disposal of property, plant and equipment......... 678,000
Payments for capital expenditures............................... (2,757,000)
-----------
Net cash used by investing activities....................... (2,079,000)
-----------
Cash flows from financing activities:
Repayment of borrowing from affiliate........................... (2,651,000)
Cash overdraft.................................................. (1,727,000)
Other........................................................... (36,000)
-----------
Net cash used by financing activities....................... (4,414,000)
-----------
Net decrease in cash and cash equivalents................... --
Cash and cash equivalents at beginning of year.................... --
-----------
Cash and cash equivalents at end of year.......................... --
===========
Supplement disclosure of cash flow information:
Cash paid (received) during the year for interest and income
taxes:
Interest...................................................... $ 17,000
Income taxes.................................................. (452,000)
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
4
<PAGE>
VISION ENERGY RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Consolidation:
The consolidated financial statements include the accounts of Vision Energy
Resources, Inc. and its wholly owned subsidiaries (the "Company"). The Company,
an indirectly wholly owned subsidiary of Bell Atlantic Corporation (Bell
Atlantic), maintains its accounts in accordance with generally accepted
accounting principles. All significant intercompany balances and transactions
have been eliminated.
Inventory:
Inventories are stated at the lower of cost or market. Cost is determined by
the first-in, first-out method.
Property, Plant and Equipment:
Property, plant and equipment are stated at cost. The provision for
depreciation is based principally on the straight-line method by using the
following estimated remaining service lives: buildings and improvements, 20 to
40 years; petroleum gas equipment, 9 years; office equipment and furniture, 5
to 13 years; and transportation equipment, 4 to 6 years. Gain or loss on sale
of property, plant and equipment is reflected currently in operating results.
Goodwill:
Goodwill, which includes the excess of the purchase price over the value of
identifiable net assets of acquired companies at the date of their acquisition,
is being amortized on a straight-line basis over a forty-year period. Goodwill
amortization for the year ended December 31, 1993 was $630,000.
Other Assets:
Other assets consist primarily of covenants not to compete and deferred
organizational expenses, which are being amortized over 60 months. Amortization
of other assets for the year ended December 31, 1993 was $863,000.
Deferred Revenue:
The Company enters into arrangements to provide customers with specified
quantities of product at specified prices. Cash received in advance of product
delivery is recorded as deferred revenue and sales revenues are recorded as
product is delivered.
5
<PAGE>
VISION ENERGY RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Income Taxes:
The Company is included in Bell Atlantic's consolidated federal income tax
return. The Company is allocated income tax assets, liabilities, expense,
benefits and credits resulting from the effects of its transactions in the
consolidated federal income tax provision determined in accordance with
Statement of Financial Accounting Standards (SFAS) No. 109 "Accounting for
Income Taxes" (Statement No. 109). As a result of this allocation method, the
Company recognizes benefits currently for net operating losses (NOLs) and NOL
carryforwards that would not have been recognizable on a separate tax return
basis. The federal portion of income taxes currently payable is due to Bell
Atlantic.
2. INVENTORIES:
<TABLE>
<S> <C>
Inventories consist of:
Liquified petroleum gas..................................... $5,732,000
Merchandise and appliances.................................. 930,000
Bulk fuels and oil.......................................... 353,000
Other....................................................... 240,000
----------
$7,255,000
==========
</TABLE>
3. PROPERTY, PLANT AND EQUIPMENT:
<TABLE>
<S> <C>
Property, plant and equipment consist of:
Land and buildings........................................ $ 6,866,000
Liquified petroleum gas equipment......................... 37,834,000
Furniture and fixtures.................................... 1,434,000
Transportation equipment.................................. 6,409,000
------------
52,543,000
Less, Accumulated depreciation.......................... (23,444,000)
------------
$ 29,099,000
============
</TABLE>
Depreciation expense for the year ended December 31, 1993 was $5,746,000.
6
<PAGE>
VISION ENERGY RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
4. LEASES AND RENTALS:
At December 31, 1993, the Company was committed under operating leases for
the rental of office space, operating equipment and operating sites. Rental
expense for operating leases amounted to $534,000 in 1993.
The following is a schedule of future minimum rental payments under operating
leases as of December 31, 1993:
<TABLE>
<S> <C>
1994............................................................. $307,000
1995............................................................. 94,000
1996............................................................. 11,000
1997............................................................. 8,000
1998............................................................. 6,000
--------
$426,000
========
</TABLE>
5. INCOME TAXES:
During 1993, the Company adopted Statement No. 109 retroactively to January
1, 1992. Financial statements for periods commencing on or after that date have
been restated. Statement No. 109 requires the determination of deferred taxes
using the liability method. Under the liability method, deferred taxes are
provided on book and tax basis differences and deferred tax balances are
adjusted to reflect enacted changes in income tax rates. Prior to 1992, the
Company accounted for income taxes based on the provisions of Accounting
Principles Board Opinion No. 11.
The Omnibus Budget Reconciliation Act of 1993, which was enacted in August
1993, increased the federal corporate income tax rate from 34% to 35%,
effective January 1, 1993. In the third quarter of 1993, the Company recorded a
charge to the tax provision of $45,000 for the effect of the 1% rate increase
on the deferred tax balances as of January 1, 1993.
The components of income tax expense (benefit) at December 31, 1993, are as
follows:
<TABLE>
<S> <C>
Current:
Federal.................................................... $ (156,000)
State...................................................... 30,000
-----------
(126,000)
Deferred:
Federal.................................................... (1,956,000)
State...................................................... (174,000)
-----------
(2,130,000)
-----------
Total.................................................. $(2,256,000)
===========
</TABLE>
7
<PAGE>
VISION ENERGY RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The provision for income taxes varies from the amount computed by applying
the statutory federal income tax rate to income before provision for income
taxes. The difference is attributable to the following factors:
<TABLE>
<S> <C>
Statutory federal income tax rate................................. (35.0)%
State income taxes, net of federal income tax effect.............. (1.3)
Goodwill amortization............................................. 3.1
Effect of Omnibus Reconciliation Act of 1993...................... 0.6
Other............................................................. 0.3
-----
Effective income tax rate......................................... (32.3)%
=====
</TABLE>
At December 31, 1993, the significant components of deferred tax assets and
liabilities were as follows:
<TABLE>
<S> <C>
Deferred tax assets:
Environmental reserves and other estimated liabilities...... $1,576,000
Net operating loss carryforwards............................ 4,658,000
Other....................................................... 253,000
----------
6,487,000
Valuation allowance......................................... (460,000)
----------
Net deferred tax assets................................. 6,027,000
----------
Deferred tax liabilities:
Depreciation and amortization............................... 5,941,000
Other....................................................... 473,000
----------
Gross deferred tax liabilities.......................... 6,414,000
----------
Net deferred tax liabilities............................ $ 387,000
==========
</TABLE>
At December 31, 1993, net operating loss carryforwards for federal income tax
purposes (federal NOLs) were approximately $11,434,000. The federal NOLs arose
prior to the merger of the Company's parent, Metro Mobile CTS Inc. (MMCTS) with
Bell Atlantic and expire from 2001 to 2006.
8
<PAGE>
VISION ENERGY RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Federal tax law restricts the future utilization of the federal NOLs,
permitting them to offset only the future taxable income earned by the MMCTS
subconsolidated group. Future utilization of the federal NOLs could also be
restricted by virtue of the "change in ownership" rules contained in Section
382 of the Internal Revenue Code of 1986.
Based on projections of future taxable income of MMCTS and the Company's
existing deferred tax liabilities, the Company expects to realize the future
tax benefit of all federal NOL carryforwards.
Also, at December 31, 1992, net operating loss carryovers for state income
tax purposes (state NOLs) were approximately $8,938,000. The state NOLs expire
from 1996 to 2003. Utilization of the state NOLs are subject to restrictions
similar to the restrictions on the federal NOLs described above, applied in
each state jurisdiction. The valuation allowances relate to the state NOLs.
6. EMPLOYEE BENEFIT PLANS:
The Company participates in a Bell Atlantic Saving Plan which allows
employees to invest up to 16% of their salary through a payroll deduction. The
Company will contribute 50% of the employee's contribution, up to 6% of their
salary. In 1993, the Company contributed $114,000 to the Plan.
7. TRANSACTION WITH AFFILIATES:
The Company has entered into a short-term borrowing arrangement with an
affiliate which bears interest at a rate which approximates the affiliate's
average daily cost of funds (3.51% at December 31, 1993). The Company
recognized interest expense of $157,000 in 1993.
During 1993, the Company paid $1,000,000 in fees to Bell Atlantic in return
for various administrative, legal, cash management, tax and financial planning
services.
9
<PAGE>
VISION ENERGY RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
8. COMMITMENTS:
At December 31, 1993, the Company was committed to sell 5,337,000 gallons of
propane for $3,488,000 under fixed price sales agreements and owned sufficient
inventory to fulfill these sales commitments.
9. CONTINGENT LIABILITIES:
One of the Company's subsidiaries holds title to land that had been occupied
by a coal gasification plant. In 1992, the EPA performed a site inspection and
shallow soil and groundwater testing.
In 1984, the Florida Department of Environmental Protection asked the Company
to submit a preliminary contamination assessment plan and to perform a
contamination assessment to confirm the EPA findings. Based on information
developed to date in connection with this assessment, the Company provided a
reserve in 1993 of $2,800,000 for the estimated remediation costs of this site.
On October 28, 1994, the Company transferred ownership of this property to
Bell Atlantic Ventures XXV, Inc. which is an indirect subsidiary of Bell
Atlantic.
10. SUBSEQUENT EVENTS (UNAUDITED):
Effective November 1, 1994, the Company expects to be sold by Bell Atlantic,
to Ferrellgas, Inc. for approximately $45 million.
10
<PAGE>
VISION ENERGY RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JULY 31, 1994
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS JULY 1994
------ ---------
<S> <C>
Current assets:
Cash and cash equivalents.......................................... $ 28
Accounts and notes receivable...................................... 5,294
Inventories........................................................ 6,535
Prepaid or refundable income taxes................................. 1,449
Prepaid expenses and other current assets.......................... 462
--------
Total Current Assets............................................. 13,768
--------
Property, plant and equipment, net of accumulated depreciation....... $ 26,553
Intangible assets.................................................... 21,723
Other assets......................................................... 906
--------
Total assets..................................................... $ 62,950
========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable and accrued expenses.............................. $ 9,405
Interest payable................................................... 78
Due to affiliate................................................... 4,259
Note payable....................................................... 489
--------
Total current liabilities........................................ 14,231
--------
Other liabilities.................................................... 2,950
Shareholder's equity:
Common stock, $1 par value; 1,000 shares authorized, 100 shares
issued and outstanding and additional paid in capital............. 67,092
Accumulated Deficit................................................ (21,323)
--------
Total shareholders' equity....................................... 45,769
--------
Total liabilities and stockholders' equity....................... $ 62,950
========
</TABLE>
11
<PAGE>
VISION ENERGY RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE SEVEN MONTHS ENDED JULY 31, 1994
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<S> <C>
Revenues:
Gas liquids and related product sales.............................. $ 30,167
Other.............................................................. 6,109
--------
Total revenues................................................... 36,276
Costs and expenses:
Cost of product sold............................................... 20,674
Operating.......................................................... 10,528
Depreciation and amortization...................................... 4,037
General and administrative......................................... 2,828
Governance fee..................................................... 467
--------
Total costs and expenses......................................... 38,534
--------
Operating loss....................................................... (2,258)
Interest income.................................................... 182
Interest expense................................................... (100)
--------
Loss before income taxes............................................. (2,176)
Income tax expense (benefit)......................................... (594)
--------
Net loss............................................................. (1,582)
Accumulated deficit--Beginning of year............................... (19,741)
--------
Accumulated deficit--End of year..................................... $(21,323)
========
</TABLE>
12
<PAGE>
VISION ENERGY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SEVEN MONTHS ENDED JULY 31, 1994
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<S> <C>
Cash flows from operating activities:
Net Loss............................................................ $(1,582)
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization..................................... 4,038
Provision for doubtful accounts................................... 165
Gain on sale of fixed assets...................................... (104)
Change in assets & liabilities:
Decrease in accounts receivable................................... 2,394
Decrease in inventory............................................. 719
Increase in prepaid expenses & other current assets............... (22)
Decrease in accounts payable & accrued liabilities................ (1,027)
Decrease in income taxes payable--current......................... (1,723)
Decrease in deferred taxes........................................ (1,059)
Increase in interest payable...................................... 23
-------
3,404
-------
Net cash provided by operating activities............................. $ 1,822
-------
Cash flows from investing activities:
Proceeds from disposal of property, plant and equipment............. 368
Capital expenditures................................................ (943)
Other............................................................... 18
-------
Net cash (used) in investing activities............................... (557)
=======
Cash flows from financing activities:
Repayment of borrowing from affiliate............................... (452)
Repayment of long term debt......................................... (208)
Cash overdraft...................................................... (577)
-------
Net cash used by financing activities................................. (1,237)
=======
Net increase in cash and cash equivalents............................. 28
Cash and cash equivalents at beginning of period...................... --
-------
Cash and cash equivalents at end of period............................ $ 28
=======
Supplemental disclosures of cash flow information:
Cash paid during the period for interest and income taxes:
Interest.......................................................... $ 77
Income taxes...................................................... 2,188
</TABLE>
13
<PAGE>
FERRELLGAS PARTNERS, L.P.
PRO FORMA BALANCE SHEET
AS OF JULY 31, 1994
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
PURCHASE PRICE OTHER
PARTNERSHIP ALLOCATION PRO FORMA PARTNERSHIP
HISTORICAL VISION ADJUSTMENTS ADJUSTMENTS PRO FORMA
----------- -------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash
equivalents.......... $ 14,535 $ 28 $ $ -- $ 14,563
Accounts and notes
receivable........... 50,780 5,294 -- 56,074
Inventories........... 43,562 6,535 -- 50,097
Prepaid/refundable
income taxes......... -- 1,449 (1,449)(B) -- --
Prepaid expenses and
other current assets. 2,042 462 -- 2,504
-------- -------- -------- -------- --------
Total Current
Assets............. 110,919 13,768 (1,449) -- 123,238
Property, plant and
equipment............ 294,765 26,553 21,310 (A) 342,628
Intangible assets..... 63,291 21,723 (14,533)(A),(C) -- 70,481
Other Assets.......... 8,218 906 (906)(B) -- 8,218
-------- -------- -------- -------- --------
Total Assets........ $477,193 $ 62,950 $ 4,422 $ -- $544,565
======== ======== ======== ======== ========
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable...... $ 46,368 9,405 $ 2,000 (D) -- $ 57,773
Other current
liabilities.......... 26,590 78 -- -- 26,668
Short-term borrowing.. 3,000 489 -- 3,489
Due to general
partner/affiliate.... 13 4,259 (4,259)(B) -- 13
-------- -------- -------- -------- --------
Total Current
Liabilities........ 75,971 14,231 (2,259) -- 87,943
Long-term debt........ 267,062 -- -- 45,000 (F) 312,062
Other liabilities..... 11,528 2,950 (2,950)(B) -- 11,528
Deferred taxes........ -- -- 10,400 (E) (10,400)(E) --
Minority interest..... 1,239 -- -- 73 (G) 1,312
Stockholder's
Equity/Partners'
Capital:
Common stock.......... -- 67,092 -- (67,092)(H) --
Accumulated deficit... -- (21,323) 6,777 (A) 22,092 (H) --
4,854 (B)
(2,000)(D)
(10,400)(E)
Common unitholders...... 84,532 -- -- 3,687 (G) 91,319
-- -- 3,100 (I)
Subordinated unitholder. 99,483 -- -- 3,468 (G) 102,951
General partner......... (62,622) -- -- 72 (G) (62,550)
-------- -------- -------- -------- --------
Total Stockholder's
Equity/ Partners'
Capital............ 121,393 45,769 (769) (34,673) 131,720
-------- -------- -------- -------- --------
Total Liabilities
and Stockholder's
Equity/ Partners'
Capital............ $477,193 $ 62,950 $ 4,422 $ -- $544,565
======== ======== ======== ======== ========
</TABLE>
1
<PAGE>
FERRELLGAS PARTNERS, L.P.
PRO FORMA STATEMENT OF EARNINGS
(IN THOUSANDS, EXCEPT UNIT AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA YEAR ENDED JULY 31, 1994
-----------------------------------------------
PRO FORMA PARTNERSHIP
PARTNERSHIP VISION ADJUSTMENTS PRO FORMA
----------- ------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Gas liquids and related product
sales......................... $ 499,696 $57,337 -- $ 557,033
Other.......................... 26,860 10,899 -- 37,759
---------- ------- ------ ----------
Total revenues............... 526,556 68,236 -- 594,792
Costs and Expenses:
Cost of product sold........... 269,306 41,540 -- 310,846
Operating...................... 145,136 17,148 (2,026)(J) 160,258
Depreciation and amortization.. 28,835 7,052 (3,441)(K) 32,446
General and administrative..... 10,358 5,683 (3,502)(L) 12,539
Vehicle Leases................. 4,290 -- -- 4,290
---------- ------- ------ ----------
Total costs and expenses..... 457,925 71,423 (8,969) 520,379
---------- ------- ------ ----------
Operating Income (loss).......... 68,631 (3,187) 8,969 74,413
Loss on disposal of assets..... (1,312) 108 -- (1,204)
Interest income................ 1,123 129 -- 1,252
Interest expense............... (28,130) (200) (1,954)(M) (30,284)
Minority interest-continuing
operations.................... (403) -- (39) (442)
---------- ------- ------ ----------
Earnings from continuing
operations before
extraordinary item............ 39,909 (3,150) 6,976 43,735
========== ======= ====== ==========
General partner's interest in
earnings from continuing
operations.................... 399 437
---------- ----------
Limited partners' interest in
earnings from continuing
operations.................... $ 39,510 $ 43,298
========== ==========
Earnings from continuing
operations per limited partner
unit.......................... $ 1.29 $ 1.40
========== ==========
Weighted average number of
limited partner units
outstanding................... 30,694,721 30,832,113
========== ==========
</TABLE>
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<PAGE>
FERRELLGAS PARTNERS, L.P.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1994
(UNAUDITED)
On September 30, 1994, Ferrellgas, Inc. ("the General Partner or Ferrellgas"
and Bell Atlantic Enterprises International, Inc. ("Bell") entered into a Stock
Purchase Agreement (the "Agreement") pursuant to which Ferrellgas agreed to
purchase all of the capital stock of Vision Energy Resources, Inc. ("Vision")
from Bell for a cash purchase price of $45,000,000. This transaction was
consummated on November 1, 1994.
Immediately following the closing of the purchase of Vision, Ferrellgas (i)
caused Vision and each of its subsidiaries to be merged into Ferrellgas (except
for a trucking subsidiary which dividended substantially all of its assets to
Ferrellgas) and (ii) transferred all of the assets of Vision and its
subsidiaries at historical cost to Ferrellgas, LP (the "Operating
Partnership"). In exchange, the Operating Partnership assumed substantially all
of the liabilities, whether known or unknown, associated with Vision and its
subsidiaries (excluding income tax liabilities). The liabilities assumed by the
Operating Partnership included the obligations of Ferrellgas under a
$45,000,000 loan agreement with Bank of America National Trust & Savings
Association (BofA), pursuant to which Ferrellgas borrowed funds to pay the
purchase price for Vision. The Operating Partnership repaid the loan
immediately after the transfer of assets with funds borrowed under its Credit
Facility. In consideration of the retention by Ferrellgas of the Vision income
tax liabilities, Ferrellgas Partners, L.P. (the "Partnership") issued 138,392
Common Units to Ferrellgas. The purchase of Vision was structured as a purchase
by Ferrellgas rather than the Partnership as the tax consequences of such a
structure were more advantageous to the Partnership than other alternatives.
The total purchase price recorded by the Partnership is approximately
$57,400,000 and is derived from the following (i) cash purchase price of
$45,000,000, in an agreed upon level (ii) deferred tax liability of
approximately $10,400,000 which is retained by the General Partner, and (iii)
additional transaction costs estimated to be approximately $2,000,000.
The pro forma consolidated balance sheet is based on the historical financial
position of the Partnership and Vision as of July 31, 1994 contained elsewhere
in this Prospectus. The pro forma consolidated statement of earnings for the
fiscal year ended July 31, 1994 is derived from the historical statement of
operations of the General Partner for the eleven months ended June 30, 1994
(the Predecessor) and the statement of operations of the Partnership for the
one month ended July 31, 1994, contained elsewhere in this Prospectus, and the
statement of operations of Vision for the twelve months ended July 31, 1994.
The following pro forma adjustments have been prepared as if the transactions
effected for the acquisition of Vision had taken place on July 31, 1994, in the
case of the pro forma consolidated balance sheet, or as of August 1, 1993, in
the case of the pro forma consolidated statement of earnings for the fiscal
year ended July 31, 1994. The adjustments are based upon currently available
information and certain estimates and assumptions, and therefore the actual
adjustments will differ from the pro forma adjustments. However, management
believes that the assumptions provide a reasonable basis for presenting the
significant effects of the transactions as contemplated and that the pro forma
adjustments give appropriate effect to those assumptions and are properly
applied in the pro forma financial information.
(A) Reflects the allocation of the total purchase price from the acquisition
of Vision. In addition, pursuant to the Agreement, Bell has guaranteed that
Vision shall have a minimum level of working capital within a range of
$2,250,000 to $3,150,000 at the closing date. According, the purchase price is
reconciled as follows (in thousands):
<TABLE>
<S> <C>
Allocation of purchase price:
Working capital:
Cash........................................................... $ 28
Accounts and notes receivable.................................. 5,294
Inventories.................................................... 6,535
Prepaid expenses............................................... 462
Accounts payable............................................... (9,405)
Other current liabilities...................................... (78)
Short-term borrowings.......................................... (489)
-------
$ 2,347
Pro forma working capital settlement from Bell................... --
-------
Total working capital guaranteed by Bell..................... $ 2,347
-------
Property, plant and equipment.................................... 47,863
Intangible assets................................................ 7,190
-------
Total purchase price to the Partnership...................... $57,400
=======
</TABLE>
3
<PAGE>
(B) Reflects the elimination of certain assets and liabilities which were not
conveyed or assumed by the Partnership.
(C) Reflects the elimination of Vision intangible assets of $21,723,000
consisting of goodwill and other assets (consisting primarily of non-compete
covenants and organization costs), offset by the allocation of purchase price
of $7,190,000 to intangible assets, as described in Note (A).
(D) Reflects the accrual of additional transaction costs, included in the
purchase price allocation, as described in Note (A).
(E) Reflects the deferred taxes associated with the purchase price of the
assets acquired over their respective income tax basis, which will not be
assumed by the Partnership. Such liability is retained by the General Partner.
(F) Reflects the assumption of long-term borrowings of $45,000,000 under the
Credit Facility in connection with the acquisition of Vision by the General
Partner.
(G) Reflects the General Partner's contribution of $7,300,000 to the
Partnership, representing the excess of historical cost of the assets over the
liabilities conveyed and/or consideration received from the Partnership. The
allocation to each partner is based on the relative partnership ownership
percentages following the closing of the Vision acquisition as follows: (1)
1.01% minority interest to Ferrellgas, Inc. for its general partner interest in
Ferrellgas, L.P., the Operating Partnership; (2) 0.99% general partner interest
to Ferrellgas, Inc. as general partner of the Partnership (3) 45.26% limited
partner interest in the Partnership to Common Unitholders; and (4) 52.74%
limited partner interest in the Partnership to the Subordinated Unitholder.
(H) Reflects the elimination of the capital stock and accumulated deficit of
Vision following the acquisition by the General Partner.
(I) Reflects the issuance of 138,392 Common Units at market value to the
General Partner in connection with the conveyance of the assets and liabilities
(except income tax liabilities) of Vision to the Partnership. The additional
Common Units represent the net present value of the future tax liabilities to
be paid by the General Partner.
(J) Reflects operating expense savings of approximately $2,414,000 from the
reduction of Vision staff and the consolidation of certain Vision retail
marketing locations with existing Partnership retail marketing sites, offset by
an increase in Partnership retail overhead expenses of $388,000.
(K) Reflects a decrease in depreciation and amortization as a result of
establishing new useful lives of the property, plant and equipment acquired
from Vision, reduction in the amortization of intangible assets (as described
in Note (C), offset by the increase in depreciation from the increase in the
cost of the property, plant and equipment to the Partnership.
(L) Reflects the general and administrative savings of approximately
$3,748,000 from the reduction of staff and closure of the Vision headquarters
and elimination of corporate overhead allocation from Bell offset by an
increase in Partnership administrative overhead expenses of $246,000.
(M) Reflects the increase in interest expense of approximately $2,109,000
related to the additional indebtedness of $45,000,000 under the Credit Facility
at an effective interest rate of approximately 4.89%, offset by the elimination
of interest expense from Bell credit line borrowings of approximately $155,000.
4
