FERRELLGAS L P

FERRELLGAS L P Annual Report Summary (Updated)

Let’s cut through the noise and see how FerrellGas really performed this year—no jargon, just the key details you need.

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1. What They Do & This Year’s Snapshot

FerrellGas is the #2 propane provider in the U.S., serving homes, farms, and businesses across all 50 states. This year was a rollercoaster: revenue grew 5% thanks to higher propane prices and customer growth, but a $125M legal settlement turned last year’s $110M profit into a $15.6M loss. Ouch.

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2. Financial Performance: Growth vs. Pain

• Revenue: Up 5% (good news).
• Profit: Swung from $110M profit to $15.6M loss (all due to that legal bill).
• Cash Flow (Adjusted EBITDA): Their favorite metric shows they’re still generating cash to keep the lights on, even with the loss.

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3. Wins vs. Losses

What Worked:

• Stayed dominant as the #2 U.S. propane retailer with strong rural customer loyalty.
• Locked in propane prices for 2026/2027 sales using financial hedges (like pre-paying to avoid price spikes).
• 90% of their hedging deals will pay off within the next year.

What Hurt:

• $125M legal settlement (details unclear, but it’s a one-time hit).
• A warm winter meant fewer people needed propane for heating.
• $1.5B+ debt still looms over the company (like a massive credit card bill).

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4. Financial Health Check

• Debt: Still sky-high at $1.5B+, but they’re generating enough cash to stay afloat.
• Hedging Success: Smart price locks minimized losses to just $0.1M this year.
• Verdict: Stable for now, but debt and surprise costs could derail progress.

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5. Top Risks for Investors

• Weather Woes: 40% of annual sales depend on cold winters. Climate change = unpredictable demand.
• Propane Prices: Hedges help, but a sudden price drop could hurt profits.
• Electric Competition: More homes/businesses are switching to heat pumps and renewables.

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6. How They Compare to Competitors

• Size: Only AmeriGas is bigger, but rivals like Suburban Propane carry less debt.
• Innovation: Lagging in renewable propane compared to some competitors.

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7. Leadership’s Game Plan

• Doubling down on price hedging to manage propane cost risks.
• Testing renewable propane projects (still a tiny side hustle).

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8. What’s Next?

• Betting on colder winters to boost sales (they’re glued to weather forecasts).
• Selling non-core assets to chip away at debt.
• Renewable energy efforts are a long-term “maybe,” not a sure thing.

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9. Market Shifts to Watch

• Green Energy Push: Governments favor electric over propane, which could shrink demand.
• Tighter Regulations: New safety rules might raise costs for storage and transport.

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Key Takeaways for Investors

• The Good: Strong market position, smart hedging, and steady cash flow.
• The Bad: Massive debt, legal surprises, and reliance on fickle weather.
• The Ugly: Falling behind in renewable energy innovation.

Bottom Line: FerrellGas is a high-risk, slow-growth bet. The $125M legal loss this year highlights vulnerability to unexpected costs. While their hedging strategy and market share provide short-term stability, long-term success depends on debt reduction, colder winters, and catching up on renewables. If you’re comfortable with volatility and believe in propane’s staying power, maybe it’s worth a look. Otherwise, tread carefully.

Final Note: The annual report lacked depth in some areas (like specifics about the legal settlement), which could mean less transparency than investors might prefer.

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Questions? Drop me a line! This is big stuff, and we’re here to help you sort it out. ☕