FERRELLGAS PARTNERS L P

FERRELLGAS PARTNERS L.P. Annual Report Summary
Your plain-English guide to their year

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What Happened This Year?

Ferrellgas (America’s #2 propane supplier) had a tough year, swinging from a $110 million profit last year to a $15.6 million loss. Two main culprits:

1. A $125 million legal settlement (like a surprise bill from a lawsuit)
2. Warmer winters = fewer customers needing propane for heat

They still dominate propane tank exchanges (those blue tanks at gas stations) and serve all 50 states.

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Financial Health Check

• Revenue: The company didn’t provide specific revenue figures, focusing instead on operational cash flow metrics.
• Debt: Still high but manageable thanks to steady demand for propane.
• Cash Flow: Their focus on "Adjusted EBITDA" (daily cash flow) suggests they prioritize short-term operations over long-term investments.
• Bright Spot: 90% of their propane price hedges (insurance against price swings) will pay off within a year.

Think of it like a food truck: Makes enough daily cash to keep rolling, but one big repair (or legal bill) hurts.

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Wins vs. Mistakes

✅ Wins:

• Still #1 in propane tank exchanges
• Expanded renewable propane projects (eco-friendly fuel)
• Smart hedging protected against energy market chaos

❌ Mistakes:

• That $125M legal settlement crushed profits
• Warm weather reduced heating demand
• Tiny ($0.1M) loss on current propane bets

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Big Risks to Watch

1. Weather: A 10% colder winter = $$$. A 10% warmer winter = trouble.
2. Propane Prices: Their hedging helps but isn’t perfect.
3. Electric Competition: More homes/businesses switching to heat pumps/solar.

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How They Compare to Competitors

• Competitors: Suburban Propane, AmeriGas (all face similar weather/price challenges).
• Edge: Ferrellgas is bigger (#2 nationally) and leads in tank exchanges.
• Reality Check: The entire propane industry is slow-growth – think "steady utility," not "tech moonshot."

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What’s Next?

• 2026/2027 Bets: Locked in propane prices for future sales – smart if prices rise, risky if they fall.
• Make-or-Break: Next winter’s weather and avoiding new legal issues.

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Market Trends

🔥 Opportunity: Renewable propane could attract eco-conscious customers.
⚠️ Threat: Governments pushing electric heating incentives. Propane is fossil fuel – not exactly trendy.

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Bottom Line for Investors

This wasn’t a disaster – just bad luck:

• The $125M legal fee was a one-time gut punch
• Operations stayed stable otherwise
• Still paying dividends (key for income investors)

Consider Ferrellgas if you want:

• A potential rebound play (if next winter is cold)
• Steady dividends from an essential-but-boring business
• Exposure to energy without volatile oil prices

Avoid if:

• You dislike weather-dependent stocks
• Prefer companies with clear growth stories
• Worry about long-term fossil fuel decline

Final thought: Like a backyard firepit – useful in winter, ignored in summer, but always there when you need it. 🔥🛢️

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Disclosure: Ferrellgas provided limited details about revenue and long-term strategy in their annual report. Investors may want to ask why.