Ferrellgas Partners, L.P.

Alan Heitmann – EVP and Chief Financial Officer Steve Wambold – President and Chief Executive Officer Julio Rios - President and CEO, Bridger, LLC; EVP, Ferrellgas Todd Soiefer - SVP, Strategic Development Boyd McGathey - EVP and Chief Operating Officer

Ben Brownlow - Raymond James Robert Balsamo - UBS Gary Stromberg - Barclays

Thank you, Steve, and good morning, everyone. Welcome to the Ferrellgas Partners fiscal 2015 fourth quarter earnings conference call.

I’m Alan Heitmann, Chief Financial Officer and joining me today is Steve Wambold, President and CEO; Boyd McGathey, our Chief Operating Officer; Julio Rios, President and CEO of Bridger Logistics, and Todd Soiefer, who heads up our business development job. Tod Brown, President of Blue Rhino was unable to join us for this call this morning.

Before we get started, I’d like to remind all of you that some of the statements made during this call maybe considered forward-looking, and that various risks, uncertainties and other factors could cause actual performance to differ materially from anticipated performance. These factors are discussed in our 10-K and other documents filed from time to time with the SEC.

So with that out of the way, I’ll turn the call over to Steve Wambold, President and Chief Executive Officer for his opening remarks.

Okay, thank you Al, good morning everyone. I'll kick it off from here, I'll give a little bit of color on the FY 15 performance, a quick preview into FY 16's expectations and then I'll turn the call over to Julio Rios who will give you a midstream Bridger Logistics update and talk about transition and then after that Al will take it back for the numbers and then we'll do some Q&A.

So as you're aware when we last spoke we were just coming off of the announcement with Bridger Logistics and we were very bullish about what that addition meant for us and I'm pleased to report that our optimism was well warranted. As you have no doubt seen from this morning's release we're proud to be announcing record adjusted EBITDA of $300.2 million making this the third year in a row we've been able to declare a record adjusted EBITDA.

It should be noted that we have posted these results in a year in which temperatures were 8% warmer than prior year, and we were able to offset Mother Nature's impact with the help of wholesale commodity prices that were 43% lower than prior year which enhanced our ability to maximize our margins, in addition we were successful in flexing our expenses in line with demand. Probably the biggest news in the fourth quarter was the closing of our acquisition of Bridger Logistics, this transaction was a big step towards our goal of significantly diversifying beyond our traditional propane space and frankly it's been everything we hoped from a financial and operational standpoint and a cultural one as well.

This success reinforces our dedication to aggressively pursuing accretive complementary acquisitions in the mid stream and propane marketplace. The most tangible result of this is that for the first time in our history we announced a distribution increase as owners of FGP are now receiving $2.05 per unit which is a 2.5% increase over prior.

As such at this point I'm happy to share our FY ‘16 adjusted EBITDA guidance will be $400 million to $420 million, we're confident that the addition of Bridger as well as our continued excellence in our traditional retail and Blue Rhino business units puts this number well within our reach. So with that I'll turn it over to Julio Rios, President and CEO of Bridger Logistics.

Thank you, Steve. First I'd like to say it's an honor to be included here and be part of the FGP team.

From our first meetings with Ferrellgas it's been an incredible experience. Bridger Logistics team is off to a strong start.

Steve and his executive team as well as everyone down the line at Ferrellgas has helped make the integration smooth and seamless which has allowed us to continue to focus on growth and executions. We have every expectation that we will continue to operate as Ferrellgas' midstream platform and grow within the organization, which will enable us to expand our business in the marketplace.

Earlier Steve mentioned Ferrellgas' ability to hold strong on margins due to lower commodity costs. I want to take the opportunity to point out that while a number of organizations mid stream sector might have exposure to the variations in the market, Bridger's contract coverage and the strategic location of our operations result in a business that performs well throughout the commodity price cycle.

As for growth we're in active and positive discussions with existing and potential new customers for additional business opportunities and organic development projects. And we're excited about what those could bring to the table.

Further, we're evaluating some exciting tuck-in acquisitions as well as larger opportunities that fit our operational and financial models. Bridger is meant to be the midstream growth platform for Ferrellgas and we intend to be exactly that.

With that update, I'll turn it over to Alan Heitmann who will provide a more in-depth financial performance of the total company.

Thanks, Julio. As Steve mentioned earlier FY15 was another record breaking year for Ferrellgas.

Our 10-K that was filed this morning details the 300.2 million of adjusted EBITDA and indicates that it included 8.6 million from our crude oil logistics segment, which represent only 38 days of results from Bridger Logistics, that acquisition was closed on June 23rd. Adjusted EBITDA for our propane segment as detailed on our 10-K was 325.8 million, and was positively impacted by strong expense controls and lower propane wholesale cost which helped to partially offset the effects of weather which was 8% warmer than that of the prior year.

So now for a deeper dive into our FY15 full year numbers. Propane sales volume for FY15 were 879 million gallons, down 7% from the 947 million gallons a year ago.

This decrease is primarily due to the warmer weather that we mentioned previously. Although negatively impacted by the recent drop in crude oil prices, we are pleased that our midstream operations processed 17 million barrels of water for the year only slightly below our expectations.

And our newly acquired Bridger Logistics acquisition called over 10.4 million barrels of crude oil for the 38 days of operations. Total gross profit for the year was 800 million, reflecting higher propane margins which benefited from an approximate 43% decline in wholesale propane prices when compared to the same period a year ago.

This also is reflective of the lower propane sales volumes due to the warmer temperatures. The gross profit generated from our midstream operations was $3 million, and while this is below our expectations, the unfavorable variance is primarily tied to the price of crude oil which declined 52% during the year.

Operating expense during the year was 432 million down from the prior year expense of $446 million. As they have done all year long, our propane operations team flexed variable expenses down reflecting the impact that warmer temperatures have on gallon sales.

This together with the lower cost of diesel and gasoline allowed us to keep our operating expenses below prior year, in spite of the additional cost associated with the midstream and propane operations we acquired. General and administrative expense was $56 million for FY15 that included a onetime charge of $16 million for the acquisition and transaction expenses related to the Bridger transaction.

Excluding this charge, our G&A expenses would have been favorable to the prior expense of $46 million. And finally interest expense was $100 million up from the $87 million a year ago primarily due to the issuance of new debt to fund acquisitions.

All of this results in an FY15 adjusted EBITDA of $300.2 million up from the record set at the end of fiscal 2014 of 288 million. Distributable cash flow for FY15 was 189.6 million or 1.12 times our distributions providing over $20 million of free cash flow to fund growth and acquisitions.

And our liquidity position is strong. We currently have no debt maturities until 2020 and we have over 264 million of borrowing capacity on our secured credit facility, which provides us with sufficient capacity to fund our working capital and short-term growth capital needs.

This concludes my comments on the financial performance of the partnership and with that I'll turn it back over to Steve for questions.

I apologize I missed the first part of the call. But I just want to touch on the Bridger EBITDA which was in line with what I had modelled, but I just want to clarify a few in line items, the revenue contribution that was only for six weeks, that's correct?

Yes, for 38 days. That's right.

Okay. And that was a pretty big acceleration from the March quarter, was that just a commodity driven or can you just talk about some of the drivers on the run rate?

The increase in the revenue, we’re seeing a full year worth of our water solutions revenues this year compared to a partial year, last year with the C&E acquisition, it's not just all Bridger, there were salt water well disposals that we acquired, that make the comparison to prior year not [indiscernible] as well.

Okay. But I was thinking kind of on the midstream revenue sequentially from March quarter, was that just -- that was the salt wells?

Yeah, because we didn’t acquire the Bridger assets till July, June, excuse me.

Yes, but I am thinking about the pro forma, we can talk about it offline, but I was looking at the pro forma financials that were filed earlier for the March quarter on Bridger?

March quarter?

Hey Ben, this is Julio Rios. The only thing I can say on that is it may be related to -- in March quarter it did not have what is -- what we call internally our Pony Express contract with Whiting and that maybe the increase in revenue that you're seeing.

Okay, that’s helpful. And on the M&A pipeline which you commented was favorable, are you seeing more tuck-in acquisitions or are there more larger deal opportunities that you're seeing?

Tod, do you want to take that?

Sure. So we’re seeing an influx of opportunities on the tuck-in side within Bridger as well as larger scale acquisitions that we’re currently evaluating.

So if anything our pipeline has continued to increase after this acquisition, so we’re keeping very busy.

Same on the propane side, lot of tuck-in opportunities we’re currently evaluating.

Great, and just one last one from me, on the target EBITDA mix for the midstream that I think a few quarters back you were going back to the Board to discuss kind of longer-term where you saw that mix on the midstream side from I guess the longer-term goal was initially kind of a [indiscernible]. Any update there on that that target midstream versus propane?

Yes, we were intending to target a 70-30 mix by the end of fiscal ’17 that was our initial goal; obviously the Bridger acquisition helped us achieve that goal. So we are now going to start focusing on 50-50 split between now and the end of fiscal ’18 that’s our new target.

Great. Thanks and congrats on the quarter.

Just, if you can do a quick clarification, you mentioned the variable expenses, flexing down variable expenses, could you elaborate on that? Is that something that could come back or are the cost savings going to continue?

Well, this is Boyd, obviously we’re trying to match our expense profile to the demand so as the demand contracts we try to marry that up, so conversely if and when volumes come back and we have a real winner and [indiscernible] kicks in, we’ll ramp up so that we meet service expectations of our customers.

[Indiscernible] offset by more cash flows as a result as well.

Okay, great. And then as far as volumes go in the propane business it looks like the volumes are roughly in line with the weather in the heating degree days, but is that -- was there an impact from the propane prices kind of increasing demand and then maybe more declines from other base business customers, could you elaborate maybe on more what you're seeing in the marketplace impacts from a lot of these…?

This is Boyd again. The customers that have weather sensitive usage clearly they are burning less gas just because the wholesale product cost or in this case the retail sales price is lower than perhaps their last delivery or even last year that has really little impact on their - influence on their usage or demand for more propane.

So where we see that's really given us an uplift is in attracting new customers. We think our service offering coupled with a very competitive sales price is obviously we’re seeing good customer organic growth on that front.

So I am not sure if that answers your question or not but --.

Yes, I guess I am wondering if propane prices were to recover a little bit we might see more just kind of base level decline, you don’t have the benefit from the attractive prices that either way was seemed to be a positive quarter. And then just one clarification, on your expectations for '16, do you have a price tag that you're looking at or expectations for crude, are you guys expecting much recovery in the crude price in those estimates or --?

Look we see crude is something that will recover over the next 18 to 24 months. Our business here at Bridger is relatively insulated from commodity prices, we’re just a transportation business and we just in the midstream space it moves the barrel that needs to be moved from where it's produced to where it's needed.

So commodity prices really don’t impact our business and as previously stated our contract coverage in operating areas insulates that from -- insulate us from that commodity price risk. But certainly on the -- I’ll let Boyd speak on the propane side, but certainly a low crude price environment has an effect on propane - downward pressure on propane prices which will certainly be good for Boyd’s business.

I wasn’t really concerned with the direct commodity exposures as much as kind of producer expectations, capital going back to work and basins might be exposed to, kind of volumes maintaining or growing in those basins but --?

Yes, look our largest contract is with a refinery, so low price environment is good for that refinery customer and they are out there buying as many barrels as they possibly can to push through our system.

Great, I appreciate the color guys. Thank you very much.

Just with regard to guidance. What are your assumptions around organic retail of propane volumes?

Do you expect flattish organic growth? I know a lot depends on weather.

And then can you just talk about your expectations around gross margin per gallon as well?

This is Boyd. I think our expectations and what we’re planning for internally is a return to normal weather, and we plan volumes around that, but we’ll continue to realize our own organic growth strategies around the current retail sales price environment.

We see some expansion in margin opportunities, its where we can smartly remain priced and pass along some of the savings in wholesale product cost and we’ll continue to do that where we can without creating any sort of trauma or customer loss.

In the normal weather -- would organic growth just be flat or do you actually expect a modest pick up?

It varies around various geographies around the country where there is real growth and organic growth and population but we tend to realize some more significant organic growth in certain parts of the country, some its market share growth other growth is just a function of what’s taken place in that geography.

And then just back to the guidance for Bridger and Sable, do you think in 2016 at $100 million run rate you referenced on the last calls you get assumption for Bridger and do you expect any pick up in Sable going forward, or do you think that’s pretty flat?

I think the number that I gave in guidance contains the answers to both of those questions.

Okay thank you everyone; appreciate the participation and interest in Ferrellgas. Clearly a very exciting time for us as we continue to pursue growth and further diversification in our operating divisions.

And we look forward to what we hope will be a very cold winter season here very soon. Thank you very much for your time.