Ferrellgas Partners, L.P.

Al Heitmann - Chief Financial Officer Steve Wambold - President and Chief Executive Officer Julio Rios - President and Chief Executive Officer, Bridger Logistics Todd Soiefer - Senior Vice President, Strategic Development and Chief Financial Officer, Bridger Logistics Tod Brown - Executive Vice President and Chief Executive Officer, Blue Rhino

Thank you, Leanne and good morning everyone. I am joined on the call this morning by Steve Wambold, our President and CEO; Julio Rios, President and CEO of Bridger Logistics; Todd Soiefer, our Senior VP of Strategic Development and CFO of Bridger Logistics; and Tod Brown, the Executive Vice President and CEO of Blue Rhino.

Before we start, I would like to remind all of you that some of the statements made during the call this morning maybe considered forward-looking. Various risks, uncertainties and other factors could cause actual performance to differ materially from the anticipated performance.

These factors are discussed in our 10-K, 10-Qs and other documents filed from time-to-time with the SEC. Now with that, I would like to turn the call over to Steve Wambold for his opening remarks.

Steve?

Okay. Thank you Al.

Good morning, everyone. I would like to start by giving a high level overview of our first quarter performance and talk a little more about our ongoing diversification process, including the opportunities we see for growth in fiscal ‘16 and where we are headed as a partnership.

After that, I will turn the call over to Julio Rios who will provide an update on Bridger Logistics operations, which comprise our midstream crude oil logistics segment, followed by a Blue Rhino update from Tod Brown and then of course Al will take you through the numbers across the business in more detail and then finally we will head to Q&A. As many of you know, with the Bridger acquisition, we took a giant step forward in our ongoing efforts to diversify our business.

With Bridger, we acquired a meaningful midstream platform for future growth and as we mark our first full quarter with Bridger as a part of Ferrellgas, we are extremely pleased with both the success of our team’s integration efforts and the solid operational and financial results of the business. As many of you know, for several years now, the management team at Ferrellgas has been executing a strategy to diversify our revenues to better position the partnership for growth and success, particularly given our position in the sometimes volatile commodities markets.

We launched our long-term midstream growth initiatives and sought out best-in-class assets to develop the platform for the future and then we found Bridger, a crude focused portfolio of strategic midstream assets with a top notch management team. Bridger was already delivering strong results independently and continues to do so as a part of FGP, contributing nearly $25 million in adjusted EBITDA this quarter.

We continue to expect that Bridger will generate $100 million in adjusted EBITDA for the partnership in fiscal ‘16, which gives us confidence in reaffirming our total company adjusted EBITDA guidance of $400 million to $420 million. As we look ahead and as we have said before, over time, we intend to opportunistically but prudently seek out and incorporate more high-quality midstream assets into our platform and in doing so, we expect to drive a shift in our existing adjusted EBITDA mix from 70% propane and 30% midstream, which is where it stands today to a 50-50 split by the end of fiscal ‘18.

For those of you that have been following our story closely, you know that our initial goal was to achieve a 70-30 mix by the end of fiscal ‘17 and obviously, the Bridger acquisition helped us achieve that goal well ahead of schedule. We are optimistic about this new target based on what we are seeing in our pipeline of acquisition opportunities this fiscal year and beyond.

And as I have said before, we are dedicated to aggressively pursuing accretive complementary acquisitions in both the midstream and propane markets, while at the same time, evaluating organic growth projects just as well. As always, we will be opportunistic in deploying capital and we will only pursue those opportunities that meet our stringent criteria and will enhance our ability to create value for our unitholders.

Turning now to the propane side of the business, we are also pleased with the underlying fundamentals there. I continue to be impressed by our team’s focus and flexibility, which has enabled us to maintain strong margins and contain expenses in the face of a very challenging operating environment.

It’s clearly no secret that this is an El Niño year and as such, we have had a soft start to the heating season. While in years past, weather-related impacts would have been caused for significant concern, with improved insight into the business and our ongoing efforts to diversify our revenue streams, we are much better positioned to navigate the road ahead now more than ever.

Moving on to distributions, thanks to the successful integration of Bridger, we did declare another strong quarterly cash distribution of 51.25 per unit. On an annualized basis, unitholders of FGP are receiving $2.05 per unit following the Bridger acquisition.

Our goal at Ferrellgas is to continue to drive strong distribution growth, equally solid distribution coverage for our unitholders. And given our strategic focus on outlook, we remain quite confident in our ability to do so.

With that, let me turn the call over to Bridger President and CEO, Julio Rios to give an operational update on Bridger.

Thank you, Steve. It’s been an exciting quarter for us at Bridger.

Not only was it our first full quarter as part of Ferrellgas, but we are pleased with the strong start to the fiscal year. As Steve mentioned, we generated $24.8 million in adjusted EBITDA and are tracking well within our expectations for the full year.

We would not have been able to achieve these results without the committed employees at Bridger and the fantastic team at Ferrellgas, all of whom I want to thank for their dedication and hard work to make our integration smooth and successful. We plan to grow the business across our various midstream sectors, with a particular focus on areas within our existing portfolio of assets.

We intend to grow the platform both organically and through selective strategic acquisitions. One of the many reasons for our success is our fully integrated logistics focused model, which is not dependent on commodity prices.

This model has helped us navigate a lower crude price environment. We benefit from strong customer relationships and contractual agreements.

Substantially, all of Bridger’s EBITDA is fee-based and supported by long-term take or pay agreements or acreage dedications. As I mentioned last quarter, we have had positive discussions with existing and potential new customers for additional business opportunities.

These initiatives are ongoing and have already generated incremental business in our truck transportation segment. I look forward to updating you further at the end of the second quarter.

And with that, I will turn the call over to Tod Brown to discuss Blue Rhino.

Thank you, Julio. While the first quarter is the beginning of our off-season at Blue Rhino, we had a positive start to the fiscal year, with volumes up 3.8% over the prior year period.

Blue Rhino continues to be an industry leader in the tank exchange category, with strong organic location growth in the first quarter from existing customers. Thanks to a number of fall price promotions at some of our largest customers.

We also experienced strong comp store growth during the quarter, which helped to offset a small number of store closures. Also, during the first quarter, Blue Rhino was recognized by Lowe’s Home Centers as one of its 2015 innovation partners of the year in the lawn and garden category.

It is a real honor that one of our largest customers appreciates our efforts to remain at the cutting edge of our industry across manufacturing, inventory management and marketing. As we look forward to calendar year 2016, we are making decisions on our Blue Rhino Global Sourcing Products business.

We are implementing improved internal processes that will result in higher overall profitability, which include evaluating lower margin categories to seek improvement, tightly manage expenses, and enhance communication to better deliver on our customer commitments as we progressed towards the appliance, the tool and accessories selling season this next spring. With that, I will turn the call back over to Al Heitmann who will take you through the partnership’s financial performance.

Thanks, Tod. As Steve mentioned earlier, the first quarter of fiscal 2016 was another strong quarter for Ferrellgas.

The partnership generated $48.9 million of adjusted EBITDA in the first quarter, which represents a 42% increase from the prior year period. These results include $24.8 million from our midstream crude oil logistics segment, reflecting the first full quarter of contribution from Bridger Logistics and $35.6 million from our propane segment.

With respect to our propane segment, these results were positively impacted by continued lower wholesale commodity prices, which were approximately 57% lower than those in the prior year quarter as well as our ability to contain retail expenses and maintain strong margins. Through this focus on operational excellence, we were able to minimize the impact of warmer temperatures, which were 31% warmer than normal and 13% warmer than the first quarter of fiscal 2015.

Results for our midstream crude oil logistics segment exceeded management’s expectations for the first quarter, especially in light of continued volatility in the commodity price environment. Our strong results reflect our focus on expense controls and Bridger’s strong customer relationships and long-term fee-based contractual agreements.

Our liquidity position remains strong. We have no senior debt maturities until 2020 and currently have approximately $240 million of borrowing capacity on our secured credit facility, which gives us sufficient capacity to fund our working capital and short-term growth capital needs.

And our OLP leverage ratio through October 2015 sits at approximately 4.5x. So, now for a deeper dive into our first quarter numbers, propane sales volumes for the first quarter were 162 million gallons, down 13% from the 186 million gallons from the same quarter a year ago.

This decrease was largely due to the warmer weather as mentioned previously. Total gross profit for the quarter was $181.3 million.

The gross margin from the propane and related equipment sales segment was $141.3 million or $7.5 million less than the prior year quarter, reflecting the decrease in volumes caused by the warmer temperatures. The gross margin generated from our midstream crude oil logistics segment was $37.7 million.

Operating expense for the quarter was $115 million, an increase from the prior year quarter, primarily due to the additional operating expenses associated with the Bridger acquisition. General and administrative expense rose to $12.2 million for the first quarter also as a result of the acquisition.

And finally, interest expense was $33.8 million, up from the $23.9 million a year ago, primarily due to the increased borrowings to fund acquisitions and growth capital expenditures. I would like to spend a minute now on our seasonal net loss for the quarter, which was $80.6 million or $0.79 per common unit.

While this figure represents a $47.4 million increase from the loss in the prior year quarter, it’s due in part to a one-time non-cash goodwill write-off related to the partnership’s midstream water solutions operations and a one-time loss on trucks held for sale. Our distributable cash flow for the trailing 12-month period was $193.3 million or 1.08x our distributions meaning we have generated $14 million of excess cash flow to fund growth and acquisition capital expenditures.

Now with that, I will turn the call back over to the operator for questions.

Okay. Thank you for your time and attention today.

We look forward to updating you on our Q2 results sometime this spring. We wish you all a very happy holiday season.

Thank you.