Ferrellgas Partners, L.P. engages in the retail distribution of propane and related equipment sales, and midstream operations. Businesses Propane and related equipment sales The company is a distributor of propane and related equipment and supplies to customers in the United States. It serves residential, industrial/commercial, portable tank exchange, agricultural, wholesale and other customers in all 50 states, the District of Columbia and Puerto Rico. The company’s operations primarily include the distribution and sale of propane and related equipment and supplies with concentrations in the Midwest, Southeast, Southwest and Northwest regions of the United States. Sales from propane distribution are generated principally from transporting propane purchased from third parties to propane distribution locations and then to tanks on customers’ premises or to portable propane tanks delivered to nationwide and local retailers. Sales from portable tank exchanges, nationally branded under the name Blue Rhino, are generated through a network of independent and partnership-owned distribution outlets. The company’s market areas for its residential and agricultural customers are rural while its market areas for its industrial/commercial and portable tank exchange customers are generally urban. The company’s retail deliveries of propane are transported from its retail propane distribution locations to its customers by its fleet of bulk delivery trucks, which are fitted with tanks ranging in size from 2,600 to 3,500 gallons. The company also delivers propane to its industrial/commercial and portable tank exchange customers using its fleet of portable tank and portable tank exchange delivery trucks, truck tractors and portable tank exchange delivery trailers. In addition, the company leases tanks to some of its independent distributors involved with its delivery of propane for portable tank exchanges. The company’s owned and independent distributors provide portable tank exchange customers with a national delivery presence that is not available from most of its competitors. Some of its propane distribution locations also conduct the retail sale of propane appliances and related parts and fittings, as well as other retail propane related services and consumer products. The company also sells gas grills, grilling tools and accessories, patio heaters, fireplace and garden accessories, mosquito traps and other outdoor products through Blue Rhino Global Sourcing, Inc. The company’s other activities include the following: the sale of refined fuels, and common carrier services. Seasonality: The volume of propane used by the company’s customers is directly affected by the severity of the winter weather in the regions the company serves and can vary substantially from year to year. Sales and operating profits are concentrated in its second and third quarters, which are during the winter heating season. Its propane by portable tank exchange business experiences higher volumes in the spring and summer, which include the majority of the grilling season. These volumes add to its operating profits during its first and fourth quarters due to those counter-seasonal business activities. Business Strategy: The company’s business strategy for this segment is to: expand its operations through disciplined acquisitions and internal growth, as accretive opportunities become available; capitalize on its national presence and economies of scale; and maximize operating efficiencies through utilization of its technology platform. Regulations: With respect to the sale and distribution of propane, the company is subject to regulations promulgated by the Occupational Safety and Health Administration (OSHA) under its Hazard Communication Standard (HCS), which requires preparation and maintenance of material safety data sheets, hazard labeling on products, and other worker protections. With respect to the transportation of propane by truck, the company is subject to regulations promulgated under the Federal Motor Carrier Safety Act. These regulations cover the transportation of flammable materials and are administered by the United States Depa
ferrellgas partners-lp (FGP:New York)
7500 College Boulevard
Overland Park, KS 66210
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