Indicate by check mark whether the registrants have filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

At ~~February 28, 2018,~~May 31, 2022, the registrants had ~~common units~~Class A Units, Class B Units or shares of common stock outstanding as follows:

Shipping and handling expenses are classified in the following condensed consolidated statements of operations line items:


	For the three months ended April 30,				For the nine months ended April 30,
	2022		2021		2022		2021
Operating expense - personnel, vehicle, plant and other	$	71,487	$	56,989	$	184,128	$	161,242
Depreciation and amortization expense		3,934		3,347		10,270		9,828
Operating expense - equipment lease expense		4,054		5,551		11,721		17,227
	$	79,475	$	65,887	$	206,119	$	188,297

Cash and cash equivalents consist of the following:


	April 30, 2022		July 31, 2021
Cash and cash equivalents	$	217,880	$	270,452
Restricted cash (1)		11,215		11,500
Cash, cash equivalents and restricted cash	$	229,095	$	281,952

(1)

As of April 30, 2022 and July 31, 2021, restricted cash consists of an $11.2 million and $11.5 million cash deposit made with the administrative agent under the operating partnership’s senior secured credit facility that was terminated in April 2020, which may be used by the administrative agent to pay contingent obligations arising under the financing agreement that governed the terminated senior secured credit facility.

For the three months ended January 31, For the six months ended January 31,
2018 2017 2018 2017
Operating expense $ 54,613
$ 47,157
$ 97,928
$ 88,883
Depreciation and amortization expense 1,123
996
2,235
2,022
Equipment lease expense 6,296
6,652
12,364
13,318
Total shipping and handling expenses $ 62,032
$ 54,805
$ 112,527
$ 104,223

~~During~~

For purposes of the quarter ended January 31, 2018, Ferrellgas committed to a plan to dispose of all of its rail cars utilized in the Midstream operations segment and as a result, reclassified 1,292 rail cars from "Property, plant and equipment, net" to "Assets held for sale" on our condensed consolidated ~~balance sheets as~~statements of ~~January 31, 2018. For the~~cash flows, Ferrellgas considers cash equivalents to include all highly liquid debt instruments purchased with an original maturity of three ~~and six~~ months ended January 31, 2018, "Loss on asset sales and disposals" includes a loss of $35.5 million related to the write-down of these rail cars classified as "Assets held for sale". On February 20, 2018, Ferrellgas completed the sale of 1,072 of these rail cars and received approximately $47.0 million in cash. Proceeds from the transaction were used to reduce outstanding debt on Ferrellgas' secured credit facility.

During the quarter ended January 31, 2018, Ferrellgas completed the sale of Bridger Energy, LLC in the Midstream operations segment in exchange for an $8.5 million secured promissory note due in May 2020. For the three and six months ended January 31, 2018, "Loss on asset sales and disposals" includes a loss of $3.6 million related to this sale.

~~"Loss on asset sales and disposals" during the three and six months ended January 31, 2018 and 2017 consists of:~~

For the three months ended January 31, For the six months ended January 31,
2018 2017 2018 2017
Loss on assets held for sale $ 35,515
$ —
$ 35,515
$ —
Loss on sale of assets and other 3,734
45
4,629
6,468
Loss on asset sales and disposals $ 39,249
$ 45
$ 40,144
$ 6,468

or less. Certain cash flow and significant non-cash activities are presented below:


	For the nine months ended April 30,
	2022		2021
Cash paid for:
Interest	$	85,867	$	154,834
Income taxes	$	650	$	438
Non-cash investing and financing activities:
Liabilities incurred in connection with acquisitions	$	644	$	—
Change in accruals for property, plant and equipment additions	$	426	$	(48)
Lease liabilities arising from operating right-of-use assets	$	11,240	$	7,315
Lease liabilities arising from finance right-of-use assets	$	1,872	$	1,904
Accrued fees relating to senior preferred units	$	—	$	18,575
Accrued senior preferred units distributions	$	16,873	$	8,011

For the six months ended January 31,
2018 2017
Cash paid for:
Interest $ 78,682
$ 69,572
Income taxes $ 12
$ 26
Non-cash investing and financing activities:
Liabilities incurred in connection with acquisitions $ 1,508
$ —
Change in accruals for property, plant and equipment additions $ 47
$ (100 )

D. Accounts and notes receivable, net ~~and accounts receivable securitization~~

Accounts and notes receivable, net consist of the following:


	April 30, 2022		July 31, 2021
Accounts receivable	$	223,349	$	135,182
Note receivable		2,635		13,648
Less: Allowance for expected credit losses		(6,733)		(17,256)
Accounts and notes receivable, net	$	219,251	$	131,574

January 31, 2018 July 31, 2017
Accounts receivable pledged as collateral $ 235,150
$ 109,407
Accounts receivable 13,596
47,346
Note receivable - current portion 10,000
10,000
Other 284
307
Less: Allowance for doubtful accounts (3,052 ) (1,976 )
Accounts and notes receivable, net $ 255,978
$ 165,084

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~~Consolidated~~

E. Debt

Long-term debt

Long-term debt consists of the following:


	April 30, 2022		July 31, 2021
Unsecured senior notes
Fixed rate, 5.375%, due 2026 (1)	$	650,000	$	650,000
Fixed rate, 5.875%, due 2029 (1)		825,000		825,000

Notes payable
9.0% and 8.8% weighted average interest rate at April 30, 2022 and July 31, 2021, respectively, due 2022 to 2029, net of unamortized discount of $497 and $573 at April 30, 2022 and July 31, 2021, respectively		4,719		3,882
Total debt, excluding unamortized debt issuance and other costs		1,479,719		1,478,882
Unamortized debt issuance and other costs		(28,910)		(32,322)
Less: current portion of long-term debt		1,979		1,670
Long-term debt	$	1,448,830	$	1,444,890

(1)

On March 30, 2021 (the “Effective Date”), 2 wholly-owned subsidiaries of the operating partnership (referred to herein as the Escrow Issuers) issued $650.0 million aggregate principal amount of 5.375% senior notes due 2026 (referred to herein as the “2026 Notes”) and $825.0 million aggregate principal amount of 5.875% senior notes due 2029 (referred to herein as the “2029 Notes”). On the Effective Date and immediately after the issuance of the 2026 Notes and 2029 Notes by the Escrow Issuers, (i) the Escrow Issuers were merged into the operating partnership and Ferrellgas Finance Corp., respectively, and the operating partnership and Ferrellgas Finance Corp. assumed the obligations of the Escrow Issuers as co-issuers of the 2026 Notes and the 2029 Notes, and (ii) the general partner and certain subsidiaries of the operating partnership guaranteed the 2026 Notes and the 2029 Notes. The 2026 Notes and 2029 Notes bear interest from the date of issuance, payable semi-annually in arrears on October 1 and April 1 of each year. The 2026 Notes will mature on April 1, 2026, and the 2029 Notes will mature on April 1, 2029. See “–Senior unsecured notes” below for additional discussion.

Senior secured revolving credit facility

On the Effective Date, the operating partnership, the general partner and certain of the operating partnership’s subsidiaries entered into a credit agreement (the “Credit Agreement”), which provides for a four-year revolving credit facility (the “Credit Facility”) in an aggregate principal amount of up to $350.0 million, including a sublimit not to exceed $225.0 million for the issuance of letters of credit for a period of 60 days after March 30, 2021, reducing to $200.0 million thereafter.

All borrowings under the Credit Facility are guaranteed by the general partner and the direct and indirect subsidiaries of the operating partnership (other than Ferrellgas Finance Corp. and Ferrellgas Receivables, LLC) and a limited-recourse guaranty from Ferrellgas Partners (limited to its equity interests in the operating partnership). Additionally, all borrowings are secured, on a first priority basis, by substantially all of the assets of the operating partnership and its subsidiaries and all of the equity interests in the operating partnership held by the general partner and Ferrellgas Partners.

Availability under the Credit Facility is, at any time, an amount equal to (a) the lesser of the revolving commitment (initially $350.0 million) and the Borrowing Base (as defined below) minus (b) the sum of the aggregate outstanding amount of borrowings under the Credit Facility plus the undrawn amount of outstanding letters of credit under the Credit Facility plus unreimbursed drawings in respect of letters of credit (unless otherwise converted into revolving loans). The "Borrowing Base" equals the sum of: (a) $200.0 million, plus (b) 80% of the eligible accounts receivable of the operating partnership and its subsidiaries, plus (c) 70% of the eligible propane inventory of the operating partnership and its subsidiaries, valued at weighted average cost, less (d) certain reserves, as determined and subject to certain modifications by the administrative agent in its permitted discretion.

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Amounts borrowed under the Credit Facility bear interest, at the operating partnership's option, at either (a) for base rate loans, (i) a base rate determined by reference to the highest of (A) the rate of interest last quoted by The Wall Street Journal in the U.S. as the prime rate in effect, (B) the NYFRB Rate from time to time plus 0.50% per annum and (C) the Adjusted LIBO Rate for a one-month interest period plus 1.00% per annum plus (ii) a margin of 1.50% to 2.00% per annum depending on total net leverage ~~ratio~~

or (b) for Eurodollar rate loans, (i) a rate determined by reference to the Adjusted LIBO Rate plus (ii) a margin of 2.50% to 3.00% per annum depending on total net leverage. The ~~consolidated~~operating partnership is required to pay an undrawn fee to the lenders on the average daily unused amount of the Credit Facility at a rate of 0.375% to 0.50% per annum depending on total net leverage.

The Credit Agreement contains customary representations, warranties, covenants and events of default.

The financial covenants in the Credit Agreement require the operating partnership to maintain: (1) a minimum interest coverage ratio (defined generally as the ratio of adjusted EBITDA to cash interest expense) of 2.50 to 1.00, (2) a maximum secured leverage ratio ~~is defined~~(defined generally as the ratio of total ~~debt~~first priority secured indebtedness to adjusted EBITDA) of 2.50 to 1.00, and (3) a maximum total net leverage ratio (defined generally as the ratio of total indebtedness (net of unrestricted cash, subject to certain limits) to adjusted EBITDA) of 5.50 to 1.00 initially. The maximum total net leverage ratio adjusts to 5.25 to 1.00 starting with the quarter ending April 30, 2022, 5.00 to 1.00 starting with the quarter ending October 31, 2022, and 4.75 to 1.00 starting with the quarter ending April 30, 2023.

In addition to the financial covenants, the Credit Agreement includes covenants that may (or if not met will) restrict the ability of the operating partnership to, among other things: incur indebtedness or liens; effect certain fundamental changes, including mergers, consolidations, liquidations, dissolutions and changes in line of business; make certain restricted payments, including distributions to holders of Preferred Units, Ferrellgas Partners and the general partner and redemptions of Preferred Units; make investments, loans or advances; dispose of assets; effect sale and leaseback transactions; enter into swap agreements; make optional payments and modifications of subordinated and other debt instruments; enter into transactions with affiliates; agree to negative pledge clauses and burdensome agreements; and effect amendments to organizational documents.

In particular, under these covenants, subject to certain exceptions and additional requirements, the operating partnership is permitted to make cash distributions to holders of Preferred Units, Ferrellgas Partners and the general partner, redemptions of Preferred Units and other restricted payments (i) only in limited amounts specified in the Credit Agreement and (ii) only if availability under the Credit Facility exceeds the greater of $50.0 million and 15% of the Borrowing Base and the operating partnership’s total net leverage ratio is not greater than 5.0 to 1.0 (or 4.75 to 1.0 starting on April 30, 2023). As of April 30, 2022, the operating partnership is in compliance with all of its debt covenants.

On June 11, 2021, the operating partnership, the general partner and certain of the operating partnership’s subsidiaries entered into a First Amendment to the Credit Agreement (the “Credit Agreement Amendment”), with an effective date of April 30, 2021. Among other matters, the Credit Agreement Amendment amended the minimum-interest-coverage-ratio covenant described above by (i) waiving compliance with the covenant for the trailing four fiscal quarters ~~earnings before~~ended April 30, 2021 and (ii) annualizing the cash interest expense ~~income tax expense, depreciation~~component of the covenant for (a) the fiscal quarter ended on July 31, 2021, (b) the two fiscal quarters ending October 31, 2021, and ~~amortization expense ("EBITDA"~~(c) the three fiscal quarters ending January 31, 2022.

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Senior unsecured notes

On the Effective Date, (i) the Escrow Issuers issued $650.0 million aggregate principal amount of 2026 Notes and $825.0 million aggregate principal amount of 2029 Notes, and (ii) the operating partnership and Ferrellgas Finance Corp. assumed the obligations of the Escrow Issuers as co-issuers of the 2026 Notes and the 2029 Notes upon the merger of the Escrow Issuers into the operating partnership and Ferrellgas Finance Corp., respectively. The operating partnership received aggregate net proceeds from the issuance and sale of the 2026 Notes and the 2029 Notes of approximately $1,441.2 million, after deducting the initial purchasers’ discount and estimated offering expenses. The operating partnership used such net proceeds, together with the net proceeds of the issuance and sale of the Preferred Units, as discussed in Note F – Preferred units, and cash on hand, (i) to redeem (or satisfy and discharge the indentures governing and subsequently redeem) all of the issued and outstanding 6.50% senior unsecured notes due 2021 (the “2021 Notes”), 6.75% senior unsecured notes due 2022 (the “2022 Notes”), 6.75% senior unsecured notes due 2023 (the “2023 Notes”) ~~(both~~and 10.00% senior secured notes due 2025 (the “2025 Notes”), in the aggregate combined principal amount for all such notes of $2,175.0 million, and (ii) to repay all outstanding obligations under the agreement governing the accounts receivable securitization facility (the “Accounts Receivables Facility”) in connection with the termination of that facility.

The 2026 Notes and 2029 Notes are the senior unsecured obligations of the operating partnership and Ferrellgas Finance Corp. and are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the general partner and all domestic subsidiaries of the operating partnership other than Ferrellgas Finance Corp. and Ferrellgas Receivables, LLC.

The 2026 Notes may be redeemed prior to April 1, 2023 and the 2029 Notes may be redeemed prior to April 1, 2024 at the issuers’ option, in whole or in part, at a redemption price of par plus the applicable make-whole premium and accrued and unpaid interest. On and after April 1, 2023 and April 1, 2024, the 2026 Notes and the 2029 Notes, respectively, may be redeemed at the issuers’ option, in whole or in part, at the redemption prices set forth in the respective indenture governing such notes, plus accrued and unpaid interest. Beginning on April 1, 2025 and April 1, 2026, the 2026 Notes and 2029 Notes, respectively, may be redeemed at par plus accrued and unpaid interest.

The indentures governing the 2026 Notes and 2029 Notes contain customary affirmative and negative covenants restricting, among other things, the ability of the operating partnership and its restricted subsidiaries to: incur additional indebtedness and guarantee indebtedness; pay dividends or make other distributions (including distributions to holders of Preferred Units, Ferrellgas Partners and the general partner) or repurchase or redeem their equity interests (including redemptions of Preferred Units); repurchase or redeem certain debt; make certain other restricted payments or investments; sell assets, incur liens, enter into transactions with affiliates, enter into agreements restricting the operating partnership’s subsidiaries’ ability to pay dividends; and consolidate, merge or sell all or substantially all of their assets. The indentures also restrict the ability of the general partner to engage in certain activities.

In particular, under these covenants, subject to certain exceptions and additional requirements, the operating partnership is permitted to make cash distributions to holders of Preferred Units, Ferrellgas Partners and the general partner, redemptions of Preferred Units and other restricted payments (i) only in limited amounts specified in the indentures and (ii) only if the operating partnership’s net leverage ratio (defined generally to mean the ratio of consolidated total net debt to trailing 4 quarters consolidated EBITDA, both as adjusted for certain, specified items) ofis not greater than 5.0 to 1.0, on a pro forma basis giving effect to the restricted payment and, if applicable, certain other specified events. Further, if the operating ~~partnership, as detailed in Ferrellgas' secured credit facility and accounts receivable securitization facility.~~

~~The current maximum~~partnership’s consolidated ~~leverage covenant ratios are as follows:~~



~~Date~~		~~Maximum consolidated leverage ratio~~
~~January 31, 2018~~		~~7.75~~
~~April 30, 2018~~		~~7.75~~
~~July 31, 2018 & thereafter~~		~~5.50~~

~~Ferrellgas' consolidated leverage ratio was 6.96x as of January 31, 2018. See additional disclosure about Ferrellgas' financial covenants in Note E - Debt.~~

~~Consolidated interest coverage ratio~~

~~The current minimum consolidated interest coverage ratios are as follows:~~



~~Date~~		~~Minimum consolidated interest coverage ratio~~
~~January 31, 2018~~		~~1.75~~
~~April 30, 2018~~		~~1.75~~
~~July 31, 2018 & thereafter~~		~~2.50~~

~~Ferrellgas' consolidated interest coverage ratio was 2.14x as of January 31, 2018; the margin allows for approximately $25.3 million of additional interest expense~~is equal to or ~~approximately $44.3 million~~ less ~~EBITDA. See additional disclosure about Ferrellgas' financial covenants in Note E - Debt.~~

This accounts receivable securitization facility matures on July 29, 2019 unless the secured credit facility matures or terminates at an earlier date. If Ferrellgas replaces the senior secured credit facility priorthan 1.75 to 1.00 (on a pro forma basis giving effect to the October 2018 maturity date, Ferrellgas will need to amend the accounts receivable securitization facility to modify the maturity date, or replace it with a new facility. Ferrellgas is working to renew or replace the accounts receivable securitization facility. Potential options include extending the current accounts receivable securitization facility, entering into a new accounts receivable securitization facility or securing alternative financing from a different source. Ferrellgas believes it is probable that it will be able to obtain sufficient capital to meet anticipated liquidity demands.

~~At January 31, 2018, $235.2 million of trade accounts receivable were pledged as collateral against $166.0 million of collateralized notes payable due to the commercial paper conduit. At~~ ~~July 31, 2017~~, $109.4 million of trade accounts receivable were pledged as collateral against $69.0 million of collateralized notes payable due to the commercial paper conduit. These accounts receivable pledged as collateral are bankruptcy remote from the operating partnership. The operating partnership does not provide any guarantee or similar support to the collectability of these accounts receivable pledged as collateral.

~~As of~~ ~~January 31, 2018~~, Ferrellgas had received cash proceeds of $166.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. As of July 31, 2017, Ferrellgas had received cash proceeds of $69.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. Borrowings under the accounts receivable securitization facility had a weighted average interest rate of 4.0% and ~~4.0%~~ ~~as of~~ ~~January 31, 2018~~ ~~and~~ ~~July 31, 2017, respectively.~~

E.~~Debt~~

~~Short-term borrowings~~

Since October 31, 2017, Ferrellgas classified all of its secured credit facility borrowings as short-term because the facility matures in October 2018. Prior to October 31, 2017, Ferrellgas classified as short-term the portion of its secured credit facility borrowings that were used to fund working capital needs that management intended to pay down within the 12 month period following the balance sheet date. As of January 31, 2018 and July 31, 2017, $261.2 million and ~~$59.8 million, respectively, were classified as short-term borrowings. For further discussion see the secured credit facility section below.~~

~~Financial covenants~~

The indenture governing the outstanding notes of Ferrellgas Partners and the agreements governing the operating partnership’s indebtedness contain various covenants that limit Ferrellgas Partners' ability and the ability of specified subsidiaries to, among other things, make restricted payments and incur additional indebtedness. The general partner believes that the most restrictive of these covenants are the consolidated fixed charge coverage ratio, as defined in the indenture governing the outstanding notes of Ferrellgas Partners, and the consolidated leverage ratio and consolidated interest coverage ratio, as defined in the secured credit facility and the accounts receivable securitization facility.

~~Before a~~ restricted payment ~~(as defined in~~and, if applicable, certain other specified events), the ~~secured credit facility~~amount of distributions and the operating partnership indentures) can be made by the operating partnership, the operating partnership must be in compliance with the consolidated leverage ratio and consolidated interest coverage ratio covenants under the secured credit facility and accounts receivable securitization facility and in compliance with the covenants under the operating partnership's indentures. Ifother restricted payments the operating partnership is ~~unable~~permitted to make ~~restricted payments, Ferrellgas Partners will not have~~under the ability to make semi-annual interest payments on its $357.0 million 8.625% unsecured senior notes due 2020 or distributions to Ferrellgas Partners common unitholders. If Ferrellgas Partners does not make interest payments on its unsecured notes, that would constitute an eventindentures is further limited. As of ~~default which would permit~~April 30, 2022, the ~~acceleration of the obligations underlying the Ferrellgas Partners indenture, including all outstanding principal owed. The~~

accelerated obligations would become immediately due and payable, which would in turn trigger cross acceleration of other debt. If Ferrellgas' debt obligations are accelerated, Ferrellgas may be unable to borrow sufficient funds to refinance debt in which case unitholders and investors in our debt instruments could experience a partial or total loss of their investment.

~~Before a restricted payment (as defined in the Ferrellgas Partners indenture) can be made by Ferrellgas Partners, Ferrellgas Partners must be~~operating partnership is in compliance with ~~the consolidated fixed charge coverage ratio covenant under the Ferrellgas Partners indenture. If Ferrellgas Partners is unable to make restricted~~all of its debt covenants.

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The scheduled annual principal payments ~~Ferrellgas Partners will not have the ability to make distributions to Ferrellgas Partners common unitholders.~~

A breach of the consolidated leverage ratio covenant or the consolidated interest coverage ratio covenant under the secured credit facility and the accounts receivable securitization facility would result in an event of default under those facilities resulting in the operating partnership’s inability to obtain funds under those facilities and would give the lenders and receivables purchasers the right to accelerate the operating partnership's obligations under those facilities and to exercise remedies to collect the outstanding amounts under those facilities. If the lenders and receivables purchasers accelerated the operating partnership's obligations, that would constitute an event of default which would permit the acceleration of the obligations underlying the Ferrellgas Partners indenture, including all outstanding principal owed. The accelerated obligations would become immediately due and payable, which would in turn trigger cross acceleration of other debt. If Ferrellgas'on long-term debt obligations are accelerated, Ferrellgas may be unable to borrow sufficient funds to refinance debt in which case unitholders and investors in our debt instruments could experience a partial or total loss of their investment.

~~Consolidated leverage ratio~~

The consolidated leverage ratio is defined as the ratio of total debt of the operating partnership to trailing four quarters EBITDA (both as adjusted for certain, defined items) of the operating partnership, as detailed in Ferrellgas' secured credit facility and accounts receivable securitization facility.

~~The current maximum consolidated leverage covenant ratios~~ are as follows:


	Scheduled
Payment due by fiscal year	principal payments
2022	$	462
2023		1,709
2024		1,139
2025		930
2026		650,710
Thereafter		825,266
Total	$	1,480,216



~~Date~~		~~Maximum consolidated leverage ratio~~
~~January 31, 2018~~		~~7.75~~
~~April 30, 2018~~		~~7.75~~
~~July 31, 2018 & thereafter~~		~~5.50~~

Ferrellgas' consolidated leverage ratio was 6.96x as of January 31, 2018; the margin allows for approximately $193.2 million of additional borrowing capacity or approximately $24.9 million less EBITDA. This covenant also restricts Ferrellgas' ability to make distribution payments as discussed above.

~~Consolidated interest coverage ratio~~

The consolidated interest coverage ratio is defined as the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of the operating partnership, as detailed in Ferrellgas' secured credit facility and accounts receivable securitization facility.

~~The current minimum consolidated interest coverage ratios are as follows:~~



~~Date~~		~~Minimum consolidated interest coverage ratio~~
~~January 31, 2018~~		~~1.75~~
~~April 30, 2018~~		~~1.75~~
~~July 31, 2018 & thereafter~~		~~2.50~~

Ferrellgas' consolidated interest coverage ratio was 2.14x at January 31, 2018; the margin allows for approximately $25.3 million of additional interest expense or approximately $44.3 million less EBITDA.

~~Consolidated fixed charge coverage ratio~~

The indenture governing the outstanding notes of Ferrellgas Partners includes a consolidated fixed charge coverage ratio test for the incurrence of debt and the making of restricted payments. This covenant requires that the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of Ferrellgas Partners be at least 1.75x before a restricted payment (as defined in the indenture) can be made by Ferrellgas Partners. If this ratio were to drop below 1.75x, the indenture allows Ferrellgas Partners to make restricted payments of up to $50.0 million in total over a 16 quarter period while below this ratio. As of January 31, 2018, the ratio was 1.59x. As a result, the $9.8 million distribution to be paid to common unitholders on March 16, 2018 will be taken from the $50.0 million restricted payment limitation, which after considering the $9.8 million deductions taken as a result of the distributions paid in September 2017 and December 2017, leaves $20.6 million for future restricted payments. Unless the indenture governing the outstanding notes is amended or refinanced, if our consolidated fixed charge coverage ratio does not improve to at least 1.75x and we continue our current quarterly distribution rate of $0.10 per common unit, this covenant will not allow us to make common unit distributions for our quarter ending October 31, 2018 and beyond.

~~Debt and interest expense reduction strategy~~

Ferrellgas continues to execute on a strategy to further reduce its debt and interest expense. This strategy may include amending or refinancing existing debt agreements, additional asset sales, a reduction in Ferrellgas Partners' annual distribution rate or the issuance of equity. Ferrellgas believes any debt and interest expense reduction strategies would remain in effect until Ferrellgas' consolidated leverage ratio reaches 4.5x or a level Ferrellgas deems appropriate for its business.

If Ferrellgas is unsuccessful with its strategy to further reduce debt and interest expense, is unsuccessful in renegotiating its secured credit facility, which matures in October 2018, or is unable to secure alternative liquidity sources, it may not have the liquidity to fund its operations after that maturity date.

Failure to maintain compliance with these and other covenants in our agreements or failure to renew or replace liquidity available under the secured credit facility could have a material, adverse effect on Ferrellgas' operating capacity and cash flows and could further restrict Ferrellgas' ability to incur debt, pay interest on the notes or to make cash distributions to unitholders. An inability to pay interest on the notes could result in an event of default that would permit the acceleration of all of Ferrellgas' indebtedness. The accelerated debt would become immediately due and payable, which would in turn trigger cross-acceleration under other debt. If the payment of Ferrellgas' debt is accelerated, Ferrellgas' assets may be insufficient to repay such debt in full and Ferrellgas may be unable to borrow sufficient funds to refinance debt, in which case investors in common units and our debt instruments could experience a partial or total loss of their investment.

As a result of the October 2018 maturity date of Ferrellgas' secured credit facility, the entire balance outstanding at January 31, 2018 has been classified as a current liability in the condensed consolidated balance sheet as of January 31, 2018. The absence of a plan to renew or refinance this debt would raise substantial doubt about Ferrellgas' ability to continue as a going concern. Ferrellgas is working to renew or replace the secured credit facility. Potential options include extending the current secured credit facility, entering into a new secured credit facility or securing alternative financing from a different source. Ferrellgas believes it is probable that it will be able to obtain sufficient capital to meet anticipated liquidity demands and, therefore, does not believe there is substantial doubt about our ability to continue as a going concern.

~~Secured credit facility~~

~~As of~~ ~~January 31, 2018~~, Ferrellgas had total borrowings outstanding under its secured credit facility of $261.2 million, all of which was classified as short-term. Ferrellgas had $125.8 million of capacity under the secured credit facility as of January 31, 2018. As of July 31, 2017, Ferrellgas had total borrowings outstanding under its secured credit facility of ~~$245.5 million, of which~~ ~~$185.7 million~~ was classified as long-term debt. Ferrellgas had $190.3 million of capacity under the secured credit facility as of July 31, 2017. However, the consolidated leverage ratio covenant under this facility limited additional borrowings to $67.5 million as of July 31, 2017. Borrowings outstanding at ~~January 31, 2018~~ ~~and~~ ~~July 31, 2017~~ ~~under the secured credit facility had weighted average interest rates of 6.5% and~~ ~~6.0%, respectively.~~

Letters of credit outstanding at ~~January~~April 30, 2022 and July 31, ~~2018~~2021 totaled ~~$188.0~~$90.8 million and $107.7 million, respectively, and were used to secure ~~commodity hedges,~~insurance arrangements, product purchases and ~~insurance arrangements. Letters~~commodity hedges. As of ~~credit outstanding at July 31, 2017 totaled $139.2 million and were used to secure commodity hedges, product purchases, and insurance arrangements. At~~ ~~January 31, 2018~~,April 30, 2022, Ferrellgas had ~~remaining letter~~available borrowing capacity under its Credit Facility of ~~credit capacity~~$259.2 million.

F. Preferred units

On the Effective Date, pursuant to an Investment Agreement with certain purchasers named therein, the operating partnership issued and sold an aggregate of ~~$12.0~~700,000 Preferred Units (the “Preferred Units”), having an aggregate initial liquidation preference of $700.0 million. At ~~July 31, 2017, Ferrellgas had remaining letter~~The purchase price per Preferred Unit was $1,000 less a 3.0% purchase price discount, for an aggregate purchase price of ~~credit capacity~~$679.0 million. The operating partnership received net proceeds from the issuance and sale of ~~$60.8~~the Preferred Units of approximately $651.3 million,.

F. ~~Partners' deficit~~

As after deduction of ~~January 31, 2018~~the purchase price discount and ~~July 31, 2017, Ferrellgas Partners limited partner units, which are listed~~certain expenses.

The operating partnership used such net proceeds, together with the net proceeds of the issuance and sale of the 2026 Notes and the 2029 Notes and cash on hand, (i) to redeem (or satisfy and discharge the ~~New York Stock Exchange~~indentures governing and subsequently redeem) all of the issued and outstanding 2021 Notes, 2022 Notes, 2023 Notes and 2025 Notes, as described in Note E - Debt, and (ii) to repay all outstanding obligations under the ~~symbol “FGP,~~Accounts Receivable Facility in connection with the termination of that facility.

Redemption of the Preferred Units in the near term is not probable because of the high redemption price in the first three to five years. As described in greater detail under “Issuer Redemption Right” below, the Redemption Price for the Preferred Units is based upon the greater of the amount that would result in a 1.47x MOIC (defined below) and the amount that would result in a 12.25% internal rate of return. If the Preferred Units were redeemed at any time during the first three to four years after issuance, the 1.47x MOIC would require a large premium payment and that large premium payment would result in an internal rate of return far in excess of the minimum 12.25%. Consequently, it is unlikely that Ferrellgas would be able to achieve any savings in its cost of capital by redeeming the Preferred Units during the first three to four years after issuance.

“MOIC” ~~were beneficially owned~~means, with respect to a Preferred Unit, a multiple on invested capital equal to the quotient determined by dividing (A) the ~~following:~~

January 31, 2018 July 31, 2017
Public common unitholders 69,612,939
69,612,939
Ferrell Companies (1) 22,529,361
22,529,361
FCI Trading Corp. (2) 195,686
195,686
Ferrell Propane, Inc. (3) 51,204
51,204
James E. Ferrell (4) 4,763,475
4,763,475

~~(1) Ferrell Companies is~~sum of (x) the ~~owner~~aggregate amount of all distributions made in cash with respect to such Preferred Unit prior to the applicable date of determination, with certain exclusions, plus (y) each Redemption Price paid in cash in respect of such Preferred Unit, on or prior to the applicable date of determination, by (B) the Purchase Price (defined below) of such Preferred Unit.

On the Effective Date the general partner entered into (i) the Fifth Amended and ~~is an approximate 23% direct owner~~Restated Agreement of Limited Partnership of Ferrellgas, ~~Partners' common units~~L.P. (the “Amended OpCo LPA”), which amended and ~~thus a related party. Ferrell Companies also beneficially owns 195,686~~restated in its entirety the Fourth Amended and ~~51,204 common units~~Restated Agreement of Limited Partnership of Ferrellgas ~~Partners held by FCI Trading Corp. ("FCI Trading")~~L.P., and ~~Ferrell Propane, Inc. ("Ferrell Propane"~~(ii) the First Amendment to the Amended OpCo LPA (the “OpCo LPA Amendment”), ~~respectively, bringing Ferrell Companies' beneficial ownership to 23.4% at January 31, 2018.~~

~~(2) FCI Trading is an affiliate~~which sets forth the preferences, rights, privileges and other terms of the ~~general partner and thus~~Preferred Units.

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Issuer Redemption Right

The operating partnership has the right to redeem all or a ~~related party.~~

~~(3) Ferrell Propane is controlled by the general partner and thus a related party.~~

~~(4) James E. Ferrell is the Interim Chief Executive Officer and President~~portion of the ~~general partner;~~Preferred Units for cash, pro rata and at any time and from time to time, including in connection with a Change of Control (as defined in the OpCo LPA Amendment), at an amount per Preferred Unit (the “Redemption Price”) equal to, without duplication, the sum of (a) the greater of (i) the amount necessary to result in a MOIC of 1.47x in respect of the purchase price, before discount, of such Preferred Unit, which is ~~Chairman~~$1,000 per Preferred Unit (the “Purchase Price”), and (ii) the amount necessary to result in the applicable internal rate of return equal to 12.25%, which is increased by 150 basis points if the operating partnership has elected to pay more than four Quarterly Distributions (as defined below) in PIK Units (as defined below) and (b) the accumulated but unpaid Quarterly Distributions to the date of redemption, if any. A partial redemption of the Preferred Units is permitted only in the event the aggregate amount to be paid in respect of all Preferred Units included in such partial redemption is at least $25.0 million.

Investor Redemption Right

In the event that (i) any Class B Units are outstanding, or (ii) (x) 0 Class B Units are outstanding and (y) no more than 233,300 Preferred Units are outstanding, at any time on and after the tenth anniversary of the Effective Date the Required Holders may elect, by delivery of written notice, to have the operating partnership fully redeem each remaining outstanding Preferred Unit for an amount in cash equal to the Redemption Price. “Required Holders” refers to both (i) holders owning at least 33.3% of the total Preferred Units outstanding at any time and (ii) certain initial affiliated purchasers, for so long as such initial affiliated purchasers collectively own at least 25% of the Preferred Units outstanding at such time.

In the event that (i) 0 Class B Units are outstanding and (ii) more than 233,300 Preferred Units are outstanding, the Required Holders will have the right to trigger a sale of the operating partnership after the tenth anniversary of the Effective Date. If the operating partnership fails to consummate a sale that would pay the Redemption Price in full within 180 days of written notice requiring such sale, the Required Holders will have the right to appoint a majority of the members of the Board of Directors of the general partner and ~~thus~~initiate a sale of the operating partnership.

Change of Control

Upon a Change of Control (as defined in the OpCo LPA Amendment), the Required Holders will have the option to require the redemption of all or a portion of the Preferred Units in cash in an amount equal to the Redemption Price; provided, that such Redemption Price shall not be payable unless the operating partnership shall have first made any required change of control offer pursuant to the indentures governing the 2026 Notes and the 2029 Notes and purchased all such 2026 Notes and 2029 Notes tendered pursuant to such offer (unless otherwise waived by such noteholders); provided, further that the Redemption Price shall be paid immediately following the purchase of such tendered Notes (if any).

Fair Value of Embedded Derivatives

Ferrellgas identified the investor redemption right and the change in control option as embedded derivatives that require bifurcation as they are not clearly and closely related ~~party. JEF Capital Management owns 4,758,859~~to the debt host contract and has concluded that the fair values at issuance and at April 30, 2022, are immaterial to the financial statements.

Distributions

Pursuant to the OpCo LPA Amendment, the operating partnership is required to pay to the holders of ~~these~~each Preferred Unit a cumulative, quarterly distribution (the "Quarterly Distribution") at the Distribution Rate (as defined below) on the Purchase Price.

"Distribution Rate" means, for the first five years after March 30, 2021, a rate per annum equal to 8.956%, with certain increases in the Distribution Rate on each of the 5^th, 6^th and 7^th anniversaries of March 30, 2021, subject to a maximum rate of 11.125% and certain other adjustments and exceptions.

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The Quarterly Distribution may be paid in cash or, at the election of the operating partnership, "in kind" through the issuance of additional Preferred Units ("PIK Units") at the quarterly Distribution Rate plus an applicable premium that escalates each year from 75 bps to 300 bps so long as the Preferred Units remain outstanding. In the event the operating partnership fails to make any Quarterly Distribution in cash, such Quarterly Distribution will automatically be paid in PIK Units.

The Distribution Rate on the Preferred Units will increase upon violation of certain protective provisions for the benefit of Preferred Unit holders notwithstanding the cap mentioned above.

On February 15, 2022 and May 15, 2022, $15.4 million of the Quarterly Distribution was paid for each quarter in cash to holders of Preferred Units. As of April 30, 2022, the Quarterly Distribution accrued was $16.9 million. The remaining Quarterly Distribution accrual of $1.5 million represents additional amounts payable to certain holders of Preferred Units pursuant to the side letters outlined in the OpCo LPA Amendment.

Tax Distributions

For any quarter in which the operating partnership makes a Quarterly Distribution in PIK Units in lieu of cash, it will be required to make a subsequent cash tax distribution for such quarter in an amount equal to the (i) the lesser of (x) 25% and (y) the highest combined federal, state and local tax rate applicable for corporations organized in New York, multiplied by (ii) the excess (if any) of (A) one-fourth (1/4th) of the estimated taxable income to be allocated to the holders of Preferred Units for the year in which the Quarterly Tax Payment Date (which refers to certain specified dates that next follow a Quarterly Distribution date on which PIK Units were issued) occurs, over (B) any cash paid on the Quarterly Distribution date immediately preceding the Quarterly Tax Payment Date on which a quarterly tax amount would otherwise be paid (such amount, the "Tax Distribution"). Tax Distributions are treated as advances against, and reduce, future cash distributions for any reason, including payments in redemption of Preferred Units or PIK Units, or payments to the holders in their capacity as such pursuant to any side letter or other agreement.

Additional Amounts for Certain Purchasers

The operating partnership is required to pay certain additional amounts of cash (the “Additional Amounts”) as necessary to certain holders of Preferred Units that hold their interests through a “blocker,” which is a U.S. entity that is owned and organized by certain original purchasers of Preferred Units who are non-U.S. persons or tax exempt for U.S. tax purposes and is treated as a corporation for U.S. tax purposes. Only certain original purchasers of Preferred Units who hold their Preferred Units through such blockers are, and none of their transferees is, entitled to Additional Amounts. Additional Amounts are capped at the lesser of: (a) the product of 20% multiplied by taxable income allocated to a “blocker” (as defined) divided by 0.8, and (b) the actual taxes payable by the “blocker” as a result of holding Senior Preferred Units.

Board Rights

For so long as at least 140,000 Preferred Units remain outstanding, holders of the Preferred Units have the right to designate 1 director to the Board of the general partner, subject to approval by the general partner.

Protective Provisions

The OpCo LPA Amendment and the Amended Ferrellgas Partners LPA (as defined in Note G – Equity (Deficit)) include, among other things, certain covenants for the benefit of holders of Preferred Units applicable to the operating partnership and, in certain instances, Ferrellgas Partners, for so long as at least $35,000,000 of Preferred Units and PIK Units remain outstanding. These covenants include, among other things, limitations on (i) effecting a Change of Control, (ii) amending organizational documents, (iii) issuing certain equity securities, (iv) issuing Preferred Units, (v) filing for bankruptcy, (vi) non-ordinary course investments, and (vii) incurring certain levels of indebtedness.

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Ranking and Liquidation Preference

The Preferred Units rank senior to any other class or series of equity interests of the operating partnership (including the partnership interests held by Ferrellgas Partners and the general partner). Upon a liquidation, dissolution or winding up of the operating partnership, each holder of Preferred Units will be entitled to receive, prior and in preference to any distribution of any assets of the operating partnership to the holders of any other class or series of equity interests in the operating partnership (including Ferrellgas Partners and the general partner), an amount per Preferred Unit equal to the Redemption Price.

Restrictions on Cash Distributions to Ferrellgas Partners and the General Partner

The operating partnership is permitted to make distributions of Available Cash (as defined in the Amended OpCo LPA) to Ferrellgas Partners only if (i) the operating partnership has made all required Quarterly Distributions (in cash or PIK Units), Tax Distributions and payments of Additional Amounts, (ii) the operating partnership has redeemed all PIK Units issued, (iii) the operating partnership’s consolidated net leverage (defined generally to mean the ratio of the operating partnership’s consolidated total net debt (including the total redemption price of all outstanding Preferred Units and PIK Units but excluding certain letters of credit and capital lease obligations) as of each Quarterly Distribution Date to trailing four quarters consolidated EBITDA, both as adjusted for certain, specified items) is below 7.25x through May 15, 2022 and 7.00x thereafter, net of cash, immediately before and after giving effect to such distribution, (iv) the operating partnership has at least $100 million of liquidity, consisting of unrestricted cash on hand and available capacity under the Credit Agreement or any replacement thereof, and (v) the operating partnership is in compliance with the other protective provisions in the OpCo LPA Amendment.

G. Equity (Deficit)

Reverse Unit Split

On the Effective Date, Ferrellgas Partners effected a 1-for-20 reverse unit split in which holders of its then-outstanding common units received one Class A Unit for every twenty common units held. No fractional Class A Units were issued in connection with the reverse unit split. If, as a result of the reverse unit split, a unitholder would otherwise have been entitled to a fractional Class A Unit, the number of Class A Units such unitholder received was rounded up or down to the nearest whole Class A Unit, with a fraction of one-half or less being rounded down. The reverse unit split resulted in a reduction of our previously outstanding common units from 97,152,665 common units to 4,857,605 Class A Units.

Class B Units

On the Effective Date, Ferrellgas Partners issued 1.3 million Class B Units to the holders of the $357.0 million aggregate principal amount of its 8.625% senior unsecured notes due June 2020 (the “Ferrellgas Partners Notes”) in exchange for such holders’ contribution of the Ferrellgas Partners Notes to Ferrellgas Partners as a capital contribution and ~~is wholly-owned~~in satisfaction of such holders’ claims in respect of the Ferrellgas Partners Notes. The terms of the Class B Units are set forth in the Sixth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. (the “Amended Ferrellgas Partners LPA”), which the general partner entered into on the Effective Date and which amended and restated in its entirety the Fifth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P.

Ferrellgas Partners may, subject to certain conditions, issue additional Class A Units to such parties as determined at the discretion of Ferrellgas Partners, upon consent by the ~~James E. Ferrell Revocable Trust Two for which James E. Ferrell is~~holders of the ~~trustee and sole beneficiary. The remaining 4,616 common units are held by Ferrell Resources Holding, Inc.~~requisite percentage of Class B Units as specified in the Amended Ferrellgas Partners LPA (the “Requisite Class B Units”), which refers to: (i) if the initial majority holder of Class B Units holds at least 50% of Class B Units, holders of at least 50% of the outstanding Class B Units, or (ii) if the initial majority holder of Class B Units holds less than 50% of Class B Units, holders of at least one-third of the outstanding Class B Units.

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Once holders of Class B Units receive distributions in the ~~James E. Ferrell Revocable Trust One,~~aggregate amount of $357.0 million (which was the outstanding principal amount of the Ferrellgas Partners Notes), the Class B Units will be (i) convertible into Class A Units at the option of Ferrellgas Partners, if that distribution threshold is reached prior to the fifth anniversary of the Effective Date, or (ii) converted automatically into Class A Units, if the distribution threshold is reached on or after the fifth anniversary of the Effective Date, in each case at the applicable conversion rate set forth in the following table:


Year Post-Emergence	Conversion Factor
Year 1	1.75x
Year 2	2.00x
Year 3	3.50x
Year 4	4.00x
Year 5	5.00x
Year 6	6.00x
Year 7	7.00x
Year 8	10.00x
Year 9	12.00x
Year 10	25.00x

In the first five years after the Effective Date, Ferrellgas Partners may redeem the Class B Units, in full, at a price equal to an amount that will result in an internal rate of return with respect to the Class B Units equal to the sum of (i) 300 basis points and (ii) the internal rate of return for ~~which James E. Ferrell~~the Preferred Units as specified in the Amended Ferrellgas Partners LPA, subject to the minimum redemption price of $302.08 per unit, less any cash distributed prior to the redemption, if called in the first year after issuance. The total internal rate of return required to redeem the Class B Units is 15.85%, but that amount increases under certain circumstances, including if the ~~trustee and sole beneficiary.~~

~~Partnership~~operating partnership paid distributions ~~paid~~

on the Preferred Units in-kind rather than in cash for a certain number of quarters. There have not been any in-kind distributions through April 30, 2022.

During the first five years following the Effective Date, after Ferrellgas Partners has ~~paid~~distributed $356 million in distributions to holders of the ~~following distributions:~~Class B Units, Ferrellgas Partners will have the option to hold cash for six months at either Ferrellgas Partners or Ferrellgas Partners Finance Corp. for the sole purpose of redeeming the Class B Units. However, if the funds held are not used to redeem the Class B Units, the funds must either be distributed to holders of the Class B Units and, if applicable, holders of the Class A Units and the general partner or returned to the operating partnership.

Ferrellgas Partners will only be able to redeem the Class B Units to the extent it receives sufficient distributions from the operating partnership, and the operating partnership is limited in its ability to make distributions by the indentures that govern the 2026 Notes and the 2029 Notes, the Credit Agreement and the OpCo LPA Amendment governing the Preferred Units.

The holders of Class B Units will have the right to acquire the general partner interests in Ferrellgas Partners and the operating partnership, without the approval of the general partner, Ferrellgas Partners, the holders of the Class A Units or the operating partnership, if the Class B Units are still outstanding and have not been converted to Class A Units by the earlier of (i) a material breach of the covenants in favor of the Class B Units under the Amended Ferrellgas Partners LPA or the Amended OpCo LPA that is not cured within the time period specified therein and (ii) the 10th anniversary of the Effective Date.

Board Rights

The holders of Class B Units will be permitted to designate 1 independent director to the Board of the general partner in accordance with a voting agreement among the general partner, Ferrell Companies, Inc. ("FCI"), the sole stockholder of the general partner, and the holders of the Class B Units and the general partner's bylaws.

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Class A Units

As of April 30, 2022 and July 31, 2021, Class A Units were beneficially owned by the following:


	April 30, 2022	July 31, 2021
Public Class A Unitholders (1)	3,480,621	3,480,621
Ferrell Companies (2)	1,126,468	1,126,468
FCI Trading Corp. (3)	9,784	9,784
Ferrell Propane, Inc. (4)	2,560	2,560
James E. Ferrell (5)	238,172	238,172

(1)	These Class A Units are traded on the OTC Pink Market under the symbol “FGPR”.

(2)

Ferrell Companies is the owner of the general partner and an approximate 23% direct owner of Ferrellgas Partners’ Class A Units and thus a related party. Ferrell Companies also beneficially owns 9,784 and 2,560 Class A Units of Ferrellgas Partners held by FCI Trading Corp. (“FCI Trading”) and Ferrell Propane, Inc. ("Ferrell Propane"), respectively, bringing Ferrell Companies’ total beneficial ownership of Class A Units to 23.4%.

(3)	FCI Trading is an affiliate of the general partner and thus a related party.

(4)	Ferrell Propane is controlled by the general partner and thus a related party.

(5)

James E. Ferrell is the Chief Executive Officer and President of our general partner; and is the Chairman of the Board of Directors of our general partner and a related party. JEF Capital Management owns 237,942 of these Class A Units and is owned by the James E. Ferrell Revocable Trust Two and other family trusts, all of which James E. Ferrell and/or his family members are the trustees and beneficiaries. James E. Ferrell holds all voting common stock of JEF Capital Management. The remaining 230 Class A Units are held by Ferrell Resources Holdings, Inc., which is wholly-owned by the James E. Ferrell Revocable Trust One, for which James E. Ferrell is the trustee and sole beneficiary.

For the three months ended January 31, For the six months ended January 31,
2018 2017 2018 2017
Public common unitholders $ 6,962
$ 6,961
$ 13,923
$ 42,639
Ferrell Companies 2,253
2,253
4,506
13,799
FCI Trading Corp. 20
20
40
120
Ferrell Propane, Inc. 5
5
10
31
James E. Ferrell 476
476
952
2,917
General partner 98
98
196
601
$ 9,814
$ 9,813
$ 19,627
$ 60,107

~~On February 22, 2018,~~

Together these Class A Units represent (i) a 99% limited partner economic interest in Ferrellgas Partners, ~~declared~~excluding the economic interest attributable to the Class B Units, and (ii) an effective 98% economic interest in the operating partnership, excluding the economic interests attributable to the Class B Units and the Preferred Units. In liquidation, allocations and distributions will be made in accordance with each Class A Unitholder’s positive capital account.

The Class A Units of Ferrellgas Partners represent limited partner interests in Ferrellgas Partners, which give the holders thereof the right to participate in distributions made by Ferrellgas Partners, subject to the rights of holders of Class B Units, and to exercise the other rights or privileges available to such holders under the Amended Ferrellgas Partners LPA. Under the terms of the Amended Ferrellgas Partners LPA, holders of Class A Units have limited voting rights on matters affecting the business of Ferrellgas Partners. Generally, persons or groups owning 20% or more of Ferrellgas Partners’ outstanding Class A Units cannot vote any of their Class A Units in excess of the 20% threshold. However, this limitation does not apply under certain circumstances and does not apply to Class A Units owned by Ferrell Companies, our general partner and its affiliates, and this limitation expires on the later of (a) five years after the Effective Date and (b) the conversion of the Class B Units to Class A Units.

The Amended Ferrellgas Partners LPA allows the general partner to issue an unlimited number of additional general and limited partner interests of Ferrellgas Partners for such consideration and on such terms and conditions as shall be established by the general partner without the approval of any Class A Unitholders.

Partnership distributions

Ferrellgas Partners did not declare or pay any distributions to Class A Unitholders or the general partner for the nine months ended April 30, 2022. On October 8, 2021, Ferrellgas Partners made a cash distribution in the aggregate amount of ~~$0.10 per common unit for the three months ended January 31, 2018, which is expected~~approximately $49.9 million to ~~be paid on March 16, 2018. Included in this cash distribution are the following amounts to be paid to related parties:~~

Ferrell Companies $ 2,253
FCI Trading Corp. 20
Ferrell Propane, Inc. 5
James E. Ferrell 476
General partner 98

~~See additional discussions about transactions with related parties in Note I – Transactions with related parties.~~

its Class B Unitholders.

Accumulated other comprehensive income (loss)(“AOCI”)

See Note HK – Derivative instruments and hedging activities – for details regarding changes in ~~the~~ fair value ofon risk management financial derivatives recorded within AOCI for the three and ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017.~~2021.

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General partner’s commitment to maintain its capital account

Ferrellgas’ partnership agreements allow the general partner to have an option to maintain its effective 2% general partner interest (excluding the interest attributable to the Class B Units and Preferred Units) concurrent with the issuance of other additional equity.

During the ~~six~~nine months ended ~~January 31, 2018,~~April 30, 2022, the general partner made non-cash contributions of ~~$0.2 million~~$49.0 thousand to Ferrellgas to maintain its effective 2% general partner interest.

During the ~~six~~nine months ended~~January 31, 2017~~, April 30, 2021, the general partner made ~~cash contributions of $1.7 million and~~ non-cash contributions of ~~$0.2 million~~$46.0 thousand to Ferrellgas to maintain its effective 2% general partner interest.

H. Leases

The following table provides the operating and financing right-of-use assets and lease liabilities as of April 30, 2022 and July 31, 2021:


Leases	Classification		April 30, 2022		July 31, 2021
Assets
Operating lease assets	Operating lease right-of-use assets	$	77,695	$	87,611
Financing lease assets	Other assets, net		32,661		34,858
Total leased assets		$	110,356	$	122,469

Liabilities
Current
Operating	Current operating lease liabilities	$	26,041	$	25,363
Financing	Other current liabilities		6,369		7,479
Noncurrent
Operating	Operating lease liabilities		51,650		74,349
Financing	Other liabilities		26,806		28,029
Total leased liabilities		$	110,866	$	135,220

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The following table provides the lease expenses for the three and nine months ended April 30, 2022 and 2021:


		For the three months ended April 30,				For the nine months ended April 30,
Leases expense	Classification	2022		2021		2022		2021
Operating lease expense	Operating expense - personnel, vehicle, plant and other	$	1,667	$	1,846	$	5,105	$	5,126
	Operating expense - equipment lease expense		4,917		6,373		15,377		19,328
	Cost of sales - propane and other gas liquids sales		471		461		1,263		1,479
	General and administrative expense		608		(169)		1,680		307
Total operating lease expense			7,663		8,511		23,425		26,240

Short-term expense	Operating expense - personnel, vehicle, plant and other		3,121		2,003		6,602		5,908
	General and administrative expense		18		111		182		475
Total short-term expense			3,139		2,114		6,784		6,383

Variable lease expense	Operating expense - personnel, vehicle, plant and other		779		784		2,319		2,328
	Operating expense - equipment lease expense		565		397		1,529		1,134
Total variable lease expense			1,344		1,181		3,848		3,462

Finance lease expense:
Amortization of leased assets	Depreciation and amortization expense		1,900		2,229		4,684		6,583
Interest on lease liabilities	Interest expense		1,283		933		2,893		2,841
Total finance lease expense			3,183		3,162		7,577		9,424

Total lease expense		$	15,329	$	14,968	$	41,634	$	45,509

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Minimum annual payments under existing operating and finance lease liabilities as of April 30, 2022 are as follows:


Maturities of lease liabilities		Operating leases		Finance leases		Total
2022	$	7,549	$	2,323	$	9,872
2023		28,100		8,730		36,830
2024		21,918		8,440		30,358
2025		15,188		8,321		23,509
2026		5,836		7,472		13,308
Thereafter		17,740		5,233		22,973
Total lease payments	$	96,331	$	40,519	$	136,850
Less: Imputed interest		18,640		7,344		25,984
Present value of lease liabilities	$	77,691	$	33,175	$	110,866

The following table represents the weighted-average remaining lease term and discount rate as of April 30, 2022:


	As of April 30, 2022
Lease type	Weighted-average remaining lease term (years)	Weighted-average discount rate
Operating leases	4.9	7.6%
Finance leases	4.5	8.3%

Cash flow information is presented below:


	For the nine months ended April 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities for operating leases:
Operating cash flows	$	13,613	$	26,454

Cash paid for amounts included in the measurement of lease liabilities for financing leases:
Operating cash flows	$	2,215	$	2,571
Financing cash flows	$	4,889	$	5,282

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I. Revenue from contracts with customers

Disaggregation of revenue

Ferrellgas disaggregates revenues based upon the type of customer and on the type of revenue. The following table presents retail propane revenues, wholesale propane revenues and other revenues. Retail revenues result from sales to end use customers, wholesale revenues result from sales to or through resellers and all other revenues include sales of appliances and other materials, other fees charged to customers and equipment rental charges.


	For the three months ended April 30,				For the nine months ended April 30,
	2022		2021		2022		2021
Retail - Sales to End Users	$	478,807	$	392,838	$	1,228,062	$	945,833
Wholesale - Sales to Resellers		137,148		140,015		405,713		381,357
Other Gas Sales		6,256		9,183		18,644		24,329
Other		25,332		22,694		74,568		67,665
Propane and related equipment revenues	$	647,543	$	564,730	$	1,726,987	$	1,419,184

Contract assets and liabilities

Ferrellgas’ performance obligations are generally limited to the delivery of propane for our retail and wholesale contracts. Ferrellgas’ performance obligations with respect to sales of appliances and other materials and other revenues are limited to the delivery of the agreed upon good or service. Ferrellgas does not have material performance obligations that are delivered over time, thus all of our revenue is recognized at the time the goods, including propane, are delivered or installed. Ferrellgas offers “even pay” billing programs that can create customer deposits or advances, depending on whether Ferrellgas has delivered more propane than the customer has paid for or whether the customer has paid for more propane than what has been delivered. Revenue is recognized from these customer deposits or advances to customers at the time product is delivered. The advance or deposit is considered to be a contract asset or liability. Additionally, from time to time, we have customers that pay in advance for goods or services, and such amounts result in contract liabilities.

Ferrellgas incurs incremental commissions directly related to the acquisition or renewal of customer contracts. The commissions are calculated and paid based upon the number of gallons sold to the acquired or renewed customer. The total amount of commissions that we incur is not material, and the commissions are expensed commensurate with the deliveries to which they relate; therefore, Ferrellgas does not capitalize these costs.

The following table presents the opening and closing balances of our receivables, contract assets, and contract liabilities:


	April 30, 2022		July 31, 2021
Accounts receivable	$	204,728	$	138,757
Contract assets	$	21,257	$	10,074
Contract liabilities
Deferred revenue (1)	$	43,061	$	49,354

(1)	Of the beginning balance of deferred revenue, $8.6 million was recognized as revenue during the nine months ended April 30, 2022.

Remaining performance obligations

Ferrellgas’ remaining performance obligations are generally limited to situations where its customers have remitted payment but have not yet received deliveries of propane. This most commonly occurs in Ferrellgas’ even pay billing programs and Ferrellgas expects that these balances will be recognized within a year or less as the customer takes delivery of propane.

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J. Fair value measurements

Derivative financial instruments

The following table presents Ferrellgas’ financial assets and financial liabilities that are measured at fair value on a recurring basis for each of the fair value hierarchy levels, including both current and noncurrent portions, as of ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017~~:

Asset (Liability)
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Total
January 31, 2018:
Assets:
Derivative financial instruments:
Commodity derivatives $ —
$ 25,725
$ —
$ 25,725
Liabilities:
Derivative financial instruments:
Interest rate swap agreements $ —
$ (2,423 ) $ —
$ (2,423 )
Commodity derivatives $ —
$ (1,417 ) $ —
$ (1,417 )

July 31, 2017:
Assets:
Derivative financial instruments:
Interest rate swap agreements $ —
$ 583
$ —
$ 583
Commodity derivatives $ —
$ 16,212
$ —
$ 16,212
Liabilities:
Derivative financial instruments:
Interest rate swap agreements $ —
$ (707 ) $ —
$ (707 )
Commodity derivatives $ —
$ (1,258 ) $ —
$ (1,258 )

2021:


	Asset (Liability)
	Quoted Prices in Active
	Markets for Identical		Significant Other
	Assets and Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
April 30, 2022:
Assets:
Derivative financial instruments:
Commodity derivatives	$	—	$	91,724	$	—	$	91,724
Liabilities:
Derivative financial instruments:
Commodity derivatives	$	—	$	(14,476)	$	—	$	(14,476)

July 31, 2021:
Assets:
Derivative financial instruments:
Commodity derivatives	$	—	$	94,244	$	—	$	94,244
Liabilities:
Derivative financial instruments:
Commodity derivatives	$	—	$	(4,458)	$	—	$	(4,458)

Methodology

The fair values of Ferrellgas’ non-exchange traded commodity derivative contracts are based upon indicative price quotations available through brokers, industry price publications or recent market transactions and related market indicators. ~~The fair values of interest rate swap contracts are based upon third-party quotes or indicative values based on recent market transactions.~~

As discussed in Note C - Supplemental financial statement information, during the quarter ended January 31, 2018, Ferrellgas committed to a plan to dispose of all of its rail cars in the Midstream operations segment. Ferrellgas measures long-lived assets held for sale at the lower of carrying amount or estimated fair value less estimated costs to sell. Ferrellgas recorded a loss on assets held for sale of $35.5 million during the three and six months ended January 31, 2018 to reduce the carrying amount of the rail cars to their estimated fair value less estimated costs to sell. At January 31, 2018, the estimated fair value less costs to sell was approximately $52.2 million. The fair value of the rail cars classified as assets held for sale is a Level 3 valuation based on the unobservable inputs used for this expected sale.

Other financial instruments

The carrying amounts of other financial instruments included in current assets and current liabilities (except for current maturities of long-term debt) approximate their fair values because of their short-term nature. The estimated fair value of various notes receivable, financial instruments classified in "Other assets, net" on the condensed consolidated balance sheets, are approximately $32.1 million, or $4.3 million less than their carrying amount as of January 31, 2018. The estimated fair values of these notes receivable were calculated using a discounted cash flow method which relied on significant unobservable inputs. At ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017,~~2021, the estimated fair value of Ferrellgas’ long-term debt instruments was ~~$1,728.3~~$1,308.2 million and ~~$1,966.6~~$1,466.4 million, respectively. Ferrellgas estimates the fair value of long-term debt based on quoted market prices. The fair value of ~~our~~Ferrellgas’ consolidated debt obligations is a Level 2 valuation based on the observable inputs used for similar liabilities.

Ferrellgas has other financial instruments such as trade accounts receivable which could expose it to concentrations of credit risk. The credit risk from trade accounts receivable is limited because of a large customer base which extends across many different U.S. markets.

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K. Derivative instruments and hedging activities

Ferrellgas is exposed to certain market risks related to its ongoing business operations. These risks include exposure to changing commodity prices as well as fluctuations in interest rates. Ferrellgas utilizes derivative instruments to manage its exposure to fluctuations in commodity prices. Of these, the propane commodity derivative instruments are designated as cash flow hedges. Prior to the sale of Bridger Energy, LLC in January 2018, all other commodity derivative instruments neither qualified nor were designated as cash flow hedges, therefore, changes in their fair value were recorded currently in earnings. Ferrellgas also periodically utilizes derivative instruments to manage its exposure to fluctuations in interest rates.

Derivative instruments and hedging activity

During the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017,~~2021, Ferrellgas did not recognize any gain or loss in earnings related to hedge ineffectiveness and did not exclude any component of financial derivative contract gains or losses from the assessment of hedge effectiveness related to commodity cash flow hedges.

The following tables provide a summary of the fair value of derivatives inwithin Ferrellgas’ condensed consolidated balance sheets as of ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017~~: 2021:


	Final	April 30, 2022
	Maturity	Asset Derivatives			Liability Derivatives
Derivative Instrument	Date	Location	Fair value		Location	Fair value
Derivatives designated as hedging instruments	December 2024
Commodity derivatives-propane		Price risk management asset	$	78,787	Other current liabilities	$	13,207
Commodity derivatives-propane		Other assets, net		12,937	Other liabilities		1,269
		Total	$	91,724	Total	$	14,476


	Final	July 31, 2021
	Maturity	Asset Derivatives			Liability Derivatives
Derivative Instrument	Date	Location	Fair value		Location	Fair value
Derivatives designated as hedging instruments	December 2023
Commodity derivatives-propane		Price risk management asset	$	78,001	Other current liabilities	$	3,429
Commodity derivatives-propane		Other assets, net		16,243	Other liabilities		1,029
		Total	$	94,244	Total	$	4,458

January 31, 2018
Asset Derivatives Liability Derivatives
Derivative Instrument Location Fair value Location Fair value
Derivatives designated as hedging instruments
  Commodity derivatives-propane Prepaid expenses and other current assets $ 18,188
Other current liabilities $ 1,417
  Commodity derivatives-propane Other assets, net 7,537
Other liabilities —
  Interest rate swap agreements Prepaid expenses and other current assets —
Other current liabilities 319
  Interest rate swap agreements Other assets, net —
Other liabilities 2,104
Total $ 25,725
Total $ 3,840

July 31, 2017
Asset Derivatives Liability Derivatives
Derivative Instrument Location Fair value Location Fair value
Derivatives designated as hedging instruments
  Commodity derivatives-propane Prepaid expenses and other current assets $ 11,061
Other current liabilities $ 415
  Commodity derivatives-propane Other assets, net 4,413
Other liabilities 15
  Interest rate swap agreements Prepaid expenses and other current assets 583
Other current liabilities 595
  Interest rate swap agreements Other assets, net —
Other liabilities 112
Derivatives not designated as hedging instruments
  Commodity derivatives-crude oil Prepaid expenses and other current assets 738
Other current liabilities 828

Total $ 16,795
Total $ 1,965

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~~Ferrellgas'~~

Ferrellgas’ exchange traded commodity derivative contracts require cash margin deposit as collateral for contracts that are in a negative mark-to-market position. These cash margin deposits will be returned if mark-to-market conditions improve or will be applied against cash settlement when the contracts are settled. Liabilities represent cash margin deposits received by Ferrellgas for contracts that are in a positive mark-to-market position. The following tables provide a summary of cash margin balances as of ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017,~~2021, respectively:


	April 30, 2022
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expense and other current assets	$	11,938	Other current liabilities	$	67,200
	Other assets, net		5,456	Other liabilities		11,270
		$	17,394		$	78,470


	July 31, 2021
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expense and other current assets	$	21,068	Other current liabilities	$	79,178
	Other assets, net		3,036	Other liabilities		15,489
		$	24,104		$	94,667

January 31, 2018
Assets Liabilities
Description Location Amount Location Amount
Margin Balances Prepaid expenses and other current assets $ 3,018
Other current liabilities $ 12,201
Other assets, net 1,404
Other liabilities 5,216
$ 4,422
$ 17,417

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July 31, 2017
Assets Liabilities
Description Location Amount Location Amount
Margin Balances Prepaid expenses and other current assets $ 1,778
Other current liabilities $ 7,729
Other assets, net 1,631
Other liabilities 3,073
$ 3,409
$ 10,802

~~The following tables provide a summary of the effect on Ferrellgas' condensed consolidated statements of operations for the three and six months ended~~ ~~January 31, 2018~~ ~~and~~ ~~2017~~ ~~due to derivatives designated as fair value hedging instruments:~~

Amount of Gain Recognized on Derivative Amount of Interest Expense Recognized on Fixed-Rate Debt (Related Hedged Item)
Derivative Instrument Location of Amounts Recognized on Derivative For the three months ended January 31, For the three months ended January 31,
2018 2017 2018 2017
Interest rate swap agreements Interest expense $ 88
$ 328
$ (2,275 ) $ (2,275 )

Amount of Gain Recognized on Derivative Amount of Interest Expense Recognized on Fixed-Rate Debt (Related Hedged Item)
Derivative Instrument Location of Amounts Recognized on Derivative For the six months ended January 31, For the six months ended January 31,
2018 2017 2018 2017
Interest rate swap agreements Interest expense $ 226
$ 748
$ (4,550 ) $ (4,550 )

The following tables provide a summary of the effect on Ferrellgas’ condensed consolidated statements of comprehensive income (loss) for the three and ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021 due to derivatives designated as cash flow hedging instruments:


	For the three months ended April 30, 2022
				Amount of Gain
	Amount of Gain		Location of Gain	Reclassified from
	Recognized in		Reclassified from	AOCI into Income
Derivative Instrument	AOCI		AOCI into Income	Effective portion		Ineffective portion
Commodity derivatives	$	29,355	Cost of sales - propane and other gas liquids sales	$	44,145	$	—


	For the three months ended April 30, 2021
				Amount of Gain
	Amount of Gain		Location of Gain	Reclassified from
	Recognized in		Reclassified from	AOCI into Income
Derivative Instrument	AOCI		AOCI into Income	Effective portion		Ineffective portion
Commodity derivatives	$	20,446	Cost of sales - propane and other gas liquids sales	$	22,383	$	—


	For the nine months ended April 30, 2022
				Amount of Gain
	Amount of Gain		Location of Gain	Reclassified from
	Recognized in		Reclassified from	AOCI into Income
Derivative Instrument	AOCI		AOCI into Income	Effective portion		Ineffective portion
Commodity derivatives	$	84,427	Cost of sales - propane and other gas liquids sales	$	96,965	$	—


	For the nine months ended April 30, 2021
				Amount of Gain
	Amount of Gain		Location of Gain	Reclassified from
	Recognized in		Reclassified from	AOCI into Income
Derivative Instrument	AOCI		AOCI into Income	Effective portion		Ineffective portion
Commodity derivatives	$	63,170	Cost of sales - propane and other gas liquids sales	$	28,674	$	—

For the three months ended January 31, 2018
Derivative Instrument Amount of Gain (Loss) Recognized in AOCI Location of Gain (Loss) Reclassified from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income
Effective portion Ineffective portion
Commodity derivatives $ 960
Cost of sales-propane and other gas liquids sales $ 9,886
$ —
Interest rate swap agreements 112
Interest expense (143 ) —
$ 1,072
$ 9,743
$ —

For the three months ended January 31, 2017
Derivative Instrument Amount of Gain (Loss) Recognized in AOCI Location of Gain (Loss) Reclassified from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income
Effective portion Ineffective portion
Commodity derivatives $ 14,699
Cost of sales-propane and other gas liquids sales $ 73
$ —
Interest rate swap agreements 563
Interest expense (587 ) —
$ 15,262
$ (514 ) $ —

For the six months ended January 31, 2018
Derivative Instrument Amount of Gain (Loss) Recognized in AOCI Location of Gain (Loss) Reclassified from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income
Effective portion Ineffective portion
Commodity derivatives $ 23,283
Cost of sales-propane and other gas liquids sales $ 14,018
$ —
Interest rate swap agreements 238
Interest expense (326 ) —
$ 23,521
$ 13,692
$ —

For the six months ended January 31, 2017
Derivative Instrument Amount of Gain (Loss) Recognized in AOCI Location of Gain (Loss) Reclassified from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income
Effective portion Ineffective portion
Commodity derivatives $ 19,572
Cost of sales-propane and other gas liquids sales $ (3,523 ) $ —
Interest rate swap agreements 828
Interest expense (1,229 ) —
$ 20,400
$ (4,752 ) $ —

The following tables provide a summary of the effect on Ferrellgas' condensed consolidated statements of operations for the three and six months ended January 31, 2018 and 2017 due to the change in fair value of derivatives not designated as hedging instruments:

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For the three months ended January 31, 2018
Derivatives Not Designated as Hedging Instruments Amount of Gain (Loss) Recognized in Income Location of Gain (Loss) Recognized in Income
Commodity derivatives - crude oil $ (2,080 ) Cost of sales - midstream operations

For the three months ended January 31, 2017
Derivatives Not Designated as Hedging Instruments Amount of Gain (Loss) Recognized in Income Location of Gain (Loss) Recognized in Income
Commodity derivatives - crude oil $ (1,007 ) Cost of sales - midstream operations
Commodity derivatives - vehicle fuel $ 489
Operating expense

For the six months ended January 31, 2018
Derivatives Not Designated as Hedging Instruments Amount of Gain (Loss) Recognized in Income Location of Gain (Loss) Recognized in Income
Commodity derivatives - crude oil $ (3,470 ) Cost of sales - midstream operations

For the six months ended January 31, 2017
Derivatives Not Designated as Hedging Instruments Amount of Gain (Loss) Recognized in Income Location of Gain (Loss) Recognized in Income
Commodity derivatives - crude oil $ (2,248 ) Cost of sales - midstream operations
Commodity derivatives - vehicle fuel $ 1,516
Operating expense

The changes in derivatives included in AOCI for the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021 were as follows:


	For the nine months ended April 30,
Gains and losses on derivatives included in AOCI	2022		2021
Beginning balance (1)	$	89,786	$	(2,313)
Change in value of risk management commodity derivatives		84,427		63,170
Reclassification of gains on commodity hedges to cost of sales - propane and other gas liquids sales, net		(96,965)		(28,674)
Ending balance (1)	$	77,248	$	32,183

(1)

Beginning balances in the table above include AOCI activity related to non-controlling interest of $0.9 million and $10.0 thousand for fiscal 2022 and 2021, respectively. Ending balances for the nine months ended April 30, 2022 and April 30, 2021 include AOCI activity related to non-controlling interest of $0.8 million and $0.3 million, respectively.

For the six months ended January 31,
Gains and losses on derivatives included in AOCI 2018 2017
Beginning balance $ 14,648
$ (9,815 )
Change in value of risk management commodity derivatives 23,283
19,572
Reclassification of (gains) and losses on commodity hedges to cost of sales - propane and other gas liquids sales, net (14,018 ) 3,523
Change in value of risk management interest rate derivatives 238
828
Reclassification of losses on interest rate hedges to interest expense 326
1,229
Ending balance $ 24,477
$ 15,337

Ferrellgas expects to reclassify net gains ~~related to the risk management commodity derivatives~~ of approximately ~~$16.8~~$65.6 million to earnings during the next 12 months. These net gains are expected to be offset by decreased margins on propane sales commitments Ferrellgas has with its customers that qualify for the normal purchase normal ~~sales~~sale exception.

During the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017,~~2021, Ferrellgas had no reclassifications to operations resulting from the discontinuance of any cash flow hedges arising from the probability of the original forecasted transactions not occurring within the originally specified period of time defined within the hedging relationship.

As of ~~January 31, 2018~~,April 30, 2022, Ferrellgas had financial derivative contracts covering ~~2.6~~4.9 million barrels of propane that were entered into as cash flow hedges of forward and forecasted purchases of propane.

Derivative financial instruments credit risk

Ferrellgas is exposed to credit loss in the event of nonperformance by counterparties to derivative financial and commodity instruments. Ferrellgas’ counterparties principally consist of major energy companies and major U.S. financial institutions. Ferrellgas maintains credit policies with regard to its counterparties that it believes ~~reduces~~reduce its overall credit risk. These policies include evaluating and monitoring its counterparties’ financial condition, including their credit ratings, and entering into agreements with counterparties that govern credit limits. Certain of these agreements call for the posting of collateral by the counterparty or by Ferrellgas in the forms of letters of credit, parent guarantees or cash. Ferrellgas has concentrations of credit risk associated with derivative financial instruments held by certain derivative financial instrument counterparties. If these counterparties that make up the concentration failed to perform according to the terms of their contracts at ~~January 31, 2018,~~April 30, 2022, the maximum amount of loss due to credit risk that Ferrellgas would incur based upon the gross fair values of the derivative financial instruments ~~Ferrellgas would incur~~ is ~~$7.5 million.~~

From time to time Ferrellgas enters into derivative contracts that have credit-risk-related contingent features which dictate credit limits based upon ~~Ferrellgas'~~Ferrellgas’ debt rating. There were no0 open derivative contracts with credit-risk-related contingent features as of ~~January 31, 2018.~~April 30, 2022.

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L. Transactions with related parties

Ferrellgas has no0 employees and is managed and controlled by its general partner. Pursuant to Ferrellgas’ partnership agreements, the general partner is entitled to reimbursement for all direct and indirect expenses incurred or payments it makes on behalf of Ferrellgas and all other necessary or appropriate expenses allocable to Ferrellgas or otherwise reasonably incurred by ~~the~~its general partner in connection with operating Ferrellgas’ business. These costs primarily include compensation and benefits paid to employees of the general partner who perform services on Ferrellgas’ behalf and are reported in the condensed consolidated statements of operations as follows:

For the three months ended January 31, For the six months ended January 31,
2018 2017 2018 2017
Operating expense $ 65,291
$ 61,492
$ 122,642
$ 117,206

General and administrative expense $ 8,422
$ 8,217
$ 15,930
$ 16,800


	For the three months ended April 30,				For the nine months ended April 30,
	2022		2021		2022		2021
Operating expense	$	73,224	$	64,242	$	209,976	$	195,817

General and administrative expense	$	6,898	$	6,194	$	21,913	$	23,348

See additional discussions about transactions with the general partner and related parties in Note FG – ~~Partners’ deficit.~~

J. Equity (Deficit).

Term loan credit agreement with Ferrellgas Partners, L.P.

On January 8, 2021, Ferrellgas Partners, L.P. entered into a term loan credit agreement with Ferrellgas, L.P., pursuant to which Ferrellgas, L.P. extended to Ferrellgas Partners, L.P. an unsecured, non-amortizing term loan in the aggregate principal amount of $19.9 million. The term loan bears interest at a rate of 20% per annum, and all interest on the term loan will be added to the outstanding principal amount of the term loan. The term loan will mature on July 1, 2022. During July 2021, Ferrellgas Partners made an optional principal prepayment of $9.0 million on the term loan. The outstanding principal and accrued interest at April 30, 2022 was $15.2 million. Subsequent to April 30, 2022, the term loan was repaid. See Note O – Subsequent events for more information.

M. Contingencies and commitments

Litigation

Ferrellgas’ operations are subject to all operating hazards and risks normally incidental to handling, storing, transporting and otherwise providing for use by consumers of combustible liquids such as propane and, prior to the sales of midstream operations in fiscal 2018, crude oil. As a result, at any given time, Ferrellgas can be threatened with or named as a defendant in various lawsuits arising in the ordinary course of business. Other than as discussed below, Ferrellgas is not a party to any legal proceedings other than various claims and lawsuits arising in the ordinary course of business. It is not possible to determine the ultimate disposition of these matters; however, management is of the opinion that there are no known claims or contingent claims that are reasonably expected to have a material adverse effect on the consolidated financial condition, results of operations and cash flows of Ferrellgas.

Ferrellgas has been named as a defendant, along with a competitor, in putative class action lawsuits filed in multiple jurisdictions. The lawsuits, which were consolidated in the Western District of Missouri on October 16, 2014, allege that Ferrellgas and a competitor coordinated in 2008 to reduce the fill level in barbeque cylinders and combined to persuade a common customer to accept that fill reduction, resulting in increased cylinder costs to direct customers and end-user customers in violation of federal and certain state antitrust laws. The lawsuits seek treble damages, attorneys’ fees, injunctive relief and costs on behalf of the putative class. These lawsuits have been consolidated into one case by a multidistrict litigation panel. The Federal Court for the Western District of Missouri initially dismissed all claims brought by direct and indirect customers other than state law claims of indirect customers under Wisconsin, Maine and Vermont law. The direct customer plaintiffs filed an appeal, which resulted in a reversal of the district court’s dismissal. We filed a petition for a writ of certiorari which was denied. An appeal by the indirect customer plaintiffs remains pending. Ferrellgas believes it has strong defenses to the claims and intends to vigorously defend against the consolidated case. Ferrellgas does not believe loss is probable or reasonably estimable at this time related to the putative class action lawsuit.

Ferrellgas has been named, along with several current and former officers, in several class action lawsuits alleging violations of certain securities laws based on alleged materially false and misleading statements in certain of our public disclosures. The lawsuits, the first of which was filed on October 6, 2016 in the Southern District of New York, seek unspecified compensatory damages. Derivative lawsuits with similar allegations have been filed naming Ferrellgas and several current and former officers and directors as defendants. Ferrellgas believes that it has defenses and will vigorously defend these cases. Ferrellgas does not believe loss is probable or reasonably estimable at this time related to the putative class action lawsuits or the derivative actions.

Ferrellgas and Bridger Logistics, LLC (“Bridger”), have been named, along with ~~two~~2 former officers (“Rios and Gamboa”), in a lawsuit (the “EDPA Lawsuit”) filed by Eddystone Rail Company ("Eddystone") on February 2, 2017 in the U.S. District Court for the Eastern District of Pennsylvania (the ~~"EDPA Lawsuit"~~"Court"). Eddystone indicated that it has prevailed in or settled an arbitration against Jamex Transfer Services (“JTS”), ~~then~~previously named Bridger Transfer Services, a former subsidiary of ~~Bridger Logistics, LLC (“Bridger”).~~Bridger. The arbitration involved a claim against JTS for money due for deficiency payments under a contract for the use of an Eddystone facility used to offload crude from rail onto barges. Eddystone alleges that Ferrellgas transferred assets out of JTS prior to the sale of the membership interest in JTS to Jamex Transfer Holdings, and that those transfers should be avoided so that the assets can be used to satisfy the amount owed by JTS to Eddystone ~~under~~as a result of the arbitration. Eddystone also alleges that JTS was an “alter ego” of Bridger and ~~Ferrellgas.~~Ferrellgas and that Bridger and Ferrellgas breached both an implicit contract as well as fiduciary duties allegedly owed to Eddystone as a creditor of JTS. Ferrellgas believes that Ferrellgas and Bridger have valid defenses to these claims and to Eddystone’s primary claim against JTS ~~on the contract claim. The lawsuit does not specify a specific amount~~for breach of ~~damages that~~contract. If Eddystone ~~is seeking;~~ultimately prevails, however, Ferrellgas believes that the amount of ~~such damage claims, if ultimately owed to Eddystone,~~damages awarded could be material to Ferrellgas. Ferrellgas intends to vigorously defend this claim. ~~The lawsuit is in its early stages; as such, management does not currently believe a loss is probable or reasonably estimable at this time.~~

Table of Contents

On August 24, 2017, Ferrellgas filed a third-party complaint against JTS, Jamex Transfer Holdings, and other related persons and entities (the "Third-Party Defendants"), asserting claims for breach of contract, indemnification of any losses in the EDPA Lawsuit, tortious interference with contract, and contribution. ~~The~~On June 25, 2018, Ferrellgas entered into an agreement with the Third-Party Defendants ~~have filed~~which, among other things, resulted in a dismissal of the claims against the Third-Party Defendants from the lawsuit.

On December 10, 2021, the Court dismissed Eddystone’s claims against Rios and Gamboa, pursuant to a settlement agreement with Eddystone.

The Court decided summary judgment motions in March 2022 and has set this matter for trial. A bench trial will proceed in segments, with the first segment to ~~dismiss~~take place in September 2022 and a second segment to take place in December 2022. The Court has not made any decision as to how many segments will be needed to complete the ~~third-party complaint~~trial. As such, management does not currently believe a loss is probable or reasonably estimable at this time. However, we may enter into settlement discussions at any time.

Long-term debt related commitments

Ferrellgas has long and short-term payment obligations under agreements such as the indentures governing its senior notes. See Note E – Debt for ~~alleged lack~~a description of ~~personal jurisdiction, failure to state claim,~~these debt obligations and ~~forum non-conveniens. Ferrellgas is vigorously opposing these motions.~~

a schedule of future maturities.

N. Net earnings (loss) per ~~common unit~~

unitholders’ interest

Below is a calculation of the basic and diluted net earnings (loss) per ~~common unit~~Class A Unitholders’ interest in the condensed consolidated statements of operations for the periods ~~indicated. Ferrellgas calculates~~indicated:


	For the three months ended April 30,				For the nine months ended April 30,
	2022		2021		2022		2021

	(in thousands, except per unit amounts)
Net earnings (loss) attributable to Ferrellgas Partners, L.P.	$	67,586	$	(66,794)	$	167,385	$	(49,589)
Less: Distributions to preferred unitholders		15,558		8,011		49,037		8,011
Less: Distribution to Class B unitholders		—		—		49,998		—
Less: Allocation of undistributed net earnings to Class B units		44,017		—		50,009		—
Less: General partner's interest in net earnings (loss)		675		(748)		1,673		(576)
Undistributed net earnings (loss) attributable to Class A unitholders		7,336		(74,057)		16,668		(57,024)
Weighted average Class A Units outstanding (in thousands)		4,857.6		4,857.6		4,857.6		4,857.6
Basic and diluted net earnings (loss) per Class A Unit	$	1.51	$	(15.25)	$	3.43	$	(11.74)

Class B Units considerations

The Class B Units meet the definition of a participating security and the two-class method is required. For any periods in which earnings are recognized, the earnings will first be allocated 100% to the Class B Units until the allocation equals the cumulative amount of all distributions paid to the Class B Units. Any remaining undistributed net earnings ~~(loss) per common unit for each period presented according to distributions declared~~will be allocated between the Class B Units and ~~participation rights in undistributed earnings,~~the Class A Units on a 6-to-one basis as if all ~~of the~~undistributed earnings ~~or loss for the period~~ had been distributed ~~according~~to each class of units in accordance with their distribution rights. For any periods in which losses are recognized, no effect is given to the ~~incentive distribution rights~~Class B Units as they do not contractually participate in the losses of Ferrellgas.

In addition, Ferrellgas ~~partnership agreement. Due~~has the option to redeem all, but not less than all, of the Class B Units outstanding at any time on or prior to the ~~seasonality~~fifth anniversary of the ~~propane business,~~Effective Date for cash. This call option does not impact the dilutive effect of ~~the two-class method typically impacts only the three months ending January 31. In periods with undistributed earnings above certain levels, the calculation according~~net loss per Class A Unit due to the ~~two-class method results in an increased allocation of undistributed earnings to the general partner~~cash-only redemption provision, which is assumed, and ~~a dilution of the earnings to the limited partners as follows:~~

Ratio of total distributions payable to:
Quarterly distribution per common unit Common unitholder General partner
$0.56 to $0.63 86.9 % 13.1 %
$0.64 to $0.82 76.8 % 23.2 %
$0.83 and above 51.5 % 48.5 %

~~There was~~therefore there would be no dilutive ~~effect resulting from this method based on basic and diluted net earnings (loss) per common unit for the three and six months ended January 31, 2018 or 2017.~~

In periods with net losses, the allocation of the net losses to the limited partners and the general partner will be determined based on the same allocation basis specified in Ferrellgas Partners’ partnership agreement that would apply to periods in which there were no undistributed earnings. Additionally, there are no dilutive securities in periods with net losses.

effect.

For the three months ended January 31, For the six months ended January 31,
2018 2017 2018 2017
(in thousands, except per common unit amounts)
Common unitholders’ interest in net earnings (loss) $ (1,824 ) $ 37,717
$ (49,260 ) $ (4,925 )

Weighted average common units outstanding - basic and diluted 97,152.7
97,152.7
97,152.7
97,305.1

Basic and diluted net earnings (loss) per common unit $ (0.02 ) $ 0.39
$ (0.51 ) $ (0.05 )

Table of Contents

L. ~~Segment reporting~~

O. Subsequent events

Ferrellgas has two primary operations that result in two reportable operating segments: propane operations and related equipment sales and midstream operations. During the quarter ended January 31, 2018, Ferrellgas recorded a goodwill impairment of $10.0 million related to a decline in future expected cash flows of an immaterial reporting unit of our Propane operations and related equipment sales segment.

~~Following is a summary of segment information for the three and six months ended January 31, 2018 and 2017:~~

Three months ended January 31, 2018
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 637,880
$ 117,276
$ —
$ 755,156
Direct costs (1) 507,386
114,929
12,214
634,529
Adjusted EBITDA $ 130,494
$ 2,347
$ (12,214 ) $ 120,627

Three months ended January 31, 2017
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 482,463
$ 96,787
$ —
$ 579,250
Direct costs (1) 370,175
93,718
10,327
474,220
Adjusted EBITDA $ 112,288
$ 3,069
$ (10,327 ) $ 105,030

Six months ended January 31, 2018
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 971,775
$ 238,036
$ —
$ 1,209,811
Direct costs (1) 810,715
228,830
23,423
1,062,968
Adjusted EBITDA $ 161,060
$ 9,206
$ (23,423 ) $ 146,843

Six months ended January 31, 2017
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 753,961
$ 204,831
$ —
$ 958,792
Direct costs (1) 607,189
196,491
21,063
824,743
Adjusted EBITDA $ 146,772
$ 8,340
$ (21,063 ) $ 134,049

(1) Direct costs are comprised of "cost of sales-propane and other gas liquids sales", "cost of products sold-midstream operations", "cost of products sold-other", "operating expense", "general and administrative expense", and "equipment lease expense" less , "severance charge", "professional fees incurred related to a lawsuit", and "unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments".

~~Following is a reconciliation of Ferrellgas' total segment performance measure to condensed consolidated net earnings (loss):~~

Three months ended January 31, Six months ended January 31,
2018 2017 2018 2017
Net earnings (loss) attributable to Ferrellgas Partners, L.P. $ (1,843 ) $ 38,098
$ (49,758 ) $ (4,975 )
Income tax expense (benefit) (162 ) 588
215
(2 )
Interest expense 42,673
36,819
83,480
72,247
Depreciation and amortization expense 25,485
25,607
51,217
51,809
EBITDA 66,153
101,112
85,154
119,079
Non-cash employee stock ownership plan compensation charge 4,031
2,945
7,993
6,699
Non-cash stock-based compensation charge —
1,417
—
3,298
Asset impairments 10,005
—
10,005
—
Loss on asset sales and disposals 39,249
45
40,144
6,468
Other income, net (684 ) (763 ) (1,195 ) (1,271 )
Severance costs —
490
1,663
1,959
Professional fees 2,118
—
2,118
—
Unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments (314 ) (646 ) 1,293
(2,215 )
Net earnings (loss) attributable to noncontrolling interest 69
430
(332 ) 32
Adjusted EBITDA $ 120,627
$ 105,030
$ 146,843
$ 134,049

~~Following are total assets by segment:~~

Assets January 31, 2018 July 31, 2017
Propane operations and related equipment sales $ 1,361,856
$ 1,194,905
Midstream operations 309,952
399,356
Corporate 15,251
15,708
Total consolidated assets $ 1,687,059
$ 1,609,969

~~Following are capital expenditures by segment:~~

Six months ended January 31, 2018
Propane operations and related equipment sales Midstream operations Corporate Total
Capital expenditures:
Maintenance $ 12,016
$ 182
$ 1,245
$ 13,443
Growth 18,311
1,013
—
19,324
Total $ 30,327
$ 1,195
$ 1,245
$ 32,767

Six months ended January 31, 2017
Propane operations and related equipment sales Midstream operations Corporate Total
Capital expenditures:
Maintenance $ 5,551
$ 204
$ 1,484
$ 7,239
Growth 9,857
—
—
9,857
Total $ 15,408
$ 204
$ 1,484
$ 17,096

M. ~~Subsequent events~~

~~Ferrellgas~~ evaluated events and transactions occurring after the balance sheet date through the date ~~Ferrellgas'~~Ferrellgas’ condensed consolidated financial statements were issued and concluded that ~~other than as discussed below,~~ there were no events or transactions occurring during this period that ~~require~~required recognition or disclosure in its condensed consolidated financial ~~statements.~~statements, except as follows.

On May 16, 2022, Ferrellgas Partners, L.P. repaid Ferrellgas, L.P. the full amount of the term loan of $15.3 million, which represented the outstanding principal and accrued interest. The term loan was scheduled to mature on July 1, 2022. Additionally, Ferrellgas Partners, L.P. paid Ferrellgas, L.P. $3.9 million for separate intercompany receivables related to expenses incurred during the 2021 debt transactions.

~~On February 20, 2018, Ferrellgas completed the sale~~

Table of 1,072 rail cars utilized in the Midstream operations segment and received approximately $47.0 million in cash. Proceeds from the transaction were used to reduce outstanding debt on Ferrellgas' secured credit facility. See additional discussions on the completed rail car sale in Note C - Supplemental financial statement information.

Contents

FERRELLGAS PARTNERS FINANCE CORP.
(a wholly-owned subsidiary of Ferrellgas Partners, L.P.)
CONDENSED BALANCE SHEETS
(unaudited)
January 31, 2018 July 31, 2017
ASSETS

Cash $ 1,000
$ 1,000
Total assets $ 1,000
$ 1,000

Contingencies and commitments (Note B)

STOCKHOLDER'S EQUITY
Common stock, $1.00 par value; 2,000 shares authorized; 1,000 shares issued and outstanding $ 1,000
$ 1,000
Additional paid in capital 25,330
25,055
Accumulated deficit (25,330 ) (25,055 )
Total stockholder's equity $ 1,000
$ 1,000
See notes to condensed financial statements.

FERRELLGAS PARTNERS FINANCE CORP.
(a wholly-owned subsidiary of Ferrellgas Partners, L.P.)
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)

For the three months ended January 31, For the six months ended January 31,
2018 2017 2018 2017

General and administrative expense $ 225
$ —
$ 275
$ 92

Net loss $ (225 ) $ —
$ (275 ) $ (92 )
See notes to condensed financial statements.

FERRELLGAS PARTNERS FINANCE CORP.
(a wholly-owned subsidiary of Ferrellgas Partners, L.P.)
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
For the six months ended January 31,
2018 2017
Cash flows from operating activities:
Net loss $ (275 ) $ (92 )
Cash used in operating activities (275 ) (92 )

Cash flows from financing activities:
Capital contribution 275
92
Cash provided by financing activities 275
92

Net change in cash —
—
Cash - beginning of period 1,000
1,000
Cash - end of period $ 1,000
$ 1,000
See notes to condensed financial statements.

FERRELLGAS PARTNERS FINANCE CORP.

(a wholly-owned subsidiary of Ferrellgas Partners, L.P.)

CONDENSED BALANCE SHEETS

(unaudited)


	April 30, 2022		July 31, 2021
ASSETS
Cash	$	302	$	1,000
Total assets	$	302	$	1,000

LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Other current liabilities	$	1,382	$	—
Total current liabilities	$	1,382	$	—

Contingencies and commitments (Note B)

STOCKHOLDER’S EQUITY (DEFICIT)
Common stock, $1.00 par value; 2,000 shares authorized; 1,000 shares issued and outstanding	$	1,000	$	1,000
Additional paid in capital		39,486		39,486
Accumulated deficit		(41,566)		(39,486)
Total stockholder’s equity (deficit)		(1,080)		1,000
Total liabilities and equity (deficit)	$	302	$	1,000

See notes to condensed financial statements.

~~(unaudited)~~

Table of Contents

FERRELLGAS PARTNERS FINANCE CORP.

(a wholly-owned subsidiary of Ferrellgas Partners, L.P.)

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)


	For the three months ended April 30,				For the nine months ended April 30,
	2022		2021		2022		2021
General and administrative expense	$	665	$	341	$	2,080	$	2,490

Net loss	$	(665)	$	(341)	$	(2,080)	$	(2,490)

See notes to condensed financial statements.

Table of Contents

FERRELLGAS PARTNERS FINANCE CORP.

(a wholly-owned subsidiary of Ferrellgas Partners, L.P.)

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)


	For the nine months ended April 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(2,080)	$	(2,490)
Changes in operating assets and liabilities:
Other current liabilities		1,382		—
Prepaid expenses and other current assets		—		1,850
Cash used in operating activities		(698)		(640)

Cash flows from financing activities:
Capital contribution		—		640
Cash provided by financing activities		—		640

Net change in cash		(698)		—
Cash - beginning of period		1,000		1,000
Cash - end of period	$	302	$	1,000

See notes to condensed financial statements.

Table of Contents

FERRELLGAS PARTNERS FINANCE CORP.

(a wholly-owned subsidiary of Ferrellgas Partners, L.P.)

(unaudited)

NOTES TO CONDENSED FINANCIAL STATEMENTS

A. Formation

Ferrellgas Partners Finance Corp. (the “Finance Corp.”), a Delaware corporation, was formed on March 28, 1996, and is a wholly-owned subsidiary of Ferrellgas Partners, L.P. ~~(the “Partnership”~~(“Ferrellgas Partners”).

~~The condensed financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the interim periods presented. All adjustments~~

Ferrellgas Partners contributed $1,000 to the ~~condensed financial statements were~~Finance Corp. on April 8, 1996 in exchange for 1,000 shares of ~~a normal recurring nature.~~

common stock.

The Finance Corp. has nominal assets, does not conduct any operations and has no0 employees.

B. Contingencies and commitments

The Finance Corp. serves as co-issuer and co-obligor for debt securities of Ferrellgas Partners. At July 31, 2020, the ~~Partnership.~~

~~The indenture governing~~Finance Corp. was liable as co-issuer and co-obligor for the $357.0 million aggregate principal amount of Ferrellgas Partners’ unsecured senior ~~unsecured~~ notes ~~contains various restrictive covenants applicable~~due June 15, 2020 (the “Ferrellgas Partners Notes”), which Ferrellgas Partners failed to repay, and which obligation was only reported on Ferrellgas Partners’ condensed consolidated balance sheet. On March 30, 2021, Ferrellgas Partners issued 1.3 million of its Class B Units in exchange for the ~~Partnership~~holders’ contribution of the Ferrellgas Partners Notes to Ferrellgas Partners as a capital contribution and ~~its subsidiaries,~~in satisfaction of such holders’ claims in respect of the ~~most restrictive relating to additional indebtedness and restricted payments.~~Ferrellgas Partners Notes. As of ~~January 31, 2018, the Partnership is in compliance with all requirements, tests, limitations and covenants related to this~~April 30, 2022, Ferrellgas Partners had 0 debt ~~agreement, except for the consolidated fixed charge coverage ratio.~~

~~The indenture governing the~~securities outstanding, ~~notes of the Partnership includes a consolidated fixed charge coverage ratio test for the incurrence of debt~~ and the ~~making~~Finance Corp. therefore was not liable as co-issuer for any such debt securities.

C. Subsequent events

The Finance Corp. has evaluated events and transactions occurring after the balance sheet date through the date the Finance Corp.’s condensed consolidated financial statements were issued and concluded that there were no events or transactions occurring during this period that required recognition or disclosure in its condensed consolidated financial statements.

Table of restricted payments. This covenant requires that the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of the Partnership be at least 1.75x before a restricted payment (as defined in the indenture) can be made by the Partnership. If this ratio were to drop below 1.75x, the indenture allows the Partnership to make restricted payments of up to $50.0 million in total over a 16 quarter period while below this ratio. As of January 31, 2018, the ratio was 1.59x. As a result, the $9.8 million distribution to be paid to common unitholders on March 16, 2018 will be taken from the $50.0 million restricted payment limitation, which after considering the $9.8 million deductions taken as a result of the distributions paid in September 2017 and December 2017, leaves $20.6 million for future restricted payments. Unless the indenture governing the outstanding notes is amended or refinanced, if the Partnership's consolidated fixed charge coverage ratio does not improve to at least 1.75x and the Partnership continues its current quarterly distribution rate of $0.10 per common unit, this covenant will not allow the Partnership to make common unit distributions for the quarter ending October 31, 2018 and beyond.

Contents

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)

January 31, 2018 July 31, 2017
ASSETS
Current assets:
Cash and cash equivalents $ 14,171
$ 5,701
Accounts and notes receivable, net (including $235,150 and $109,407 of accounts receivable pledged as collateral at January 31, 2018 and July 31, 2017, respectively) 255,978
165,084
Inventories 110,092
92,552
Assets held for sale 52,200
—
Prepaid expenses and other current assets 41,393
33,426
Total current assets 473,834
296,763

Property, plant and equipment, net 646,327
731,923
Goodwill, net 246,098
256,103
Intangible assets (net of accumulated amortization of $452,283 and $436,428 at January 31, 2018 and July 31, 2017, respectively) 243,079
251,102
Other assets, net 77,712
74,057
Total assets $ 1,687,050
$ 1,609,948

LIABILITIES AND PARTNERS' DEFICIT

Current liabilities:

Accounts payable $ 82,072
$ 85,561
Short-term borrowings 261,200
59,781
Collateralized note payable 166,000
69,000
Other current liabilities 136,591
122,016
Total current liabilities 645,863
336,358

Long-term debt 1,462,973
1,649,270
Other liabilities 35,422
31,118
Contingencies and commitments (Note J)

Partners' deficit:

Limited partner (477,096 ) (417,467 )
General partner (4,705 ) (4,095 )
Accumulated other comprehensive income 24,593
14,764
Total partners' deficit (457,208 ) (406,798 )
Total liabilities and partners' deficit $ 1,687,050
$ 1,609,948
See notes to condensed consolidated financial statements.

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)

For the three months ended January 31, For the six months ended January 31,
2018 2017 2018 2017
Revenues:
Propane and other gas liquids sales $ 592,239
$ 437,375
$ 894,997
$ 679,774

Midstream operations 117,276
96,787
238,036
204,831

Other 45,641
45,088
76,778
74,187

Total revenues 755,156
579,250
1,209,811
958,792

Costs and expenses:
Cost of sales - propane and other gas liquids sales 362,918
235,029
542,433
354,241

Cost of sales - midstream operations 107,067
87,024
215,192
181,666

Cost of sales - other 20,787
20,657
34,489
32,403

Operating expense 123,716
113,076
234,178
218,162

Depreciation and amortization expense 25,485
25,607
51,217
51,809

General and administrative expense 14,890
12,278
28,054
26,547

Equipment lease expense 6,954
7,416
13,695
14,765

Non-cash employee stock ownership plan compensation charge 4,031
2,945
7,993
6,699

Asset impairments 10,005
—
10,005
—

Loss on asset sales and disposals 39,249
45
40,144
6,468

Operating income 40,054
75,173
32,411
66,032

Interest expense (34,058 ) (32,748 ) (66,254 ) (64,146 )
Other income, net 684
763
1,195
1,271

Earnings (loss) before income taxes 6,680
43,188
(32,648 ) 3,157

Income tax expense (benefit) (167 ) 588
204
(3 )

Net earnings (loss) $ 6,847
$ 42,600
$ (32,852 ) $ 3,160

See notes to condensed consolidated financial statements.

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(unaudited)

For the three months ended January 31, For the six months ended January 31,
2018 2017 2018 2017

Net earnings (loss) $ 6,847
$ 42,600
$ (32,852 ) $ 3,160

Other comprehensive income (loss):
Change in value of risk management derivatives 1,072
15,262
23,521
20,400

Reclassification of (gains) losses on derivatives to earnings, net (9,743 ) 514
(13,692 ) 4,752

Other comprehensive income (loss) (8,671 ) 15,776
9,829
25,152

Comprehensive income (loss) $ (1,824 ) $ 58,376
$ (23,023 ) $ 28,312

See notes to condensed consolidated financial statements.

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' DEFICIT
(in thousands)
(unaudited)
Accumulated
other Total
Limited General comprehensive partners'
partner partner income deficit

Balance at July 31, 2017 $ (417,467 ) $ (4,095 ) $ 14,764
$ (406,798 )
Contributions in connection with non-cash ESOP and stock-based compensation charges 7,914
79
—
7,993
Distributions (35,023 ) (357 ) —
(35,380 )
Net loss (32,520 ) (332 ) —
(32,852 )
Other comprehensive income —
—
9,829
9,829
Balance at January 31, 2018 $ (477,096 ) $ (4,705 ) $ 24,593
$ (457,208 )
See notes to condensed consolidated financial statements.

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
For the six months ended January 31,
2018 2017
Cash flows from operating activities:
Net earnings (loss) $ (32,852 ) $ 3,160
Reconciliation of net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization expense 51,217
51,809
Non-cash employee stock ownership plan compensation charge 7,993
6,699
Non-cash stock-based compensation charge —
3,298
Asset impairments 10,005
—
Loss on asset sales and disposals 40,144
6,468
Unrealized gain on derivative instruments (91 ) (1,862 )
Provision for doubtful accounts 1,688
(283 )
Deferred income tax expense 364
35
Other 2,650
2,448
Changes in operating assets and liabilities, net of effects from business acquisitions:
Accounts and notes receivable, net of securitization (102,315 ) (74,403 )
Inventories (17,275 ) (24,268 )
Prepaid expenses and other current assets (4,637 ) 6,924
Accounts payable 11,510
40,444
Accrued interest expense 304
(12 )
Other current liabilities 13,662
20,087
Other assets and liabilities (3,208 ) 4,757
Net cash provided by (used in) operating activities (20,841 ) 45,301

Cash flows from investing activities:
Business acquisitions, net of cash acquired (14,862 ) —
Capital expenditures (35,693 ) (19,768 )
Proceeds from sale of assets 4,207
4,591
Other —
(37 )
Net cash used in investing activities (46,348 ) (15,214 )

Cash flows from financing activities:
Distributions (35,380 ) (84,500 )
Contributions from partners —
167,640
Proceeds from issuance of long-term debt 23,580
36,444
Payments on long-term debt (1,267 ) (172,790 )
Net reductions in short-term borrowings (7,879 ) (35,692 )
Net additions to collateralized short-term borrowings 97,000
69,000
Cash paid for financing costs (395 ) (1,422 )
Net cash provided by (used in) financing activities 75,659
(21,320 )

Net change in cash and cash equivalents 8,470
8,767
Cash and cash equivalents - beginning of period 5,701
4,890
Cash and cash equivalents - end of period $ 14,171
$ 13,657
See notes to condensed consolidated financial statements.

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)


	April 30, 2022		July 31, 2021
ASSETS
Current assets:
Cash and cash equivalents (including $11,215 and $11,500 of restricted cash at April 30, 2022 and July 31, 2021, respectively)	$	228,857	$	281,688
Accounts and notes receivable, net		219,251		131,574
Inventories		100,554		88,379
Price risk management asset		78,787		78,001
Loan receivable - Ferrellgas Partners, L.P.		19,091		—
Prepaid expenses and other current assets		35,344		39,073
Total current assets		681,884		618,715

Property, plant and equipment, net		594,362		582,118
Goodwill, net		251,065		246,946
Intangible assets (net of accumulated amortization of $438,161 and $432,032 at April 30, 2022 and July 31, 2021, respectively)		99,283		100,743
Operating lease right-of-use assets		77,695		87,611
Loan receivable - Ferrellgas Partners, L.P.		—		17,001
Other assets, net		87,058		93,228
Total assets	$	1,791,347	$	1,746,362

LIABILITIES, MEZZANINE AND EQUITY (DEFICIT)

Current liabilities:
Accounts payable	$	80,955	$	47,913
Broker margin deposit liability		67,200		79,178
Current portion of long-term debt		1,979		1,670
Current operating lease liabilities		26,041		25,363
Other current liabilities		158,407		166,604
Total current liabilities		334,582		320,728

Long-term debt		1,448,830		1,444,890
Operating lease liabilities		51,650		74,349
Other liabilities		49,428		61,189
Contingencies and commitments (Note M)

Mezzanine equity:
Senior preferred units, net of issue discount and offering costs (700,000 units outstanding at April 30, 2022 and July 31, 2021)		651,349		651,349

Equity (Deficit):
Limited partners		(814,109)		(887,043)
General partner		(7,631)		(8,886)
Accumulated other comprehensive income		77,248		89,786
Total deficit		(744,492)		(806,143)
Total liabilities, mezzanine and deficit	$	1,791,347	$	1,746,362

See notes to condensed consolidated financial statements.

Table of Contents

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

(unaudited)


	For the three months ended April 30,				For the nine months ended April 30,
	2022		2021		2022		2021

Revenues:
Propane and other gas liquids sales	$	622,211	$	542,036	$	1,652,419	$	1,351,519
Other		25,332		22,694		74,566		67,665
Total revenues		647,543		564,730		1,726,985		1,419,184

Costs and expenses:
Cost of sales - propane and other gas liquids sales		362,958		298,386		966,709		706,790
Cost of sales - other		3,176		2,985		10,343		10,156
Operating expense - personnel, vehicle, plant and other		147,293		124,624		392,418		348,898
Operating expense - equipment lease expense		5,775		6,770		17,487		20,462
Depreciation and amortization expense		23,067		21,281		65,306		63,920
General and administrative expense		10,959		15,203		39,312		48,533
Non-cash employee stock ownership plan compensation charge		776		811		2,436		2,281
(Gain) loss on asset sales and disposals		1,299		1,345		(6,566)		2,238

Operating income		92,240		93,325		239,540		215,906

Interest expense		(23,965)		(42,189)		(74,499)		(135,239)
Loss on extinguishment of debt		—		(107,968)		—		(107,968)
Other income, net		840		1,552		6,569		5,419

Earnings (loss) before income taxes		69,115		(55,280)		171,610		(21,882)

Income tax expense		243		193		820		592

Net earnings (loss)	$	68,872	$	(55,473)	$	170,790	$	(22,474)

See notes to condensed consolidated financial statements.

Table of Contents

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)


	For the three months ended April 30,				For the nine months ended April 30,
	2022		2021		2022		2021

Net earnings (loss)	$	68,872	$	(55,473)	$	170,790	$	(22,474)
Other comprehensive income (loss):
Change in value of risk management derivatives		29,355		20,446		84,427		63,170
Reclassification of gains on derivatives to earnings, net		(44,145)		(22,383)		(96,965)		(28,674)
Other comprehensive income (loss)		(14,790)		(1,937)		(12,538)		34,496
Comprehensive income (loss)	$	54,082	$	(57,410)	$	158,252	$	12,022

See notes to condensed consolidated financial statements.

Table of Contents

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF PARTNERS’ DEFICIT

(in thousands)

(unaudited)


					Accumulated
					other		Total
	Limited		General		comprehensive		partners’
	partner		partner		income		deficit

Balance at July 31, 2021	$	(887,043)	$	(8,886)	$	89,786	$	(806,143)
Contributions in connection with non-cash ESOP compensation charges		900		9		—		909
Distributions		(50,000)		—		—		(50,000)
Net earnings allocated to preferred units		(17,005)		—		—		(17,005)
Net loss		(7,913)		(254)		—		(8,167)
Other comprehensive income		—		—		50,322		50,322
Balance at October 31, 2021		(961,061)		(9,131)		140,108		(830,084)
Contributions in connection with non-cash ESOP compensation charges		743		8		—		751
Net earnings allocated to preferred units		(16,317)		—		—		(16,317)
Net earnings		109,138		947		—		110,085
Other comprehensive loss		—		—		(48,070)		(48,070)
Balance at January 31, 2022		(867,497)		(8,176)		92,038		(783,635)
Contributions in connection with non-cash ESOP compensation charges		768		8		—		776
Net earnings allocated to preferred units		(15,715)		—		—		(15,715)
Net earnings		68,335		537		—		68,872
Other comprehensive loss		—		—		(14,790)		(14,790)
Balance at April 30, 2022	$	(814,109)	$	(7,631)	$	77,248	$	(744,492)


					Accumulated
					other		Total
	Limited		General		comprehensive		partners’
	partner		partner		income (loss)		deficit
Balance at July 31, 2020	$	(821,462)	$	(8,216)	$	(2,313)	$	(831,991)
Contributions in connection with non-cash ESOP compensation charges		701		7		—		708
Net loss		(38,360)		(391)		—		(38,751)
Other comprehensive income		—		—		7,917		7,917
Balance at October 31, 2020		(859,121)		(8,600)		5,604		(862,117)
Contributions in connection with non-cash ESOP compensation charges		754		8		—		762
Net earnings		71,026		724		—		71,750
Other comprehensive income		—		—		28,516		28,516
Balance at January 31, 2021		(787,341)		(7,868)		34,120		(761,089)
Contributions in connection with non-cash ESOP compensation charges		803		8		—		811
Net earnings allocated to preferred units		(8,011)		—				(8,011)
Net loss		(54,832)		(641)		—		(55,473)
Other comprehensive loss		—		—		(1,937)		(1,937)
Balance at April 30, 2021	$	(849,381)	$	(8,501)	$	32,183	$	(825,699)

See notes to condensed consolidated financial statements.

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FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	For the nine months ended April 30,
	2022		2021
Cash flows from operating activities:
Net earnings (loss)	$	170,790	$	(22,474)
Reconciliation of net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization expense		65,306		63,920
Non-cash employee stock ownership plan compensation charge		2,436		2,281
(Gain) loss on asset sales and disposals		(6,566)		2,238
Loss on extinguishment of debt		—		107,968
Provision for expected credit losses		1,456		3,479
Deferred income tax benefit		(3)		—
Other		5,598		6,524
Changes in operating assets and liabilities, net of effects from business acquisitions:
Accounts and notes receivable, net of securitization		(89,133)		(72,557)
Inventories		(12,175)		2,922
Prepaid expenses and other current assets		3,730		(11,300)
Accounts payable		32,758		20,520
Accrued interest expense		(20,803)		(26,757)
Other current liabilities		(7,937)		28,099
Other assets and liabilities		(17,258)		5,401
Net cash provided by operating activities		128,199		110,264

Cash flows from investing activities:
Business acquisitions, net of cash acquired		(9,610)		—
Capital expenditures		(69,611)		(50,470)
Proceeds from sale of assets		2,170		3,707
Cash payments to construct assets in connection with future lease transactions		(1,425)		(603)
Cash receipts in connection with leased vehicles		1,663		391
Loan to Ferrellgas Partners, L.P.		—		(23,808)
Net cash used in investing activities		(76,813)		(70,783)

Cash flows from financing activities:
Distributions to Ferrellgas Partners		(50,000)		—
Preferred unit distributions		(47,783)		—
Proceeds from sale of preferred units, net of issue discount and offering costs		—		670,429
Proceeds from issuance of long-term debt		—		1,475,000
Payments on long-term debt		(1,208)		(1,540)
Payment for settlement and early extinguishment of liabilities		—		(2,175,000)
Payment of redemption premium on debt extinguishment		—		(83,072)
Cash payments for principal portion of finance lease liability		(4,889)		(5,282)
Cash paid for financing costs		(337)		(43,520)
Net cash used in financing activities		(104,217)		(162,985)

Net change in cash, cash equivalents and restricted cash		(52,831)		(123,504)
Cash, cash equivalents and restricted cash - beginning of period		281,688		333,755
Cash, cash equivalents and restricted cash - end of period	$	228,857	$	210,251

See notes to condensed consolidated financial statements.

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FERRELLGAS, L.P. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, unless otherwise designated)

(unaudited)

A. Partnership organization and formation

Ferrellgas, L.P. (the “operating partnership”) is a limited partnership that owns and operates propane distribution and related ~~assets, crude oil transportation and logistics related assets and salt water disposal wells in south Texas.~~assets. Ferrellgas Partners, L.P. (“Ferrellgas Partners”) is a holding entity that conducts no operations and was formed to acquire and hold a limited partner interest in the operating partnership. Ferrellgas Partners and the holders of the Preferred Units (as defined in Note F – Preferred units) are the only limited partners of the operating partnership. Ferrellgas, Inc. (the “general partner”), a ~~publicly traded limited~~Delaware corporation and a wholly-owned subsidiary of Ferrell Companies, is the sole general partner of Ferrellgas Partners and the operating partnership ~~holds~~and excluding the economic interests attributable to Ferrellgas Partners’ Class B Units and the operating partnership’s Preferred Units, owns an approximate 1% general partner economic interest in each and, therefore, an effective 2% general partner economic interest in the operating partnership.

Excluding the economic interests attributable to the Preferred Units, Ferrellgas Partners owns an approximate 99% limited partner interest in ~~and consolidates, Ferrellgas, L.P. Ferrellgas, Inc. (the “general partner”), a wholly-owned subsidiary of Ferrell Companies, Inc. (“Ferrell Companies”), holds an approximate 1%~~the operating partnership. Our general partner ~~interest in Ferrellgas, L.P. and~~ performs all management functions ~~required~~for us. The operating partnership and Ferrellgas Partners, collectively referred to as “Ferrellgas,” are both Delaware limited partnerships and are governed by ~~Ferrellgas, L.P.~~

~~Ferrellgas, L.P.~~their respective partnership agreements. These agreements contain specific provisions for the allocation of net earnings and loss to each of the partners for purposes of maintaining the partner capital accounts.

The operating partnership owns a 100% equity interest in Ferrellgas Finance Corp., whose only business activity is to act as the co-issuer and co-obligor of debt securities issued by ~~Ferrellgas, L.P.~~

~~Ferrellgas, L.P.~~the operating partnership.

The operating partnership is primarily engaged in the ~~following primary businesses:~~

~~Propane operations and related equipment sales consists of the~~retail distribution of propane and related equipment ~~and supplies.~~sales. The propane distribution market is seasonal because propane is used primarily for heating in residential and commercial buildings. Ferrellgas ~~L.P.~~ serves residential, industrial/commercial, portable tank exchange, agricultural, wholesale and other customers in all 50 states, the District of Columbia, and Puerto Rico.

Midstream operations consists of crude oil logistics and water solutions. Crude oil logistics primarily generates income by providing crude oil transportation and logistics services on behalf of producers and end-users of crude oil. Water solutions generates income primarily through the operation of salt water disposal wells in the Eagle Ford shale region of south Texas.

Due to seasonality, the results of operations for the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year ending July 31, ~~2018.~~

2022.

The condensed consolidated financial statements of ~~Ferrellgas, L.P.~~the operating partnership and subsidiaries reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the interim periods presented. All adjustments to the condensed consolidated financial statements were of a normal recurring nature. ~~Certain prior period amounts have been reclassified to conform to the current period presentation.~~ The information included in this Quarterly Report on Form 10-Q should be read in conjunction with (i) the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and (ii) the consolidated financial statements and accompanying notes included in Ferrellgas, L.P.’s Annual Report on Form 10-K for fiscal ~~2017~~.2021.

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B. Summary of significant accounting policies

(1)Accounting estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from these estimates. Significant estimates impacting the condensed consolidated financial statements include accruals that have been established for contingent liabilities, pending claims and legal actions arising in the normal course of business, useful lives of property, plant and equipment, ~~assets,~~ residual values of tanks, capitalization of customer tank installation costs, amortization methods of intangible assets, valuation methods used to value sales returns and allowances, allowance for ~~doubtful accounts,~~expected credit losses, fair value of reporting units, recoverability of long-lived assets, assumptions used to value business combinations, determination of incremental borrowing rate used to measure right-of-use asset and lease liability, fair values of derivative contracts and stock-based compensation calculations.

(2) ~~Assets held~~Goodwill, net: The operating partnership tests goodwill for ~~sale:~~ ~~Assets held for sale represent rail cars~~impairment annually during the second fiscal quarter or more frequently if events or changes in circumstances indicate that ~~have met~~it is more likely than not the ~~criteria~~fair value of ~~“held for sale” accounting.~~a reporting unit is less than the carrying value. During the ~~second~~most recent impairment testing conducted during the fiscal quarter of fiscal 2018, Ferrellgas, L.P. committed to a plan to sell certain rail cars held by the Midstream operations segment. These assets were reclassified from Rail cars within "Property, plant and equipment, net" to "Assets held for sale" in the accompanying balance sheet as ofended January 31, ~~2018. Ferrellgas, L.P. ceased depreciation on these assets during January 2018. Assets held for sale are recorded at~~2022, the ~~lower of the carrying amount or fair value less costs to sell. For further discussion of assets held for sale, see Note C - Supplemental financial statement information.~~

operating partnership determined that goodwill was not impaired.

(3) New accounting standards:

~~FASB Accounting Standard Update No. 2014-09~~

~~In May 2014,~~

No new accounting standards were adopted during the ~~Financial Accounting Standards Board, ("FASB") issued Accounting Standard Update ("ASU") 2014-09,~~ ~~Revenue from Contracts with Customers.~~ ~~The issuance is part of a joint effort by the FASB and the International Accounting~~

Standards Board ("IASB") to enhance financial reporting by creating common revenue recognition guidance for U.S. GAAP and International Financial Reporting Standards ("IFRS") and, thereby, improving the consistency of requirements, comparability of practices and usefulness of disclosures. The new standard will supersede much of the existing authoritative literature for revenue recognition. The standard and related amendments will be effective for Ferrellgas, L.P. for its annual reporting period beginning August 1, 2018, including interim periods within that reporting period. Entities are allowed to transition to the new standard by either recasting prior periods or recognizing the cumulative effect. Ferrellgas, L.P. is in the final stages of analyzing the impact of the new guidance using an integrated approach which includes evaluating differences in the amount and timing of revenue recognition from applying the requirements of the new guidance, reviewing its accounting policies and practices, and assessing the need for changes to its processes, accounting systems and design of internal controls. Ferrellgas, L.P. has completed the assessment of a significant number of its contracts with customers under the new guidance to determine the effect of the adoption of the new guidance. Although Ferrellgas, L.P. has not completed its assessment of the impact of the new guidance, it does not expect its adoption will have a material impact on its consolidated financial statements.

~~FASB Accounting Standard Update No. 2015-11~~

~~In July 2015, the FASB issued ASU 2015-11,~~ ~~Inventory (Topic 330) - Simplifying the Measurement of Inventory,~~ which requires that inventory within the scope of the guidance be measured at the lower of cost or net realizable value. We adopted ASU 2015-11 effective August 1, 2017. The adoption of this standard did not materially impact our consolidated financial statements.

~~FASB Accounting Standard Update No. 2016-02~~

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842)~~ to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 iseffective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Ferrellgas, L.P. is currently evaluating the impact of our pending adoption of ASU 2016-02 on the consolidated financial statements. Ferrellgas, L.P. has formed an implementation team, completed training on the new standard, and is working on an initial assessment.

~~FASB Accounting Standard Update No. 2016-13~~

~~In June 2016, the FASB issued ASU 2016-13,~~ ~~Financial Instruments - Credit Losses (Topic 326)~~ which requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. Ferrellgas, L.P. is currently evaluating the impact of its pending adoption of this standard on the consolidated financial statements.

~~FASB Accounting Standard Update No. 2017-12~~

~~In August 2017, the FASB issued ASU 2017-12,~~ ~~Financial Instruments - Derivatives and Hedging (Topic 815) - Targeted Improvements to Accounting for Hedging Activities~~ which is intended to improve the financial reporting for hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. This standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Ferrellgas, L.P. is currently evaluating the impact of its pending adoption of this standard on the consolidated financial statements.

nine months ended April 30, 2022.

C. Supplemental financial statement information

Inventories consist of the following:

January 31, 2018 July 31, 2017
Propane gas and related products $ 81,644
$ 67,049
Appliances, parts and supplies, and other 28,448
25,503
Inventories $ 110,092
$ 92,552


	April 30, 2022		July 31, 2021
Propane gas and related products	$	86,663	$	75,848
Appliances, parts and supplies, and other		13,891		12,531
Inventories	$	100,554	$	88,379

In addition to inventories on hand, Ferrellgas, L.P. enters into contracts to take delivery of propane for supply procurement purposes with terms that generally do not exceed 36 months. Most of these contracts call for payment based on market prices at the date of delivery. As of ~~January 31, 2018,~~April 30, 2022, Ferrellgas, L.P. had committed, for supply procurement purposes, to ~~take delivery of~~deliver approximately ~~81.9~~1.3 million gallons of propane at fixed ~~prices.~~

~~Other~~prices, net of contracts to take delivery.

Prepaid expenses and other current assets ~~net~~ consist of the following:

January 31, 2018 July 31, 2017
Notes receivable, less current portion $ 36,371
$ 32,500
Other 41,341
41,557
Other assets, net $ 77,712
$ 74,057


	April 30, 2022		July 31, 2021
Broker margin deposit assets	$	11,938	$	21,068
Other		23,406		18,005
Prepaid expenses and other current assets	$	35,344	$	39,073

Other current liabilities consist of the following:


	April 30, 2022		July 31, 2021
Accrued interest	$	8,292	$	29,095
Customer deposits and advances		31,765		35,734
Accrued payroll		23,246		28,143
Accrued insurance		22,735		11,104
Accrued senior preferred units distributions		16,873		16,013
Other		55,496		46,515
Other current liabilities	$	158,407	$	166,604

January 31, 2018 July 31, 2017
Accrued interest $ 15,041
$ 14,737
Customer deposits and advances 24,676
25,541
Other 96,874
81,738
Other current liabilities $ 136,591
$ 122,016

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Shipping and handling expenses are classified in the following condensed consolidated statements of operations line items:


	For the three months ended April 30,				For the nine months ended April 30,
	2022		2021		2022		2021
Operating expense - personnel, vehicle, plant and other	$	71,487	$	56,989	$	184,128	$	161,242
Depreciation and amortization expense		3,934		3,347		10,270		9,828
Operating expense - equipment lease expense		4,054		5,551		11,721		17,227
	$	79,475	$	65,887	$	206,119	$	188,297

Cash and cash equivalents consist of the following:


	April 30, 2022		July 31, 2021
Cash and cash equivalents	$	217,642	$	270,188
Restricted cash (1)		11,215		11,500
Cash, cash equivalents and restricted cash	$	228,857	$	281,688

(1)

~~During~~

For purposes of the ~~quarter ended January 31, 2018,~~condensed consolidated statements of cash flows, Ferrellgas, L.P. ~~committed~~considers cash equivalents to ~~a plan to dispose~~include all highly liquid debt instruments purchased with an original maturity of all of its rail cars utilized in the Midstream operations segment and as a result, reclassified 1,292 rail cars from "Property, plant and equipment, net" to "Assets held for sale" on our condensed consolidated balance sheets as of January 31, 2018. For the three ~~and six~~ months ended January 31, 2018, "Loss on asset sales and disposals" includes a loss of $35.5 million related to the write-down of these rail cars classified as "Assets held for sale". On February 20, 2018, Ferrellgas, L.P. completed the sale of 1,072 of these rail cars and received approximately $47.0 million in cash. Proceeds from the transaction were used to reduce outstanding debt on Ferrellgas L.P.'s secured credit facility.

During the quarter ended January 31, 2018, Ferrellgas, L.P. completed the sale of Bridger Energy, LLC in the Midstream operations segment in exchange for an $8.5 million secured promissory note due in May 2020. For the three and six months ended January 31, 2018, "Loss on asset sales and disposals" includes a loss of $3.6 million related to this sale.

~~"Loss on asset sales and disposals" during the three and six months ended January 31, 2018 and 2017 consists of:~~

For the three months ended January 31, For the six months ended January 31,
2018 2017 2018 2017
Loss on assets held for sale $ 35,515
$ —
35,515
—
Loss on sale of assets and other 3,734
45
4,629
6,468
Loss on asset sales and disposals $ 39,249
$ 45
$ 40,144
$ 6,468

or less. Certain cash flow and significant non-cash activities are presented below:


	For the nine months ended April 30,
	2022		2021
Cash paid for:
Interest	$	85,867	$	154,834
Income taxes	$	646	$	424
Non-cash investing and financing activities:
Liabilities incurred in connection with acquisitions	$	644	$	—
Change in accruals for property, plant and equipment additions	$	426	$	(48)
Lease liabilities arising from operating right-of-use assets	$	11,240	$	7,315
Lease liabilities arising from finance right-of-use assets	$	1,872	$	1,904
Accrued fees relating to senior preferred units	$	—	$	18,575
Accrued senior preferred units distributions	$	16,873	$	8,011

For the six months ended January 31,
2018 2017
Cash paid for:
Interest $ 63,286
$ 61,723
Income taxes $ 1
$ 25
Non-cash investing and financing activities:
Liabilities incurred in connection with acquisitions $ 1,508
$ —
Change in accruals for property, plant and equipment additions $ 47
$ (100 )

D. Accounts and notes receivable, net ~~and accounts receivable securitization~~

Accounts and notes receivable, net consist of the following:


	April 30, 2022		July 31, 2021
Accounts receivable	$	223,349	$	135,182
Note receivable		2,635		13,648
Less: Allowance for expected credit losses		(6,733)		(17,256)
Accounts and notes receivable, net	$	219,251	$	131,574

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E. Debt

Long-term debt

Long-term debt consists of the following:


	April 30, 2022		July 31, 2021
Unsecured senior notes
Fixed rate, 5.375%, due 2026 (1)	$	650,000	$	650,000
Fixed rate, 5.875%, due 2029 (1)		825,000		825,000

Notes payable
9.0% and 8.8% weighted average interest rate at April 30, 2022 and July 31, 2021, respectively, due 2022 to 2029, net of unamortized discount of $497 and $573 at April 30, 2022 and July 31, 2021, respectively		4,719		3,882
Total debt, excluding unamortized debt issuance and other costs		1,479,719		1,478,882
Unamortized debt issuance and other costs		(28,910)		(32,322)
Less: current portion of long-term debt		1,979		1,670
Long-term debt	$	1,448,830	$	1,444,890

(1)

Senior secured revolving credit facility

~~Consolidated~~

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The Credit Agreement contains customary representations, warranties, covenants and events of default.

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Senior unsecured notes

In particular, under these covenants, subject to certain exceptions and additional requirements, the operating partnership is permitted to make cash distributions to holders of Preferred Units, Ferrellgas Partners and the general partner, redemptions of Preferred Units and other restricted payments (i) only in limited amounts specified in the indentures and (ii) only if the operating partnership’s net leverage ratio (defined generally to mean the ratio of consolidated total net debt to trailing 4 quarters consolidated EBITDA, both as adjusted for certain, specified items) ofis not greater than 5.0 to 1.0, on a pro forma basis giving effect to the restricted payment and, if applicable, certain other specified events. Further, if the operating ~~partnership, as detailed in Ferrellgas, L.P.'s secured credit facility and accounts receivable securitization facility.~~

~~The current maximum~~partnership’s consolidated ~~leverage covenant ratios are as follows:~~



~~Date~~		~~Maximum consolidated leverage ratio~~
~~January 31, 2018~~		~~7.75~~
~~April 30, 2018~~		~~7.75~~
~~July 31, 2018 & thereafter~~		~~5.50~~

~~Ferrellgas, L.P.'s consolidated leverage ratio was 6.96x as of January 31, 2018. See additional disclosure about Ferrellgas' financial covenants in Note E - Debt.~~

~~Consolidated interest coverage ratio~~

~~The consolidated interest~~fixed charge coverage ratio ~~is defined as~~(defined generally to mean the ratio of trailing ~~four~~4 quarters consolidated EBITDA to ~~interest expense (both~~consolidated fixed charges, both as adjusted for certain, specified items) is equal to or less than 1.75 to 1.00 (on a pro forma basis giving effect to the restricted payment and, if applicable, certain other specified events), the amount of distributions and other restricted payments the operating partnership is permitted to make under the indentures is further limited. As of April 30, 2022, the operating partnership is in compliance with all of its debt covenants.

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The scheduled annual principal payments on long-term debt are as follows:


Payment due by fiscal year	Scheduled principal payments
2022	$	462
2023		1,709
2024		1,139
2025		930
2026		650,710
Thereafter		825,266
Total	$	1,480,216

Letters of credit outstanding at April 30, 2022 and July 31, 2021 totaled $90.8 million and $107.7 million, respectively, and were used to secure insurance arrangements, product purchases and commodity hedges. As of April 30, 2022, Ferrellgas, L.P. had available borrowing capacity under its Credit Facility of $259.2 million.

F. Preferred units

On the Effective Date, pursuant to an Investment Agreement with certain purchasers named therein, the operating partnership issued and sold an aggregate of 700,000 Preferred Units (the “Preferred Units”), having an aggregate initial liquidation preference of $700.0 million. The purchase price per Preferred Unit was $1,000 less a 3.0% purchase price discount, for an aggregate purchase price of $679.0 million. The operating partnership received net proceeds from the issuance and sale of the Preferred Units of approximately $651.3 million, after deduction of the purchase price discount and certain expenses.

The operating partnership used such net proceeds, together with the net proceeds of the issuance and sale of the 2026 Notes and the 2029 Notes and cash on hand, (i) to redeem (or satisfy and discharge the indentures governing and subsequently redeem) all of the issued and outstanding 2021 Notes, 2022 Notes, 2023 Notes and 2025 Notes, as described in Note E - Debt, and (ii) to repay all outstanding obligations under the Accounts Receivable Facility in connection with the termination of that facility.

“MOIC” means, with respect to a Preferred Unit, a multiple on invested capital equal to the quotient determined by dividing (A) the sum of (x) the aggregate amount of all distributions made in cash with respect to such Preferred Unit prior to the applicable date of determination, with certain exclusions, plus (y) each Redemption Price paid in cash in respect of such Preferred Unit, on or prior to the applicable date of determination, by (B) the Purchase Price (defined below) of such Preferred Unit.

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On the Effective Date the general partner entered into (i) the Fifth Amended and Restated Agreement of Limited Partnership of Ferrellgas, L.P. (the “Amended OpCo LPA”), which amended and restated in its entirety the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas L.P., and (ii) the First Amendment to the Amended OpCo LPA (the “OpCo LPA Amendment”), which sets forth the preferences, rights, privileges and other terms of the Preferred Units.

Issuer Redemption Right

The operating partnership has the right to redeem all or a portion of the Preferred Units for cash, pro rata and at any time and from time to time, including in connection with a Change of Control (as defined in the OpCo LPA Amendment), at an amount per Preferred Unit (the “Redemption Price”) equal to, without duplication, the sum of (a) the greater of (i) the amount necessary to result in a MOIC of 1.47x in respect of the purchase price, before discount, of such Preferred Unit, which is $1,000 per Preferred Unit (the “Purchase Price”), and (ii) the amount necessary to result in the applicable internal rate of return equal to 12.25%, which is increased by 150 basis points if the operating partnership has elected to pay more than four Quarterly Distributions (as defined below) in PIK Units (as defined below) and (b) the accumulated but unpaid Quarterly Distributions to the date of redemption, if any. A partial redemption of the Preferred Units is permitted only in the event the aggregate amount to be paid in respect of all Preferred Units included in such partial redemption is at least $25.0 million.

Investor Redemption Right

~~The current minimum consolidated interest coverage ratios are as follows:~~



~~Date~~		~~Minimum consolidated interest coverage ratio~~
~~January 31, 2018~~		~~1.75~~
~~April 30, 2018~~		~~1.75~~
~~July 31, 2018 & thereafter~~		~~2.50~~

~~Ferrellgas, L.P.'s consolidated interest coverage ratio was 2.14x as~~after the tenth anniversary of ~~January 31, 2018;~~ the margin allows for approximately $25.3 million of additional interest expense or approximately $44.3 million less EBITDA. See additional disclosure about Ferrellgas' financial covenants in Note E - Debt.

~~This accounts receivable securitization facility matures on July 29, 2019 unless the secured credit facility matures or terminates at an earlier date.~~Effective Date. If Ferrellgas, L.P. replaces the senior secured credit facility prior to the October 2018 maturity date, Ferrellgas, L.P. will need to amend the accounts receivable securitization facility to modify the maturity date, or replace it with a new facility. Ferrellgas, L.P. is working to renew or replace the accounts receivable securitization facility. Potential options include extending the current accounts receivable securitization facility, entering into a new accounts receivable securitization facility or securing alternative financing from a different source. Ferrellgas, L.P. believes it is probable that it will be able to obtain sufficient capital to meet anticipated liquidity demands.

At January 31, 2018, $235.2 million of trade accounts receivable were pledged as collateral against $166.0 million of collateralized notes payable due to a commercial paper conduit. At July 31, 2017, $109.4 million of trade accounts receivable were pledged as collateral against $69.0 million of collateralized notes payable due to the commercial paper conduit. These

accounts receivable pledged as collateral are bankruptcy remote from Ferrellgas, L.P. Ferrellgas, L.P. does not provide any guarantee or similar support to the collectability of these accounts receivable pledged as collateral.

As of January 31, 2018, Ferrellgas, L.P. had received cash proceeds of $166.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. As of July 31, 2017, Ferrellgas, L.P. had received cash proceeds of $69.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. Borrowings under the accounts receivable securitization facility had a weighted average interest rate of 4.0% and ~~4.0%~~ ~~as of~~ ~~January 31, 2018~~ ~~and~~ ~~July 31, 2017, respectively.~~

E. ~~Debt~~

~~Short-term borrowings~~

Since October 31, 2017, Ferrellgas, L.P. classified all of its secured credit facility borrowings as short-term because the facility matures in October 2018. Prior to October 31, 2017, Ferrellgas, L.P. classified as short-term the portion of its secured credit facility borrowings that were used to fund working capital needs that management intended to pay down within the 12 month period following the balance sheet date. As of January 31, 2018 and July 31, 2017, $261.2 million and $59.8 million, respectively, were classified as short-term borrowings. For further discussion see the secured credit facility section below.

~~Financial covenants~~

~~The agreements governing~~ the operating ~~partnership’s indebtedness contain various covenants~~partnership fails to consummate a sale that ~~limit our ability and~~would pay the ~~ability~~Redemption Price in full within 180 days of ~~specified subsidiaries~~written notice requiring such sale, the Required Holders will have the right to ~~among other things, make restricted payments and incur additional indebtedness. Our~~appoint a majority of the members of the Board of Directors of the general partner ~~believes that~~and initiate a sale of the ~~most restrictive~~operating partnership.

Change of ~~these covenants are the consolidated leverage ratio and consolidated interest coverage ratio, as defined in our secured credit facility and our accounts receivable securitization facility.~~

~~Before~~Control

Upon a ~~restricted payment~~Change of Control (as defined in the ~~secured credit facility and~~OpCo LPA Amendment), the Required Holders will have the option to require the redemption of all or a portion of the Preferred Units in cash in an amount equal to the Redemption Price; provided, that such Redemption Price shall not be payable unless the operating partnership ~~indentures) can~~shall have first made any required change of control offer pursuant to the indentures governing the 2026 Notes and the 2029 Notes and purchased all such 2026 Notes and 2029 Notes tendered pursuant to such offer (unless otherwise waived by such noteholders); provided, further that the Redemption Price shall be ~~made by~~paid immediately following the ~~operating partnership,~~purchase of such tendered Notes (if any).

Fair Value of Embedded Derivatives

Ferrellgas identified the ~~operating partnership must be~~investor redemption right and the change in ~~compliance with~~control option as embedded derivatives that require bifurcation as they are not clearly and closely related to the ~~consolidated leverage ratio~~debt host contract and ~~consolidated interest coverage ratio covenants under~~has concluded that the ~~secured credit facility~~fair values at issuance and ~~accounts receivable securitization facility and in compliance with~~at April 30, 2022, are immaterial to the ~~covenants under~~financial statements.

Distributions

Pursuant to the ~~operating partnerships indentures. If~~OpCo LPA Amendment, the operating partnership is ~~unable~~required to pay to the holders of each Preferred Unit a cumulative, quarterly distribution (the "Quarterly Distribution") at the Distribution Rate (as defined below) on the Purchase Price.

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The Quarterly Distribution may be paid in cash or, at the election of the operating partnership, "in kind" through the issuance of additional Preferred Units ("PIK Units") at the quarterly Distribution Rate plus an applicable premium that escalates each year from 75 bps to 300 bps so long as the Preferred Units remain outstanding. In the event the operating partnership fails to make ~~restricted payments, Ferrellgas Partners~~any Quarterly Distribution in cash, such Quarterly Distribution will ~~not have~~automatically be paid in PIK Units.

The Distribution Rate on the ~~ability~~Preferred Units will increase upon violation of certain protective provisions for the benefit of Preferred Unit holders notwithstanding the cap mentioned above.

Tax Distributions

For any quarter in which the operating partnership makes a Quarterly Distribution in PIK Units in lieu of cash, it will be required to make ~~semi-annual interest payments on its $357.0 million 8.625% unsecured senior notes due 2020 or distributions~~a subsequent cash tax distribution for such quarter in an amount equal to ~~Ferrellgas Partners common unitholders. If Ferrellgas Partners does not make interest payments on its unsecured notes, that would constitute an event~~the (i) the lesser of ~~default which would permit~~(x) 25% and (y) the ~~acceleration~~highest combined federal, state and local tax rate applicable for corporations organized in New York, multiplied by (ii) the excess (if any) of (A) one-fourth (1/4th) of the ~~obligations underlying~~estimated taxable income to be allocated to the ~~Ferrellgas Partners indenture, including all outstanding principal owed. The accelerated obligations would become immediately due and payable, which would in turn trigger cross acceleration~~holders of ~~other debt. If Ferrellgas, L.P.'s debt obligations are accelerated, Ferrellgas, L.P. may be unable to borrow sufficient funds to refinance debt~~Preferred Units for the year in which ~~case Ferrellgas Partners' unitholders~~the Quarterly Tax Payment Date (which refers to certain specified dates that next follow a Quarterly Distribution date on which PIK Units were issued) occurs, over (B) any cash paid on the Quarterly Distribution date immediately preceding the Quarterly Tax Payment Date on which a quarterly tax amount would otherwise be paid (such amount, the "Tax Distribution"). Tax Distributions are treated as advances against, and ~~investors~~reduce, future cash distributions for any reason, including payments in ~~our debt instruments could experience~~redemption of Preferred Units or PIK Units, or payments to the holders in their capacity as such pursuant to any side letter or other agreement.

Additional Amounts for Certain Purchasers

~~A breach~~transferees is, entitled to Additional Amounts. Additional Amounts are capped at the lesser of: (a) the product of 20% multiplied by taxable income allocated to a “blocker” (as defined) divided by 0.8, and (b) the actual taxes payable by the “blocker” as a result of holding Senior Preferred Units.

Board Rights

For so long as at least 140,000 Preferred Units remain outstanding, holders of the consolidated leverage ratio covenant or the consolidated interest coverage ratio covenant under the secured credit facility and the accounts receivable securitization facility would result in an event of default under those facilities resulting in the operating partnership’s inability to obtain funds under those facilities and would give the lenders and receivables purchasersPreferred Units have the right to ~~accelerate~~designate 1 director to the Board of the general partner, subject to approval by the general partner.

Protective Provisions

The OpCo LPA Amendment and the Sixth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. include, among other things, certain covenants for the benefit of holders of Preferred Units applicable to the operating ~~partnership’s obligations under those facilities~~partnership and, in certain instances, Ferrellgas Partners, for so long as at least $35,000,000 of Preferred Units and PIK Units remain outstanding. These covenants include, among other things, limitations on (i) effecting a Change of Control, (ii) amending organizational documents, (iii) issuing certain equity securities, (iv) issuing Preferred Units, (v) filing for bankruptcy, (vi) non-ordinary course investments, and (vii) incurring certain levels of indebtedness.

Ranking and Liquidation Preference

The Preferred Units rank senior to ~~exercise remedies to collect the outstanding amounts under those facilities. If the lenders and receivables purchasers accelerated~~any other class or series of equity interests of the operating ~~partnership's obligations, that would constitute an event of default which would permit~~partnership (including the ~~acceleration~~partnership interests held by Ferrellgas Partners and the general partner). Upon a liquidation, dissolution or winding up of the ~~obligations underlying the Ferrellgas Partners indenture, including all outstanding principal owed. The accelerated obligations would become immediately due~~operating partnership, each holder of Preferred Units will be entitled to receive, prior and ~~payable, which would~~ in ~~turn trigger cross acceleration~~preference to any distribution of other debt. If Ferrellgas, L.P.'s debt obligations are accelerated, Ferrellgas, L.P. may be unable to borrow sufficient funds to refinance debt in which case Ferrellgas Partners unitholders and investors in our debt instruments could experience a partial or total loss of their investment.

~~Consolidated leverage ratio~~

~~The consolidated leverage ratio is defined as the ratio of total debt~~any assets of the operating partnership to the holders of any other class or series of equity interests in the operating partnership (including Ferrellgas Partners and the general partner), an amount per Preferred Unit equal to the Redemption Price.

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Restrictions on Cash Distributions to Ferrellgas Partners and the General Partner

The operating partnership is permitted to make distributions of Available Cash (as defined in the Amended OpCo LPA) to Ferrellgas Partners only if (i) the operating partnership has made all required Quarterly Distributions (in cash or PIK Units), Tax Distributions and payments of Additional Amounts, (ii) the operating partnership has redeemed all PIK Units issued, (iii) the operating partnership’s consolidated net leverage (defined generally to mean the ratio of the operating partnership’s consolidated total net debt (including the total redemption price of all outstanding Preferred Units and PIK Units but excluding certain letters of credit and capital lease obligations) as of each Quarterly Distribution Date to trailing four quarters consolidated EBITDA, ~~(both~~both as adjusted for certain, specified items) is below 7.25x through May 15, 2022 and 7.00x thereafter, net of cash, immediately before and after giving effect to such distribution, (iv) the operating partnership ~~as detailed in Ferrellgas, L.P.'s secured credit facility and accounts receivable securitization facility.~~

~~The current maximum consolidated leverage covenant ratios are as follows:~~



~~Date~~		~~Maximum consolidated leverage ratio~~
~~January 31, 2018~~		~~7.75~~
~~April 30, 2018~~		~~7.75~~
~~July 31, 2018 & thereafter~~		~~5.50~~

~~Ferrellgas, L.P.'s consolidated leverage ratio was 6.96x as of January 31, 2018; the margin allows for approximately $193.2~~has at least $100 million of ~~additional borrowing~~liquidity, consisting of unrestricted cash on hand and available capacity under the Credit Agreement or ~~approximately $24.9 million less EBITDA. This covenant also restricts Ferrellgas, L.P.'s ability to make payments to Ferrellgas Partners for purposes of funding distribution payments as discussed above.~~

~~Consolidated interest coverage ratio~~

~~The consolidated interest coverage ratio is defined as the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of~~any replacement thereof, and (v) the operating partnership ~~as detailed~~is in ~~Ferrellgas' secured credit facility and accounts receivable securitization facility.~~

~~The current minimum consolidated interest coverage ratios are as follows:~~



~~Date~~		~~Minimum consolidated interest coverage ratio~~
~~January 31, 2018~~		~~1.75~~
~~April 30, 2018~~		~~1.75~~
~~July 31, 2018 & thereafter~~		~~2.50~~

~~Ferrellgas, L.P.'s consolidated interest coverage ratio was 2.14x at January 31, 2018;~~compliance with the ~~margin allows for approximately $25.3 million of additional interest expense or approximately $44.3 million less EBITDA.~~

~~Debt and interest expense reduction strategy~~

Ferrellgas, L.P. continues to execute on a strategy to further reduce its debt and interest expense. This strategy may include amending or refinancing existing debt agreements, additional asset sales, a reductionother protective provisions in the operating partnership's funding of Ferrellgas Partners' annual distribution rate or the issuance of equity. Ferrellgas, L.P. believes any debt and interest expense reduction strategies would remain in effect until Ferrellgas, L.P.'s consolidated leverage ratio reaches 4.5x or a level Ferrellgas, L.P. deems appropriate for its business.

If Ferrellgas, L.P. is unsuccessful with its strategy to further reduce debt and interest expense, or is unsuccessful in renegotiating its secured credit facility, which matures in October 2018, or is unable to secure alternative liquidity sources, it may not have the liquidity to fund its operations after that maturity date.

Failure to maintain compliance with these and other covenants in our agreements or failure to renew or replace liquidity available under the secured credit facility could have a material, adverse effect on Ferrellgas, L.P.'s operating capacity and cash flows and could further restrict Ferrellgas, L.P.'s ability to incur debt, pay interest on the notes or to make cash distributions to its limited and general partners, which could result in an event of default that would permit the acceleration of all of Ferrellgas, L.P.'s indebtedness. The accelerated debt would become immediately due and payable, which would in turn trigger cross-acceleration under other debt. If the payment of Ferrellgas, L.P.'s debt is accelerated, Ferrellgas, L.P.'s assets may be insufficient to repay such debt in full and Ferrellgas, L.P. may be unable to borrow sufficient funds to refinance debt, in which case the limited and general partners and investors in our debt instruments could experience a partial or total loss of their investment.

As a result of the October 2018 maturity date of Ferrellgas, L.P.'s secured credit facility, the entire balance outstanding at January 31, 2018 has been classified as a current liability in the condensed consolidated balance sheet as of January 31, 2018. The absence of a plan to renew or refinance this debt would raise substantial doubt about Ferrellgas, L.P.'s ability to continue as a going concern. Ferrellgas, L.P. is working to renew or replace the secured credit facility. Potential options include extending the current secured credit facility, entering into a new secured credit facility or securing alternative financing from a different source. Ferrellgas, L.P. believes it is probable that it will be able to obtain sufficient capital to meet anticipated liquidity demands and, therefore, does not believe there is substantial doubt about our ability to continue as a going concern.

~~Secured credit facility~~

As of January 31, 2018, Ferrellgas, L.P. had total borrowings outstanding under its secured credit facility of $261.2 million, all of which was classified as short-term. Ferrellgas, L.P. had $125.8 million of capacity under the secured credit facility as of January 31, 2018. As of July 31, 2017, Ferrellgas, L.P. had total borrowings outstanding under its secured credit facility of $245.5 million, of which $185.7 million was classified as long-term debt. Ferrellgas, L.P. had $190.3 million of capacity under our secured credit facility as of July 31, 2017. However, the consolidated leverage ratio covenant under this facility limited additional borrowings to $67.5 million as of July 31, 2017. Borrowings outstanding at January 31, 2018 and July 31, 2017 under the secured credit facility had weighted average interest rates of 6.5% and 6.0%, respectively.

~~Letters of credit outstanding at~~ ~~January 31, 2018~~ totaled $188.0 million and were used to secure commodity hedges, product purchases, and insurance arrangements. Letters of credit outstanding at July 31, 2017 totaled $139.2 million and were used to secure commodity hedges, product purchases, and insurance arrangements. At January 31, 2018, Ferrellgas, L.P. had remaining letter of credit capacity of $12.0 million. At ~~July 31, 2017~~ ~~Ferrellgas, L.P. had remaining letter of credit capacity of~~ ~~$60.8 million~~.

OpCo LPA Amendment.

F. ~~Partners’ deficit~~

G. Equity (Deficit)

Partnership distributions ~~paid~~

Ferrellgas, L.P. has ~~paid~~recognized the following distributions:

For the three months ended January 31, For the six months ended January 31,
2018 2017 2018 2017
Ferrellgas Partners $ 25,210
$ 17,662
$ 35,023
$ 83,807
General partner 257
180
357
693
$ 25,467
$ 17,842
$ 35,380
$ 84,500

On February 22, 2018, Ferrellgas, L.P. declared distributions for the three months ended January 31, 2018 to Ferrellgas Partners and the general partner of $9.8 million and $0.1 million, respectively, which are expected to be paid on March 16, 2018.


	For the three months ended April 30,				For the nine months ended April 30,
	2022		2021		2022		2021
Ferrellgas Partners	$	—	$	—	$	50,000	$	—
General partner		—		—		—		—

See additional discussions about transactions with related parties in Note IL – Transactions with related parties.

Accumulated other comprehensive income (loss)(“AOCI”)

2021.

General partner’s commitment to maintain its capital account

Ferrellgas, L.P.’s partnership agreement allows the general partner to have an option to maintain its 1.0101% general partner interest (excluding the interest attributable to the Preferred Units) concurrent with the issuance of other additional equity.

During the ~~six~~nine months ended ~~January 31, 2018,~~April 30, 2022, the general partner made non-cash contributions of ~~$0.1 million~~$25.0 thousand to Ferrellgas, L.P. to maintain its 1.0101% general partner interest.

During the ~~six~~nine months ended ~~January 31, 2017,~~April 30, 2021, the general partner made ~~cash contributions of $1.7 million and~~ non-cash contributions of ~~$0.1 million~~$23.0 thousand to Ferrellgas, L.P. to maintain its 1.0101% general partner interest.

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H. Leases

The following table provides the operating and financing right-of-use assets and lease liabilities as of April 30, 2022 and July 31, 2021:


Leases	Classification		April 30, 2022		July 31, 2021
Assets
Operating lease assets	Operating lease right-of-use assets	$	77,695	$	87,611
Financing lease assets	Other assets, net		32,661		34,858
Total leased assets		$	110,356	$	122,469

Liabilities
Current
Operating	Current operating lease liabilities	$	26,041	$	25,363
Financing	Other current liabilities		6,369		7,479
Noncurrent
Operating	Operating lease liabilities		51,650		74,349
Financing	Other liabilities		26,806		28,029
Total leased liabilities		$	110,866	$	135,220

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The following table provides the lease expenses for the three and nine months ended April 30, 2022 and 2021:


		For the three months ended April 30,				For the nine months ended April 30,
Leases expense	Classification	2022		2021		2022		2021
Operating lease expense	Operating expense - personnel, vehicle, plant and other	$	1,667	$	1,846	$	5,105	$	5,126
	Operating expense - equipment lease expense		4,917		6,373		15,377		19,328
	Cost of sales - propane and other gas liquids sales		471		461		1,263		1,479
	General and administrative expense		608		(169)		1,680		307
Total operating lease expense			7,663		8,511		23,425		26,240

Short-term expense	Operating expense - personnel, vehicle, plant and other		3,121		2,003		6,602		5,908
	General and administrative expense		18		111		182		475
Total short-term expense			3,139		2,114		6,784		6,383

Variable lease expense	Operating expense - personnel, vehicle, plant and other		779		784		2,319		2,328
	Operating expense - equipment lease expense		565		397		1,529		1,134
Total variable lease expense			1,344		1,181		3,848		3,462

Finance lease expense:
Amortization of leased assets	Depreciation and amortization expense		1,900		2,229		4,684		6,583
Interest on lease liabilities	Interest expense		1,283		933		2,893		2,841
Total finance lease expense			3,183		3,162		7,577		9,424

Total lease expense		$	15,329	$	14,968	$	41,634	$	45,509

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Minimum annual payments under existing operating and finance lease liabilities as of April 30, 2022 are as follows:


Maturities of lease liabilities		Operating leases		Finance leases		Total
2022	$	7,549	$	2,323	$	9,872
2023		28,100		8,730		36,830
2024		21,918		8,440		30,358
2025		15,188		8,321		23,509
2026		5,836		7,472		13,308
Thereafter		17,740		5,233		22,973
Total lease payments	$	96,331	$	40,519	$	136,850
Less: Imputed interest		18,640		7,344		25,984
Present value of lease liabilities	$	77,691	$	33,175	$	110,866

The following table represents the weighted-average remaining lease term and discount rate as of April 30, 2022:


	As of April 30, 2022
Lease type	Weighted-average remaining lease term (years)	Weighted-average discount rate
Operating leases	4.9	7.6%
Finance leases	4.5	8.3%

Cash flow information is presented below:


	For the nine months ended April 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities for operating leases:
Operating cash flows	$	13,613	$	26,454

Cash paid for amounts included in the measurement of lease liabilities for financing leases:
Operating cash flows	$	2,215	$	2,571
Financing cash flows	$	4,889	$	5,282

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I. Revenue from contracts with customers

Disaggregation of revenue

Ferrellgas, L.P. disaggregates revenues based upon the type of customer and on the type of revenue. The following table presents retail propane revenues, wholesale propane revenues and other revenues. Retail revenues result from sales to end use customers, wholesale revenues result from sales to or through resellers and all other revenues include sales of appliances and other materials, other fees charged to customers and equipment rental charges.


	For the three months ended April 30,				For the nine months ended April 30,
	2022		2021		2022		2021
Retail - Sales to End Users	$	478,807	$	392,838	$	1,228,062	$	945,833
Wholesale - Sales to Resellers		137,148		140,015		405,713		381,357
Other Gas Sales		6,256		9,183		18,644		24,329
Other		25,332		22,694		74,566		67,665
Propane and related equipment revenues	$	647,543	$	564,730	$	1,726,985	$	1,419,184

Contract assets and liabilities

Ferrellgas, L.P.’s performance obligations are generally limited to the delivery of propane for our retail and wholesale contracts. Ferrellgas, L.P.’s performance obligations with respect to sales of appliances and other materials and other revenues are limited to the delivery of the agreed upon good or service. Ferrellgas, L.P. does not have material performance obligations that are delivered over time, thus all of our revenue is recognized at the time the goods, including propane, are delivered or installed. Ferrellgas, L.P. offers “even pay” billing programs that can create customer deposits or advances, depending on whether Ferrellgas, L.P. has delivered more propane than the customer has paid for or whether the customer has paid for more propane than what has been delivered. Revenue is recognized from these customer deposits or advances to customers at the time product is delivered. The advance or deposit is considered to be a contract asset or liability. Additionally, from time to time, we have customers that pay in advance for goods or services, and such amounts result in contract liabilities.

Ferrellgas, L.P. incurs incremental commissions directly related to the acquisition or renewal of customer contracts. The commissions are calculated and paid based upon the number of gallons sold to the acquired or renewed customer. The total amount of commissions that we incur is not material, and the commissions are expensed commensurate with the deliveries to which they relate; therefore, Ferrellgas, L.P. does not capitalize these costs.

The following table presents the opening and closing balances of our receivables, contract assets, and contract liabilities:


	April 30, 2022		July 31, 2021
Accounts receivable	$	204,728	$	138,757
Contract assets	$	21,257	$	10,074
Contract liabilities
Deferred revenue (1)	$	43,061	$	49,354

(1)	Of the beginning balance of deferred revenue, $8.6 million was recognized as revenue during the nine months ended April 30, 2022.

Remaining performance obligations

Ferrellgas, L.P.’s remaining performance obligations are generally limited to situations where its customers have remitted payment but have not yet received deliveries of propane. This most commonly occurs in Ferrellgas, L.P.’s even pay billing programs and Ferrellgas expects that these balances will be recognized within a year or less as the customer takes delivery of propane.

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J. Fair value measurements

Derivative financial instruments

The following table presents Ferrellgas, L.P.’s financial assets and financial liabilities that are measured at fair value on a recurring basis for each of the fair value hierarchy levels, including both current and noncurrent portions, as of ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017~~:

Asset (Liability)
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs
(Level 2) Unobservable Inputs (Level 3) Total
January 31, 2018:
Assets:
Derivative financial instruments:
Commodity derivatives $ —
$ 25,725
$ —
$ 25,725
Liabilities:
Derivative financial instruments:
Interest rate swap agreements $ —
$ (2,423 ) $ —
$ (2,423 )
Commodity derivatives $ —
$ (1,417 ) $ —
$ (1,417 )

July 31, 2017:
Assets:
Derivative financial instruments:
Interest rate swap agreements $ —
$ 583
$ —
$ 583
Commodity derivatives $ —
$ 16,212
$ —
$ 16,212
Liabilities:
Derivative financial instruments:
Interest rate swap agreements $ —
$ (707 ) $ —
$ (707 )
Commodity derivatives $ —
$ (1,258 ) $ —
$ (1,258 )

2021:


	Asset (Liability)
	Quoted Prices in Active
	Markets for Identical		Significant Other
	Assets and Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
April 30, 2022:
Assets:
Derivative financial instruments:
Commodity derivatives	$	—	$	91,724	$	—	$	91,724
Liabilities:
Derivative financial instruments:
Commodity derivatives	$	—	$	(14,476)	$	—	$	(14,476)

July 31, 2021:
Assets:
Derivative financial instruments:
Commodity derivatives	$	—	$	94,244	$	—	$	94,244
Liabilities:
Derivative financial instruments:
Commodity derivatives	$	—	$	(4,458)	$	—	$	(4,458)

Methodology

The fair values of Ferrellgas, L.P.’s non-exchange traded commodity derivative contracts are based upon indicative price quotations available through brokers, industry price publications or recent market transactions and related market indicators. ~~The fair values of interest rate swap contracts are based upon third-party quotes or indicative values based on recent market transactions.~~

As discussed in Note C - Supplemental financial statement information, during the quarter ended January 31, 2018, Ferrellgas, L.P. committed to a plan to dispose of all of its rail cars in the Midstream operations segment. Ferrellgas, L.P. measures long-lived assets held for sale at the lower of carrying amount or estimated fair value less estimated costs to sell. Ferrellgas, L.P. recorded a loss on assets held for sale of $35.5 million during the three and six months ended January 31, 2018 to reduce the carrying amount of the rail cars to their estimated fair value less estimated costs to sell. At January 31, 2018, the estimated fair value less costs to sell was approximately $52.2 million. The fair value of the rail cars classified as assets held for sale is a Level 3 valuation based on the unobservable inputs used for this expected sale.

Other financial instruments

The carrying amounts of other financial instruments included in current assets and current liabilities (except for current maturities of long-term debt) approximate their fair values because of their short-term nature. The estimated fair value of various notes receivable, financial instruments classified in "Other assets, net" on the condensed consolidated balance sheets, are approximately $32.1 million, or $4.3 million less than their carrying amount as of January 31, 2018. The estimated fair values of these notes receivable were calculated using a discounted cash flow method which relied on significant unobservable inputs. At ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017,~~2021, the estimated fair value of Ferrellgas, L.P.’s long-term debt instruments was ~~$1,410.6~~$1,308.2 million and ~~$1,645.3~~$1,466.4 million, respectively. Ferrellgas, L.P. estimates the fair value of long-term debt based on quoted market prices. The fair value of our consolidated debt obligations is a Level 2 valuation based on the observable inputs used for similar liabilities.

Ferrellgas, L.P. has other financial instruments such as trade accounts receivable which could expose it to concentrations of credit risk. The credit risk from trade accounts receivable is limited because of a large customer base which extends across many different U.S. markets.

K. Derivative instruments and hedging activities

Ferrellgas, L.P. is exposed to certain market risks related to its ongoing business operations. These risks include exposure to changing commodity prices as well as fluctuations in interest rates. Ferrellgas, L.P. utilizes derivative instruments to manage its exposure to fluctuations in commodity prices. Of these, the propane commodity derivative instruments are designated as cash flow hedges. ~~Prior to the sale~~

Table of Bridger Energy, LLC in January 2018, all other commodity derivative instruments neither qualified nor were designated as cash flow hedges, therefore, changes in their fair value were recorded currently in earnings. Ferrellgas, L.P. also periodically utilizes derivative instruments to manage its exposure to fluctuations in interest rates.Contents

Derivative instruments and hedging activity

During the ~~six~~nine months ended ~~January 31, 2018~~ April 30, 2022 and ~~2017,~~2021, Ferrellgas, L.P. did not recognize any gain or loss in earnings related to hedge ineffectiveness and did not exclude any component of financial derivative contract gains or losses from the assessment of hedge effectiveness related to commodity cash flow hedges.

The following tables provide a summary of the fair value of derivatives inwithin Ferrellgas, L.P.’s condensed consolidated balance sheets as of ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017:~~

2021:


	Final	April 30, 2022
	Maturity	Asset Derivatives			Liability Derivatives
Derivative Instrument	Date	Location	Fair value		Location	Fair value
Derivatives designated as hedging instruments	December 2024
Commodity derivatives-propane		Price risk management asset	$	78,787	Other current liabilities	$	13,207
Commodity derivatives-propane		Other assets, net		12,937	Other liabilities		1,269
		Total	$	91,724	Total	$	14,476


	Final	July 31, 2021
	Maturity	Asset Derivatives			Liability Derivatives
Derivative Instrument	Date	Location	Fair value		Location	Fair value
Derivatives designated as hedging instruments	December 2023
Commodity derivatives-propane		Price risk management asset	$	78,001	Other current liabilities	$	3,429
Commodity derivatives-propane		Other assets, net		16,243	Other liabilities		1,029
		Total	$	94,244	Total	$	4,458

Ferrellgas, L.P.'s’s exchange traded commodity derivative contracts require cash margin deposit as collateral for contracts that are in a negative mark-to-market position. These cash margin deposits will be returned if mark-to-market conditions improve or will be applied against cash settlement when the contracts are settled. Liabilities represent cash margin deposits received by Ferrellgas, L.P. for contracts that are in a positive mark-to-market position. The following tables provide a summary of cash margin balances as of ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017~~,2021, respectively:


	April 30, 2022
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expense and other current assets	$	11,938	Other current liabilities	$	67,200
	Other assets, net		5,456	Other liabilities		11,270
		$	17,394		$	78,470


	July 31, 2021
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expense and other current assets	$	21,068	Other current liabilities	$	79,178
	Other assets, net		3,036	Other liabilities		15,489
		$	24,104		$	94,667

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~~The following tables provides a summary of the effect on Ferrellgas, L.P.’s condensed consolidated statements of operations for the three and six months ended~~ ~~January 31, 2018~~ ~~and~~ ~~2017~~ ~~due to derivatives designated as fair value hedging instruments:~~

Amount of Gain Recognized on Derivative
Amount of Interest Expense Recognized on Fixed-Rate Debt (Related Hedged Item)
Derivative Instrument Location of Amounts Recognized on Derivative For the three months ended January 31, For the three months ended January 31,
2018 2017 2018 2017
Interest rate swap agreements Interest expense $ 88
$ 328
$ (2,275 ) $ (2,275 )

Amount of Gain Recognized on Derivative Amount of Interest Expense Recognized on Fixed-Rate Debt (Related Hedged Item)
Derivative Instrument Location of Amounts Recognized on Derivative For the six months ended January 31, For the six months ended January 31,
2018 2017 2018 2017
Interest rate swap agreements Interest expense $ 226
$ 748
$ (4,550 ) $ (4,550 )

The following tables provide a summary of the effect on Ferrellgas, L.P.’s condensed consolidated statements of comprehensive income (loss) for the three and ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021 due to derivatives designated as cash flow hedging instruments:


	For the three months ended April 30, 2022
				Amount of Gain
			Location of Gain	Reclassified from
	Amount of Gain		Reclassified from AOCI	AOCI into Income
Derivative Instrument	Recognized in AOCI		into Income	Effective portion		Ineffective portion
Commodity derivatives	$	29,355	Cost of sales - propane and other gas liquids sales	$	44,145	$	—


	For the three months ended April 30, 2021
				Amount of Gain
			Location of Gain	Reclassified from
	Amount of Gain		Reclassified from AOCI	AOCI into Income
Derivative Instrument	Recognized in AOCI		into Income	Effective portion		Ineffective portion
Commodity derivatives	$	20,446	Cost of sales - propane and other gas liquids sales	$	22,383	$	—


	For the nine months ended April 30, 2022
				Amount of Gain
			Location of Gain	Reclassified from
	Amount of Gain		Reclassified from AOCI	AOCI into Income
Derivative Instrument	Recognized in AOCI		into Income	Effective portion		Ineffective portion
Commodity derivatives	$	84,427	Cost of sales - propane and other gas liquids sales	$	96,965	$	—


	For the nine months ended April 30, 2021
				Amount of Gain
			Location of Gain	Reclassified from
	Amount of Gain		Reclassified from AOCI	AOCI into Income
Derivative Instrument	Recognized in AOCI		into Income	Effective portion		Ineffective portion
Commodity derivatives	$	63,170	Cost of sales - propane and other gas liquids sales	$	28,674	$	—

The following tables provide a summary of the effect on Ferrellgas, L.P.'s condensed consolidated statements of operations for the three and six months ended January 31, 2018 and 2017 due to the change in fair value of derivatives not designated as hedging instruments:

The changes in derivatives included in AOCI for the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021 were as follows:


	For the nine months ended April 30,
Gains and losses on derivatives included in AOCI	2022		2021
Beginning balance	$	89,786	$	(2,313)
Change in value of risk management commodity derivatives		84,427		63,170
Reclassification of gains on commodity hedges to cost of sales - propane and other gas liquids sales, net		(96,965)		(28,674)
Ending balance	$	77,248	$	32,183

Ferrellgas, L.P. expects to reclassify net gains ~~related to the risk management commodity derivatives~~ of approximately ~~$16.8~~$65.6 million to earnings during the next 12 months. These net gains are expected to be offset by decreased margins on propane sales commitments Ferrellgas, L.P. has with its customers that qualify for the normal purchase normal ~~sales~~sale exception.

During the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017,~~2021, Ferrellgas, L.P. had no reclassifications to operations resulting from the discontinuance of any cash flow hedges arising from the probability of the original forecasted transactions not occurring within the originally specified period of time defined within the hedging relationship.

As of ~~January 31, 2018,~~April 30, 2022, Ferrellgas, L.P. had financial derivative contracts covering ~~2.6~~4.9 million barrels of propane that were entered into as cash flow hedges of forward and forecasted purchases of propane.

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Derivative financial instruments credit risk

Ferrellgas, L.P. is exposed to credit loss in the event of nonperformance by counterparties to derivative financial and commodity instruments. Ferrellgas, L.P.’s counterparties principally consist of major energy companies and major U.S. financial institutions. Ferrellgas, L.P. maintains credit policies with regard to its counterparties that it believes ~~reduces~~reduce its overall credit risk. These policies include evaluating and monitoring its counterparties’ financial condition, including their credit ratings, and entering into agreements with counterparties that govern credit limits. Certain of these agreements call for the posting of collateral by the counterparty or by Ferrellgas, L.P. in the forms of letters of credit, parent guarantees or cash. Ferrellgas, L.P. has concentrations of credit risk associated with derivative financial instruments held by certain derivative financial instrument counterparties. If these counterparties that make up the concentration failed to perform according to the terms of their contracts at ~~January 31, 2018,~~April 30, 2022, the maximum amount of loss due to credit risk that Ferrellgas, L.P. would incur based upon the gross fair values of the derivative financial instruments ~~Ferrellgas, L.P. would incur~~ is ~~$7.5 million.~~

From time to time Ferrellgas, L.P. enters into derivative contracts that have credit-risk-related contingent features which dictate credit limits based upon Ferrellgas, L.P.’s debt rating. There were no0 open derivative contracts with credit-risk-related contingent features as of ~~January 31, 2018.~~

April 30, 2022.

L. Transactions with related parties

Ferrellgas, L.P. has no0 employees and is managed and controlled by its general partner. Pursuant to Ferrellgas, L.P.’s partnership agreement, the general partner is entitled to reimbursement for all direct and indirect expenses incurred or payments it makes on behalf of Ferrellgas, L.P. and all other necessary or appropriate expenses allocable to Ferrellgas, L.P. or otherwise reasonably incurred by ~~the~~its general partner in connection with operating Ferrellgas, L.P.’s business. These costs primarily include compensation and benefits paid to employees of the general partner who perform services on Ferrellgas, L.P.’s behalf and are reported in the condensed consolidated statements of operations as follows:


	For the three months ended April 30,				For the nine months ended April 30,
	2022		2021		2022		2021
Operating expense	$	73,224	$	64,242	$	209,976	$	195,817

General and administrative expense	$	6,898	$	6,194	$	21,913	$	23,348

See additional discussions about transactions with the general partner and related parties in Note FG – ~~Partners’ deficit.~~Equity (Deficit).

Term loan credit agreement with Ferrellgas Partners, L.P.

On January 8, 2021, Ferrellgas, L.P. entered into a term loan credit agreement pursuant to which Ferrellgas, L.P. extended to Ferrellgas Partners, L.P. an unsecured, non-amortizing term loan in the aggregate principal amount of $19.9 million. The term loan bears interest at a rate of 20% per annum, and all interest on the term loan will be added to the outstanding principal amount of the term loan. The term loan will mature on July 1, 2022. During July 2021, Ferrellgas Partners made an optional principal prepayment of $9.0 million on the term loan. The outstanding principal and accrued interest at April 30, 2022 was $15.2 million. Subsequent to April 30, 2022, the term loan was repaid. See Note N – Subsequent events for more information.

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M. Contingencies and commitments

Litigation

Ferrellgas, L.P.’s operations are subject to all operating hazards and risks normally incidental to handling, storing, transporting and otherwise providing for use by consumers of combustible liquids such as propane and, prior to the sales of midstream operations in fiscal 2018, crude oil. As a result, at any given time, Ferrellgas, L.P. can be threatened with or named as a defendant in various lawsuits arising in the ordinary course of business. Other than as discussed below, Ferrellgas, L.P. is not a party to any legal proceedings other than various claims and lawsuits arising in the ordinary course of business. It is not possible to determine the ultimate disposition of these matters; however, management is of the opinion that there are no known claims or contingent claims that are reasonably expected to have a material adverse effect on the consolidated financial condition, results of operations and cash flows of Ferrellgas, L.P.

Ferrellgas, L.P. has been named as a defendant, along with a competitor, in putative class action lawsuits filed in multiple jurisdictions. The lawsuits, which were consolidated in the Western District of Missouri on October 16, 2014, allege that Ferrellgas, L.P. and a competitor coordinated in 2008 to reduce the fill level in barbeque cylinders and combined to persuade a common customer to accept that fill reduction, resulting in increased cylinder costs to direct customers and end-user customers in violation of federal and certain state antitrust laws. The lawsuits seek treble damages, attorneys’ fees, injunctive relief and costs on behalf of the putative class. These lawsuits have been consolidated into one case by a multidistrict litigation panel. The Federal Court for the Western District of Missouri initially dismissed all claims brought by direct and indirect customers other than state law claims of indirect customers under Wisconsin, Maine and Vermont law. The direct customer plaintiffs filed an appeal, which resulted in a reversal of the district court’s dismissal. We filed a petition for a writ of certiorari which was denied. An appeal by the indirect customer plaintiffs remains pending. Ferrellgas, L.P. believes it has strong defenses to the claims and intends to vigorously defend against the consolidated case. Ferrellgas, L.P. does not believe loss is probable or reasonably estimable at this time related to the putative class action lawsuit.

Ferrellgas, L.P. has been named, along with several current and former officers, in several class action lawsuits alleging violations of certain securities laws based on alleged materially false and misleading statements in certain of our public disclosures. The lawsuits, the first of which was filed on October 6, 2016 in the Southern District of New York, seek unspecified compensatory damages. Derivative lawsuits with similar allegations have been filed naming Ferrellgas, L.P. and several current and former officers and directors as defendants. Ferrellgas, L.P. believes that it has defenses and will vigorously defend these cases. Ferrellgas, L.P. does not believe loss is probable or reasonably estimable at this time related to the putative class action lawsuits or the derivative actions.

Ferrellgas, L.P. and Bridger Logistics, LLC (“Bridger”), have been named, along with ~~two~~2 former officers (“Rios and Gamboa”), in a lawsuit (the “EDPA Lawsuit”) filed by Eddystone Rail Company ("Eddystone") on February 2, 2017 in the U.S. District Court for the Eastern District of Pennsylvania (the ~~"EDPA Lawsuit"~~"Court"). Eddystone indicated that it has prevailed in or settled an arbitration against Jamex Transfer Services (“JTS”), ~~then~~previously named Bridger Transfer Services, a former subsidiary of ~~Bridger Logistics, LLC (“Bridger”).~~Bridger. The arbitration involved a claim against JTS for money due for deficiency payments under a contract for the use of an Eddystone facility used to offload crude from rail onto barges. Eddystone alleges that Ferrellgas ~~L.P.~~ transferred assets out of JTS prior to the sale of the membership interest in JTS to Jamex Transfer Holdings, and that those transfers should be avoided so that the assets can be used to satisfy the amount owed by JTS to Eddystone ~~under~~as a result of the arbitration. Eddystone also alleges that JTS was an “alter ego” of Bridger and ~~Ferrellgas.~~ Ferrellgas ~~L.P.~~and that Bridger and Ferrellgas breached both an implicit contract as well as fiduciary duties allegedly owed to Eddystone as a creditor of JTS. Ferrellgas believes that Ferrellgas ~~L.P.~~ and Bridger have valid defenses to these claims and to Eddystone’s primary claim against JTS ~~on the contract claim. The lawsuit does not specify a specific amount~~for breach of ~~damages that~~contract. If Eddystone ~~is seeking;~~ultimately prevails, however, Ferrellgas ~~L.P.~~ believes that the amount of ~~such damage claims, if ultimately owed to Eddystone,~~damages awarded, could be material to Ferrellgas. Ferrellgas ~~L.P. Ferrellgas, L.P.~~ intends to vigorously defend this claim. ~~The lawsuit is in its early stages; as such, management does not currently believe a loss is probable or reasonably estimable at this time.~~

On August 24, 2017, Ferrellgas ~~L.P.~~ filed a third-party complaint against JTS, Jamex Transfer Holdings, and other related persons and entities (the "Third-Party Defendants"), asserting claims for breach of contract, indemnification of any losses in the EDPA Lawsuit, tortious interference with contract, and contribution. ~~The~~On June 25, 2018, Ferrellgas entered into an agreement with the Third-Party Defendants ~~have filed~~which, among other things, resulted in a dismissal of the claims against the Third-Party Defendants from the lawsuit.

On December 10, 2021, the Court dismissed Eddystone’s claims against Rios and Gamboa, pursuant to a settlement agreement with Eddystone.

The Court decided summary judgment motions in March 2022 and has set this matter for trial. A bench trial will proceed in segments, with the first segment to ~~dismiss~~take place in September 2022 and a second segment to take place in December 2022. The Court has not made any decision as to how many segments will be needed to complete the ~~third-party complaint for alleged lack of personal jurisdiction, failure to state claim, and forum non-conveniens. Ferrellgas, L.P.~~trial. As such, management does not currently believe a loss is ~~vigorously opposing these motions.~~

K. ~~Segment reporting~~

probable or reasonably estimable at this time. However, we may enter into settlement discussions at any time.

Long-term debt-related commitments

Ferrellgas, L.P. has ~~two primary operations that result in two reportable operating segments: Propane operations~~long and ~~related equipment sales~~short-term payment obligations under agreements such as the indentures governing its senior notes. See Note E – Debt for a description of these debt obligations and ~~Midstream operations. During the quarter ended January 31, 2018,~~ a schedule of future maturities.

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N. Subsequent events

Ferrellgas, L.P. ~~recorded a goodwill impairment of $10.0 million related to a decline in future expected cash flows of an immaterial reporting unit of our Propane operations and related equipment sales segment.~~

~~Following is a summary of segment information for the three and six months ended January 31, 2018 and 2017:~~

Three months ended January 31, 2018
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 637,880
$ 117,276
$ —
$ 755,156
Direct costs (1) 507,386
114,929
12,213
634,528
Adjusted EBITDA $ 130,494
$ 2,347
$ (12,213 ) $ 120,628

Three months ended January 31, 2017
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 482,463
$ 96,787
$ —
$ 579,250
Direct costs (1) 370,175
93,718
10,326
474,219
Adjusted EBITDA $ 112,288
$ 3,069
$ (10,326 ) $ 105,031

Six months ended January 31, 2018
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 971,775
$ 238,036
$ —
$ 1,209,811
Direct costs (1) 810,715
228,830
23,422
1,062,967
Adjusted EBITDA $ 161,060
$ 9,206
$ (23,422 ) $ 146,844

Six months ended January 31, 2017
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 753,961
$ 204,831
$ —
$ 958,792
Direct costs (1) 607,189
196,490
21,063
824,742
Adjusted EBITDA $ 146,772
$ 8,341
$ (21,063 ) $ 134,050

~~Following is a reconciliation of Ferrellgas, L.P.'s total segment performance measure to condensed consolidated net earnings (loss):~~

Three months ended January 31, Six months ended January 31,
2018 2017 2018 2017
Net earnings (loss) $ 6,847
$ 42,600
$ (32,852 ) $ 3,160
Income tax expense (benefit) (167 ) 588
204
(3 )
Interest expense 34,058
32,748
66,254
64,146
Depreciation and amortization expense 25,485
25,607
51,217
51,809
EBITDA 66,223
101,543
84,823
119,112
Non-cash employee stock ownership plan compensation charge 4,031
2,945
7,993
6,699
Non-cash stock-based compensation charge —
1,417
—
3,298
Asset impairments 10,005
—
10,005
—
Loss on asset sales and disposals 39,249
45
40,144
6,468
Other income, net (684 ) (763 ) (1,195 ) (1,271 )
Severance costs —
490
1,663
1,959
Professional fees 2,118
—
2,118
—
Unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments (314 ) (646 ) 1,293
(2,215 )
Adjusted EBITDA $ 120,628
$ 105,031
$ 146,844
$ 134,050

~~Following are total assets by segment:~~

Assets January 31, 2018 July 31, 2017
Propane operations and related equipment sales $ 1,361,856
$ 1,194,905
Midstream operations 309,952
399,356
Corporate 15,242
15,687
Total consolidated assets $ 1,687,050
$ 1,609,948

~~Following are capital expenditures by segment:~~

L. ~~Guarantor financial information~~

The $500.0 million aggregate principal amount of 6.75% senior notes due 2023 co-issued by Ferrellgas, L.P. and Ferrellgas Finance Corp. are fully and unconditionally and jointly and severally guaranteed by all of Ferrellgas, L.P.’s 100% owned subsidiaries except: (i) Ferrellgas Finance Corp; (ii) certain special purposes subsidiaries formed for use in connection with our accounts receivable securitization; and (iii) foreign subsidiaries. Guarantees of these senior notes will be released under certain circumstances, including (i) in connection with any sale or other disposition of (a) all or substantially all of the assets of a guarantor or (b) all of the capital stock of such guarantor (including by way of merger or consolidation), in each case, to a person that is not Ferrellgas, L.P. or a restricted subsidiary of Ferrellgas, L.P., (ii) if Ferrellgas, L.P. designates any restricted subsidiary that is a guarantor as an unrestricted subsidiary, (iii) upon defeasance or discharge of the notes, (iv) upon the liquidation or dissolution of such guarantor, or (v) at such time as such guarantor ceases to guarantee any other indebtedness of either of the issuers and any other guarantor.

The guarantor financial information discloses in separate columns the financial position, results of operations and the cash flows of Ferrellgas, L.P. (Parent), Ferrellgas Finance Corp. (co-issuer), Ferrellgas, L.P.’s guarantor subsidiaries on a combined basis, and Ferrellgas, L.P.’s non-guarantor subsidiaries on a combined basis. The dates and the periods presented in the guarantor financial information are consistent with the periods presented in Ferrellgas, L.P.’s condensed consolidated financial statements.

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
(in thousands)
As of January 31, 2018
Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ 13,954
$ 1
$ 216
$ —
$ —
$ 14,171
Accounts and notes receivable, net (3,004 ) —
23,832
235,150
—
255,978
Intercompany receivables 37,988
—
—
—
(37,988 ) —
Inventories 95,097
—
14,995
—
—
110,092
Assets held for sale —
—
52,200
—
—
52,200
Prepaid expenses and other current assets 33,630
—
7,762
1
—
41,393
Total current assets 177,665
1
99,005
235,151
(37,988 ) 473,834

Property, plant and equipment, net 547,441
—
98,886
—
—
646,327
Goodwill, net 246,098
—
—
—
—
246,098
Intangible assets, net 127,316
—
115,763
—
—
243,079
Intercompany receivables 450,000
—
—
—
(450,000 ) —
Investments in consolidated subsidiaries (80,685 ) —
—
—
80,685
—
Other assets, net 39,847
—
37,432
433
—
77,712
Total assets $ 1,507,682
$ 1
$ 351,086
$ 235,584
$ (407,303 ) $ 1,687,050

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Current liabilities:

Accounts payable $ 78,054
$ —
$ 3,926
$ 92
$ —
$ 82,072
Short-term borrowings 261,200
—
—
—
—
261,200
Collateralized note payable —
—
—
166,000
—
166,000
Intercompany payables —
—
44,259
(6,271 ) (37,988 ) —
Other current liabilities 132,047
—
4,074
470
—
136,591
Total current liabilities 471,301
—
52,259
160,291
(37,988 ) 645,863

Long-term debt 1,462,936
—
450,037
—
(450,000 ) 1,462,973
Other liabilities 30,653
—
4,769
—
—
35,422
Contingencies and commitments

Partners' capital (deficit):

Partners' equity (481,801 ) 1
(155,979 ) 75,293
80,685
(481,801 )
Accumulated other comprehensive income 24,593
—
—
—
—
24,593
Total partners' capital (deficit) (457,208 ) 1
(155,979 ) 75,293
80,685
(457,208 )
Total liabilities and partners' capital (deficit) $ 1,507,682
$ 1
$ 351,086
$ 235,584
$ (407,303 ) $ 1,687,050

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
(in thousands)
As of July 31, 2017
Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ 5,327
$ 1
$ 373
$ —
$ —
$ 5,701
Accounts and notes receivable, net (3,132 ) —
58,618
109,598
—
165,084
Intercompany receivables 39,877
—
—
—
(39,877 ) —
Inventories 78,963
—
13,589
—
—
92,552
Prepaid expenses and other current assets 26,106
—
7,314
6
—
33,426
Total current assets 147,141
1
79,894
109,604
(39,877 ) 296,763

Property, plant and equipment, net 537,582
—
194,341
—
—
731,923
Goodwill, net 246,098
—
10,005
—
—
256,103
Intangible assets, net 128,209
—
122,893
—
—
251,102
Intercompany receivables 450,000
—
—
—
(450,000 ) —
Investments in consolidated subsidiaries (53,915 ) —
—
—
53,915
—
Other assets, net 35,862
—
37,618
577
—
74,057
Total assets $ 1,490,977
$ 1
$ 444,751
$ 110,181
$ (435,962 ) $ 1,609,948

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Current liabilities:

Accounts payable $ 44,026
$ —
$ 41,345
$ 190
$ —
$ 85,561
Short-term borrowings 59,781
—
—
—
—
59,781
Collateralized note payable —
—
—
69,000
—
69,000
Intercompany payables —
—
41,645
(1,768 ) (39,877 ) —
Other current liabilities 118,039
—
3,776
201
—
122,016
Total current liabilities 221,846
—
86,766
67,623
(39,877 ) 336,358

Long-term debt 1,649,139
—
450,131
—
(450,000 ) 1,649,270
Other liabilities 26,790
—
4,300
28
—
31,118
Contingencies and commitments

Partners' capital (deficit):

Partners' equity (421,562 ) 1
(96,446 ) 42,530
53,915
(421,562 )
Accumulated other comprehensive income 14,764
—
—
—
—
14,764
Total partners' capital (deficit) (406,798 ) 1
(96,446 ) 42,530
53,915
(406,798 )
Total liabilities and partners' capital (deficit) $ 1,490,977
$ 1
$ 444,751
$ 110,181
$ (435,962 ) $ 1,609,948

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(in thousands)

For the three months ended January 31, 2018
Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated

Revenues:
Propane and other gas liquids sales $ 592,275
$ —
$ (36 ) $ —
$ —
$ 592,239
Midstream operations —
—
117,276
—
—
117,276
Other 22,707
—
22,934
—
—
45,641
Total revenues 614,982
—
140,174
—
—
755,156

Costs and expenses:
Cost of sales - propane and other gas liquids sales 362,927
—
(9 ) —
—
362,918
Cost of sales - midstream operations —
—
107,067
—
—
107,067
Cost of sales - other 2,853
—
17,934
—
—
20,787
Operating expense 114,096
—
9,795
1,833
(2,008 ) 123,716
Depreciation and amortization expense 18,521
—
6,893
71
—
25,485
General and administrative expense 13,833
3
1,054
—
—
14,890
Equipment lease expense 6,862
—
92
—
—
6,954
Non-cash employee stock ownership plan compensation charge 4,031
—
—
—
—
4,031
Asset impairments —
—
10,005
—
—
10,005
Loss on asset sales and disposals 555
—
38,694
—
—
39,249

Operating income (loss) 91,304
(3 ) (51,351 ) (1,904 ) 2,008
40,054

Interest expense (21,212 ) —
(11,739 ) (1,107 ) —
(34,058 )
Other income (expense), net 408
—
276
2,008
(2,008 ) 684

Earnings (loss) before income taxes 70,500
(3 ) (62,814 ) (1,003 ) —
6,680

Income tax expense (benefit) 82
—
(249 ) —
—
(167 )
Equity in earnings (loss) of subsidiary (63,571 ) —
—
—
63,571
—

Net earnings (loss) 6,847
(3 ) (62,565 ) (1,003 ) 63,571
6,847

Other comprehensive loss (8,671 ) —
—
—
—
(8,671 )

Comprehensive income (loss) $ (1,824 ) $ (3 ) $ (62,565 ) $ (1,003 ) $ 63,571
$ (1,824 )

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(in thousands)

For the three months ended January 31, 2017
Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated

Revenues:
Propane and other gas liquids sales $ 437,375
$ —
$ —
$ —
$ —
$ 437,375
Midstream operations —
—
96,787
—
—
96,787
Other 21,609
—
23,479
—
—
45,088
Total revenues 458,984
—
120,266
—
—
579,250

Costs and expenses:
Cost of sales - propane and other gas liquids sales 235,029
—
—
—
—
235,029
Cost of sales - midstream operations —
—
87,024
—
—
87,024
Cost of sales - other 2,571
—
18,086
—
—
20,657
Operating expense 103,986
—
9,642
539
(1,091 ) 113,076
Depreciation and amortization expense 18,014
—
7,527
66
—
25,607
General and administrative expense 11,093
3
1,182
—
—
12,278
Equipment lease expense 7,267
—
149
—
—
7,416
Non-cash employee stock ownership plan compensation charge 2,945
—
—
—
—
2,945
Loss on asset sales and disposals 73
—
(28 ) —
—
45

Operating income (loss) 78,006
(3 ) (3,316 ) (605 ) 1,091
75,173

Interest expense (21,089 ) —
(11,002 ) (657 ) —
(32,748 )
Other income (expense), net 304
—
459
1,091
(1,091 ) 763

Earnings (loss) before income taxes 57,221
(3 ) (13,859 ) (171 ) —
43,188

Income tax expense 103
—
485
—
—
588
Equity in earnings (loss) of subsidiary (14,518 ) —
—
—
14,518
—

Net earnings (loss) 42,600
(3 ) (14,344 ) (171 ) 14,518
42,600

Other comprehensive income 15,776
—
—
—
—
15,776

Comprehensive income (loss) $ 58,376
$ (3 ) $ (14,344 ) $ (171 ) $ 14,518
$ 58,376

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(in thousands)

For the six months ended January 31, 2018
Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated

Revenues:
Propane and other gas liquids sales $ 894,392
$ —
$ 605
$ —
$ —
$ 894,997
Midstream operations —
—
238,036
—
—
238,036
Other 39,384
—
37,394
—
—
76,778
Total revenues 933,776
—
276,035
—
—
1,209,811

Costs and expenses:
Cost of sales - propane and other gas liquids sales 541,746
—
687
—
—
542,433
Cost of sales - midstream operations —
—
215,192
—
—
215,192
Cost of sales - other 5,562
—
28,927
—
—
34,489
Operating expense 215,328
—
19,058
3,015
(3,223 ) 234,178
Depreciation and amortization expense 36,868
—
14,206
143
—
51,217
General and administrative expense 24,588
5
3,461
—
—
28,054
Equipment lease expense 13,510
—
185
—
—
13,695
Non-cash employee stock ownership plan compensation charge 7,993
—
—
—
—
7,993
Asset impairments —
—
10,005
—
—
10,005
Loss on asset sales and disposals 1,463
—
38,681
—
—
40,144

Operating income (loss) 86,718
(5 ) (54,367 ) (3,158 ) 3,223
32,411

Interest expense (41,606 ) —
(22,924 ) (1,724 ) —
(66,254 )
Other income (expense), net 623
—
572
3,223
(3,223 ) 1,195

Earnings (loss) before income taxes 45,735
(5 ) (76,719 ) (1,659 ) —
(32,648 )

Income tax expense 72
—
132
—
—
204
Equity in earnings (loss) of subsidiary (78,515 ) —
—
—
78,515
—

Net earnings (loss) (32,852 ) (5 ) (76,851 ) (1,659 ) 78,515
(32,852 )

Other comprehensive income 9,829
—
—
—
—
9,829

Comprehensive income (loss) $ (23,023 ) $ (5 ) $ (76,851 ) $ (1,659 ) $ 78,515
$ (23,023 )

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(in thousands)

For the six months ended January 31, 2017
Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated

Revenues:
Propane and other gas liquids sales $ 679,774
$ —
$ —
$ —
$ —
$ 679,774
Midstream operations —
—
204,831
—
—
204,831
Other 38,935
—
35,252
—
—
74,187
Total revenues 718,709
—
240,083
—
—
958,792

Costs and expenses:
Cost of sales - propane and other gas liquids sales 354,241
—
—
—
—
354,241
Cost of sales - midstream operations —
—
181,666
—
—
181,666
Cost of sales - other 5,001
—
27,402
—
—
32,403
Operating expense 201,641
—
19,888
(1,566 ) (1,801 ) 218,162
Depreciation and amortization expense 36,291
—
15,399
119
—
51,809
General and administrative expense 23,956
5
2,586
—
—
26,547
Equipment lease expense 14,477
—
288
—
—
14,765
Non-cash employee stock ownership plan compensation charge 6,699
—
—
—
—
6,699
Loss on asset sales and disposals 1,520
—
4,948
—
—
6,468

Operating income (loss) 74,883
(5 ) (12,094 ) 1,447
1,801
66,032

Interest expense (41,441 ) —
(21,675 ) (1,027 ) (3 ) (64,146 )
Other income (expense), net 257
—
1,014
1,798
(1,798 ) 1,271

Earnings (loss) before income taxes 33,699
(5 ) (32,755 ) 2,218
—
3,157

Income tax expense (benefit) 74
—
(77 ) —
—
(3 )
Equity in earnings (loss) of subsidiary (30,465 ) —
—
—
30,465
—

Net earnings (loss) 3,160
(5 ) (32,678 ) 2,218
30,465
3,160

Other comprehensive income 25,152
—
—
—
—
25,152

Comprehensive income (loss) $ 28,312
$ (5 ) $ (32,678 ) $ 2,218
$ 30,465
$ 28,312

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in thousands)

For the six months ended January 31, 2018
Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities $ (57,734 ) $ (5 ) $ 13,335
$ 120,563
$ (97,000 ) $ (20,841 )

Cash flows from investing activities:
Business acquisitions, net of cash acquired (14,862 ) —
—
—
—
(14,862 )
Capital expenditures (34,391 ) —
(1,302 ) —
—
(35,693 )
Proceeds from sale of assets 4,207
—
—
—
—
4,207
Cash collected for purchase of interest in accounts receivable —
—
—
574,783
(574,783 ) —
Cash remitted to Ferrellgas, L.P for accounts receivable —
—
—
(671,783 ) 671,783
—
Net changes in advances with consolidated entities 132,748
—
—
—
(132,748 ) —
Net cash provided by (used in) investing activities 87,702
—
(1,302 ) (97,000 ) (35,748 ) (46,348 )

Cash flows from financing activities:
Distributions (35,380 ) —
—
—
—
(35,380 )
Proceeds from increase in long-term debt 23,580
—
—
—
—
23,580
Payments on long-term debt (1,267 ) —
—
—
—
(1,267 )
Net reductions in short-term borrowings (7,879 ) —
—
—
—
(7,879 )
Net additions to collateralized short-term borrowings —
—
—
97,000
—
97,000
Net changes in advances with parent —
5
(12,190 ) (120,563 ) 132,748
—
Cash paid for financing costs (395 ) ��
—
—
—
(395 )
Net cash provided by (used in) financing activities (21,341 ) 5
(12,190 ) (23,563 ) 132,748
75,659

Increase (decrease) in cash and cash equivalents 8,627
—
(157 ) —
—
8,470
Cash and cash equivalents - beginning of year 5,327
1
373
—
—
5,701
Cash and cash equivalents - end of year $ 13,954
$ 1
$ 216
$ —
$ —
$ 14,171

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in thousands)

For the six months ended January 31, 2017
Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities $ 85,916
$ (5 ) $ (47,221 ) $ 75,611
$ (69,000 ) $ 45,301

Cash flows from investing activities:
Capital expenditures (19,686 ) —
(82 ) —
—
(19,768 )
Proceeds from sale of assets 4,591
—
—
—
—
4,591
Cash collected for purchase of interest in accounts receivable —
—
—
469,600
(469,600 ) —
Cash remitted to Ferrellgas, L.P for accounts receivable —
—
—
(538,600 ) 538,600
—
Net changes in advances with consolidated entities 28,408
—
—
—
(28,408 ) —
Other (37 ) —
—
—
—
(37 )
Net cash provided by (used in) investing activities 13,276
—
(82 ) (69,000 ) 40,592
(15,214 )

Cash flows from financing activities:
Distributions (84,500 ) —
—
—
—
(84,500 )
Contributions from Partners 167,640
—
—
—
—
167,640
Proceeds from increase in long-term debt 36,444
—
—
—
—
36,444
Payments on long-term debt (172,790 ) —
—
—
—
(172,790 )
Net reductions in short-term borrowings (35,692 ) —
—
—
—
(35,692 )
Net additions to collateralized short-term borrowings —
—
—
69,000
—
69,000
Net changes in advances with parent —
5
47,198
(75,611 ) 28,408
—
Cash paid for financing costs (1,422 ) —
—
—
—
(1,422 )
Net cash provided by (used in) financing activities (90,320 ) 5
47,198
(6,611 ) 28,408
(21,320 )

Increase (decrease) in cash and cash equivalents 8,872
—
(105 ) —
—
8,767
Cash and cash equivalents - beginning of year 4,472
1
417
—
—
4,890
Cash and cash equivalents - end of year $ 13,344
$ 1
$ 312
$ —
$ —
$ 13,657

M. ~~Subsequent events~~

~~Ferrellgas, L.P.~~has evaluated events and transactions occurring after the balance sheet date through the date Ferrellgas, L.P.'s’s condensed consolidated financial statements were issued and concluded that ~~other than as discussed below,~~ there were no

events or transactions occurring during this period that require recognition or disclosure in its condensed consolidated financial ~~statements.~~

statements, except as follows.

On ~~February 20, 2018,~~May 16, 2022, Ferrellgas Partners, L.P. repaid Ferrellgas, L.P. ~~completed~~ the ~~sale~~full amount of ~~1,072 rail cars utilized in~~ the ~~Midstream operations segment~~term loan of $15.3 million, which represented the outstanding principal and ~~received approximately $47.0 million in cash. Proceeds from the transaction were used~~accrued interest. The term loan was scheduled to ~~reduce outstanding debt~~mature on July 1, 2022. Additionally, Ferrellgas Partners, L.P. paid Ferrellgas, L.P.~~'s secured credit facility. See additional discussions on~~ $3.9 million for separate intercompany receivables related to expenses incurred during the ~~completed rail car sale in Note C - Supplemental financial statement information.~~2021 debt transactions.

Table of Contents

FERRELLGAS FINANCE CORP.
(a wholly-owned subsidiary of Ferrellgas, L.P.)
CONDENSED BALANCE SHEETS
(unaudited)
January 31, 2018 July 31, 2017
ASSETS

Cash $ 1,100
$ 1,100
Other current assets —
1,500
Total assets $ 1,100
$ 2,600

Contingencies and commitments (Note B)

STOCKHOLDER'S EQUITY
Common stock, $1.00 par value; 2,000 shares authorized; 1,000 shares issued and outstanding $ 1,000
$ 1,000
Additional paid in capital 71,052
67,336
Accumulated deficit (70,952 ) (65,736 )
Total stockholder's equity $ 1,100
$ 2,600
See notes to condensed financial statements.

FERRELLGAS FINANCE CORP.
(a wholly-owned subsidiary of Ferrellgas, L.P.)
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)

For the three months ended January 31, For the six months ended January 31,
2018 2017 2018 2017

General and administrative expense $ 3,666
$ 3,400
$ 5,216
$ 4,950

Net loss $ (3,666 ) $ (3,400 ) $ (5,216 ) $ (4,950 )
See notes to condensed financial statements.

FERRELLGAS FINANCE CORP.
(a wholly-owned subsidiary of Ferrellgas, L.P.)
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
For the six months ended January 31,
2018 2017
Cash flows from operating activities:
Net loss $ (5,216 ) $ (4,950 )
Changes in operating assets and liabilities:

Other current assets 1,500
1,500
Cash used in operating activities (3,716 ) (3,450 )

Cash flows from financing activities:
Capital contribution 3,716
3,450
Cash provided by financing activities 3,716
3,450

Net change in cash —
—
Cash - beginning of period 1,100
1,100
Cash - end of period $ 1,100
$ 1,100
See notes to condensed financial statements.

FERRELLGAS FINANCE CORP.

(a wholly-owned subsidiary of Ferrellgas, L.P.)

CONDENSED BALANCE SHEETS

(unaudited)


	April 30, 2022		July 31, 2021
ASSETS
Cash	$	129	$	1,100
Total assets	$	129	$	1,100

LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
Other current liabilities	$	1,110	$	—
Total current liabilities	$	1,110	$	—

Contingencies and commitments (Note B)

Equity (Deficit):
Common stock, $1.00 par value; 2,000 shares authorized; 1,000 shares issued and outstanding	$	1,000	$	1,000
Additional paid in capital		102,947		102,628
Accumulated deficit		(104,928)		(102,528)
Total stockholder's equity (deficit)	$	(981)	$	1,100
Total liabilities and equity (deficit)	$	129	$	1,100

See notes to condensed financial statements.

~~(unaudited)~~

Table of Contents

FERRELLGAS FINANCE CORP.

(a wholly-owned subsidiary of Ferrellgas, L.P.)

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)


	For the three months ended April 30,				For the nine months ended April 30,
	2022		2021		2022		2021
General and administrative expense	$	932	$	17,419	$	2,400	$	19,275

Net loss	$	(932)	$	(17,419)	$	(2,400)	$	(19,275)

See notes to condensed financial statements.

Table of Contents

FERRELLGAS FINANCE CORP.

(a wholly-owned subsidiary of Ferrellgas, L.P.)

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)


	For the nine months ended April 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(2,400)	$	(19,275)
Changes in operating assets and liabilities:
Other current liabilities		1,110		—
Prepaid expenses and other current assets		—		1,500
Cash used in operating activities		(1,290)		(17,775)

Cash flows from financing activities:
Capital contribution		319		17,775
Cash provided by financing activities		319		17,775

Net change in cash		(971)		—
Cash - beginning of period		1,100		1,100
Cash - end of period	$	129	$	1,100

See notes to condensed financial statements.

Table of Contents

FERRELLGAS FINANCE CORP.

(a wholly-owned subsidiary of Ferrellgas, L.P.)

(unaudited)

NOTES TO CONDENSED FINANCIAL STATEMENTS

A. Formation

Ferrellgas Finance Corp. (the “Finance Corp.”), a Delaware corporation, was formed on January 16, 2003, and is a wholly-owned subsidiary of Ferrellgas, L.P. (the “Partnership”).

The ~~condensed financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the interim periods presented. All adjustments~~Partnership contributed $1,000 to the ~~condensed financial statements were~~Finance Corp. on January 24, 2003 in exchange for 1,000 shares of ~~a normal recurring nature.~~

common stock.

The Finance Corp. has nominal assets, does not conduct any operations and has no0 employees.

B. Contingencies and commitments

The ~~Finance Corp. serves as co-issuer and co-obligor for debt securities of the Partnership.~~

The indentures governing the senior notes agreements contains various restrictive covenants applicable to the Partnership and its subsidiaries, the most restrictive relating to additional indebtedness and restricted payments. As of January 31, 2018, the Partnership is in compliance with all requirements, tests, limitations and covenants related to these debt agreements.


~~ITEM 2.~~	~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~Overview~~

~~Our management’s discussion and analysis of financial condition and results of operations relates to Ferrellgas Partners and the operating partnership.~~

Ferrellgas Partners Finance Corp. and Ferrellgas Finance Corp. have nominal assets, do not conduct any operations and have no employees other than officers. Ferrellgas Partners Finance Corp. serves as co-issuer and co-obligor for debt securities of Ferrellgas Partners while Ferrellgas Finance Corp. serves as co-issuer and co-obligor for debt securities of the operating partnership. ~~Accordingly, and due to~~At July 31, 2020, the ~~reduced disclosure format, a discussion of the results of operations, liquidity and capital resources of Ferrellgas Partners~~ Finance Corp. was liable as co-issuer and ~~Ferrellgas~~co-obligor for the operating partnership’s (i) $500 million aggregate principal amount of unsecured senior notes due 2021, (ii) $475 million aggregate principal amount of unsecured senior notes due 2022, (iii) $500 million aggregate principal amount of unsecured senior notes due 2023, and (iv) $700 million aggregate principal amount of senior secured notes due 2025, which obligations were only reported on the operating partnership’s condensed consolidated balance sheet. The senior notes due 2021, senior notes due 2022 and senior notes due 2023 were redeemed on April 5, 2021, and the senior secured notes due 2025 were redeemed on March 30, 2021. As of April 30, 2022, the Finance Corp. ~~is not presented.~~was liable as co-issuer and co-obligor for the operating partnership’s (i) $650 million aggregate principal amount of unsecured senior notes due 2026 and (ii) $825 million aggregate principal amount of unsecured senior notes due 2029, each of which were issued on March 30, 2021 and which obligations are only reported on the operating partnership’s condensed consolidated balance sheet.

C. Subsequent events

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References and Defined Terms

In this Item 2 of ~~the~~this Quarterly Report on Form 10-Q, unless the context indicates otherwise:

●

“us,” “we,” “our,” “ours,” “consolidated,” or “Ferrellgas” are references to Ferrellgas Partners, L.P. together with its consolidated subsidiaries, including Ferrellgas Partners Finance Corp., Ferrellgas, L.P. and Ferrellgas Finance Corp., except when used in connection with “Class A Units” or “Class B Units,” in which case these terms refer to Ferrellgas Partners, L.P. without its consolidated subsidiaries;

●

“Ferrellgas Partners” refers to Ferrellgas Partners, L.P. itself, without its consolidated subsidiaries;

●

the “operating partnership” refers to Ferrellgas, L.P., together (except where the context indicates otherwise) with its consolidated subsidiaries, including Ferrellgas Finance Corp.;

●

our “general partner” refers to Ferrellgas, Inc.;

●

“Ferrell Companies” refers to Ferrell Companies, Inc., the sole shareholder of our general partner;

●

“Board of Directors” or “Board” refers to the board of directors of our general partner;

●

"GAAP" refers to accounting principles generally accepted in the United States;

●

“retail sales” refers to Propane and other gas liquid sales: Retail - Sales to End Users, or the volume of propane sold primarily to our residential, industrial/commercial and agricultural customers;

●

“wholesale sales” refers to Propane and other gas liquid sales: Wholesale - Sales to Resellers, or the volume of propane sold primarily to our portable tank exchange customers and bulk propane sold to wholesale customers;

●

“other gas sales” refers to Propane and other gas liquid sales: Other Gas Sales, or the volume of bulk propane sold to other third-party propane distributors or marketers and the volume of refined fuel sold;

●

“propane sales volume” refers to the volume of propane sold to our retail sales and wholesale sales customers;

●

“Class A Units” refers to the Class A Units of Ferrellgas Partners, one of which was issued for every twenty of Ferrellgas Partners’ then-outstanding common units in a 1-for-20 reverse unit split effected on March 30, 2021;

●

“Class B Units” refers to the Class B Units of Ferrellgas Partners;

●

“Preferred Units” refers to the Senior Preferred Units of the operating partnership;

●

“Unitholders” or “unitholders” refers to holders of Class A Units, holders of Class B Units or holders of Preferred Units, as indicated or as the context requires for each such reference; and

●

references to any fiscal year are to the fiscal year ended or ending on July 31 of the applicable year.

~~“us,” “we,” “our,” “ours,” “consolidated,” or "Ferrellgas"~~

Also, the following terms are references exclusively to Ferrellgas Partners, L.P. together with its consolidated subsidiaries, including Ferrellgas Partners Finance Corp., Ferrellgas, L.P. and Ferrellgas Finance Corp., except when useddefined in ~~connection with “common units,” in which case these terms refer to Ferrellgas Partners, L.P. without its consolidated subsidiaries;~~

~~“Ferrellgas Partners” refers to Ferrellgas Partners, L.P. itself, without its consolidated subsidiaries;~~

~~the “operating partnership” refers to Ferrellgas, L.P., together with its consolidated subsidiaries, including Ferrellgas Finance Corp.;~~

~~our “general partner” refers to Ferrellgas, Inc.;~~

~~“Ferrell Companies” refers to Ferrell Companies, Inc., the sole shareholder~~this Item 2 of ~~our general partner;~~

~~“unitholders” refers to holders of common units of Ferrellgas Partners;~~

~~"GAAP" refers to accounting principles generally accepted in the United States;~~

“retail sales” refers to Propane and other gas liquid sales: Retail - Sales to End Users or the volume of propane sold primarily to our residential, industrial/commercial and agricultural customers;

“wholesale sales” refers to Propane and other gas liquid sales: Wholesale - Sales to Resellers or the volume of propane sold primarily to our portable tank exchange customers and bulk propane sold to wholesale customers;

“other gas sales” refers to Propane and other gas liquid sales: Other Gas Sales or the volume of bulk propane sold to other third party propane distributors or marketers and the volume of refined fuel sold;

~~“propane sales volume” refers to the volume of propane sold to our retail sales and wholesale sales customers;~~

~~“water solutions revenues” refers to fees charged for the processing and disposal of salt water as well as the sale of skimming oil;~~

~~"crude oil logistics revenues" refers to fees charged for crude oil transportation and logistics services on behalf of producers and end-users of crude oil;~~

~~"crude oil sales" refers to crude oil purchased and sold in connection with crude oil transportation and logistics services on behalf of producers and end-users of crude oil;~~

~~"crude oil hauled" refers to the crude oil volume in barrels transported through our operation of a fleet of trucks, tank trailers, rail cars and a barge;~~

~~"Jamex" refers to Jamex Marketing, LLC;~~

~~“salt water volume” refers to the number of barrels of salt water processed at our disposal sites;~~

“skimming oil” refers to the oil collected from the process used at our salt water disposal wells through a combination of gravity and chemicals to separate crude oil that is dissolved in the salt water;

~~“Notes” refers to the notes of the condensed consolidated financial statements of Ferrellgas Partners or the operating partnership, as applicable;~~

~~"MBbls/d" refers to one thousand barrels per day; and~~

Ferrellgas Partners is a holding entity that conducts no operations and has two direct subsidiaries, Ferrellgas Partners Finance Corp. and the operating partnership. Ferrellgas Partners’ only significant assets are its approximate 99% limited partnership interest in the operating partnership and its 100% equity interest in Ferrellgas Partners Finance Corp. The common units of Ferrellgas Partners are listed on the New York Stock Exchange and our activities are primarily conducted through the operating partnership.

The operating partnership was formed on April 22, 1994, and accounts for substantially all of our consolidated assets, sales and operating earnings, except for interest expense related to the senior notes co-issued by Ferrellgas Partners and Ferrellgas Partners Finance Corp.

Our general partner performs all management functions for us and our subsidiaries and holds a 1% general partner interest in Ferrellgas Partners and an approximate 1% general partner interest in the operating partnership. The parent company of our general partner, Ferrell Companies, beneficially owns approximately 23% of our outstanding common units. Ferrell Companies is owned 100% by an employee stock ownership trust.

We file annual, quarterly, and other reports and information with the Securities and Exchange Commission (the "SEC"). You may read and download our SEC filings over the Internet from several commercial document retrieval services as well as at the SEC’s website at www.sec.gov. You may also read and copy our SEC filings at the SEC’s Public Reference Room located at 100 F Street, NE, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information concerning the Public Reference Room and any applicable copy charges. Because our common units are traded on the New York Stock Exchange under the ticker symbol “FGP,” we also provide our SEC filings and particular other information to the New York Stock Exchange. You may obtain copies of these filings and such other information at the offices of the New York Stock Exchange located at 11 Wall Street, New York, New York 10005. In addition, our SEC filings are available on our website at www.ferrellgas.com at no cost as soon as reasonably practicable after our electronic filing or furnishing thereof with the SEC. Please note that any Internet addresses provided in this Quarterly Report on Form 10-Q are for informational purposes only and are not intended to be hyperlinks. Accordingly, no information found and/or provided at such Internet addresses is intended or deemed to be incorporated by reference herein.10-Q:

●

Amended Ferrellgas Partners LPA

●

Credit Agreement

~~The following is a discussion~~

Table of our historical financial condition and results of operations and should be read in conjunction with our historical condensed consolidated financial statements and accompanying Notes thereto included elsewhere in this Quarterly Report on Form 10-Q.Contents

●

Credit Facility

●

Effective Date

●

Ferrellgas Partners Notes

●

OpCo LPA Amendment

The discussions set forth in the “Results of Operations” and “Liquidity and Capital Resources” sections generally refer to Ferrellgas Partners and its consolidated subsidiaries. However, in these discussions there exist two material differences between Ferrellgas Partners and the operating partnership. Those material differences are:

because Ferrellgas Partners has outstanding $357.0 million in aggregate principal amount of 8.625% senior notes due fiscal 2020, the two partnerships incur different amounts of interest expense on their outstanding indebtedness; see the statements of operations in their respective condensed consolidated financial statements; and

~~Ferrellgas Partners repurchased common units in fiscal 2017.~~

Cautionary Note Regarding Forward-looking Statements

Statements included in this report include forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. These statements often use words such as “anticipate,” “believe,” “intend,” “plan,” “projection,” “forecast,” “strategy,” “position,” “continue,” “estimate,” “expect,” “may,” “will,” or the negative of those terms or other variations of them or comparable terminology. These statements often discuss plans, strategies, events or developments that we expect or anticipate will or may occur in the future and are based upon the beliefs and assumptions of our management and on the information currently available to them. In particular, statements, express or implied, concerning our future operating results or financial position or our ability to generate sales, income or cash flow are forward-looking statements.

Forward-looking statements are not guarantees of performance. You should not put undue reliance on any forward-looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially from those expressed in or implied by these forward-looking statements. Many of the factors that will affect our future results are beyond our ability to control or predict. Some of the risk factors that may affect our business, financial condition or results of operations include:

●

the effect of weather conditions on the demand for propane;

●

the prices of wholesale propane, motor fuel and crude oil;

●

disruptions to the supply of propane;

●

competition from other industry participants and other energy sources;

●

energy efficiency and technology advances;

●

adverse changes in our relationships with our national tank exchange customers;

●

significant delays in the collection of accounts or notes receivable;

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customer, counterparty, supplier or vendor defaults;

●

changes in demand for, and production of, hydrocarbon products;

●

disruptions to railroad operations on the railroads we use;

●

increased trucking and rail regulations;

●

inherent operating and litigation risks in gathering, transporting, handling and storing propane;

●

our inability to complete acquisitions or to successfully integrate acquired operations;

●

costs of complying with, or liabilities imposed under, environmental, health and safety laws;

●

the impact of pending and future legal proceedings;

~~Ferrellgas' ability to refinance or replace its secured credit facility and/or its accounts receivable securitization facility;~~

~~the effect~~

Table of ~~weather conditions on the demand for propane;~~Contents

~~the prices of wholesale propane, motor fuel and crude oil;~~

●

the interruption, disruption, failure or malfunction of our information technology systems including due to cyber-attack;

●

the impact of changes in tax law that could adversely affect the tax treatment of Ferrellgas Partners for federal income tax purposes;

●

economic and political instability, particularly in areas of the world tied to the energy industry;

●

disruptions in the capital and credit markets; and

●

access to available capital to meet our operating and debt-service requirements.

~~disruptions to the supply of propane;~~

~~competition from other industry participants and other energy sources;~~

~~energy efficiency and technology advances;~~

~~the termination or non-renewal of certain arrangements or agreements;~~

~~adverse changes in our relationships with our national tank exchange customers;~~

~~significant delays in the collection of, or uncollectibility of, accounts or notes receivable;~~

~~customer, counterparty, supplier or vendor defaults;~~

~~changes in demand for, and production of, hydrocarbon products;~~

~~capacity overbuild of midstream energy infrastructure in our midstream operational areas;~~

~~increased trucking regulations;~~

~~cost increases that exceed contractual rate increases for our logistics services;~~

~~inherent operating and litigation risks in gathering, transporting, handling and storing propane and crude oil;~~

~~our inability to complete acquisitions or to successfully integrate acquired operations;~~

~~costs of complying with, or liabilities imposed under, environmental, health and safety laws;~~

~~the impact of pending and future legal proceedings;~~

~~the interruption, disruption, failure or malfunction of our information technology systems including due to cyber attack;~~

~~the impact of changes in tax law that could adversely affect the tax treatment of Ferrellgas Partners for federal income tax purposes;~~

~~economic and political instability, particularly in areas of the world tied to the energy industry; and~~

~~disruptions in the capital and credit markets.~~

When considering any forward-looking statement, you should also keep in mind the risk factors set forth in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for fiscal ~~2017~~2021 and ~~under Part II, Item 1A "Risk Factors" of this Quarterly Report on Form 10-Q.~~in any more recent filings with the SEC. Any of these risks could impair our business, financial condition or results of operations. Any such impairment may affect our ability to make distributions to our unitholders or pay interest on the principal of any of our debt securities. In addition, the trading price of our securities could decline as a result of any such impairment.

Except for our ongoing obligations to disclose material information as required by federal securities laws, we undertake no obligation to update any forward-looking statements or risk factors after the date of this Quarterly Report on Form 10-Q.

~~Recent developments~~

~~Rail car sale~~

~~During~~

Overview

Our management’s discussion and analysis of financial condition and results of operations relates to Ferrellgas Partners and the ~~quarter ended January 31, 2018, we committed to~~operating partnership.

Ferrellgas Partners is a ~~plan to dispose~~holding entity that conducts no operations and has two direct subsidiaries, Ferrellgas Partners Finance Corp. and the operating partnership. Ferrellgas Partners Finance Corp. and Ferrellgas Finance Corp. have nominal assets, do not conduct any operations and have no employees other than officers. Our activities are primarily conducted through the operating partnership. Ferrellgas Partners Finance Corp. has served as co-issuer and co-obligor for debt securities of all of our rail cars utilized in the Midstream operations segment and as a result, reclassified 1,292 rail cars from "Property, plant and equipment, net" to "Assets held for sale" on our condensed consolidated balance sheet as of January 31, 2018. For the three and six months ended January 31, 2018, "Loss on asset sales and disposals" includes a loss of $35.5 million related to the write-down of these rail cars classified as "Assets held for sale".

In February 2018 we sold 1,072 rail cars and received approximately $47.0 million in cash, which we used to reduce borrowings under our senior secured credit facility. We expect that the sale will reduce our interest expense in future periods, improve our credit metrics, and lessen our reliance on our senior secured credit facility as we move forward with growth efforts. We expect that the liquidity benefits from the sale of these assets will be achieved without impacting our forecasted Adjusted EBTIDA.

~~Bridger Energy, LLC sale~~

~~In January 2018 we completed the sale of Bridger Energy, LLC,~~Ferrellgas Partners, while Ferrellgas Finance Corp., a subsidiary of ~~Bridger Logistics, which is~~the operating partnership, serves as co-issuer and co-obligor for debt securities of the operating partnership. Accordingly, and due to the reduced disclosure format, a ~~subsidiary~~discussion of the results of operations, liquidity and capital resources of Ferrellgas ~~L.P. With~~Partners Finance Corp. and Ferrellgas Finance Corp. is not presented in this section.

Ferrellgas Partners and the ~~sale, we exited Bridger Energy's oil purchase and sale activity, and as a result will be able to realize a near-term reduction~~Preferred Unitholders are the only limited partners of ~~approximately $80 million in letters of credit issued on our senior secured credit facility to support Bridger Energy.~~

~~Financial covenants~~

~~The indenture governing~~ the ~~outstanding notes~~operating partnership. Ferrellgas, Inc. is the sole general partner of Ferrellgas Partners and the ~~agreements governing~~operating partnership and, excluding the economic interests attributable to the Class B Units and the Preferred Units, owns an approximate 1% general partner economic interest in each, and, therefore, an effective 2% general partner economic interest in the operating ~~partnership’s indebtedness contain various covenants that limit our ability~~partnership. Excluding the economic interests attributable to the Preferred Units, Ferrellgas Partners owns an approximate 99% limited partner interest in the operating partnership. For information regarding the economic and other terms of the Class B Units and the ~~ability~~Preferred Units, see Note G – Equity (Deficit) and Note F – Preferred units to our condensed consolidated financial statements included elsewhere herein.

Our Class A Units of ~~specified subsidiaries to, among other things, make restricted payments and incur additional indebtedness.~~ Ferrellgas Partners are traded on the OTC Pink Market under the symbol “FGPR”.

Our general partner ~~believes~~performs all management functions for us. The parent of our general partner, Ferrell Companies, currently beneficially owns approximately 23.4% of our outstanding Class A units. Ferrell Companies is owned 100% by an employee stock ownership trust.

The operating partnership was formed on April 22, 1994, and accounts for substantially all of our consolidated assets, sales and operating earnings, except for interest expense related to the $357.0 million aggregate principal amount of Ferrellgas Partners’ unsecured senior notes due June 15, 2020 (the “Ferrellgas Partners Notes”) during the relevant historical periods.

Table of Contents

We file annual, quarterly, and current reports and other information with the Securities and Exchange Commission (the "SEC"). You may read and download our SEC filings over the Internet from several commercial document retrieval services as well as at the SEC’s website at www.sec.gov. Our SEC filings are also available on our website at www.ferrellgas.com at no cost as soon as reasonably practicable after our electronic filing or furnishing thereof with the SEC. Please note that ~~the most restrictive~~any Internet addresses provided in this Quarterly Report on Form 10-Q are for informational purposes only and are not intended to be hyperlinks. Accordingly, no information found and/or provided at such Internet addresses is intended or deemed to be incorporated by reference herein.

The following is a discussion of ~~these covenants are the~~our historical financial condition and results of operations and should be read in conjunction with our audited historical consolidated ~~fixed charge coverage ratio, as defined~~financial statements and accompanying Notes thereto included in our Annual Report on Form 10-K for fiscal 2021 and in our unaudited historical condensed consolidated financial statements and accompanying Notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

The discussions set forth in the ~~indenture governing the outstanding notes~~“Results of Operations” and “Liquidity and Capital Resources” sections generally refer to Ferrellgas Partners and its consolidated subsidiaries. However, in these discussions there exists one material difference between Ferrellgas Partners and the ~~consolidated leverage ratio and consolidated interest coverage ratio, as defined in our secured~~operating partnership:

Ferrellgas Partners entered into a term loan credit ~~facility and our accounts receivable securitization facility.~~

~~Before a restricted payment (as defined in the secured credit facility and~~agreement with the operating partnership, ~~indentures) can be made by~~pursuant to which the operating partnership extended to Ferrellgas Partners an unsecured, non-amortizing term loan in the aggregate principal amount of $19.9 million. The term loan bore interest at a rate of 20% per annum, all interest on the term loan was added to the outstanding principal amount, and the term loan’s maturity date was July 1, 2022. During July 2021, Ferrellgas Partners made an optional principal prepayment of $9.0 million on the term loan. The outstanding principal and accrued interest at April 30, 2022 was $15.2 million. As of April 30, 2022, the operating partnership must be in compliance with the consolidated leverage ratio and consolidated interest coverage ratio covenants under the secured credit facility and accounts receivable securitization facility and in compliance with the covenants under the operating partnership's indentures. If the operating partnership is unable to make restricted payments,had additional intercompany receivables from Ferrellgas Partners ~~will~~ not ~~have~~related to the ~~ability to make semi-annual interest payments on its $357.0 million 8.625% unsecured senior notes due 2020 or distributions to~~term loan totaling $3.9 million. Ferrellgas Partners ~~common unitholders. If Ferrellgas Partners does not make interest payments~~repaid the term loan and the additional intercompany receivables on ~~its unsecured notes, that would constitute an event~~May 16, 2022. See Note O – Subsequent events to our condensed consolidated financial statements for more information.

Recent developments

COVID-19

The coronavirus disease 2019 (COVID-19), which has been declared by the World Health Organization as a “Public Health Emergency of ~~default which would permit~~International Concern,” continues to impact the ~~acceleration~~economy of the ~~obligations underlying~~United States and other countries around the ~~Ferrellgas Partners indenture, including all outstanding principal owed. The accelerated obligations would become immediately due~~world. COVID-19 poses the risk that we or our employees, contractors, suppliers, customers and ~~payable, which would in turn trigger cross acceleration of~~ other ~~debt. If Ferrellgas' debt obligations are accelerated, Ferrellgas~~business partners may be ~~unable~~prevented from or limited in conducting business activities for an indefinite period of time. The outbreak of COVID-19 has already resulted in significant governmental measures being implemented to ~~borrow sufficient funds to refinance debt in which case unitholders and investors in our debt instruments could experience a partial or total loss of their investment.~~

~~Before a restricted payment (as defined in~~control the Ferrellgas Partners indenture) can be made by Ferrellgas Partners, Ferrellgas Partners must be in compliance with the consolidated fixed charge coverage ratio covenant under the Ferrellgas Partners indenture. If Ferrellgas Partners is unable to make restricted payments, Ferrellgas Partners will not have the ability to make distributions to Ferrellgas Partners common unitholders.

~~A breach~~spread of the ~~consolidated leverage ratio covenant or~~virus, including quarantines, travel restrictions, manufacturing restrictions, declarations of national emergency and states of emergency, business shutdowns and restrictions on the ~~consolidated interest coverage ratio covenant under~~movement of people throughout the ~~secured credit facility~~United States and the ~~accounts receivable securitization facility would result~~world. While some of our business operations and support systems are deemed essential in an event of default under those facilities resulting in the operating partnership’s inability to obtain funds under those facilities and would give the lenders and receivables purchasers the right to accelerate the operating partnership’s obligations under those facilities and to exercise remedies to collect the outstanding amounts under those facilities. If the lenders and receivables purchasers accelerated the operating partnership's obligations, that would constitute an event of default which would permit the acceleration of the obligations underlying the Ferrellgas Partners indenture, including all outstanding principal owed. The accelerated obligations would become immediately due and payable, which would in turn trigger cross acceleration of other debt. If our debt obligations are accelerated, we may be unable to borrow sufficient funds to refinance debt in which case unitholders and investors in our debt instruments could experience a partial or total loss of their investment.

~~Consolidated leverage ratio~~

Our consolidated leverage ratio is defined as the ratio of total debt of the operating partnership to trailing four quarters EBITDA (both as adjusted for certain, defined items) of the operating partnership, as detailed in our secured credit facility and our accounts receivable securitization facility.

~~The current maximum consolidated leverage covenant ratios are as follows:~~



~~Date~~		~~Maximum leverage ratio~~
~~January 31, 2018~~		~~7.75~~
~~April 30, 2018~~		~~7.75~~
~~July 31, 2018 & thereafter~~		~~5.50~~

Our consolidated leverage ratio was 6.96x as of January 31, 2018; the margin allows for approximately $193.2 million of additional borrowing capacity or approximately $24.9 million less EBITDA. This covenant also restricts the operating partnership's ability to make payments to Ferrellgas Partners for purposes of funding quarterly common unit distributions as discussed above.

~~Consolidated interest coverage ratio~~

The consolidated interest coverage ratio is defined as the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of the operating partnership, as detailed in our secured credit facility and accounts receivable securitization facility.

~~The current minimum consolidated interest coverage ratios are as follows:~~



~~Date~~		~~Minimum consolidated interest coverage ratio~~
~~January 31, 2018~~		~~1.75~~
~~April 30, 2018~~		~~1.75~~
~~July 31, 2018 & thereafter~~		~~2.50~~

~~Our consolidated interest ratio was 2.14x as of January 31, 2018; the margin allows for approximately $25.3 million of additional interest expense or approximately $44.3 million less EBITDA.~~

~~Consolidated fixed charge coverage ratio~~

The indenture governing the outstanding notes of Ferrellgas Partners includes a consolidated fixed charge coverage ratio test for the incurrence of debt and the making of restricted payments. This covenant requires that the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of Ferrellgas Partners be at least 1.75x before a restricted payment (as defined in the indenture) can be made by Ferrellgas Partners. If this ratio were to drop below 1.75x, the indenture allows us to make restricted payments of up to $50.0 million in total over a 16 quarter period while below this ratio. As of January 31, 2018, the ratio was 1.59x. As a result, the $9.8 million distribution to be paid to common unitholders on March 16, 2018 will be taken from the $50.0 million restricted payment limitation, which after considering the $9.8 million deductions taken as a result of the distributions paid in September 2017 and December 2017, leaves $20.6 million for future restricted payments. Unless the indenture governing the outstanding notes is amended or refinanced, if our consolidated fixed charge coverage ratio does not improve to at least 1.75x and we continue our current quarterly distribution rate of $0.10 per common unit, this covenant will not allow us to make common unit distributions for our quarter ending October 31, 2018 and beyond.

~~Debt and interest expense reduction strategy~~

We continue to execute on a strategy to further reduce our debt and interest expense. This strategy may include amending or refinancing existing debt agreements, additional asset sales (see Recent Developments above for such actions taken since October 31, 2017), a reduction in Ferrellgas Partners' annual distribution rate or the issuance of equity. We believe any debt and interest expense reduction strategies would remain in effect until our consolidated leverage ratio reaches 4.5x or a level that we deem appropriate for our business.

Ifmany jurisdictions, we are ~~unsuccessful with our strategy~~continuing to further reduce debt and interest expense, or are unsuccessful in renegotiating our secured credit facility and our accounts receivable securitization facility, which both mature in October 2018, or are unable to secure alternative liquidity sources, weassess the impact that COVID-19 may ~~not~~ have ~~the liquidity to fund our operations after that maturity date.~~

Failure to maintain compliance with these and other covenants in our agreements or failure to renew or replace liquidity available under the secured credit facility and the accounts receivable securitization facility could have a material, adverse effect on our operating capacity and cash flows and could further restrict our ability to incur debt, pay interest on the notes or to make cash distributions to unitholders. An inability to pay interest on the notes could result in an event of default that would permit the acceleration of all of our indebtedness. The accelerated debt would become immediately due and payable, which would in turn trigger cross-acceleration under other debt. If the payment of our debt is accelerated, our assets may be insufficient to repay such debt in full and we may be unable to borrow sufficient funds to refinance debt, in which case investors in common units and our debt instruments could experience a partial or total loss of their investment.

As a result of the October 2018 maturity date of Ferrellgas' secured credit facility, the entire balance outstanding at January 31, 2018 has been classified as a current liability in the condensed consolidated balance sheets as of January 31, 2018. The absence of a plan to renew or refinance this debt would raise substantial doubt about Ferrellgas' ability to continue as a going concern. Ferrellgas is working to renew or replace the secured credit facility and the accounts receivable securitization facility. Potential options include extending the current secured credit facility and accounts receivable securitization facility, entering into a new secured credit facility and accounts receivable securitization facility, or securing alternative financing from different sources. Ferrellgas believes it is probable that it will be able to obtain sufficient capital to meet anticipated liquidity demands and, therefore, does not believe there is substantial doubt about our ability to continue as a going concern.

~~Distributions~~

On February 22, 2018 the board of directors of our general partner announced a quarterly distribution of $0.10, payable on March 16, 2018, to all unitholders of record as of March 9, 2018, which equates to an annual distribution rate of $0.40. On December 15, 2017 and September 14, 2017, we also paid a quarterly distribution of $0.10.

~~U.S. Tax Reform~~

On December 22, 2017, the Tax Cuts and Jobs Act (“2017 Act”) was signed into law, which enacted significant changes to U.S. tax and related laws. Some of the provisions of the 2017 Act that could affect Ferrellgas and its subsidiaries include, but are not limited to, a reduction of the federal corporate income tax rate from 35% to 21%, limitations on the deductibility of interest expense, and full expensing for certain qualified property.

Ferrellgas has adjusted all federal net deferred tax assets of its corporate subsidiaries using the lower federal corporate income tax rate. Since the corporate subsidiaries are fiscal year tax filers with a tax year straddling the effective date of the 2017 Act, a blended corporate tax federal rate has been applied in accordance with the requirements of Internal Revenue Code Section 15.

~~While we do not expect the 2017 Act to have a material impact~~ on our results ~~Ferrellgas~~of operations and financial condition and cannot at this time accurately predict what effects these conditions will ~~continue~~have on our operations and sales due to ~~analyze~~uncertainties relating to the ~~2017 Act to determine the full effects~~ultimate geographic spread of the ~~new law on its consolidated financial statements.~~

virus, the severity of the disease, the duration of the outbreak and the length of the travel restrictions and business closures imposed by governments in different jurisdictions. Additionally, initiatives we have implemented or may implement to slow and/or reduce the impact of COVID-19, such as using staggered start times for drivers, may increase our operating expenses and reduce the efficiency of our operations.

How We Evaluate Our Operations

We evaluate our overall business performance based primarily on ~~Adjusted EBITDA.~~a metric we refer to as “Adjusted EBITDA”, which is not defined by GAAP and should not be considered an alternative to earnings measures defined by GAAP. We do not utilize depreciation, depletion and amortization expense in our key measures because we focus our performance management on cash flow generation and our revenue generating assets have long useful lives. For the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net earnings (loss) attributable to Ferrellgas Partners, L.P., the most directly comparable GAAP measure, see the subheading “Non-GAAP Financial Measures” below.

~~Segment disclosure~~

Table of Contents

~~Propane operations and related equipment sales~~

Based on our propane sales volumes in fiscal ~~2017,~~2021, we believe that we are the second largest retail marketer of propane in the United States and a leading national provider of propane by portable tank exchange. We serve residential, industrial/commercial, portable tank exchange, agricultural, wholesale and other customers in all 50 states, the District of Columbia and Puerto Rico. Our operations primarily include the retail distribution and sale of propane and related equipment and supplies with concentrations in the Midwest, Southeast, Southwest and Northwest regions of the United States.

We use information on temperatures to understand how our results of operations are affected by temperatures that are warmer or colder than normal. Normal temperatures computed by us are the average of the last 3010 years of information published by the

National Oceanic and Atmospheric Administration. Based on this information we calculate a ratio of actual heating degree days to normal heating degree days. Heating degree days are a general indicator of weather impacting propane usage.

Weather conditions have a significant impact on demand for propane for heating purposes primarily during the months of November through March (the “winter heating season”). Accordingly, the volume of propane used by our customers for this purpose is directly affected by the severity of the winter weather in the regions we serve and can vary substantially from year to year. In any given region, sustained warmer-than-normal temperatures will tend to result in reduced propane usage, while sustained colder-than-normal temperatures will tend to result in greater usage. Although there is a strong correlation between weather and customer usage, general economic conditions in the United States and the wholesale price of propane can have a significant impact on this correlation. Additionally, there is a natural time lag between the onset of cold weather and increased sales to customers. If the United States were to experience a cooling trend we could expect nationwide demand for propane to increase which could lead to greater sales, income and liquidity availability. Conversely, if the United States were to experience a continued warming trend, we could expect nationwide demand for propane for heating purposes to decrease which could lead to a reduction in our sales, income and liquidity availability as well as impact our ability to maintain compliance with our debt covenants.

We employ risk management activities that attempt to mitigate price risks related to the purchase, storage, transport and sale of propane generally in the contract and spot markets from major domestic energy companies. We attempt to mitigate these price risks through the use of financial derivative instruments and forward propane purchase and sales contracts. We enter into propane sales commitments with a portion of our customers that provide for a contracted price agreement for a specified period of time. These commitments can expose us to product price risk if not immediately hedged with an offsetting propane purchase commitment.

Our open financial derivative propane purchase commitments are designated as hedges primarily for fiscal ~~2018~~2022 and ~~2019~~2023 sales commitments and, as of ~~January 31, 2018,~~April 30, 2022, we have experienced net mark-to-market gains of approximately ~~$24.3~~$77.2 million. Because these financial derivative purchase commitments qualify for hedge accounting treatment, the resulting asset, liability and related mark-to-market gains or losses are recorded on the condensed consolidated balance sheets as “Prepaid expenses and other current assets,” ~~"Other~~“Other assets, net,"” “Other current liabilities,” "Other liabilities" and “Accumulated other comprehensive ~~income,~~loss,” respectively, until settled. Upon settlement, realized gains or losses on these contracts will be reclassified to “Cost of sales-propane and other gas liquid sales” in the condensed consolidated statements of operations as the underlying inventory is sold. These financial derivative purchase commitment net gains are expected to be offset by decreased margins on propane sales commitments that qualify for the normal purchase normal sale exception. At ~~January 31, 2018,~~April 30, 2022, we estimate ~~72%~~74% of currently open financial derivative purchase commitments, the related propane sales commitments and the resulting gross margin will be realized into earnings during the next twelve months.

~~Midstream Operations~~

Our midstream operations primarily include crude oil logistics ("Bridger Logistics"). Bridger Logistics primarily generates income by providing crude oil transportation and logistics services on behalf

Table of producers and end-users of crude oil. Bridger Logistics services include transportation through its operation of a fleet of trucks, tank trailers and pipeline injection terminals. We primarily operate in major oil and gas basins across the continental United States. Additionally, midstream operations includes water solutions which generates income primarily through the operation of salt water disposal wells in the Eagle Ford shale region of south Texas.Contents

Summary Discussion of Results of Operations:

Executive Overview

For the three months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~

2021

During the three months ended ~~January 31, 2018,~~April 30, 2022, we ~~generated~~recognized net earnings attributable to Ferrellgas Partners, L.P. of $67.6 million, compared to a net loss attributable to Ferrellgas Partners, L.P. of ~~$1.8 million, compared to net earnings attributable to Ferrellgas Partners L.P. of $38.1~~$66.8 million during the three months ended ~~January 31, 2017.~~

Our propane operations and related equipment sales segment generated operating income of $101.8 million during the three months ended January 31, 2018, compared to operating income of $95.3 million during the three months ended January 31, 2017. Due to the seasonal nature of demand for propane, sales volumes of our propane operations and related equipment sales segment typically are higher during the second and third quarters of the fiscal year than during the first and fourth quarters of the fiscal year. The increase in operating income resulted from a $27.0 million increase in gross margin largely offset by a

~~$10.7 million increase in operating expenses and a $10.0 million impairment of goodwill related to an immaterial reporting unit.~~

Our midstream operations segment generated an operating loss of $42.3 million during the three months ended January 31, 2018 compared to an operating loss of $4.4 million during the three months ended January 31, 2017.April 30, 2021. This increase was primarily driven by $109.9 million in ~~operating loss is primarily due to a $35.5~~“Loss on extinguishment of debt” and $9.0 million ~~loss on~~in “Reorganization expense – professional fees,” both of which were recorded in the ~~disposal of rail car assets recognized in fiscal 2018.~~

~~Corporate operations recognized~~prior year period, and an operating loss of $19.4 million during the three months ended January 31, 2018, compared to an operating loss of $15.8 million recognized during the three months ended January 31, 2017. This increase in operating loss is primarily due to a $4.5 million increase in legal costs, partially offset by a $1.0$18.2 million decrease in ~~corporate personnel costs.~~

“Interest expense”.

“Interest expense” for Ferrellgas ~~increased $5.9~~Partners decreased $18.2 million primarily due to ~~increased~~(i) a decrease in interest ~~rates~~ on the ~~secured credit facility and accounts receivable securitization facility, as well as increased interest rates associated with the $175.0 million of debt issued by~~ Ferrellgas Partners Notes and (ii) lower interest expense in ~~January 2017, which replaced~~2022 as a ~~portion~~result of the ~~borrowings under the secured credit facility.~~

March 30, 2021 refinancing transactions.

Distributable cash flow attributable to equity investors increased to ~~$79.2~~$86.4 million for the three months ended April 30, 2022 compared to $78.5 million for the prior year period, primarily due to a $12.1 million decrease in net cash interest expense, which was partially offset by a $2.1 million decrease in Adjusted EBITDA, a $1.4 million increase in maintenance capital expenditures and a $0.6 million decrease in proceeds from asset sales.

Distributable cash flow excess was flat at $69.0 million in the current period ~~from~~compared to $68.9 million in the prior year period, primarily due to ~~a $15.6~~the $7.9 million increase in ~~our Adjusted EBITDA,~~distributable cash flow attributable to equity investors noted above, partially offset by a ~~$5.0~~$7.7 million increase in ~~net cash interest expense.~~

~~Distributable cash flow excess increased~~distributions accrued or paid to $67.9 million in the current period from $57.8 million in the prior period, primarily due to a $15.6 million increase in our Adjusted EBITDA, partially offset by a $5.0 million increase in net cash interest expense.

preferred unitholders.

For the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~

2021

During the ~~six~~nine months ended ~~January 31, 2018,~~April 30, 2022, we ~~generated~~recognized net earnings attributable to Ferrellgas Partners, L.P. of $167.4 million, compared to net loss attributable to Ferrellgas Partners, L.P. of ~~$49.8 million, compared to $5.0~~$49.6 million during the ~~six~~nine months ended ~~January 31, 2017.~~

~~Our propane operations~~April 30, 2021. This increase primarily reflects $109.9 million in “Loss on extinguishment of debt” and ~~related equipment sales segment generated operating income~~$10.2 million in “Reorganization expense – professional fees,” both of ~~$113.0~~which were recorded in the prior year period, and a $74.5 million during the six months ended January 31, 2018, compared to operating income of $111.9 million during the six months ended January 31, 2017. Due to the seasonal nature of demand for propane, sales volumes of our propane operationsdecrease in “Interest expense” and related equipment sales segment typically are higher during the second and third quarters of the fiscal year than during the first and fourth quarters of the fiscal year. The slight increase in operating income resulted from the $27.5a $23.9 million increase in ~~gross margin being largely offset by a $17.1 million increase in operating expenses and a $10.0 million impairment of goodwill related to an immaterial reporting unit.~~

Our midstream operations segment generated an operating loss of $45.1 million during the six months ended January 31, 2018 compared to an operating loss of $11.9 million during the six months ended January 31, 2017. This increase in operating loss is primarily due to a $35.5 million loss on disposal of rail car assets recognized in fiscal 2018.

Corporate operations recognized an operating loss of $35.5 million during the six months ended January 31, 2018, compared to an operating loss of $33.9 million recognized during the six months ended January 31, 2017. This increase in operating loss is primarily due to a $6.1 million increase in legal costs, partially offset by $2.0 million of decreased non-cash compensation charges and a $2.7 million decrease in corporate personnel costs.

“Operating income.”

“Interest expense” for Ferrellgas ~~increased $11.2~~Partners decreased $74.5 million primarily due to ~~increased~~(i) a decrease in interest ~~rates~~ on the ~~secured credit facility and accounts receivable securitization facility, as well as increased interest rates associated with the $175.0 million of debt issued by~~ Ferrellgas Partners Notes and (ii) lower interest expense in ~~January 2017, which replaced~~2022 as a ~~portion~~result of the ~~borrowings under the secured credit facility.~~

March 30, 2021 refinancing transactions.

The $23.9 million increase in “Operating income” was primarily attributable to a $47.7 million increase in “Gross margin,” a $9.4 million decrease in “General and administrative expenses,” and an $8.8 million increase in “(Gain) loss on asset sales and disposals, which was partially offset by a $43.5 million increase in “Operating expense – personnel, vehicle, plant and other.”

Distributable cash flow attributable to equity investors ~~of $59.9~~increased to $223.1 million infor the ~~current period decreased from $62.7~~nine months ended April 30, 2022 compared to $145.0 million infor the prior year period, primarily due to a ~~$9.5~~$65.3 million ~~increase~~decrease in net cash interest expense ~~a $6.3~~and an $11.9 million increase in ~~maintenance capital expenditures, partially offset by a $12.8 million increase in our~~ Adjusted EBITDA. ~~The increase in maintenance capital expenditures was primarily for the purchase of new propane delivery trucks.~~

Distributable cash flow excess ~~increased~~decreased to ~~$39.3~~$119.6 million in the current period from ~~$1.9~~$134.1 million in the prior year period, primarily due to a ~~$40.1~~$50.0 million ~~decrease in distributions~~distribution paid to ~~common unitholders~~Class B Unitholders in the first fiscal quarter and a ~~$12.8~~$41.0 million increase in ~~our Adjusted EBITDA,~~distributions accrued or paid to preferred unitholders, partially offset by ~~a $9.5~~the $78.1 million increase in ~~net~~distributable cash ~~interest expense and a $6.3 million increase in maintenance capital expenditures.~~flow attributable to equity investors noted above.

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Consolidated Results of Operations


	Three months ended April 30,				Nine months ended April 30,
(amounts in thousands)	2022		2021		2022		2021
Total revenues	$	647,543	$	564,730	$	1,726,987	$	1,419,184

Total cost of sales		366,134		301,371		977,052		716,946

Operating expense - personnel, vehicle, plant and other		147,293		124,624		392,418		348,898
Depreciation and amortization expense		23,067		21,281		65,306		63,920
General and administrative expense		10,962		15,205		39,321		48,760
Operating expense - equipment lease expense		5,775		6,770		17,487		20,462
Non-cash employee stock ownership plan compensation charge		776		811		2,436		2,281
(Gain) loss on asset sales and disposals		1,299		1,345		(6,566)		2,238
Operating income		92,237		93,323		239,533		215,679
Interest expense		(23,965)		(42,189)		(74,499)		(149,010)
Loss on extinguishment of debt		—		(109,922)		—		(109,922)
Other income, net		99		553		4,406		4,169
Reorganization expense - professional fees		—		(9,007)		—		(10,207)
Earnings (loss) before income taxes		68,371		(67,242)		169,440		(49,291)
Income tax expense		248		193		825		606
Net earnings (loss)		68,123		(67,435)		168,615		(49,897)
Net earnings (loss) attributable to noncontrolling interest		537		(641)		1,230		(308)
Net earnings (loss) attributable to Ferrellgas Partners, L.P.	$	67,586	$	(66,794)	$	167,385	$	(49,589)

Three months ended January 31, Six months ended January 31,
(amounts in thousands) 2018 2017 2018 2017
Total revenues $ 755,156
$ 579,250
$ 1,209,811
$ 958,792

Total cost of sales 490,772
342,710
792,114
568,310

Operating expense 123,716
113,076
234,178
218,162
Depreciation and amortization expense 25,485
25,607
51,217
51,809
General and administrative expense 14,891
12,279
28,055
26,548
Equipment lease expense 6,954
7,416
13,695
14,765
Non-cash employee stock ownership plan compensation charge 4,031
2,945
7,993
6,699
Asset impairments 10,005
—
10,005
—
Loss on asset sales and disposals 39,249
45
40,144
6,468
Operating income 40,053
75,172
32,410
66,031
Interest expense (42,673 ) (36,819 ) (83,480 ) (72,247 )
Other income, net 684
763
1,195
1,271
Earnings (loss) before income taxes (1,936 ) 39,116
(49,875 ) (4,945 )
Income tax expense (benefit) (162 ) 588
215
(2 )
Net earnings (loss) (1,774 ) 38,528
(50,090 ) (4,943 )
Net earnings (loss) attributable to noncontrolling interest 69
430
(332 ) 32
Net earnings (loss) attributable to Ferrellgas Partners, L.P. (1,843 ) 38,098
(49,758 ) (4,975 )
Less: General partner's interest in net earnings (loss) (19 ) 381
(498 ) (50 )
Common unitholders' interest in net earnings (loss) $ (1,824 ) $ 37,717
$ (49,260 ) $ (4,925 )

Non-GAAP Financial Measures

In this Quarterly Report we present ~~three primary non-GAAP~~the following Non-GAAP financial measures: Adjusted EBITDA, Distributable cash flow attributable to equity investors, ~~and~~ Distributable cash flow attributable to ~~common unitholders.~~

Class A and B Unitholders, and Distributable cash flow excess.

Adjusted EBITDA. Adjusted EBITDA for Ferrellgas Partners is calculated as net earnings (loss) attributable to Ferrellgas Partners, L.P., ~~less~~plus the sum of the following: income tax expense, ~~(benefit),~~ interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, ~~non-cash stock-based compensation charge, asset impairments,~~(gain) loss on asset sales and disposals, loss on extinguishment of debt, other income, net, reorganization expense – professional fees, severance costs, ~~professional~~legal fees ~~incurred~~and settlements related to ~~a lawsuit, unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments,~~non-core businesses, provision for doubtful accounts related to non-core businesses, and net earnings (loss) attributable to noncontrolling interest. Management believes the presentation of this measure is relevant and useful because it allows investors to view the ~~partnership's~~partnership’s performance in a manner similar to the method management uses, adjusted for items management believes ~~makes~~make it easier to compare its results with other companies that have different financing and capital structures. Adjusted EBITDA, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of Adjusted EBITDA that will not occur on a continuing basis may have associated cash payments. This method of calculating Adjusted EBITDA ~~may not be consistent with that of other companies and~~ should be viewed in conjunction with measurements that are computed in accordance with GAAP.

Distributable Cash Flow Attributable to Equity Investors. Distributable cash flow attributable to equity investors is calculated as Adjusted EBITDA minus net cash interest expense, maintenance capital expenditures and cash paid for income taxes, plus proceeds from certain asset sales. Management considers distributable cash flow attributable to equity investors a meaningful measure of ~~the partnership’s~~Ferrellgas’ ability to declare and pay quarterly distributions to equity ~~investors.~~investors, including holders of the operating partnership’s Preferred Units. Distributable cash flow attributable to equity investors, as management defines it, may not be comparable to ~~distributable cash flow attributable to equity investors or~~ similarly titled measurements used by other ~~corporations and partnerships.~~companies. Items added into our calculation of distributable cash flow attributable to equity investors that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to equity investors ~~may not be consistent with that of other companies and~~ should be viewed in conjunction with measurements that are computed in accordance with GAAP.

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Distributable Cash Flow Attributable to ~~Common~~Class A and B Unitholders. Distributable cash flow attributable to ~~common unitholders~~Class A and B Unitholders is calculated as Distributable cash flow attributable to equity investors minus distributions accrued or paid to Preferred Unitholders and distributable cash flow attributable to general partner and noncontrolling interest. Management considers ~~distributable~~Distributable cash flow attributable to ~~common unitholders~~Class A and B Unitholders a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to ~~common unitholders.~~Class A and B Unitholders. Distributable cash flow attributable to ~~common unitholders,~~Class A and B Unitholders, as management defines it, may not be comparable to ~~distributable cash flow attributable to common unitholders or~~ similarly titled measurements used by other ~~corporations and partnerships.~~companies. Items added into our calculation of distributable cash flow attributable to ~~common unitholders~~Class A and B Unitholders that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to ~~common unitholders may not be consistent with that of other companies~~Class A and B Unitholders should be viewed in conjunction with measurements that are computed in accordance with GAAP.

Distributable Cash Flow Excess. Distributable cash flow excess is calculated as Distributable cash flow attributable to Class A and B Unitholders minus Distributions paid to Class A and B Unitholders. Distributable cash flow excess, if any, is retained to establish reserves, to reduce debt, to fund capital expenditures and for other partnership purposes and any shortage is funded from previously established reserves, cash on hand or borrowings under our Credit Facility or, previously, under our terminated accounts receivable securitization facility. Management considers Distributable cash flow excess a meaningful measure of the partnership’s ability to effectuate those purposes. Distributable cash flow excess, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of distributable cash flow excess that will not occur on a continuing basis may have associated cash payments. Distributable cash flow excess should be viewed in conjunction with measurements that are computed in accordance with GAAP.

Table of Contents

The following table ~~summarizes EBITDA,~~reconciles Adjusted EBITDA, Distributable cash flow attributable to equity investors, ~~and~~ Distributable cash flow attributable to ~~common unitholders~~Class A and B Unitholders and Distributable cash flow excess to Net earnings (loss) attributable to Ferrellgas Partners, L.P., the most directly comparable GAAP measure, for the three and ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017, respectively:~~

2021:


	Three months ended April 30,				Nine months ended April 30,
(amounts in thousands)	2022		2021		2022		2021
Net earnings (loss) attributable to Ferrellgas Partners, L.P.	$	67,586	$	(66,794)	$	167,385	$	(49,589)
Income tax expense		248		193		825		606
Interest expense		23,965		42,189		74,499		149,010
Depreciation and amortization expense		23,067		21,281		65,306		63,920
EBITDA		114,866		(3,131)		308,015		163,947
Non-cash employee stock ownership plan compensation charge		776		811		2,436		2,281
(Gain) loss on asset sales and disposals		1,299		1,345		(6,566)		2,238
Loss on extinguishment of debt		—		109,922		—		109,922
Other income, net		(99)		(553)		(4,406)		(4,169)
Reorganization expense - professional fees		—		9,007		—		10,207
Severance costs		49		—		546		1,761
Legal fees and settlements related to non-core businesses		(303)		2,436		4,635		8,572
Provision for doubtful accounts related to non-core businesses		—		—		—		(500)
Net earnings (loss) attributable to noncontrolling interest		537		(641)		1,230		(308)
Adjusted EBITDA		117,125		119,196		305,890		293,951
Net cash interest expense (a)		(25,654)		(37,757)		(72,393)		(137,716)
Maintenance capital expenditures (b)		(5,477)		(4,058)		(13,116)		(14,517)
Cash paid for income taxes		(243)		(133)		(650)		(438)
Proceeds from certain asset sales		642		1,270		3,368		3,707
Distributable cash flow attributable to equity investors		86,393		78,518		223,099		144,987
Less: Distributions accrued or paid to preferred unitholders		15,715		8,011		49,037		8,011
Distributable cash flow attributable to general partner and non-controlling interest		(1,720)		(1,571)		(4,462)		(2,900)
Distributable cash flow attributable to Class A and B unitholders		68,958		68,936		169,600		134,076
Less: Distributions paid to Class A and B unitholders		—		—		49,998		—
Distributable cash flow excess	$	68,958	$	68,936	$	119,602	$	134,076

Three months ended January 31, Six months ended January 31,
(amounts in thousands) 2018 2017 2018 2017
Net earnings (loss) attributable to Ferrellgas Partners, L.P. $ (1,843 ) $ 38,098
$ (49,758 ) $ (4,975 )
Income tax expense (benefit) (162 ) 588
215
(2 )
Interest expense 42,673
36,819
83,480
72,247
Depreciation and amortization expense 25,485
25,607
51,217
51,809
EBITDA 66,153
101,112
85,154
119,079
Non-cash employee stock ownership plan compensation charge 4,031
2,945
7,993
6,699
Non-cash stock-based compensation charge —
1,417
—
3,298
Asset impairments 10,005
—
10,005

—
Loss on asset sales and disposals 39,249
45
40,144
6,468
Other income, net (684 ) (763 ) (1,195 ) (1,271 )
Severance costs —
490
1,663
1,959
Professional fees (d) 2,118
—
2,118
—
Unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments (314 ) (646 ) 1,293
(2,215 )
Net earnings (loss) attributable to noncontrolling interest 69
430
(332 ) 32
Adjusted EBITDA 120,627
105,030
146,843
134,049
Net cash interest expense (a) (39,734 ) (34,712 ) (77,791 ) (68,330 )
Maintenance capital expenditures (b) (4,640 ) (3,754 ) (13,344 ) (7,076 )
Cash paid for taxes (6 ) (25 ) (12 ) (26 )
Proceeds from asset sales 2,999
2,313
4,207
4,033
Distributable cash flow attributable to equity investors 79,246
68,852
59,903
62,650
Distributable cash flow attributable to general partner and non-controlling interest 1,585
1,377
1,198
1,253
Distributable cash flow attributable to common unitholders 77,661
67,475
58,705
61,397
Less: Distributions paid to common unitholders 9,716
9,715
19,431
59,506
Distributable cash flow excess (c) $ 67,945
$ 57,760
$ 39,274
$ 1,891


(a)	Net cash interest expense is the sum of interest expense less non-cash interest expense and other income, ~~(expense),~~ net. This amount includes interest expense related to the terminated accounts receivable securitization facility.


(b)	Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and ~~equipment.~~equipment, and may from time to time include the purchase of assets that are typically leased.


~~(c)~~	Distributable cash flow excess is retained to establish reserves for future distributions, reduce debt, fund capital expenditures and for other partnership purposes. Distributable cash flow shortages are funded from previously established reserves, cash on hand or borrowings under our secured credit facility or accounts receivable securitization facility.


~~(d)~~	~~Professional fees incurred related to a lawsuit.~~

~~Segment~~

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Operating Results for the three months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~

~~Items Impacting the Comparability of Our Financial Results~~

Our current and future results of operations may not be comparable to our historical results of operations for the periods presented due to the following transactions. In January 2018, we completed the sale of Bridger Energy, LLC, a subsidiary of Bridger Logistics, which is a subsidiary of Ferrellgas, L.P. After January 2018, we will no longer report oil purchase and sale activity within the midstream reporting segment. In February 2018, we announced the sale of 1,072 rail cars from our crude oil logistics operations. Most of these rail cars were in storage and incurring storage fees, while fewer were leased to a

~~third party under a multi-year contract. The sale of these rail cars will not significantly affect future revenues or operating income within the midstream reporting segment.~~

~~Propane operations and related equipment sales~~

2021

The following table summarizes propane sales volumes and ~~the~~ Adjusted EBITDA results ~~of our propane operations and related equipment sales segment~~ for the periods indicated:


	2022		2021		Increase (Decrease)
As of April 30,
Retail customers		695,287		721,562		(26,275)	(4)	%
Tank exchange selling locations		60,663		62,372		(1,709)	(3)	%

(amounts in thousands)
Three months ended April 30,
Propane sales volumes (gallons):
Retail - Sales to End Users		198,783		200,028		(1,245)	(1)	%
Wholesale - Sales to Resellers		52,943		60,128		(7,185)	(12)	%
		251,726		260,156		(8,430)	(3)	%
Revenues -
Propane and other gas liquids sales:
Retail - Sales to End Users	$	478,807	$	392,838	$	85,969	22	%
Wholesale - Sales to Resellers		137,148		140,015		(2,867)	(2)	%
Other Gas Sales (a)		6,256		9,183		(2,927)	(32)	%
Other (b)		25,332		22,694		2,638	12	%
Propane and related equipment revenues	$	647,543	$	564,730	$	82,813	15	%

Gross Margin -
Propane and other gas liquids sales gross margin: (c)
Retail - Sales to End Users (a)	$	200,222	$	181,000	$	19,222	11	%
Wholesale - Sales to Resellers (a)		59,031		62,650		(3,619)	(6)	%
Other (b)		22,156		19,709		2,447	12	%
Propane and related equipment gross profit	$	281,409	$	263,359	$	18,050	7	%

Operating, general and administrative expense (d)	$	158,255	$	139,829	$	18,426	13	%
Operating expense - equipment lease expense		5,775		6,770		(995)	(15)	%

Operating income	$	92,237	$	93,323	$	(1,086)	(1)	%

Depreciation and amortization expense		23,067		21,281		1,786	8	%
Non-cash employee stock ownership plan compensation charge		776		811		(35)	(4)	%
(Gain) loss on asset sales and disposals		1,299		1,345		(46)	(3)	%
Legal fees and settlements related to non-core businesses		(303)		2,436		(2,739)	(112)	%
Severance costs		49		—		49	NM
Adjusted EBITDA	$	117,125	$	119,196	$	(2,071)	(2)	%

(amounts in thousands)
Three months ended January 31, 2018 2017 Increase (Decrease)
Propane sales volumes (gallons):
Retail - Sales to End Users 235,071
201,580
33,491
17 %
Wholesale - Sales to Resellers 74,942
66,152
8,790
13 %
310,013
267,732
42,281
16 %

Revenues -
Propane and other gas liquids sales:
Retail - Sales to End Users $ 417,472
$ 313,169
$ 104,303
33 %
Wholesale - Sales to Resellers 128,654
103,223
25,431
25 %
Other Gas Sales (a) 46,113
20,983
25,130
120 %
Other (b) 45,641
45,088
553
1 %
Propane and related equipment revenues $ 637,880
$ 482,463
$ 155,417
32 %

Gross Margin -
Propane and other gas liquids sales: (c)
Retail - Sales to End Users (a) $ 182,129
$ 158,369
$ 23,760
15 %
Wholesale - Sales to Resellers (a) 47,192
43,977
3,215
7 %
Other (b) 24,854
24,431
423
2 %
Propane and related equipment gross margin $ 254,175
$ 226,777
$ 27,398
12 %

Operating, general and administrative expense (d) $ 117,306
$ 106,651
$ 10,655
10 %
Equipment lease expense 6,375
6,704
(329 ) (5 )%

Operating income $ 101,767
$ 95,332
$ 6,435
7 %
Depreciation and amortization expense 18,167
18,017
150
1 %
Loss on asset sales and disposals 555
73
482
660 %
Asset impairments
10,005

—

10,005

NM
Unrealized (non-cash) gains on changes in fair value of derivatives not designated as hedging instruments —
(1,134 ) 1,134
100 %
Adjusted EBITDA $ 130,494
$ 112,288
$ 18,206
16 %

NM – Not meaningful

(a)	Gross margin for “Other Gas Sales” is allocated to Gross margin "Retail - Sales to End Users" and "Wholesale - Sales to Resellers" based on the volumes in each respective category.

(b)	“Other” primarily includes various customer fee income and to a lesser extent appliance and material sales.

(c)	Gross margin from "Propane and other gas liquids sales" represents "Revenues - Propane and other gas liquids sales" less "Cost of sales - Propane and other gas liquids sales" and does not include depreciation and amortization.

(d)	“Operating, general and administrative expense” above includes both the “Operating expense – personnel, vehicle, plant and other” and the “General and administrative expense” captions in the condensed consolidated statement of operations.

~~(a) Gross margin for Other Gas Sales is allocated to Gross margin "Retail - Sales to End Users" and "Wholesale - Sales to Resellers" based on the volumes in each respective category.~~

~~(b) Other primarily includes appliance and material sales, and to a lesser extent various customer fee income.~~

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(c) Gross margin from "Propane and other gas liquids sales" represents "Revenues - Propane and other gas liquids sales" less "Cost of sales - Propane and other gas liquids sales" and does not include depreciation and amortization.

(d) Operating, general, and administrative expenses are included in the calculation of Adjusted EBITDA. General and administrative expenses include only certain items that were directly attributable to the ~~propane operations and related equipment sales~~ ~~segment.~~

Propane sales volumes during the three months ended ~~January 31, 2018 increased 16%~~April 30, 2022 decreased 3%, or ~~42.3~~8.4 million gallons, from ~~that of~~ the prior year period primarily due to ~~33.5 million and 8.8 million of increased gallon~~decreased sales volumes to ~~retail and wholesale~~tank exchange customers ~~respectively.~~

~~Weather in the more highly concentrated geographic areas we serve for the three months ended January 31, 2018 was approximately 5% warmer than normal, but 12% colder than~~primarily due to the prior year ~~period. Retail and wholesale gallons increased due~~favorable impact of outdoor living. Based on a ten-year average, weather was relatively stable at only a 0.1% decrease in weighted-average degree days for the third fiscal quarter compared to ~~a combination of efforts to increase market share and colder weather.~~

normal average temperatures.

Our wholesale sales price per gallon ~~largely~~partially correlates to the change in the wholesale market price of propane. The wholesale market price at major supply points in Mt. Belvieu, Texas ~~and Conway, Kansas~~ during the three months ended ~~January 31, 2018~~April 30, 2022 averaged ~~46% and 45% greater~~53% more than the prior year period, ~~respectively.~~while at the Conway, Kansas major supply point prices averaged 50% more than the prior year period. The wholesale market price at Mt. Belvieu, Texas averaged ~~$0.95~~$1.36 and ~~$0.65~~$0.89 per gallon during the three months ended ~~January 31, 2018~~April 30, 2022 and ~~2017,~~2021, respectively, while the wholesale market price at Conway, Kansas averaged ~~$0.90~~$1.32 and ~~$0.62~~$0.88 per gallon during the three months ended ~~January 31, 2018~~April 30, 2022 and ~~2017,~~2021, respectively.

~~Revenues~~

~~Retail sales increased $104.3 million compared to the prior period.~~ This increase ~~resulted from a $52.3 million~~in the wholesale cost of propane contributed to our increase in sales price per gallon and ~~$52.0 million from increased sales volumes, both as discussed above.~~

~~Wholesale~~therefore revenues.

Revenues

Retail sales increased ~~$25.4 million compared to the prior period. This increase resulted from a $13.9 million increase in sales volumes and an $11.5 million increase in sales price per gallon, both as discussed above.~~

~~Other gas sales increased $25.1 million compared to the prior year period due to both an increase in sales volumes and sales price per gallon, as discussed above.~~

~~Other revenues increased $0.6~~$86.0 million compared to the prior year period primarily due to ~~an increase~~our strategic initiatives in the right-timed delivery of gallons. This includes using new monitoring technology that allows us to provide more gallons at each stop, thereby optimizing the use of our labor force and vehicle fleet and our fuel efficiency.

Wholesale sales decreased $2.9 million compared to the prior year period as a result of ~~certain lower margin equipment.~~

a decrease in tank exchange revenue primarily due to the prior year favorable impact of outdoor living.

Other gas sales decreased $2.9 million compared to the prior year period primarily due to a decrease in sales volume.

Other revenues increased $2.6 million compared to the prior year period primarily due to revenue from services to customers provided in support of final mile operations.

Gross margin - Propane and other gas liquids sales

Gross margin increased ~~$27.0~~$15.6 million primarily due to ~~the 42.3~~an $80.2 million increase in ~~gallon~~revenue, as discussed above, offset by a $64.6 million increase in related cost of sales as ~~discussed above,~~a result of increases in price per gallon. Margin per gallon for the quarter increased by $0.09, or 10%, compared to the prior year period.

Gross margin - other

Gross margin increased $2.4 million compared to the prior year period primarily due to increased miscellaneous fees billed to customers and increased tank rental income.

Operating income

Operating income decreased $1.1 million primarily due to an $18.4 million increase in “Operating general and administrative expense,” which is partially offset by a slight decrease in gross margin per gallon. The increase in retail gross margin of $23.8 million resulted from efforts to increase market share and to a lesser extent colder weather. The increase in wholesale gross margin primarily relates to increased volumes related to colder weather, partially offset by decreased gross margin per gallon.

~~Operating income~~

~~Operating income increased $6.4 million primarily due to a $27.0~~$15.6 million increase in ~~Gross~~"Gross margin - Propane and other gas liquid ~~sales,~~sales" and a $2.4 million increase in “Gross margin – other,” both as discussed above.

“Operating, general and administrative expense” increased due to a $22.7 million increase in “Operating expense – personnel, vehicle, plant and other,” partially offset by a ~~$10.7~~$4.2 million ~~increase~~decrease in ~~"Operating, general~~“General and administrative ~~expense"~~expense.” “Operating expense – personnel, vehicle, plant and ~~a $10.0 million "Asset impairments". "Operating, general and administrative expense"~~other” increased primarily due to ~~a $5.6 million increase in personnel~~higher fleet costs and fuel costs. Operating expenses as a ~~$3.8~~percentage of total revenue were approximately 1% higher than the prior year period due to higher fuel costs, higher fleet costs, and wage increases. Cost of sales also had an unfavorable increase of $64.8 million ~~increase in vehicle costs, both related~~or 21% compared to the ~~increase in gallons sold as discussed above,~~prior year period driven by inflationary costs for materials and ~~a $1.3 million increase in bad debt expense. The "Asset impairments" relates to an impairment of goodwill of an immaterial reporting unit.~~

other commodities.

Adjusted EBITDA

Adjusted EBITDA ~~increased $18.2~~decreased $2.1 million primarily due to a $27.0 million increase in Gross margin - Propane and other gas liquid sales, partially offset by a $9.5 million increase in "Operating, general and administrative expense"" "Operating, general and administrative expense" increased primarily due to a $5.6 million increase in personnel costs and a $2.7 million increase in vehicle costs, both relatedfor the third fiscal quarter compared to the ~~increase~~prior year period.Excluding the impact of approximately $5.0 million in ~~gallons sold as discussed above and a $1.3 million increase in bad debt expense.~~

~~Midstream operations~~

~~The following table summarizes the volume of product hauled, sold and processed, as well as Adjusted EBITDA results of our midstream operations segment for the periods indicated:~~

(amounts in thousands)
Three months ended January 31, 2018 2017 Increase (Decrease)
Volumes (barrels):
Crude oil hauled 11,065
13,005
(1,940 ) (15 )%
Crude oil sold 1,556
1,326
230
17 %
Salt water volume processed 4,851
4,002
849
21 %

Revenues -
Crude oil and other logistics $ 15,886
$ 19,573
$ (3,687 ) (19 )%
Crude oil sales 97,646
74,794
22,852
31 %
Other 3,744
2,510
1,234
49 %

$ 117,276
$ 96,877
$ 20,399
21 %

Gross margin - (a)

Crude oil and other logistics $ 6,550
$ 3,829
$ 2,721
71 %
Crude oil sales 2,365
4,888
(2,523 ) (52 )%
Other 1,294
1,046
248
24 %

$ 10,209
$ 9,763
$ 446
5 %

Operating, general, and administrative expenses (b) $ 7,464
$ 7,041
$ 423
6 %
Equipment lease expense 84
141
(57 ) (40 )%

Operating loss $ (42,299 ) $ (4,400 ) $ (37,899 ) NM
Depreciation and amortization expense 6,266
7,009
(743 ) (11 )%
Loss (gain) on asset sales and disposals 38,694
(28 ) 38,722
NM
Unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments (314 ) 488
(802 ) NM
Adjusted EBITDA $ 2,347
$ 3,069
$ (722 ) (24 )%

~~NM - Not meaningful~~

~~(a) Gross margin represents "Revenues - Midstream operations" less "Cost of sales - Midstream operations" and does not include depreciation and amortization.~~

(b) Operating, general, and administrative expenses are included in the calculation of Adjusted EBITDA. General and administrative expenses include only certain items that were directly attributable to the midstream operations segment.

~~Crude oil hauled~~legal settlements during the ~~three months ended January 31, 2018 decreased 15%, or 1.9 million barrels, from that of the prior period primarily due to decreased short haul trucking volumes.~~

~~Revenues~~

~~Crude oil sales~~third fiscal quarter, adjusted EBITDA would have increased ~~31% or $22.9~~$2.9 million compared to the prior period, while crude oil and other logistics revenue decreased 19% or $3.7 million. The increase in crude oil sales reflects $13.0 million related to the increase in the crude oil volumes sold and a $9.9 million increase due to the increase in the market priceyear period.

Table of ~~crude oil. The decrease in crude oil and other logistics revenues is driven by the trucking industry related labor shortages.~~Contents

~~Gross margin~~

Gross margin increased 5% or $0.4 million compared to the prior period, primarily due to a $2.7 million increase related to crude oil and other logistics hauling, partially offset by a $2.5 million decrease related to crude oil sales. Despite decreased volumes and revenues, crude oil and other logistics gross margin increased primarily due to the benefits from the cessation of barge operations related to a transportation and logistics agreement with Jamex Marketing, LLC (the "Jamex TLA"). Crude oil sales gross margin decreased primarily due to smaller margins on contracted physical crude deals from market conditions in the Niobrara region.

~~Operating loss~~

Operating loss increased by $37.9 million during the three months ended January 31, 2018 as compared to the three months ended January 31, 2017. This increase in operating loss was primarily due to a $35.5 million loss on disposal of rail car assets recognized in fiscal 2018, partially offset by a $0.4 million decrease in gross margin as discussed above.

~~Adjusted EBITDA~~

~~Adjusted EBITDA decreased $0.7 million primarily due to $0.4 million decrease in gross margin, as discussed above.~~

~~Corporate~~

~~The following table summarizes the financial results of our corporate operations for the periods indicated:~~

(amounts in thousands)
Three months ended January 31, 2018 2017 Increase (Decrease)

Operating, general and administrative expense (a) $ 13,837
$ 11,664
$ 2,173
19 %
Equipment lease expense 495
570
(75 ) (13 )%

Operating loss $ (19,415 ) $ (15,760 ) $ (3,655 ) (23 )%
Depreciation and amortization expense 1,052
581
471
81 %
Non-cash employee stock ownership plan compensation charge 4,031
2,945
1,086
37 %
Non-cash stock based compensation charge —
1,417
(1,417 ) (100 )%
Severance costs —
490
(490 ) NM
Professional fees (b) 2,118
—
2,118
NM
Adjusted EBITDA $ (12,214 ) $ (10,327 ) $ (1,887 ) (18 )%

~~(a) Some general and administrative expenses have been allocated to other segments.~~

~~(b)~~ ~~Professional fees incurred related to a lawsuit.~~

~~Operating loss~~

Corporate recognized an operating loss of $19.4 million during the three months ended January 31, 2018, compared to an operating loss of $15.8 million recognized during the three months ended January 31, 2017. This increase in operating loss is primarily due to a $4.5 million increase in legal costs, partially offset by a $1.0 million decrease in corporate personnel costs.

~~Adjusted EBITDA~~

The Adjusted EBITDA loss within "Corporate" increased by $1.9 million primarily due to $2.4 million in increased legal costs, partially offset by a $0.5 million reduction in corporate personnel expenses, both as discussed above.

~~Segment~~

Operating Results for the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~

~~Items Impacting the Comparability of Our Financial Results~~

~~Propane operations and related equipment sales~~

2021

The following table summarizes propane sales volumes and ~~the~~ Adjusted EBITDA results ~~of our propane operations and related equipment sales segment~~ for the periods indicated:



	2022		2021		Increase (Decrease)
As of April 30,
Retail customers		695,287		721,562		(26,275)	(4)	%
Tank exchange selling locations		60,663		62,372		(1,709)	(3)	%

(amounts in thousands)
Nine months ended April 30,
Propane sales volumes (gallons):
Retail - Sales to End Users		529,884		536,124		(6,240)	(1)	%
Wholesale - Sales to Resellers		158,955		176,970		(18,015)	(10)	%
		688,839		713,094		(24,255)	(3)	%
Revenues -
Propane and other gas liquids sales:
Retail - Sales to End Users	$	1,228,062	$	945,833	$	282,229	30	%
Wholesale - Sales to Resellers		405,713		381,357		24,356	6	%
Other Gas Sales (a)		18,644		24,329		(5,685)	(23)	%
Other (b)		74,568		67,665		6,903	10	%
Propane and related equipment revenues	$	1,726,987	$	1,419,184	$	307,803	22	%

Gross Margin -
Propane and other gas liquids sales gross margin: (c)
Retail - Sales to End Users (a)	$	521,132	$	464,343	$	56,789	12	%
Wholesale - Sales to Resellers (a)		164,578		180,386		(15,808)	(9)	%
Other (b)		64,225		57,509		6,716	12	%
Propane and related equipment gross profit	$	749,935	$	702,238	$	47,697	7	%

Operating, general and administrative expense (d)	$	431,739	$	397,658	$	34,081	9	%
Operating expense - equipment lease expense		17,487		20,462		(2,975)	(15)	%

Operating income	$	239,533	$	215,679	$	23,854	11	%

Depreciation and amortization expense		65,306		63,920		1,386	2	%
Non-cash employee stock ownership plan compensation charge		2,436		2,281		155	7	%
(Gain) loss on asset sales and disposals		(6,566)		2,238		(8,804)	NM
Legal fees and settlements related to non-core businesses		4,635		8,572		(3,937)	(46)	%
Provision for doubtful accounts related to non-core businesses		—		(500)		500	(100)	%
Severance costs		546		1,761		(1,215)	(69)	%
Adjusted EBITDA	$	305,890	$	293,951	$	11,939	4	%

(amounts in thousands)
Six months ended January 31, 2018 2017 Increase (Decrease)
Propane sales volumes (gallons):
Retail - Sales to End Users 354,365
312,768
41,597
13 %
Wholesale - Sales to Resellers 128,371
118,142
10,229
9 %
482,736
430,910
51,826
12 %

Revenues -
Propane and other gas liquids sales:
Retail - Sales to End Users $ 601,266
$ 461,786
$ 139,480
30 %
Wholesale - Sales to Resellers 227,083
187,442
39,641
21 %
Other Gas Sales (a) 66,648
30,546
36,102
118 %
Other (b) 76,778
74,187
2,591
3 %
Propane and related equipment other revenues $ 971,775
$ 753,961
$ 217,814
29 %

Gross Margin -
Propane and other gas liquids sales: (c)
Retail - Sales to End Users (a) $ 260,560
$ 239,754
$ 20,806
9 %
Wholesale - Sales to Resellers (a) 92,004
85,779
6,225
7 %
Other (b) 42,289
41,784
505
1 %
Propane and related equipment gross margin $ 394,853
$ 367,317
$ 27,536
7 %

Operating, general and administrative expense (d) $ 221,571
$ 204,510
$ 17,061
8 %
Equipment lease expense 12,580
13,277
(697 ) (5 )%

Operating income $ 112,979
$ 111,860
$ 1,119
1 %
Depreciation and amortization expense 36,255
36,150
105
— %
Loss on asset sales and disposals 1,463
1,520
(57 ) (4 )%
Asset impairments
10,005

—

10,005

NM
Severance costs 358
253
105
42 %
Unrealized (non-cash) gains on changes in fair value of derivatives not designated as hedging instruments —
(3,011 ) 3,011
NM
Adjusted EBITDA $ 161,060
$ 146,772
$ 14,288
10 %

NM – Not meaningful

(a)	Gross margin for “Other Gas Sales” is allocated to Gross margin "Retail - Sales to End Users" and "Wholesale - Sales to Resellers" based on the volumes in each respective category.

(b)	“Other” primarily includes various customer fee income and to a lesser extent appliance and material sales.

(c)	Gross margin from "Propane and other gas liquids sales" represents "Revenues - Propane and other gas liquids sales" less "Cost of sales - Propane and other gas liquids sales" and does not include depreciation and amortization.

(d)	“Operating, general and administrative expense” above includes both the “Operating expense – personnel, vehicle, plant and other” and the “General and administrative expense” captions in the condensed consolidated statement of operations.

~~(a) Gross margin for Other Gas Sales is allocated to Gross margin "Retail - Sales to End Users" and "Wholesale - Sales to Resellers" based on the volumes in each respective category.~~

~~(b) Other primarily includes appliance and material sales, and to a lesser extent various customer fee income.~~

Table of Contents

Propane sales volumes during the ~~six~~nine months ended ~~January 31, 2018 increased 12%~~April 30, 2022 decreased 3%, or ~~51.8~~24.3 million gallons, from ~~that of~~ the prior year period primarily due to ~~41.6 million and 10.2 million of increased gallon~~decreased sales volumes to ~~retail and wholesale~~tank exchange customers ~~respectively.~~

~~Weather in the more highly concentrated geographic areas we serve for the six months ended January 31, 2018 was approximately 7% warmer than normal, but 13% colder than~~primarily due to the prior year ~~period. Retail and wholesale gallons increased due~~favorable impact of outdoor living. Based on a ten-year average, weather was slightly below normal at a 5.0% decrease in weighted-average degree days for the nine months ended April 30, 2022 compared to ~~a combination of efforts to increase market share and colder weather.~~

normal average temperatures.

Our wholesale sales price per gallon ~~largely~~partially correlates to the change in the wholesale market price of propane. The wholesale market price at major supply points in Mt. Belvieu, Texas ~~and Conway, Kansas~~ during the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 averaged ~~58% and 62% greater~~83% more than the prior year period, ~~respectively.~~while at the Conway, Kansas major supply point prices averaged 87% more than the prior year period. The wholesale market price at Mt. Belvieu, Texas averaged ~~$0.90~~$1.26 and ~~$0.57~~$0.69 per gallon during the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017,~~2021, respectively, while the wholesale market price at Conway, Kansas averaged ~~$0.86~~$1.25 and ~~$0.53~~$0.67 per gallon during the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017,~~2021, respectively.

~~Revenues~~

~~Retail sales increased $139.5 million compared to the prior period.~~ This increase ~~resulted from a $78.1 million~~in the wholesale cost of propane contributed to our increase in sales price per gallon and ~~$61.4 million from increased sales volumes, both as discussed above.~~

~~Wholesale~~therefore revenues.

Revenues

Retail sales increased ~~$39.6~~$282.2 million compared to the prior ~~period. This~~year period due to continued focus on the management of the sales lifecycle, from asset utilization through final mile optimization and the strategic initiatives described above.

Wholesale sales increased $24.4 million compared to the prior year period as a result of an increase ~~resulted~~in volume in non-retail opportunities.

Other gas sales decreased $5.7 million compared to the prior year period primarily due to a decrease in sales volume.

Other revenues increased $6.9 million compared to the prior year period primarily due to revenue from services to customers provided in support of final mile operations.

Gross margin - Propane and other gas liquids sales

Gross margin increased $41.0 million primarily due to a ~~$23.4~~$300.9 million increase in revenue, as discussed above, offset by a $259.9 million increase in related cost of sales as a result of increases in price per gallon and ~~$16.2 million from~~ increased ~~sales volumes, both as discussed above.~~

~~Other gas sales~~costs for materials due to high inflationary costs.

Gross margin - other

Gross margin increased ~~$36.1~~$6.7 million compared to the prior year period primarily due to increased ~~sales price per gallon~~miscellaneous fees billed to customers and increased tank rental income.

Operating income

Operating income increased $23.9 million primarily due to a ~~lesser extent an~~$41.0 million increase in ~~sales volumes,~~"Gross margin - Propane and other gas liquid sales" and a $6.7 million increase in “Gross margin – other,” both as discussed ~~above.~~

~~Other revenues~~above, an $8.8 million increase in “(Gain) loss on asset sales and disposals” and a $3.0 million decrease in “Operating expense – equipment lease expense,” partially offset by a $34.1 million increase in “Operating, general and administrative expense”. The $8.8 million increase in “(Gain) loss on asset sales and disposals primarily related to the derecognition of a lease liability and the related asset. The decrease in “Operating expense – equipment lease expense” was due to our entering into more finance leases instead of operating leases, resulting in less lease expense and greater interest expense and amortization expense. “Operating, general and administrative expense” increased ~~$2.6~~due to a $43.5 million increase in “Operating expense – personnel, vehicle, plant and other,” partially offset by a $9.4 million decrease in “General and administrative expense”. “Operating expense – personnel, vehicle, plant and other” increased primarily due to planned increases for workforce and overtime costs and higher fleet expenses and fuel costs.

Adjusted EBITDA

Adjusted EBITDA increased $11.9 million primarily due to the $23.9 million increase in "Operating income," partially offset by the $8.8 million increase in “(Gain) loss on asset sales and disposals,” each as discussed above. Excluding the impact of approximately $5.0 million in legal settlements during the third fiscal quarter, adjusted EBITDA would have increased $16.9 million compared to the prior year ~~period, primarily due to an increase in the sales~~period.

Table of ~~certain lower margin equipment.~~Contents

~~Gross margin - Propane and other gas liquids sales~~

Gross margin increased $27.0 million primarily due to the 51.8 million increase in gallon sales as discussed above, partially offset by a slight decrease in gross margin per gallon. The increase in retail gross margin of $20.8 million resulted from efforts to increase market share and to a lesser extent colder weather, partially offset by a decrease in gross margin per gallon. The increase in wholesale gross margin primarily relates to increased volumes related to colder weather, partially offset by a slight decreased gross margin per gallon.

~~Operating income~~

Operating income increased $1.1 million primarily due to a $27.0 million increase in Gross margin - Propane and other gas liquids sales offset by a $17.1 million increase in "Operating, general and administrative expense" and a $10.0 million "Asset impairment". "Operating, general and administrative expense" increased primarily due to a $7.4 million increase in personnel costs and a $5.7 million increase in vehicle costs, both related to the increase in gallons sold as discussed above and a $1.9 million increase in bad debt expense. The "Asset impairments" relates to an impairment of goodwill of an immaterial reporting unit.

~~Adjusted EBITDA~~

Adjusted EBITDA increased $14.3 million primarily due to a $27.0 million increase in Gross margin - Propane and other gas liquids sales offset by a $13.9 million increase in "Operating, general and administrative expense." "Operating, general and administrative expense" increased primarily due to a $7.3 million increase in personnel costs related to the increase in gallons sold as discussed above, a $2.7 million increase in vehicle costs and a $1.9 million increase in bad debt expense.

~~Midstream operations~~

~~The following table summarizes the volume of product hauled, sold and processed, as well as Adjusted EBITDA results of our midstream operations segment for the periods indicated:~~

(amounts in thousands)
Six months ended January 31, 2018 2017 Increase (Decrease)
Volumes (barrels):
Crude oil hauled 23,215
24,269
(1,054 ) (4 )%
Crude oil sold 3,385
3,118
267
9 %
Salt water volume processed 9,791
7,705
2,086
27 %

Revenues -
Crude oil logistics $ 33,227
$ 40,614
$ (7,387 ) (18 )%
Crude oil sales 196,665
159,481
37,184
23 %
Other 8,144
4,736
3,408
72 %
$ 238,036
$ 204,831
$ 33,205
16 %

Gross margin (a)
Crude oil logistics $ 17,506
$ 10,994
$ 6,512
59 %
Crude oil sales 3,014
10,292
(7,278 ) (71 )%
Other 2,324
1,879
445
24 %
$ 22,844
$ 23,165
$ (321 ) (1 )%

Operating, general, and administrative expenses (b) $ 16,068
$ 15,578
$ 490
3 %
Equipment lease expense 168
270
(102 ) (38 )%

Operating loss $ (45,053 ) $ (11,947 ) $ (33,106 ) (277 )%
Depreciation and amortization expense 12,980
14,316
(1,336 ) (9 )%
Loss on asset sales and disposals 38,681
4,948
33,733
682 %
Severance costs 1,305
227
1,078
475 %
Unrealized (non-cash) loss on changes in fair value of derivatives not designated as hedging instruments 1,293
796
497
NM
Adjusted EBITDA $ 9,206
$ 8,340
$ 866
10 %

~~NM - Not meaningful~~

~~(a) Gross margin represents "Revenues - Midstream operations" less "Cost of sales - Midstream operations" and does not include depreciation and amortization.~~

~~Crude oil hauled during the six months ended January 31, 2018 decreased 4%, or 1.1 million barrels, from that of the prior period primarily due to decreased short haul trucking volumes.~~

~~Revenues~~

Crude oil sales increased 23% or $37.2 million compared to the prior period, while crude oil and other logistics revenue decreased 18% or $7.4 million. The increase in crude oil sales reflects a $23.6 million increase related to the increase in the market price of crude oil and a $13.6 million increase related to increased sales volumes. The decrease in crude oil and other logistics revenues is driven by the trucking industry related labor shortages.

~~Gross margin~~

Gross margin decreased 1% or $0.3 million compared to the prior period, primarily due to a $7.3 million decrease related to crude oil sales, partially offset by a $6.5 million increase related to crude oil and other logistics hauling. Crude oil sales gross margin decreased primarily due to smaller margins on contracted physical crude deals from market conditions in the Niobrara region. Despite decreased volumes and revenues, crude oil and other logistics gross margin increased primarily due to the benefits from the cessation of barge operations related to the Jamex TLA.

~~Operating loss~~

Operating loss increased by $33.1 million during the six months ended January 31, 2018 as compared to the six months ended January 31, 2017. This increase in operating loss was primarily due to a $35.5 million loss on disposal of rail car assets recognized in fiscal 2018.

~~Adjusted EBITDA~~

Adjusted EBITDA increased $0.9 million primarily due to a $0.6 million decrease in operating, general and administrative costs. Operating, general and administrative costs decreased $0.6 million primarily due to a $0.3 million decrease in personnel costs.

~~Corporate~~

~~The following table summarizes the financial results of our corporate operations for the periods indicated:~~

(amounts in thousands)
Six months ended January 31, 2018 2017 Increase (Decrease)

Operating, general and administrative expense (a) $ 24,594
$ 24,623
$ (29 ) — %
Equipment lease expense 947
1,217
(270 ) (22 )%

Operating loss $ (35,516 ) $ (33,882 ) $ (1,634 ) (5 )%
Depreciation and amortization expense 1,982
1,343
639
48 %
Non-cash employee stock ownership plan compensation charge 7,993
6,699
1,294
19 %
Non-cash stock based compensation charge —
3,298
(3,298 ) NM
Severance costs —
1,479
(1,479 ) NM
Professional fees (b) 2,118
—
2,118
NM
Adjusted EBITDA $ (23,423 ) $ (21,063 ) $ (2,360 ) (11 )%

~~(a) Some general and administrative expenses have been allocated to other segments.~~

~~(b) Professional fees incurred related to a lawsuit.~~

~~Operating loss~~

Corporate recognized an operating loss of $35.5 million during the six months ended January 31, 2018, compared to an operating loss of $33.9 million recognized during the six months ended January 31, 2017. This increase in operating loss is primarily due to an increase of $6.1 million in legal costs, partially offset by $2.0 million of decreased non-cash compensation charges and a $2.7 million decrease in corporate personnel costs.

~~Adjusted EBITDA~~

The Adjusted EBITDA loss within "Corporate" increased by $2.4 million primarily due to a $4.0 million increase in legal costs, partially offset by a $1.2 million reduction in corporate personnel expenses.

Liquidity and Capital Resources

General

Our primary sources of liquidity and capital resources are cash flows from operating activities, ~~borrowings under~~ our ~~secured credit facility and our accounts receivable securitization facility~~Credit Facility and funds received from sales of debt and equity securities. As of April 30, 2022, our total liquidity was $477.1 million, which was comprised of $217.9 million in unrestricted cash and $259.2 million of availability under our Credit Facility. These sources of liquidity and short-term capital resources are intended to fund our working capital requirements, ~~letter~~acquisitions and capital expenditures. As of April 30, 2022, letters of credit ~~requirements,~~outstanding totaled $90.8 million. Our access to long-term capital resources, to the extent needed to refinance debt ~~service payments, acquisition and capital expenditures and distributions to our unitholders. Our liquidity and capital resources~~or for other purposes, may be affected by our ability to ~~renegotiate our secured credit facility and our accounts receivable securitization facility or secure alternative liquidity sources,~~ access the capital markets, covenants in our debt agreements and other financial obligations, unforeseen demands on cash, or other events beyond our control.

~~Financial Covenants~~

As ~~more fully described in Item 2. Management’s Discussion and Analysis~~of April 30, 2022, we had $11.2 million of restricted cash consisting of a cash deposit made with the administrative agent under the subheading “Financial Covenants”, the indenture governing the outstanding notes of Ferrellgas Partners and the agreements governing the operating partnership’s indebtedness contain various covenants that limit our ability to, among other things, incur additional indebtedness and make distribution payments to our common unitholders. Given the limitations and the lack of headroom on these covenants, we continue to execute on a strategy to reduce our debt and interest expense. If we are unsuccessful with our strategy to further reduce debt and interest expense, or in renegotiating ourprior senior secured credit facility ~~and/or our accounts receivable securitization facility, which both mature~~that was terminated in ~~October 2018, or are unable to secure alternative liquidity sources, we may not have the liquidity to fund our operations after that maturity date.~~

~~We may not meet the applicable financial tests in future quarters if we were to experience:~~

~~significantly warmer than normal temperatures during the winter heating season;~~

~~significant and sustained increases in the wholesale cost of propane that we are unable to pass along to our customers;~~

~~a more volatile energy commodity cost environment;~~

~~an unexpected downturn in business operations;~~

~~a significant delay in the collection of accounts or notes receivable;~~

~~a failure to execute our debt and interest expense reduction initiatives;~~

~~a change in customer retention or purchasing patterns due to economic or other factors in the United States;~~

~~a material downturn in the credit and/or equity markets; or~~

~~a large uninsured, unfavorable lawsuit judgment or settlement.~~

As described in financing activities below, on February 22, 2018, the board of directors of our general partner announced a quarterly distribution of $0.10 per common unit, payable on March 16, 2018, to all unitholders of record as of March 9, 2018, which equates to an annual distribution rate of $0.40 per common unit.

~~Distributable Cash Flow~~

Distributable cash flow to equity investors is reconciled to net loss attributable to Ferrellgas Partners, L.P. in Item 2. Management's Discuss and Analysis under the subheading "Non-GAAP Financial Measures." A comparison of distributable cash flow to distributions paid for the twelve months ended January 31, 2018 to the twelve months ended October 31, 2017 is as follows (in thousands):

Distributable Cash Flow to equity investors Cash reserves (deficiency) approved by our General Partner Cash distributions paid to equity investors DCF ratio
Six months ended January 31, 2018 $ 59,903
$ 39,919
$ 19,984

For the year ended July 31, 2017 77,182
(3,601 ) 80,783

Less: Six months ended January 31, 2017 62,650
1,850
60,800

Twelve months ended January 31, 2018 $ 74,435
$ 34,468
$ 39,967
1.86

Twelve months ended October 31, 2017 64,041
24,152
39,889
1.61
Change $ 10,394
$ 10,316
$ 78
0.25

For the twelve months ended January 31, 2018, distributable cash flow attributable to equity investors increased $10.4 million compared to the twelve months ended October 31, 2017 primarily due to a $15.6 million increase in Adjusted EBITDA, partially offset by a $5.0 million increase in interest paid. The increase in Adjusted EBITDA is primarily due to an $18.2 million increase in our Propane operations and related equipment sales segment, partially offset by a $1.9 million decrease in Corporate, both as discussed above. The increase in interest paid is primarily due to increased interest rates on the secured credit facility and accounts receivable securitization facility, as well as increased interest expense associated with the $175.0 million of debt issued by Ferrellgas Partners in January 2017, which replaced a portion of the borrowings under the secured credit facility. Cash distributions paid to equity investors were unchanged because the number of common units outstanding and our annual distribution rate has not changed. Our distribution coverage ratio increased to 1.86 for the twelve months ended January 31, 2018. Cash reserves, which we utilize to meet future anticipated expenditures, increased by $34.5 million during the twelve months ended January 31, 2018 compared to an increase of $24.2 million in the twelve months ended October 31, 2017.

We believe that the liquidity available from our cash flows from operating activities, our secured credit facility, the accounts receivable securitization facility, combined with our other debt and interest expense reduction initiatives, which may include issuance of equity, restructuring existing debt agreements, asset sales or a further reduction in our annualized distribution, will be sufficient to meet our capital expenditure, working capital and letter of credit requirements. If we are unsuccessful with our strategy to further reduce debt and interest expense, or are unsuccessful in renegotiating our secured credit facility and our accounts receivable securitization facility, which mature in October 2018, or are unable to secure alternative liquidity sources, we may not have the liquidity to meet our capital expenditure, working capital and letter of credit requirements.

During periods of high volatility, our risk management activities may expose us to the risk of counterparty margin calls in amounts greater than we have the capacity to fund. Likewise our counterparties may not be able to fulfill their margin calls from us or may default on the settlement of positions with us.

April 2020.

Our working capital requirements are subject to, among other things, the price of propane, ~~and crude oil,~~ delays in the collection of receivables, volatility in energy commodity prices, liquidity imposed by insurance providers, downgrades in our credit ratings, decreased trade credit, significant acquisitions, the weather, customer retention and purchasing patterns and other changes in the demand for propane. Relatively colder weather or higher propane prices during the winter heating season are factors that could significantly increase our working capital requirements.

Our material known cash requirements continue to be our long-term debt, including current portion, and ~~crude oil.~~

fixed rate interest obligations. These obligations reflect the operating partnership’s issuance of the $650.0 million aggregate principal amount of 2026 Notes and the $825.0 million aggregate principal amount of 2029 Notes and the other transactions effected on the Effective Date.

Our ability to satisfy our obligations is dependent upon our future performance, which will be subject to prevailing weather, economic, financial and business conditions and other factors, many of which are beyond our control. Due to the seasonality of the retail propane distribution business, a significant portion of our propane operations and related products cash flows from operations is generated during the winter heating season. Our ~~Midstream operations segment is not expected to experience seasonality. Our~~ net cash provided by operating activities primarily reflects earnings from our business activities adjusted for depreciation and amortization and changes in our working capital accounts. Historically, we generate significantly lower net cash from operating activities in our first and fourth fiscal quarters as compared to the second and third fiscal quarters due to the seasonality of our propane operations and related equipment sales ~~segment.~~

~~Operating Activities~~

~~Ferrellgas Partners~~

~~Net~~operations.

During periods of high volatility, our risk management activities may expose us to the risk of counterparty margin calls in amounts greater than we have the capacity to fund. Likewise, our counterparties may not be able to fulfill their margin calls from us or may default on the settlement of positions with us.

We believe that the liquidity available from cash ~~used in~~flows from operating activities, ~~was $36.3 million~~unrestricted cash and the Credit Facility will be sufficient to meet our capital expenditure, working capital and letter of credit requirements for the ~~six~~foreseeable future.

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Distributable Cash Flow

Distributable cash flow attributable to equity investors is reconciled to net earnings (loss) attributable to Ferrellgas Partners, L.P., the most directly comparable GAAP measure, in this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations under the subheading "Non-GAAP Financial Measures" above. A comparison of distributable cash flow attributable to equity investors to cash distributions accrued or paid to equity investors for the twelve months ended April 30, 2022 to the twelve months ended January 31, ~~2018,~~2022 is as follows (in thousands):


	Distributable		Cash reserves		Cash distributions
	cash flow attributable		approved by our		accrued or paid to		DCF ratio
	to equity investors		General Partner		equity investors		(a)
Nine months ended April 30, 2022	$	223,099	$	174,062	$	49,037	4.5
Fiscal 2021		135,654		111,630		24,024
Less: Nine months ended April 30, 2021		144,987		136,976		8,011
Twelve months ended April 30, 2022	$	213,766	$	148,716	$	65,050	3.3

Twelve months ended January 31, 2022		205,891		148,545		57,346	3.6
Change	$	7,875	$	171	$	7,704	1.0

(a)

DCF ratio is calculated as Distributable cash flow attributable to equity investors divided by Cash distributions accrued or paid to equity investors.

For the twelve months ended April 30, 2022, distributable cash flow attributable to equity investors increased $7.9 million compared to the twelve months ended January 31, 2022. As of April 30, 2022, the accrued quarterly distribution to Preferred Unitholders was $16.9 million. We paid $15.4 million of this distribution on May 15, 2022. The remaining $1.5 million remains accrued as additional amounts payable to certain holders of Preferred Units, pursuant to the side letters outlined in the OpCo LPA Amendment. No cash distributions have been paid to our Class A Unitholders since the three months ended October 31, 2018. Cash reserves, which we utilize to meet future anticipated expenditures, were flat at $148.7 million during the twelve months ended April 30, 2022, compared to $148.5 million in the twelve months ended January 31, 2022.

Operating Activities

Ferrellgas Partners

Net cash provided by operating activities was $128.2 million for the nine months ended April 30, 2022, compared to net cash provided by operating activities of ~~$39.3~~$103.0 million for the ~~six~~nine months ended ~~January 31, 2017. This decrease~~April 30, 2021. The increase in cash provided by operating activities was primarily due to a ~~$69.8~~$98.4 million increase in cash flow from operations, partially offset by a $51.4 million increase in working capital requirements and a ~~$7.7~~$21.8 million ~~unfavorable impact in~~outflow associated with other assets ~~net, primarily due to an increase in crude oil barrels in linefill during the six months ended January 31, 2018, partially offset by a $1.8 million increase in cash flow from operations.~~

The increase in cash flow from operations is primarily due to a $12.8 million increase in Adjusted EBITDA, as discussed above by segment, partially offset by an $11.2 million increase in "Interest expense", as discussed above.

and liabilities.

The increase in working capital requirements for the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 compared to the ~~six~~nine months ended ~~January 31, 2017~~April 30, 2021 was primarily due to a ~~$27.9~~$39.1 million increase in requirements for other current liabilities. Additionally, due to rising propane prices in the current period, we had a $16.6 million increase in requirements for accounts and notes receivable ~~due to increases in the the number of gallons sold~~ and ~~the average selling price of propane gas, an $11.7~~a $15.1 million increase in requirements for inventory. The $7.8 million increase in accrued interest expense related primarily to the timing and nature of the restructuring transactions in March 2021. These increases were partially offset by decreases of $15.0 million and $12.2 million in prepaid expenses and other current assets and accounts payable, respectively.

The increase in cash flow from operations was primarily due ~~primarily~~ to a $74.5 million decrease in ~~margin deposits returned to us by our counterparties during the six months ended January 31, 2018 and~~"Interest expense," a ~~$28.9~~$47.7 million increase in ~~requirements for accounts payable largely due to~~gross profit, a $9.4 million decrease in ~~days outstanding for our purchases~~“General and administrative expense,” an $8.8 million gain on asset sales and disposals and a $3.0 million decrease in “Operating expense – equipment lease expense,” which were partially offset by a net increase in “Operating expense – personnel, vehicle, plant and other” of ~~propane.~~$43.5 million.

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The operating partnership

Net cash ~~used in~~provided by operating activities was ~~$20.8~~$128.2 million for the ~~six~~nine months ended ~~January 31, 2018,~~April 30, 2022, compared to net cash provided by operating activities of ~~$45.3~~$110.3 million for the ~~six~~nine months ended ~~January 31, 2017.~~April 30, 2021. This ~~decrease~~increase in cash provided by operating activities was primarily due to a ~~$67.5~~$75.1 million increase in cash flow from operations, partially offset by a $34.5 million increase in working capital requirements and ~~an $8.0~~a $22.7 million ~~unfavorable impact in~~outflow associated with other assets ~~net, primarily due to an increase in crude oil barrels in linefill during the six months ended January 31, 2018, partially offset by a $9.3 million increase in cash flow from operations.~~

The increase in cash flow from operations is primarily due to a $12.8 million increase in Adjusted EBITDA, as discussed above by segment, partially offset by a $2.1 million increase in "Interest expense" due to increased interest rates on the secured credit facility.

and liabilities.

The increase in working capital requirements for the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 compared to the ~~six~~nine months ended ~~January 31, 2017~~April 30, 2021 was primarily due to a ~~$27.9~~$36.0 million increase in requirements for other current liabilities. Additionally, due to rising propane prices in the current period, we had a $16.6 million increase in requirements for accounts and notes receivable ~~due to increases in the the number of gallons sold~~ and ~~the average selling price of propane gas, an $11.6~~a $15.1 million increase in requirements for inventory. These increases were partially offset by decreases of $15.0 million and $12.2 million in prepaid expenses and other current assets ~~due~~and accounts payable, respectively. The $6.0 million decrease in accrued interest expense related primarily to the timing and nature of the restructuring transactions in March 2021.

The increase in cash flow from operations was primarily due to a $60.7 million decrease in ~~margin deposits returned to us by our counterparties during the six months ended January 31, 2018 and~~"Interest expense," a ~~$28.9~~$47.7 million increase in ~~requirements for accounts payable largely due to~~gross profit, an $8.8 million gain on asset sales and disposals and a $3.0 million decrease in ~~days outstanding for our purchases~~“Operating expense – equipment lease expense,” which were partially offset by an increase in “Operating expense – personnel, vehicle, plant and other” of ~~propane.~~

$43.5 million.

Investing Activities

Ferrellgas Partners

Capital Requirements

Our business requires continual investments to upgrade or enhance existing operations and to ensure compliance with safety and environmental regulations. Capital expenditures for our business consist primarily of:

●

Maintenance capital expenditures. These capital expenditures include expenditures for betterment and replacement of property, plant and equipment, and may from time to time include assets that are typically leased, rather than purchased to generate incremental distributable cash flow. Examples of maintenance capital expenditures include a routine replacement of a worn-out asset or replacement of major vehicle components; and

●

Growth capital expenditures. These expenditures are undertaken primarily to generate incremental distributable cash flow. Examples include expenditures for purchases of both bulk and portable propane tanks and other equipment to facilitate expansion of our customer base and operating capacity.

Maintenance capital expenditures. These capital expenditures include expenditures for betterment and replacement of property, plant and equipment rather than to generate incremental distributable cash flow. Examples of maintenance capital expenditures include a routine replacement of a worn-out asset or replacement of major vehicle components; and

Net cash used in investing activities was ~~$46.3~~$76.8 million for the ~~six~~nine months ended ~~January 31, 2018,~~April 30, 2022, compared to net cash used in investing activities of ~~$15.2~~$47.0 million for the ~~six~~nine months ended ~~January 31, 2017.~~April 30, 2021. This increase in net cash used in investing activities iswas primarily due to a ~~$15.9~~$19.1 million increase in ~~"Capital expenditures"~~“Capital expenditures” and a ~~$14.9~~$9.6 million increase in ~~"Business~~“Business acquisitions, net of cash acquired."

The increase in "Capital expenditures" is primarily due to increases in maintenance and growth capital expenditures in our Propane operations and related equipment sales segment during the six months ended January 31, 2018. The increase in maintenance capital expenditures is primarily related to the purchase of new propane delivery trucks. The increase in growth capital expenditures is primarily related to an increase in the number of cylinders purchased to support increases in tank exchange sales and selling locations.

The increase in "Business acquisitions, net of cash acquired" is attributable to four acquisitions by our Propane operations and related equipment sales segment during the six months ended January 31, 2018.

”

Due to the mature nature of our ~~Propane~~ operations ~~and related equipment sales operations segment,~~ we do not anticipate significant fluctuations in maintenance capital ~~expenditures.~~expenditures, with the exception of future decisions regarding lease versus buy financing options. However, future fluctuations in growth capital expenditures could occur due to the opportunistic nature of these projects.

The operating partnership

The investing activities discussed above also apply to the operating partnership, other than the net activity of the term loan credit agreement with Ferrellgas Partners, L.P. See “Disclosures about Effects of Transactions with Related Parties” below for further discussion.

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Financing Activities

Ferrellgas Partners

Net cash ~~provided by~~used in financing activities was ~~$91.1~~$104.2 million for the ~~six~~nine months ended ~~January 31, 2018,~~April 30, 2022, compared to net cash used in financing activities of ~~$14.4~~$166.9 million for the ~~six~~nine months ended ~~January 31, 2017.~~April 30, 2021. This ~~increase~~decrease in cash flow ~~provided by~~used in financing activities was primarily due to ~~a $40.5 million reduction~~financing costs related to the prior year debt transactions (as discussed further in ~~distributions, a $15.9 million reduction in common unit repurchases, a $55.8 million net increase in proceeds from short-term borrowings, and a $4.0 million reduction in cash paid for financing costs,~~Note F – Debt), partially offset by ~~a $9.3~~$50.0 million ~~net reduction~~ in ~~proceeds from long-term debt.~~

~~Distributions~~

~~During~~distributions to Class B unitholders and $47.8 million in preferred unit distributions, both of which occurred in the ~~six~~nine months ended January 31, 2018, Ferrellgas Partners paid quarterly per unit distributions on all common units of $0.10 in connection with the distributions declared for the three month periods ended July 31, 2017 and October 31, 2017. Total distributions paid to common unitholders during the six months ended January 31, 2018, including the related general partner distributions, was $19.6 million. The quarterly distribution of $0.10 on all common units and the related general partner distribution for the three months ended January 31, 2018 totaling $9.8 million are expected to be paid on March 16, 2018 to holders of record on March 9, 2018.

~~Secured credit facility~~

~~Refer to discussions of covenants in our debt agreements within the "Recent Developments" section and the "Liquidity and Capital Resources" section, both under the heading "Financial Covenants".~~

Since October 31, 2017, we classified all borrowings outstanding under our secured credit facility of $261.2 million as short-term because the facility matures in October 2018. Additionally, Ferrellgas had $125.8 million of capacity under our secured credit facility as of January 31, 2018. As of March 5, 2018, Ferrellgas had $234.5 million of capacity under our secured credit facility. The increase from January 31, 2018 is primarily attributable to using cash proceeds of approximately $47.0 million from the sale of 1,072 rail cars to reduce borrowings under our senior secured credit facility and a reduction in outstanding letters of credit of approximately $42.4 million.

Borrowings outstanding at January 31, 2018 under the secured credit facility had a weighted average interest rate of 6.5%. All borrowings under the secured credit facility bear interest, at our option, at a rate equal to either:

for Base Rate Loans or Swing Line Loans, the Base Rate, which is defined as the higher of (i) the federal funds rate plus 0.50%, (ii) Bank of America’s prime rate; or (iii) the Eurodollar Rate plus 1.00%; plus a margin varying from 0.75% to 3.00%; or

~~for Eurodollar Rate Loans, the Eurodollar Rate, which is defined as the LIBOR Rate plus a margin varying from 1.75% to 4.00%.~~

As of January 31, 2018, the federal funds rate and Bank of America’s prime rate were 1.34% and 4.50%, respectively. As of January 31, 2018, the one-month and three-month LIBOR Rates were 1.58% and 1.78%, respectively.

In addition, an annual commitment fee is payable at a per annum rate ranging from 0.35% to 0.50% times the actual daily amount by which the secured credit facility exceeds the sum of (i) the outstanding amount of revolving credit loans and (ii) the outstanding amount of letter of credit obligations.

The obligations under this secured credit facility are secured by substantially all assets of the operating partnership, the general partner and certain subsidiaries of the operating partnership but specifically excluding (a) assets that are subject to the operating partnership’s accounts receivable securitization facility, (b) the general partner’s equity interest in Ferrellgas Partners and (c) equity interest in certain unrestricted subsidiaries. Such obligations are also guaranteed by the general partner and certain subsidiaries of the operating partnership.

April 30, 2022.

Letters of credit outstanding at ~~January~~April 30, 2022 and July 31, ~~2018~~2021 totaled ~~$188.0~~$90.8 million and $107.7 million, respectively, and were used to secure ~~commodity hedges,~~insurance arrangements, product purchases and ~~insurance arrangements. At January 31, 2018,~~commodity hedges. As of April 30, 2022, we had ~~remaining letter of credit~~available borrowing capacity ~~of $12.0 million. As a result of the sale of Bridger Energy, LLC on January 16, 2018, we anticipate near-term reductions in outstanding letters of credit of approximately $80.0 million.~~

~~All standby letter of credit commitments~~ under our ~~secured credit facility bear a per annum rate varying from 1.75% to 4.00% (as~~Credit Facility of ~~January 31, 2018, the rate was 4.0%) times the daily maximum amount available to be drawn under such letter of credit. Letter of credit fees are computed on a quarterly basis in arrears.~~

~~Accounts receivable securitization~~

~~Refer to discussions of covenants in our debt agreements within the "Recent Developments" section and the "Liquidity and Capital Resources" section, both under the heading "Financial Covenants".~~

Ferrellgas Receivables is a consolidated subsidiary. Expenses associated with accounts receivable securitization transactions are recorded in “Interest expense” in the condensed consolidated statements of operations. Additionally, borrowings and repayments associated with these transactions are recorded in “Cash flows from financing activities” in the condensed consolidated statements of cash flows.

~~Cash flows from our accounts receivable securitization facility increased $28.0~~$259.2 million. We received net funding of $97.0 million from this facility during the six months ended January 31, 2018 as compared to receiving net funding of $69.0 million from this facility during the six months ended January 31, 2017.

Our strategy is to maximize liquidity by utilizing the accounts receivable securitization facility along with borrowings under the secured credit facility. See additional discussion about the secured credit facility in “Financing Activities – Secured credit facility.” Our utilization of the accounts receivable securitization facility is limited by the amount of accounts receivable that we are permitted to securitize according to the facility agreement. As of January 31, 2018, we had received cash proceeds of $166.0 million related to the securitization of our trade accounts receivable, with no remaining capacity to receive additional proceeds. As of January 31, 2018, the weighted average interest rate was 4.0%. As our trade accounts receivable increase during the winter heating season, the securitization facility permits us to receive greater proceeds as eligible trade accounts receivable increase, thereby providing additional cash for working capital needs.

~~Common unit repurchase~~

On September 1, 2016, utilizing borrowings under our secured credit facility, Ferrellgas Partners paid approximately $16.9 million to Jamex and in return received 0.9 million of Ferrellgas Partners' common units, which were cancelled upon receipt, and approximately 23 thousand barrels of crude oil.

The operating partnership

The financing activities discussed above also apply to the operating partnership except for ~~the repurchase of common units discussed above, and~~ cash flows related to distributions paid, as discussed below.

Distributions

Partnership distributions

The Sixth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. (the “Amended Ferrellgas Partners LPA”) requires Ferrellgas Partners to make quarterly cash distributions of all of its “available cash”. Available cash is defined in the Amended Ferrellgas Partners LPA as, generally, the sum of Ferrellgas’ Partners cash receipts less consolidated cash disbursements and net changes in reserves established by our general partner for future requirements. In general, the amount of Ferrellgas Partners’ available cash depends primarily on whether and the extent to which Ferrellgas Partners receives cash distributions from the operating partnership, as such distributions generally would be Ferrellgas Partners’ only significant cash receipts.

Pursuant to the Amended Ferrellgas Partners LPA, while any Class B Units remain outstanding, any distributions by Ferrellgas Partners to its partners must be made such that the ratio of (i) the amount of distributions made to holders of Class B Units to (ii) the amount of distributions made to holders of Class A Units and the general partner is not less than 6:1. The Amended Ferrellgas Partners LPA permits Ferrellgas Partners, in the general partner’s discretion, to make distributions to the Class B Unitholders in a greater proportion than the minimum 6:1 ratio, including paying 100% of any such distribution Class B Unitholders. The Class B Units will not be convertible into Class A Units until Class B Unitholders receive distributions in the aggregate amount of $357.0 million (which was the outstanding principal amount of the Ferrellgas Partners Notes), and the rate at which Class B Units will convert into Class A Units increases annually. Additionally, the price at which Ferrellgas Partners may redeem the Class B Units during the first five years after March 30, 2021 (the “Effective Date”) is based on the Class B Unitholders’ receipt of a specified internal rate of return in respect of their Class B Units. This specified internal rate of return in respect of the Class B Units is 15.85%, but that amount increases under certain circumstances, including if the operating partnership paid distributions on the Preferred Units in-kind rather than in cash for a certain number of quarters. Accordingly, distributing cash to the Class B Unitholders in a greater proportion than the minimum 6:1 ratio could result in the Class B Units becoming convertible into Class A Units more quickly or at a lower conversion rate or reduce the redemption price for the Class B Units. For additional discussion of the terms of the Class B Units, see Note G – Equity (Deficit) in the notes to our condensed consolidated financial statements.

~~Distributions~~

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For these reasons, although the general partner has not made any decisions or adopted any policy with respect to the allocation of future distributions by Ferrellgas Partners to its partners, the general partner may determine that it is advisable to pay more than the minimum amount of any distribution, up to 100% of the amount of such distribution, to Class B Unitholders. In fact, on October 8, 2021, Ferrellgas Partners made a cash distribution in the aggregate amount of approximately $49.9 million entirely to the Class B Unitholders, without making any distribution to Class A Unitholders and the general partner. In our Annual Report on Form 10-K for fiscal 2021, see “Risk Factors—Risks Inherent in an Investment in our Class A or Class B Units or our Debt Securities and Other Risks Related to Our Capital Structure and Financing Arrangements—If Ferrellgas Partners is permitted to make and makes distributions to its partners, while any Class B Units remain outstanding, Class B Unitholders collectively will receive at least approximately 85.7% of the aggregate amount of each such distribution and may receive up to 100% of any such distribution. Accordingly, while any Class B Units remain outstanding, Class A Unitholders may not receive any distributions and, in any case, will not receive collectively more than approximately 14.1% of any distribution.”

Ferrellgas Partners did not pay any distributions to Class A Unitholders or the general partner for the nine months ended April 30, 2022.

The ability of Ferrellgas Partners to make cash distributions to its Class A Unitholders and Class B Unitholders is dependent on the receipt by Ferrellgas Partners of cash distributions from the operating partnership. For so long as any Preferred Units remain outstanding, the amount of cash that otherwise would be available for distribution by the operating partnership to Ferrellgas Partners and the general partner will be reduced by the amount of cash distributions and other payments made by the operating partnership in respect of the Preferred Units, including payments to redeem Preferred Units. Further, the indentures governing the 2026 Notes and 2029 Notes, the credit agreement (the “Credit Agreement”) that provides for a four-year revolving credit facility (the “Credit Facility”) in an aggregate principal amount of up to $350.0 million, and the First Amendment to the Amended OpCo LPA which sets forth the preferences, rights, privileges and other terms governing the Preferred Units (the “OpCo LPA Amendment”) contain covenants that limit the ability of the operating partnership to make distributions to Ferrellgas Partners and therefore effectively limit the ability of Ferrellgas Partners to make distributions to its Class A Unitholders and Class B Unitholders. See Note E – Debt and Note F – Preferred units for a discussion of these limitations. In our Annual Report on Form 10-K for fiscal 2021, see “Risk Factors—Risks Inherent in an Investment in our Class A or Class B Units or our Debt Securities and Other Risks Related to Our Capital Structure and Financing Arrangements—Our ability to make cash distributions to holders of Class A Units and Class B Units is dependent on the receipt by Ferrellgas Partners of cash distributions from the operating partnership, which are limited by our obligations under the Indentures, the Credit Agreement and the OpCo LPA Amendment and may be limited by a variety of other factors. Accordingly, we may be unable to make cash distributions to holders of Class A Units and Class B Units.”

Preferred unit distributions

Pursuant to the OpCo LPA Amendment, the operating partnership is required to pay to the holders of each Preferred Unit a cumulative, quarterly distribution (the "Quarterly Distribution") at the Distribution Rate (as defined below) on the unit purchase price of such Preferred Unit, which is $1,000 per unit.

The Quarterly Distribution may be paid in cash or, at the election of the operating partnership, “in kind” through the issuance of additional Preferred Units (“PIK Units”) at the quarterly Distribution Rate plus an applicable premium that escalates each year from 75 bps to 300 bps so long as the Preferred Units remain outstanding. In the event the operating partnership fails to make any Quarterly Distribution in cash, such Quarterly Distribution will automatically be paid in PIK Units.

The Distribution Rate on the Preferred Units will increase upon violation of certain protective provisions for the benefit of Preferred Unit holders notwithstanding the cap mentioned above.

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Preferred unit tax distributions

For any quarter in which the operating partnership makes a Quarterly Distribution in PIK Units in lieu of cash, it shall make a subsequent cash tax distribution for such quarter in an amount equal to the (i) the lesser of (x) 25% and (y) the highest combined federal, state and local tax rate applicable for corporations organized in New York, multiplied by (ii) the excess (if any) of (A) one-fourth (1/4th) of the estimated taxable income to be allocated to the holders of Preferred Units for the year in which the Quarterly Tax Payment Date (which refers to certain specified dates that next follow a Quarterly Distribution date on which PIK Units were issued) occurs, over (B) any cash paid on the Quarterly Distribution date immediately preceding the Quarterly Tax Payment Date on which a quarterly tax amount would otherwise be paid (such amount, the "Tax Distribution"). Tax Distributions are treated as advances against, and reduce, future cash distributions for any reason, including payments in redemption of Preferred Units or PIK Units, or payments to the holders in their capacity as such pursuant to any side letter or other agreement.

Cash distributions paid

Ferrellgas Partners did not pay any cash distributions to its Class A Unitholders during the nine months ended April 30, 2022. On October 8, 2021, Ferrellgas Partners paid a cash distribution to holders of the Class B Units in the amount of $38.46 per Class B Unit or approximately $49.9 million in the aggregate. As permitted by the Amended Ferrellgas LPA as described above, Ferrellgas Partners made this distribution solely to Class B Unitholders without any contemporaneous distribution to Class A Unitholders and the general partner.

On September 14, 2021, the operating partnership paid a cash distribution to Ferrellgas Partners in the amount of approximately $49.9 million, which Ferrellgas Partners used to pay the October 8, 2021 distribution to its Class B Unitholders described above. The operating partnership also paid cash distributions for the nine months ended April 30, 2022 in respect of its Preferred Units as discussed above under “—Preferred unit distributions.”

On May 16, 2022, the operating partnership paid a cash distribution to Ferrellgas Partners in the amount of approximately $19.2 million. $15.3 million was used to repay the term loan, as discussed below in “—Term loan credit agreement between Ferrellgas Partners and the operating partnership”. The remaining $3.9 million was used to repay separate intercompany receivables related to expenses incurred during the 2021 debt transactions.

The operating partnership

The operating partnership paid cash distributions ~~of $35.4 million and $84.5 million~~ during the ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 to Ferrellgas Partners and ~~2017, respectively.~~to holders of the Preferred Units as described above. The operating partnership ~~expects to~~did not pay any other cash distributions ~~of $9.9 million on March 16, 2018.~~

during the nine months ended April 30, 2021.

Disclosures about Effects of Transactions with Related Parties

We have no employees and are managed and controlled by our general partner. Pursuant to our partnership agreements, our general partner is entitled to reimbursement for all direct and indirect expenses incurred or payments it makes on our behalf,

and all other necessary or appropriate expenses allocable to us or otherwise reasonably incurred by our general partner in connection with operating our business. These reimbursable costs, which totaled ~~$138.6~~$231.9 million for the ~~six~~nine months ended ~~January 31, 2018,~~April 30, 2022, include operating expenses such as compensation and benefits paid to employees of our general partner who perform services on our behalf as well as related general and administrative expenses.

~~Related party common unitholder information consisted of~~

During the ~~following:~~

Common unit ownership at Distributions (in thousands) paid during the six months ended
January 31, 2018 January 31, 2018
Ferrell Companies (1) 22,529,361
$ 4,506
FCI Trading Corp. (2) 195,686
40
Ferrell Propane, Inc. (3) 51,204
10
James E. Ferrell (4) 4,763,475
952

~~(1) Ferrell Companies is~~nine months ended April 30, 2022, the owner of the general partner and is an approximate 23% direct owner of Ferrellgas Partners' common units and thus a related party. Ferrell Companies also beneficially owns 195,686 and 51,204 common units ofoperating partnership paid distributions to Ferrellgas Partners ~~held by FCI Trading Corp. ("FCI Trading") and Ferrell Propane, Inc. ("Ferrell Propane"), respectively, bringing Ferrell Companies' beneficial ownership to 23.4% at January 31, 2018.~~as described above.

~~(2) FCI Trading is an affiliate~~

Table of ~~the general partner and thus a related party.~~Contents

~~(3) Ferrell Propane is controlled by the general partner and thus a related party.~~

(4) James E. Ferrell is the Interim Chief Executive Officer and President of the general partner; and is Chairman of the Board of Directors of the general partner and thus a related party. JEF Capital Management owns 4,758,859 of these common units and is wholly-owned by the James E. Ferrell Revocable Trust Two for which James E. Ferrell is the trustee and sole beneficiary. The remaining 4,616 common units are held by Ferrell Resources Holding, Inc., which is wholly-owned by the James E. Ferrell Revocable Trust One, for which James E. Ferrell is the trustee and sole beneficiary.

~~During the six months ended January 31, 2018,~~

Term loan credit agreement between Ferrellgas Partners and the operating partnership ~~together paid~~

As discussed in Note L – Transactions with related parties in the ~~general partner distributions~~notes to the condensed consolidated financial statements of ~~$0.6 million.~~

~~On March 16, 2018,~~the operating partnership, on January 8, 2021 Ferrellgas Partners ~~expects~~entered into a term loan credit agreement with the operating partnership, pursuant to ~~pay distributions~~which the operating partnership extended to ~~Ferrell Companies, FCI Trading Corp., Ferrell Propane, Inc., James E. Ferrell (indirectly),~~Ferrellgas Partners an unsecured, non-amortizing term loan in the aggregate principal amount of $19.9 million. The term loan bore interest at a rate of 20% per annum, all interest on the term loan was added to the outstanding principal amount of the term loan, and the ~~general partner~~term loan’s maturity date was July 1, 2022. During July 2021, Ferrellgas Partners made an optional principal prepayment of ~~$2.3~~$9.0 million ~~$20 thousand, $5 thousand, $0.5 million,~~on the term loan. The outstanding principal and ~~$0.1 million, respectively.~~

accrued interest at April 30, 2022 was $15.2 million. Ferrellgas Partners repaid the term loan on May 16, 2022. See Note O – Subsequent events to our condensed consolidated financial statements for more information.

Contractual Obligations

As of April 30, 2022, there have been no material changes to our contractual obligations and commitments from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations” in our Annual Report on Form 10-K for fiscal 2021. For additional information regarding our debt obligations, see Note E – Debt to our condensed consolidated financial statements.

The operating partnership

The contractual obligations discussed above also apply to the operating partnership.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We did not enter into any risk management trading activities during the ~~six~~nine months ended ~~January 31, 2018.~~April 30, 2022. Our remaining market risk sensitive instruments and positions have been determined to be “other than trading.”

We are no longer subject to price risks related to crude oil line fill and inventory as result of our January 2018 sale of Bridger Energy, LLC. This sale resulted in our exit from crude oil purchase and sale activity.

Commodity price risk management

Our risk management activities primarily attempt to mitigate price risks related to the purchase, storage, transport and sale of propane generally in the contract and spot markets from major domestic energy ~~companies.~~companies on a short-term basis. We attempt to mitigate these price risks through the use of financial derivative instruments and forward propane purchase and sales contracts.

Our risk management strategy involves taking positions in the forward or financial markets that are equal and opposite to our positions in the physical products market in order to minimize the risk of financial loss from an adverse price change. This risk management strategy is successful when our gains or losses in the physical product markets are offset by our losses or gains in the forward or financial markets. ~~Propane~~Our propane related financial derivatives are designated as cash flow hedges.

Our risk management activities include the use of financial derivative instruments including, but not limited to, ~~price~~futures, swaps, ~~options, futures~~ and ~~basis swaps~~options to seek protection from adverse price movements and to minimize potential losses. We enter into these financial derivative instruments ~~directly with third parties in the over-the-counter market and~~ with brokers who are clearing members with the Intercontinental Exchange or the Chicago Mercantile ~~Exchange.~~Exchange and, to a lesser extent, directly with third parties in the over-the-counter market. We also enter into forward propane purchase and sales contracts with counterparties. These forward contracts qualify for the normal purchase normal sales exception within GAAP guidance and are therefore not recorded on our financial statements until settled.

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Transportation Fuel Price Risk

From time to time, our risk management activities also attempt to mitigate price risks related to the purchase of gasoline and diesel fuel for use in the transport of propane from supply or storage locations and from retail fueling stations. When employed, we attempt to mitigate these price risks through the use of financial derivative instruments.

When employed, our risk management strategy involves taking positions in the financial markets that are not more than the forecasted purchases of fuel for our internal use in ~~the~~supply and retail ~~and supply~~ propane delivery fleet in order to minimize the risk of decreased earnings from an adverse price change. This risk management strategy locks in our purchase price and is successful when our gains or losses in the physical product markets are offset by our losses or gains in the financial markets. Our transport fuel financial derivatives are not designated as cash flow hedges.

Risk Policy and Sensitivity Analysis

Market risks associated with energy commodities are monitored daily by senior management for compliance with our commodity risk management policy. This policy includes an aggregate dollar loss limit and limits on the term of various contracts. We also utilize volume limits for various energy commodities and review our positions daily where we remain exposed to market risk, so as to manage exposures to changing market prices.

We have prepared a sensitivity analysis to estimate the exposure to market risk of our energy commodity positions. Forward contracts, futures, swaps and options outstanding as of ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017,~~2021, that were used in our risk management activities were analyzed assuming a hypothetical 10% adverse change in prices for the delivery month for all energy commodities. The potential loss in future earnings from these positions due to a 10% adverse movement in market prices of the underlying energy commodities was estimated at ~~$14.8~~$22.9 million and ~~$16.8~~$30.1 million as of ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017,~~2021, respectively. The preceding hypothetical analysis is limited because changes in prices may or may not equal 10%, thus actual results may differ. Our sensitivity analysis does not include the anticipated transactions associated with these transactions, which we anticipate will be 100% effective.

Credit risk

We maintain credit policies with regard to our counterparties that we believe significantly ~~minimize~~reduce overall credit risk. These policies include ~~an evaluation~~evaluating and monitoring of counterparties’ financial condition (including credit ratings), and entering into agreements with counterparties that govern credit guidelines.

Our other counterparties principally consist of major energy companies ~~who~~that are suppliers, marketers, wholesalers, retailers and end ~~users~~users; and major U.S. financial institutions. The overall impact due to certain changes in economic, regulatory and other events may impact our overall exposure to credit risk, either positively or negatively in that counterparties may be similarly impacted. Based on our policies, exposures, credit and other reserves, management does not anticipate a material adverse effect on financial position or results of operations as a result of counterparty performance.

~~On September 1, 2016, we entered into a group~~

Interest rate risk

We had variable rate indebtedness outstanding related to our letters of ~~agreements with Jamex which, among other things, Jamex agreed to execute~~credit under our Credit Facility of $90.8 million and deliver a secured promissory note ("Jamex Secured Promissory Note") in favor of Bridger in satisfaction of all obligations owed to Bridger under the Jamex TLA. The Jamex Secured Promissory Note is guaranteed, pursuant to a Guaranty Agreement, jointly by James Ballengee and Bacchus Capital Trading, LLC, an entity controlled by Mr. Ballengee (up to a maximum aggregate amount of $20.0 million), and pursuant to Guaranty Agreements, by the other Jamex entities. The obligations of Jamex and the other Jamex entities under the Note are secured, pursuant to a Security Agreement, by a lien on certain of those entities’ assets, actively traded marketable securities and cash, which are held in a controlled account that can be seized by Ferrellgas in the event of default. The sum of the amounts available under the controlled account and the $20.0$107.7 million ~~guarantee approximate the $37.5 million note receivable~~ as of ~~January~~April 30, 2022 and July 31, ~~2018.~~

~~Interest rate risk~~

~~At January 31, 2018, we~~2021, respectively. We had ~~$427.2 million in variable rate secured credit facility and~~no collateralized note payable ~~borrowings. We also have an interest rate swap that hedges a portion of the interest rate risk associated with these variable rate~~ borrowings, as ~~discussed in~~we terminated our accounts receivable securitization facility on the table below. Thus, assuming a one percent increase in our variable interest rate, our interest rate risk related to these borrowings would result in a reduction to future earnings of $3.8 million for the twelve months ending January 31, 2019. The preceding hypothetical analysis is limited because changes in interest rates may or may not equal one percent, thus actual results may differ. We manage a portion of our interest rate exposure by utilizing interest rate swaps. To the extent that we have debt with variable interest rates that is not hedged, ourEffective Date. Our results of operations, cash flows and financial condition could be materially adversely affected by significant increases in interest ~~rates.~~

~~We also manage a portion~~rates to the extent that we have variable rate indebtedness (including any disbursements or payments related to letters of credit) outstanding under our ~~interest rate exposure associated with~~Credit Facility.

Critical accounting estimates

Our critical accounting estimates are disclosed under “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our ~~fixed rate debt by utilizing an interest rate swap. A hypothetical one percent change in interest rates would result in a reduction~~Form 10-K for fiscal 2021. During the nine months ended April 30, 2022 no modifications were made to ~~future earnings of $1.4 million for the twelve months ending January 31, 2019.~~

~~As discussed above, the following interest rate swaps are outstanding as of January 31, 2018, and are all designated as hedges for~~these critical accounting ~~purposes:~~estimates.



~~Term~~	~~Notional Amount(s) (in thousands)~~	~~Type~~
~~May 2021~~	~~$140,000~~	~~Pay a floating rate and receive a fixed rate of 6.50%~~
~~Aug 2018~~	~~$100,000~~	~~Pay a fixed rate of 1.95% and receive a floating rate~~

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ITEM 4. CONTROLS AND PROCEDURES

An evaluation was performed by the management of Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P., and Ferrellgas Finance Corp., with the participation of the principal executive officer and principal financial officer of our general partner, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our management, including our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures, as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act, were ~~effective.~~

effective as of April 30, 2022.

The management of Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P., and Ferrellgas Finance Corp. does not expect that our disclosure controls and procedures will prevent all errors and all fraud. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Based on the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the above mentioned partnerships and corporations have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events. Therefore, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Our disclosure controls and procedures are designed to provide such reasonable assurances of achieving our desired control objectives, and the principal executive officer and principal financial officer of our general partner have concluded, as of ~~January 31, 2018,~~April 30, 2022, that our disclosure controls and procedures are effective in achieving that level of reasonable assurance.

During the most recent fiscal quarter ended ~~January 31, 2018,~~April 30, 2022, there have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Our operations are subject to all operating hazards and risks normally incidental to handling, storing, transporting and otherwise providing for use by consumers of combustible liquids such as propane and crude oil. As a result, at any given time, we can be threatened with or named as a defendant in various lawsuits arising in the ordinary course of business. Other than as discussed below, we are not a party to any

For information regarding legal proceedings, ~~other than various claims~~see Note M “Contingencies and ~~lawsuits arising~~commitments” in the ordinary course of business. It is not possible to determine the ultimate disposition of these matters; however, management is of the opinion that there are no known claims or contingent claims that are reasonably expected to have a material adverse effect on our condensed consolidated financial ~~condition, results of operations and cash flows.~~

~~We have been named as a defendant, along with a competitor,~~statements included in putative class action lawsuits filed in multiple jurisdictions. The lawsuits, which were consolidated in the Western District of Missouri on October 16, 2014, allege that we and a competitor coordinated in 2008 to reduce the fill level in barbeque cylinders and combined to persuade a common customer to accept that fill reduction, resulting in increased cylinder costs to direct customers and end-user customers in violation of federal and certain state antitrust laws. The lawsuits seek treble damages, attorneys’ fees, injunctive relief and costs on behalf of the putative class. These lawsuits have been consolidated into one case by a multidistrict litigation panel. The Federal Court for the Western District of Missouri initially dismissed all claims brought by direct and indirect customers other than state law claims of indirect customers under Wisconsin, Maine and Vermont law. The direct customer plaintiffs filed an appeal, which resulted in a reversal of the district court’s dismissal. We filed a petition for a writ of certiorari which was denied. An appeal by the indirect customer plaintiffs remains pending. We believe we have strong defenses to the claims and intend to vigorously defend against the consolidated case. We do not believe loss is probable or reasonably estimable at this time related to the putative class action lawsuit.

We have been named, along with several current and former officers, in several class action lawsuits alleging violations of certain securities laws based on alleged materially false and misleading statements in certain of our public disclosures. The lawsuits, the first of which was filed on October 6, 2016 in the Southern District of New York, seek unspecified compensatory damages. Derivative lawsuits with similar allegations have been filed naming Ferrellgas and several current and former officers and directors as defendants. We believe that we have defenses and will vigorously defend these cases. We do not believe loss is probable or reasonably estimable at this time related to the putative class action lawsuits or the derivative actions.

We and Bridger Logistics, LLC, have been named, along with two former officers, in a lawsuit filed by Eddystone Rail Company ("Eddystone") on February 2, 2017 in the Eastern District of Pennsylvania (the "EDPA Lawsuit"). Eddystone indicated that it has prevailed or settled an arbitration against Jamex Transfer Services (“JTS”), then named Bridger Transfer Services, a former subsidiary of Bridger Logistics, LLC (“Bridger”). The arbitration involved a claim against JTS for money due for deficiency payments under a contract for the use of an Eddystone facility used to offload crude from rail onto barges. Eddystone alleges that we transferred assets out of JTS prior to the sale of the membership interest in JTS to Jamex Transfer Holdings, and that those transfers should be avoided so that the assets can be used to satisfy the amount owed by JTS to Eddystone under the arbitration. Eddystone also alleges that JTS was an “alter ego” of Bridger and Ferrellgas. We believe that we and Bridger have valid defenses to these claims and to Eddystone’s primary claim against JTS on the contract claim. The lawsuit does not specify a specific amount of damages that Eddystone is seeking; however we believe that the amount of such damage claims, if ultimately owed to Eddystone, could be material. We intend to vigorously defend this claim. The lawsuit is in its early stages; as such, management does not currently believe a loss is probable or reasonably estimable at this time. On August 24, 2017, we filed a third-party complaint against JTS, Jamex Transfer Holdings, and other related persons and entities (the "Third-Party Defendants"), asserting claims for breach of contract, indemnification of any losses in the EDPA Lawsuit, tortious interference with contract, and contribution. The Third-Party Defendants have filed motions to dismiss the third-party complaint for alleged lack of personal jurisdiction, failure to state claim, and forum non-conveniens. Ferrellgas is vigorously opposing these motions.

Item 1. “Financial Statements.”

ITEM 1A. RISK FACTORS

~~Except as set forth below, there~~

There have been no material changes from the risk factors set forth under Part I, Item 1A. ~~"Risk Factors"~~“Risk Factors” in our Annual Report on Form 10-K for fiscal ~~2017.~~

~~You may be required to pay taxes on your share of our taxable income even if you do not receive cash distributions from us.~~

~~You may be required to pay federal income taxes~~2021 and in ~~some cases, state and local income taxes on your share of~~ our ~~taxable income, including our taxable income associated with a disposition of property or cancellation of debt, whether or not~~

you receive cash distributions from us. You may not receive cash distributions from us equal to your share of our taxable income or even equal to the actual tax liability which results from that income.

We are currently undertaking a debt and interest expense reduction strategy. As such, we may engage in transactions that could have significant adverse tax consequences to our unitholders. For example, we may sell some of our assets and use the proceeds to pay down debt or fund capital expenditures rather than distributing the proceeds to our unitholders, and some or all of our unitholders may be allocated substantial taxable income and gain resulting from the sale without receiving a cash distribution. We may also engage in transactions to further reduce our existing debt, such as debt exchanges, debt repurchases, or modifications of our existing debt, that could result in cancellation of indebtedness income (COD income), or other income, being allocated to our unitholders as taxable income. This may cause a unitholder to be allocated taxable income with respect to our units with no corresponding distribution of cash to fund the payment of the resulting tax liability to the unitholder.

The ultimate effect of any such allocations will depend on the unitholder's individual tax position with respect to its units. Unitholders are encouraged to consult their tax advisors with respect to the consequences to them of this income.

subsequent SEC filings.


~~ITEM 2.~~	~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

~~None.~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

~~Departure~~

Table of ~~Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers~~Contents

On March 8, 2018, Randy V. Schott, resigned as Senior Vice President of Retail Operations of Ferrellgas, Inc. Ferrellgas, Inc. is the general partner of Ferrellgas Partners, L.P. and Ferrellgas, L.P.

Pursuant to a voluntary retirement and release agreement (the “Release”) effective March 8, 2018 between Mr. Schott and Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P., Mr. Schott will serve in an advisory role for a two-year period. In consideration for his advisory services, Mr. Schott will receive $0.5 million to be paid in bi-weekly installments over the next 24 months, and Ferrellgas, Inc. will cover the employer share of Mr. Schott's medical insurance premiums for 24 months. All existing stock options that Mr. Schott has will, through the term of his employment and thereafter, continue to be subject to the terms and conditions of the Ferrell Companies, Inc. incentive compensation plan documents. The description of the Release is qualified in its entirety by reference to the full text of the agreement, a copy of which is attached as an Exhibit to this Quarterly Report on Form 10-Q.

ITEM 6. EXHIBITS

The exhibits listed below are furnished as part of this Quarterly Report on Form 10-Q. Exhibits required by Item 601 of Regulation S-K of the Securities Act, which are not listed, are not applicable.



	~~Exhibit~~ ~~Number~~	~~Description~~
Exhibit Number	~~3.1~~ Description
2.1	Second Amended Prepackaged Joint Chapter 11 Plan of Reorganization of Ferrellgas Partners, L.P. and Ferrellgas Partners Finance Corp. Incorporated by reference to Exhibit 99.1 to our Quarterly Report on Form 10-Q filed March 8, 2021.
2.2	Transaction Support Agreement, dated December 10, 2020, by and among the Company Parties (as defined therein) and the Consenting Lenders (as defined therein). Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed December 11, 2020.
3.1	Certificate of Limited Partnership of Ferrellgas Partners, L.P. Incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K filed September 29, 2015.
3.2	~~3.2~~	Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. dated as of February 18, 2003. Incorporated by reference to Exhibit 3.1 to our registration statement on Form S-3 filed March 6, 2009.
	~~3.3~~	First Amendment to Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. dated as of March 8, 2005. Incorporated by reference to Exhibit 3.2 to our registration statement on Form S-3 filed March 6, 2009.
	~~3.4~~	Second Amendment to Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. dated as of June 29, 2005. Incorporated by reference to Exhibit 3.3 to our registration statement on Form S-3 filed March 6, 2009.
	~~3.5~~	Third Amendment to Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. dated as of October 11, 2006. Incorporated by reference to Exhibit 3.4 to our registration statement on Form S-3 filed March 6, 2009.
	~~3.6~~	~~Fourth Amendment to the Fourth~~Fifth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. Incorporated by reference to Exhibit ~~3.13~~3.14 to our Quarterly Report on Form 10-Q filed June 7, 2018.
3.3	First Amendment to Fifth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P., dated as of December 11, 2020. Incorporated by reference to Exhibit 3.3 to our Quarterly Report on Form 10-Q filed December ~~7, 2017.~~15, 2020.
3.4	~~3.7~~ Sixth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. dated as of March 30, 2021. Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed April 5, 2021.
3.5	Certificate of Incorporation of Ferrellgas Partners Finance Corp. filed with the Delaware Division of Corporations on March 28, 1996. Incorporated by reference to Exhibit 3.6 to our registration statement on Form S-3 filed March 6, 2009.
3.6	~~3.8~~	Bylaws of Ferrellgas Partners Finance Corp. adopted as of April 1, 1996. Incorporated by reference to Exhibit 3.7 to our registration statement on Form S-3 filed March 6, 2009.
3.7	~~3.9~~	Certificate of Limited Partnership of Ferrellgas, L.P. Incorporated by reference to Exhibit 3.9 to our Annual Report on Form 10-K filed September 29, 2015.
3.8	~~3.10~~	~~Third~~Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas, L.P., dated as of April ~~7, 2004.~~24, 2020. Incorporated by reference to Exhibit ~~3.5 to~~3.1 of our ~~registration statement~~Current Report on Form ~~S-3~~8-K filed ~~March 6, 2009.~~on April 27, 2020.
3.9	~~3.11~~	~~First Amendment to the Third~~Fifth Amended and Restated Agreement of Limited Partnership of Ferrellgas, L.P., dated as of March 30, 2021. Incorporated by reference to Exhibit ~~3.12 to~~3.2 of our ~~Quarterly~~Current Report on Form ~~10-Q~~8-K filed ~~December 7, 2017.~~April 5, 2021.
3.10	~~3.12~~ First Amendment to the Fifth Amended and Restated Agreement of Limited Partnership of Ferrellgas, L.P., dated as of March 30, 2021. Incorporated by reference to Exhibit 3.3 of our Current Report on Form 8-K filed April 5, 2021.
3.11	Certificate of Incorporation of Ferrellgas Finance Corp. filed with the Delaware Division of Corporations on January 16, 2003. Incorporated by reference to Exhibit 3.8 to our registration statement on Form S-3 filed March 6, 2009.
3.12	~~3.13~~	Bylaws of Ferrellgas Finance Corp. adopted as of January 16, 2003. Incorporated by reference to Exhibit 3.9 to our registration statement on Form S-3 filed March 6, 2009.
4.1	~~4.1~~	Specimen Certificate evidencing Common Units representing Limited Partner Interests. Incorporated by reference to Exhibit A of Exhibit 3.1 to our ~~registration statement~~Current Report on Form ~~S-3~~8-K filed ~~March 6, 2009.~~April 5, 2021.
4.2	~~4.2~~	Indenture relating to 5.375% Senior Notes due 2026, dated as of ~~November 4, 2013 with~~March 30, 2021 (with form of Note ~~attached, by and~~attached), among Ferrellgas ~~L.P.~~Escrow, LLC and FG Operating Finance Escrow Corp., ~~Ferrellgas Finance Corp.~~as co-issuers, and U.S. Bank National Association, as ~~trustee, relating to $475 million aggregate amount of the Registrant’s 6 3/4% Senior Notes due 2022.~~trustee. Incorporated by reference to Exhibit 4.1 ~~to our Current Report on Form 8-K filed November 5, 2013.~~
	~~4.3~~	~~Indenture dated as~~ of April 13, 2010, among Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp. and U.S. Bank National Association, as trustee, relating to $280 million aggregate amount of the Registrant’s 8 5/8% Senior Notes due 2020. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed April ~~13, 2010; File No. 001-11331; 000-50182; 000-50183 and 333-06693.~~5, 2021.
4.3	~~4.4~~	~~First~~Assumption Supplemental Indenture relating to 5.375% Senior Notes due 2026, dated as of ~~April 13, 2010, with form of Note attached, by and~~March 30, 2021, among Ferrellgas, ~~Partners,~~ L.P., and Ferrellgas ~~Partners~~ Finance Corp., as co-issuers, the guarantors party thereto and U.S. Bank National Association, as trustee. Incorporated by reference to Exhibit 4.2 toof our Current Report on Form 8-K filed April ~~13, 2010; File No. 001-11331; 000-50182; 000-50183 and 333-06693.~~5, 2021.
4.4	~~4.5~~	~~Second Supplemental~~ Indenture relating to 5.875% Senior Notes due 2029, dated as of ~~January~~March 30, ~~2017, by and~~2021 (with form of Note attached), among Ferrellgas ~~Partners, L.P.~~Escrow, LLC and FG Operating Finance Escrow Corp., ~~Ferrellgas Partners Finance Corp.~~as co-issuers, and U.S. Bank National Association, as trustee. Incorporated by reference to Exhibit ~~4.3 to~~4.4 of our Current Report on Form 8-K filed ~~January 30, 2017; File No. 001-11331; 000-50182; 000-50183 and 333-06693.~~April 5, 2021.

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4.5		~~4.6~~		Assumption Supplemental Indenture relating to 5.875% Senior Notes due 2029, dated as of ~~November 24, 2010, by and~~March 30, 2021, among Ferrellgas, L.P., and Ferrellgas Finance Corp., as co-issuers, the guarantors party thereto and U.S. Bank National Association, as ~~trustee, relating to $500 million aggregate amount of the Registrant’s 6 1/2% Senior Notes due 2021.~~trustee. Incorporated by reference to Exhibit ~~4.1 to~~4.5 of our Current Report on Form 8-K filed ~~November 30, 2010; File No. 001-11331; 000-50182; 000-50183 and 333-06693.~~April 5, 2021.
4.6		~~4.7~~		~~Registration Rights~~Investment Agreement, dated as of ~~December 17, 1999, by~~March 30, 2021, among Ferrellgas, L.P., Ferrellgas, Inc. and ~~between Ferrellgas Partners, L.P. and Williams Natural Gas Liquids, Inc.~~the several purchasers named therein. Incorporated by reference to Exhibit ~~4.6 to~~10.2 of our ~~Annual~~Current Report on Form ~~10-K~~8-K filed ~~September 29, 2014.~~April 5, 2021.


4.7
		~~4.8~~	~~First Amendment to Registration Rights~~Voting Agreement, dated as of March ~~14, 2000, by~~30, 2021, among Ferrellgas, Inc., Ferrell Companies, Inc., and ~~between~~the holders of Class B Units of Ferrellgas Partners, L.P. ~~and Williams Natural Gas Liquids, Inc.~~ Incorporated by reference to Exhibit ~~4.7 to~~4.1 of our ~~Annual~~Current Report on Form ~~10-K~~8-K filed ~~September 29, 2014.~~April 14, 2021.
4.8		~~4.9~~	~~Second Amendment to Registration Rights~~Voting Agreement, dated as of ~~April 6, 2001, by~~March 30, 2021, among Ferrellgas, Inc., Ferrell Companies, Inc., and ~~between~~the purchasers of the Senior Preferred Units of Ferrellgas, ~~Partners,~~ L.P. ~~and The Williams Companies, Inc.~~ Incorporated by reference to Exhibit ~~4.8 to~~4.2 of our ~~Annual~~Current Report on Form ~~10-K~~8-K filed ~~September 29, 2014.~~April 14, 2021.
10.1		~~4.10~~ Credit Agreement, dated as of March 30, 2021, among Ferrellgas, L.P., Ferrellgas, Inc., certain subsidiaries of Ferrellgas, L.P., as guarantors, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed April 5, 2021.
10.2		~~Third~~First Amendment to ~~Registration Rights~~the Credit Agreement, dated as of June ~~29, 2005, by~~11, 2021, among Ferrellgas, L.P., Ferrellgas, Inc., the lenders party thereto, and ~~between Ferrellgas Partners, L.P.~~JPMorgan Chase Bank, N.A., as administrative agent and ~~JEF Capital Management, Inc.~~collateral agent. Incorporated by reference to Exhibit ~~4.13~~10.29 to our Quarterly Report on Form 10-Q filed June ~~9, 2010; File No. 001-11331; 000-50182; 000-50183 and 333-06693.~~14, 2021.
# 10.3		~~4.11~~	Indenture, dated June 8, 2015, by and among Ferrellgas, L.P., Ferrellgas, Finance Corp. the subsidiary guarantors party thereto, and U.S. Bank National Association, as trustee, relating to $500 million aggregate amount of the Registrant’s 6 3/4% Senior Notes due 2023. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed June 8, 2015.
		~~4.12~~	Registration Rights Agreement, dated as of June 8, 2015, by and among Ferrellgas, L.P., Ferrellgas Finance Corp. and J.P. Morgan Securities L.L.C., as representative of the several initial purchasers. Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed June 8, 2015.
		~~4.13~~	Registration Rights Agreement, dated as of June 24, 2015 among Ferrellgas Partners, L.P., Jamex Marketing, LLC, Rios Holdings, Inc. and Gamboa Enterprises, LLC. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed June 24, 2015.
		~~4.14~~	Registration Rights Agreement dated as of January 30, 2017 by and among Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the initial purchasers referred to therein. Incorporated by reference to Exhibit 4.4 to our Current Report on Form 8-K filed January 30, 2017.
		~~10.1~~	Credit Agreement dated as of November 2, 2009, among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America, N.A. as administrative agent, swing line lender and L/C issuer, and the lenders party hereto. Incorporated by reference to Exhibit 10.1 to our Annual Report on Form 10-K filed September 29, 2014.
		~~10.2~~	Amendment No. 1 to Credit Agreement dated as of September 23, 2011, by and among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America, N.A. as administrative agent, swing line lender and L/C issuer, and the lenders party hereto. Incorporated by reference to Exhibit 10.2 to our Annual Report on Form 10-K filed September 26, 2011; File No. 001-11331; 000-50182; 000-50183 and 333-06693.
		~~10.3~~	Amendment No. 2 to Credit Agreement dated as of October 21, 2013, by and among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America, N.A. as administrative agent, swing line lender and L/C issuer, and the lenders party hereto. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed October 23, 2013.
		~~10.4~~	Amendment No. 3 to Credit Agreement dated as of June 6, 2014, by and among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America, N.A. as administrative agent, swing line lender and L/C issuer, and the lenders party hereto. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed June 9, 2014.
		~~10.5~~	Amendment No. 4 to Credit Agreement and Amendment No. 2 to Security Agreement, dated as of May 29, 2015, by and among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America, N.A. as administrative agent, swing line lender and L/C issuer, and the lenders party hereto. Incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q filed June 9, 2015.
		~~10.6~~	Amended and Restated Receivable Sale Agreement dated as of January 19, 2012, between Ferrellgas, L.P. and Blue Rhino Global Sourcing, Inc., as originators, and Ferrellgas Receivables, LLC, as buyer. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed January 20, 2012; File No. 001-11331; 000-50182; 000-50183 and 333-06693.
		~~10.7~~	Receivables Purchase Agreement dated as of January 19, 2012, among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, the purchasers from time to time party hereto, Fifth Third Bank and SunTrust Bank, as co-agents, and Wells Fargo Bank, N.A., as administrative agent. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed January 20, 2012; File No. 001-11331; 000-50182; 000-50183 and 333-06693.
		~~10.8~~	First Amendment to Receivables Purchase Agreement dated as of April 30, 2012, among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, the purchasers from time to time party hereto, Fifth Third Bank and SunTrust Bank, as co-agents, and Wells Fargo Bank, N.A., as administrative agent. Incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q filed June 8, 2012; File No. 001-11331; 000-50182; 000-50183 and 333-06693.
		~~10.9~~	Second Amendment to Receivables Purchase Agreement dated as of April 1, 2014, among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, the purchasers from time to time party hereto, Fifth Third Bank and SunTrust Bank, as co-agents, and Wells Fargo Bank, N.A., as administrative agent. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed April 4, 2014.
		~~10.10~~	Third Amendment to Receivables Purchase Agreement dated as of July 27, 2016, among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, the purchasers from time to time party hereto, Fifth Third Bank and SunTrust Bank, as co-agents, and Wells Fargo Bank, N.A., as administrative agent. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed July 27, 2016.
	#	~~10.11~~	Ferrell Companies, Inc. Supplemental Savings Plan, as amended and restated effective January 1, 2010. Incorporated by reference to Exhibit 10.14 to our Quarterly Report on Form 10-Q filed March 10, 2010; File No. 001-11331; 000-50182; 000-50183 and 333-06693.
# 10.4	#	~~10.12~~	Ferrell Companies, Inc. 1998 Incentive Compensation Plan, as amended and restated effective October 11, 2004. Incorporated by reference to Exhibit 10.9 to our Annual Report on Form 10-K filed September 29, 2014.
# 10.5	#	~~10.13~~	Amendment to Ferrell Companies, Inc. 1998 Incentive Compensation Plan, dated as of March 7, 2010. Incorporated by reference to Exhibit 10.7 to our Quarterly Report on Form 10-Q filed June 9, 2010; File No. 001-11331; 000-50182; 000-50183 and 333-06693.
# 10.6	#	~~10.14~~	Employment, Confidentiality, and Noncompete Agreement dated as of July 17, 1998 by and among Ferrell Companies, Inc. as the company, Ferrellgas, Inc. as the company, James E. Ferrell as the executive and LaSalle National Bank as trustee of the Ferrell Companies, Inc. Employee Stock Ownership Trust. Incorporated by reference to Exhibit 10.11 to our Annual Report on Form 10-K filed September 29, 2014.
# 10.7	#	~~10.15~~	Employment Agreement dated as of August 10, 2009 by and between Ferrellgas, Inc. as the company and Stephen L. Wambold as the executive. Incorporated by reference to Exhibit 10.13 to our Annual Report on Form 10-K filed September 29, 2014.



	#	~~10.16~~	Employment Agreement dated as of August 10, 2009 by and between Ferrellgas, Inc. as the company and Tod Brown as the executive. Incorporated by reference to Exhibit 10.15 to our Annual Report on Form 10-K filed September 29, 2014.
	#	~~10.17~~	ISDA 2002 Master Agreement and Schedule to the 2002 ISDA Master Agreement both dated as of May 3, 2012 together with three Confirmation of Swap Transaction documents each dated as of May 8, 2012, all between SunTrust Bank and Ferrellgas, L.P. Incorporated by reference to Exhibit 10.17 to our Quarterly Report on Form 10-Q filed June 8, 2012; File No. 001-11331; 000-50182; 000-50183 and 333-06693.
	#	~~10.18~~	Form of Director/Officer Indemnification Agreement, by and between Ferrellgas, Inc. and each director and executive officer. Incorporated by reference to Exhibit 10.16 to our Quarterly Report on Form 10-Q filed March 9, 2012; File No. 001-11331; 000-50182; 000-50183 and 333-06693.
# 10.8	#	~~10.19~~	Membership interest purchase agreement dated May 1, 2014, among Ferrellgas, L.P. and the former members of Sable Environmental LLC and Sable SWD 2 LLC. Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed May 1, 2014. .
	#	~~10.20~~	Ferrell Companies, Inc. 2015 Deferred Appreciation Rights Plan, dated as of July 31, 2015. Incorporated by reference to Exhibit 10.23 to our Annual Report on Form 10-K filed September 29, 2015.
# 10.9	#	~~10.21~~	~~Employment agreement~~Form of Indemnification Agreement, dated ~~July 10, 2015~~as of November 19, 2019, by and between Ferrellgas ~~Inc. as the company~~Partners, LP and ~~Alan C. Heitmann as the executive.~~each director and executive officer of Ferrellgas, Inc., its general partner. Incorporated by reference to Exhibit ~~99.1~~10.34 to our ~~Current~~Quarterly Report on Form ~~8-K~~10-Q filed ~~July 15, 2015.~~December 6, 2019.
# 10.10		~~10.22~~	~~Employment agreement dated as of May 29, 2015 by~~Change in Control Retention Bonus Letter Agreement with Tamria A. Zertuche, Senior Vice President and ~~between Ferrellgas, Inc. as the company and Julio E. Rios, II as the executive. Incorporated by reference to Exhibit 10.25 to our Annual Report on Form 10-K filed September 29, 2015.~~
	#	~~10.23~~	Employment agreement dated as of May 29, 2015 by and between Ferrellgas, Inc. as the company and Jeremy H. Gamboa as the executive. Incorporated by reference to Exhibit 10.26 to our Annual Report on Form 10-K filed September 29, 2015.
	#	~~10.24~~	~~Employment agreement dated as of May 28, 2015 by and between Ferrellgas, Inc. as the company and Thomas M. Van Buren as the executive.~~Chief Operating Officer. Incorporated by reference to Exhibit 10.27 to our ~~Annual~~Quarterly Report on Form ~~10-K~~10-Q filed ~~September 29, 2015.~~December 15, 2020.
# 10.11	+	~~10.25~~	Transportation Logistics Agreement, dated June 24, 2015, by and between Ferrellgas Partners, L.P. and Bridger, L.L.C. Incorporated by reference to Exhibit 10.28 to our Annual Report on Form 10-K filed September 29, 2015.
		~~10.26~~	Termination, Settlement and Release Agreement dated September 1, 2016, by and between Jamex, LLC, Jamex Marketing, LLC, Jamex Unitholder, LLC, and, together with Jamex and Jamex Parent, and James Ballengee, on the one hand, and Ferrellgas Partners, L.P. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed September 2, 2016.
		~~10.27~~	~~Common Unit Repurchase Agreement, dated~~Offer Letter, effective as of ~~November 13, 2015, by and between Jamex Marketing, LLC and Ferrellgas Partners, L.P. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed November 13, 2015.~~
		~~10.28~~	Secured Promissory Note dated September 1, 2016 between Jamex Marketing, LLC and Bridger Logistics, LLC. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed September 2, 2016.
		~~10.29~~	Secured Revolving Promissory Note dated September 1, 2016 between Jamex Marketing, LLC and Ferrellgas, L.P. Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed September 2, 2016.
		~~10.30~~	Guaranty Agreement dated September 1, 2016 by James Ballengee and Bacchus Capital Trading, LLC in favor of Bridger Logistics, LLC. Incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed September 2, 2016.
		~~10.31~~	Guaranty Agreement (Term Note) dated September 1, 2016 by the Guarantors party thereto in favor of Bridger Logistics, LLC. Incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K filed September 2, 2016.
		~~10.32~~	Guaranty Agreement (Working Capital Note) dated September 1, 2016 by the Guarantors party thereto in favor of Ferrellgas, L.P. Incorporated by reference to Exhibit 10.6 to our Current Report on Form 8-K filed September 2, 2016.
		~~10.33~~	Security Agreement dated September 1, 2016 by the Grantors party thereto in favor of Ferrellgas, L.P. as collateral agent for itself and for the benefit of Bridger Logistics, LLC. Incorporated by reference to Exhibit 10.7 to our Current Report on Form 8-K filed September 2, 2016.
		~~10.34~~	Agreement and release dated September 27, 2016 by and between Stephen L. Wambold and Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P. Incorporated by reference to Exhibit 10.36 to our Current Report on Form 10-K filed September 28, 2016.
		~~10.35~~	~~Amendment No. 5 to Credit Agreement dated as of September 27, 2016,~~December 30, 2020, by and among Ferrellgas, ~~L.P. as the borrower, Ferrellgas,~~ Inc. ~~as the general partner of the borrower, Bank of America, N.A. as administrative agent, swing line lender~~ and ~~L/C issuer, and the lenders party hereto. Incorporated by reference to Exhibit 10.37 to our Current Report on Form 10-K filed September 28, 2016.~~
		~~10.36~~	Fourth Amendment to Receivables Purchase Agreement dated as of September 27, 2016, among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, the purchasers from time to time party hereto, Fifth Third Bank and SunTrust Bank, as co-agents, and Wells Fargo Bank, N.A., as administrative agent. Incorporated by reference to Exhibit 10.38 to our Current Report on Form 10-K filed September 28, 2016.
		~~10.37~~	Amendment No. 6 to Credit Agreement and Amendment No. 3 to Security Agreement, dated as of April 28, 2017, by and among Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the general partner of the borrower, Bank of America, N.A. as administrative agent, swing line lender and L/C issuer, and the lenders party hereto. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed May 2, 2017.
		~~10.38~~	Amendment No. 5 to Receivables Purchase Agreement dated as of April 28, 2017, among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, the purchasers from time to time party hereto, Fifth Third Bank and SunTrust Bank, as co-agents, and Wells Fargo Bank, N.A., as administrative agent. Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed May 2, 2017.
	#	~~10.39~~	~~Tod D. Brown Agreement and Release.~~James E. Ferrell. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed January ~~19, 2017.~~5, 2021.
# 10.12	#	~~10.40~~	~~Thomas M. Van Buren~~Employment Agreement, dated as of December 31, 2020, by and ~~Release.~~among Ferrellgas, Inc. and James E. Ferrell. Incorporated by reference to Exhibit ~~10.1~~10.2 to our Current Report on Form 8-K filed ~~September 15, 2017.~~January 5, 2021.


# 10.13
	~~10.41~~	~~Purchase~~Executive Confidentiality and Restrictive Covenants Agreement, dated ~~January 24, 2017~~as of December 31, 2020, by and among Ferrellgas, Inc. and James E. Ferrell. Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed January 5, 2021.
10.14	Term Loan Credit Agreement, dated as of January 8, 2021, between Ferrellgas Partners, L.P., ~~Ferrellgas Partners Finance Corp.,~~as the borrower, and Ferrellgas, L.P., ~~Ferrellgas, Inc. and~~as the ~~initial purchasers named therein.~~lender. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed January ~~30, 2017.~~11, 2021.
# 10.15	~~10.42~~	~~Settlement Agreement and Release~~Offer Letter, dated ~~September 25, 2017~~as of July 29, 2021, by and ~~between Julio E. Rios, II,~~among Ferrellgas, Inc. and ~~Ferrellgas, Inc.~~Dhiraj Cherian. Incorporated by reference to Exhibit ~~10.42~~10.30 to our Annual Report on Form 10-K filed October 15, 2021.

Table of Contents

# 10.16		Executive Severance Agreement, dated as of September ~~28, 2017.~~
		~~10.43~~	~~Settlement Agreement and Release dated September 25, 2017~~20, 2021, by and ~~between Jeremy Gamboa,~~among Ferrellgas, Inc. and ~~Ferrellgas, Inc.~~Dhiraj Cherian. Incorporated by reference to Exhibit ~~10.42~~10.31 to our Annual Report on Form 10-K filed ~~September 28, 2017.~~October 15, 2021.
# 10.17	#	~~10.44~~	~~Doran N. Schwartz offer letter dated as of September 8, 2017.~~Ferrellgas, Inc. Short Term Incentive Plan, effective August 1, 2020. Incorporated by reference to Exhibit ~~10.1~~10.32 to our ~~Current~~Annual Report on Form ~~8-K~~10-K filed ~~September 22, 2017.~~October 15, 2021.
* # 10.18	#	~~10.45~~	~~Voluntary Retirement~~Separation and Release Agreement, dated ~~March 8, 2018~~as of December 1, 2021, by and ~~between Randy V. Schott~~among Ferrellgas, Inc. and ~~Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P.~~Dhiraj Cherian. Incorporated by reference to Exhibit 10.18 to our Quarterly Report on Form 10-Q filed December 15, 2021.
* 31.1		~~31.1~~	Certification of Ferrellgas Partners, L.P. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.
* 31.2		~~31.2~~	Certification of Ferrellgas Partners Finance Corp. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.
* 31.3		~~31.3~~	Certification of Ferrellgas, L.P. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.
* 31.4		~~31.4~~	Certification of Ferrellgas Finance Corp. pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.
* 32.1		~~32.1~~	Certification of Ferrellgas Partners, L.P. pursuant to 18 U.S.C. Section 1350.
* 32.2		~~32.2~~	Certification of Ferrellgas Partners Finance Corp. pursuant to 18 U.S.C. Section 1350.
* 32.3		~~32.3~~	Certification of Ferrellgas, L.P. pursuant to 18 U.S.C. Section 1350.
* 32.4		~~32.4~~	Certification of Ferrellgas Finance Corp. pursuant to 18 U.S.C. Section 1350.
* 101.INS		~~101.INS~~	XBRL Instance ~~Document.~~Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
* 101.SCH		~~101.SCH~~	XBRL Taxonomy Extension Schema Document.
* 101.CAL		~~101.CAL~~	XBRL Taxonomy Extension Calculation Linkbase Document.
* 101.DEF		~~101.DEF~~	XBRL Taxonomy Extension Definition Linkbase Document.
* 101.LAB		~~101.LAB~~	XBRL Taxonomy Extension Label Linkbase Document.
* 101.PRE		~~101.PRE~~	XBRL Taxonomy Extension Presentation Linkbase Document.
* 104		The cover page from Ferrellgas Partners, L.P.’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2022, formatted in Inline XBRL and contained in Exhibit 101.

*
		*		Filed herewith

Management contracts or compensatory plans.

Confidential treatment has been granted with respect to certain portions of this exhibit. Omitted portions have been filed separately with the SEC.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

~~SIGNATURES~~

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on ~~its~~their behalf by the undersigned, thereunto duly authorized.



		FERRELLGAS PARTNERS, L.P.
		By Ferrellgas, Inc. ~~(General Partner)~~, its general partner

Date:	~~March 8, 2018~~ June 10, 2022	By	/s/ ~~Doran N. Schwartz~~James E. Ferrell
			~~Doran N. Schwartz~~ James E. Ferrell
			~~Senior Vice~~ Chief Executive Officer and President; ~~Chief Financial Officer; Treasurer~~
			Chairman of the Board of Directors

		By	/s/ Wendel Parks
			Wendel Parks
			Corporate Controller (Principal Financial and Accounting Officer)


		FERRELLGAS PARTNERS FINANCE CORP.

Date:	~~March 8, 2018~~ June 10, 2022	By	/s/ ~~Doran N. Schwartz~~James E. Ferrell
			~~Doran N. Schwartz~~ James E. Ferrell
			Chief ~~Financial~~Executive Officer, President, and Sole Director

		By	/s/ Wendel Parks
		~~FERRELLGAS, L.P.~~	Wendel Parks
		~~By Ferrellgas, Inc. (General Partner)~~

~~Date:~~	~~March 8, 2018~~	By	~~/s/ Doran N. Schwartz~~
			~~Doran N. Schwartz~~
			~~Senior Vice President; Chief Financial Officer; Treasurer~~ Corporate Controller (Principal Financial and Accounting Officer)

				FERRELLGAS, L.P.
		By Ferrellgas, Inc., its general partner

Date:	June 10, 2022	By	/s/ James E. Ferrell
			James E. Ferrell
			Chief Executive Officer and President; Chairman of the Board of Directors

		By	/s/ Wendel Parks
			Wendel Parks
			Corporate Controller (Principal Financial and Accounting Officer)

		FERRELLGAS FINANCE CORP.

Date:	~~March 8, 2018~~ June 10, 2022	By	/s/ ~~Doran N. Schwartz~~James E. Ferrell
			~~Doran N. Schwartz~~ James E. Ferrell
			Chief ~~Financial~~Executive Officer, President, and Sole Director

		By	/s/ Wendel Parks
			Wendel Parks
			Corporate Controller (Principal Financial and Accounting Officer)

~~E-5~~


or
o ☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from to

Delaware		43-1698480
Delaware		43-1742520
Delaware ~~Delaware~~ ~~Delaware~~ ~~Delaware~~		~~43-1698480~~ ~~43-1742520~~ 43-1698481 ~~14-1866671~~
Delaware		14-1866671
(States or other jurisdictions of incorporation or organization)		(I.R.S. Employer Identification Nos.)

~~7500 College Boulevard,~~ ~~Suite 1000, Overland Park, Kansas~~ One Liberty Plaza, Liberty, Missouri		~~66210~~ 64068
(Address of principal executive office)		(Zip Code)



Ferrellgas Partners, L.P.:
Large ~~accelerated filer~~ x Accelerated Filer ☐	Accelerated Filer ☐	~~Accelerated filer~~ o Non-accelerated Filer ☒	~~Non-accelerated filer~~ o ~~(do not check if a smaller reporting company)~~	Smaller ~~reporting company~~ o Reporting Company ☒
				Emerging ~~growth company~~ Growth Company ☐



Ferrellgas Partners Finance Corp, Ferrellgas, L.P. and Ferrellgas Finance Corp.:
Large ~~accelerated filer~~ o Accelerated Filer ☐	Accelerated Filer ☐	~~Accelerated filer~~ o Non-accelerated Filer ☒	~~Non-accelerated filer~~ x ~~(do not check if a smaller reporting company)~~	Smaller ~~reporting company~~ o Reporting Company ☒
				Emerging ~~growth company~~ Growth Company ☐


Title of each class:	Trading Symbol	Name of each exchange on which registered:
N/A	N/A	N/A


☒
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended ~~January 31, 2018~~April 30, 2022



Ferrellgas Partners, L.P.	4,857,605	~~97,152,665~~	~~Common~~ Class A Units
	1,300,000	Class B Units
Ferrellgas Partners Finance Corp.	1,000	~~1,000~~	Common Stock
Ferrellgas, L.P.	n/a	n/a	~~n/a~~
Ferrellgas Finance Corp.	1,000	~~1,000~~	Common Stock

	Page

	PART I - FINANCIAL INFORMATION	~~Page~~
ITEM 1.	FINANCIAL STATEMENTS (unaudited)

	Ferrellgas Partners, L.P. and Subsidiaries
	Condensed Consolidated Balance Sheets – ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017~~2021	4 3
	Condensed Consolidated Statements of Operations – Three and ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021	5 4
	Condensed Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) – Three and ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021	6 5
	Condensed Consolidated Statement of ~~Partners’ Deficit~~Equity – ~~Six~~Three and nine months ended ~~January 31, 2018~~April 30, 2022 and 2021	7 6
	Condensed Consolidated Statements of Cash Flows – ~~Six~~Nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021	8 7
	Notes to Condensed Consolidated Financial Statements	9 8

	Ferrellgas Partners Finance Corp.
	Condensed Balance Sheets – ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017~~2021	30 32
	Condensed Statements of Operations – Three and ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021	30 33
	Condensed Statements of Cash Flows – ~~Six~~Nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021	31 34
	Notes to Condensed Financial Statements	32 35

	Ferrellgas, L.P. and Subsidiaries
	Condensed Consolidated Balance Sheets – ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017~~2021	33 36
	Condensed Consolidated Statements of Operations – Three and ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021	34 37
	Condensed Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) – Three and ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021	35 38
	Condensed Consolidated Statement of Partners’ Deficit – ~~Six~~Three and nine months ended ~~January 31, 2018~~April 30, 2022 and 2021	36 39
	Condensed Consolidated Statements of Cash Flows – ~~Six~~Nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021	37 40
	Notes to Condensed Consolidated Financial Statements	38 41

	Ferrellgas Finance Corp.
	Condensed Balance Sheets – ~~January 31, 2018~~April 30, 2022 and July 31, ~~2017~~2021	63 61
	Condensed Statements of Operations – Three and ~~six~~nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021	63

62

		Condensed Statements of Cash Flows – ~~Six~~Nine months ended ~~January 31, 2018~~April 30, 2022 and ~~2017~~2021		64 63
		Notes to Condensed Financial Statements		65 64

ITEM 2.		~~MANAGEMENT'S~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		66 65
ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		92 84
ITEM 4.		CONTROLS AND PROCEDURES		93 86

			PART II - OTHER INFORMATION
ITEM 1.		LEGAL PROCEEDINGS		94 86
ITEM 1A.		RISK FACTORS		94 86
ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		95 86
ITEM 3.		DEFAULTS UPON SENIOR SECURITIES		95 86
ITEM 4.		MINE SAFETY DISCLOSURES		95 86
ITEM 5.		OTHER INFORMATION		95 86
ITEM 6.	EXHIBITS	~~EXHIBITS~~		~~E-1~~ 87



FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
	January 31, 2018			July 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	14,173		$	5,760
Accounts and notes receivable, net (including $235,150 and $109,407 of accounts receivable pledged as collateral at January 31, 2018 and July 31, 2017, respectively)	255,978			165,084
Inventories	110,092			92,552
Assets held for sale	52,200			—
Prepaid expenses and other current assets	41,400			33,388
Total current assets	473,843			296,784

Property, plant and equipment, net	646,327			731,923
Goodwill, net	246,098			256,103
Intangible assets (net of accumulated amortization of $452,283 and $436,428 at January 31, 2018 and July 31, 2017, respectively)	243,079			251,102
Other assets, net	77,712			74,057
Total assets	$	1,687,059		$	1,609,969

LIABILITIES AND PARTNERS' DEFICIT
Current liabilities:
Accounts payable	$	82,072		$	85,561
Short-term borrowings	261,200			59,781
Collateralized note payable	166,000			69,000
Other current liabilities	140,510			126,224
Total current liabilities	649,782			340,566

Long-term debt	1,811,617			1,995,795
Other liabilities	35,422			31,118
Contingencies and commitments (Note J)

Partners' deficit:
Common unitholders (97,152,665 units outstanding at January 31, 2018 and July 31, 2017)	(762,046		)	(701,188		)
General partner unitholder (989,926 units outstanding at January 31, 2018 and July 31, 2017)	(67,604		)	(66,991		)
Accumulated other comprehensive income	24,332			14,601
Total Ferrellgas Partners, L.P. partners' deficit	(805,318		)	(753,578		)
Noncontrolling interest	(4,444		)	(3,932		)
Total partners' deficit	(809,762		)	(757,510		)
Total liabilities and partners' deficit	$	1,687,059		$	1,609,969
See notes to condensed consolidated financial statements.



FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)

	For the three months ended January 31,					For the six months ended January 31,
	2018			2017		2018			2017

Net earnings (loss)	$	(1,774	)	$	38,528	$	(50,090	)	$	(4,943	)
Other comprehensive income (loss):
Change in value of risk management derivatives	1,072			15,262		23,521			20,400
Reclassification of (gains) losses on derivatives to earnings, net	(9,743		)	514		(13,692		)	4,752
Other comprehensive income (loss)	(8,671		)	15,776		9,829			25,152
Comprehensive income (loss)	(10,445		)	54,304		(40,261		)	20,209
Less: Comprehensive income (loss) attributable to noncontrolling interest	(19		)	590		(234		)	286
Comprehensive income (loss) attributable to Ferrellgas Partners, L.P.	$	(10,426	)	$	53,714	$	(40,027	)	$	19,923
See notes to condensed consolidated financial statements.



	Number of units									Accumulated		Total Ferrellgas
			General					General		other		Partners, L.P.
	Class A	Class B	partner	Class A		Class B		partner		comprehensive		partners'		Non-controlling		Total partners'
	unitholders	unitholders	unitholder	unitholders		unitholders		unitholder		income		deficit		interest		deficit
Balance at July 31, 2021	4,857.6	1,300.0	49.5	$	(1,214,813)	$	383,012	$	(72,178)	$	88,866	$	(815,113)	$	(7,966)	$	(823,079)
Contributions in connection with non-cash ESOP compensation charges	—	—	—		892		—		8		—		900		9		909
Distributions to Class B unitholders	—	—	—		—		(49,998)		—		—		(49,998)		—		(49,998)
Net earnings allocated to preferred units	—	—	—		(16,835)		—		(170)		—		(17,005)		—		(17,005)
Net loss	—	—	—		(8,520)		—		(86)		—		(8,606)		(254)		(8,860)
Other comprehensive income	—	—	—		—		—		—		49,813		49,813		509		50,322
Balance at October 31, 2021	4,857.6	1,300.0	49.5		(1,239,276)		333,014		(72,426)		138,679		(840,009)		(7,702)		(847,711)
Contributions in connection with non-cash ESOP compensation charges	—	—	—		736		—		7		—		743		8	��	751
Net earnings allocated to preferred units	—	—	—		(16,154)		—		(163)		—		(16,317)		—		(16,317)
Net earnings	—	—	—		57,323		49,998		1,084		—		108,405		947		109,352
Other comprehensive loss	—	—	—		—		—		—		(47,583)		(47,583)		(487)		(48,070)
Balance at January 31, 2022	4,857.6	1,300.0	49.5		(1,197,371)		383,012		(71,498)		91,096		(794,761)		(7,234)		(801,995)
Contributions in connection with non-cash ESOP compensation charges	—	—	—		759		—		9		—		768		8		776
Net earnings allocated to preferred units	—	—	—		(15,558)		—		(157)		—		(15,715)		—		(15,715)
Net earnings	—	—	—		66,911		—		675		—		67,586		537		68,123
Other comprehensive loss	—	—	—		—		—		—		(14,642)		(14,642)		(148)		(14,790)
Balance at April 30, 2022	4,857.6	1,300.0	49.5	$	(1,145,259)	$	383,012	$	(70,971)	$	76,454	$	(756,764)	$	(6,837)	$	(763,601)



	January 31, 2018		July 31, 2017
Notes receivable, less current portion	$	36,371	$	32,500
Other	41,341		41,557
Other assets, net	$	77,712	$	74,057



	January 31, 2018	July 31, 2017
Public common unitholders	69,612,939	69,612,939
Ferrell Companies (1)	22,529,361	22,529,361
FCI Trading Corp. (2)	195,686	195,686
Ferrell Propane, Inc. (3)	51,204	51,204
James E. Ferrell (4)	4,763,475	4,763,475



Ferrell Companies	$	2,253
FCI Trading Corp.	20
Ferrell Propane, Inc.	5
James E. Ferrell	476
General partner	98



	Asset (Liability)
	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)		Total
January 31, 2018:
Assets:
Derivative financial instruments:
Commodity derivatives	$	—	$	25,725		$	—	$	25,725
Liabilities:
Derivative financial instruments:
Interest rate swap agreements	$	—	$	(2,423	)	$	—	$	(2,423	)
Commodity derivatives	$	—	$	(1,417	)	$	—	$	(1,417	)


July 31, 2017:
Assets:
Derivative financial instruments:
Interest rate swap agreements	$	—	$	583		$	—	$	583
Commodity derivatives	$	—	$	16,212		$	—	$	16,212
Liabilities:
Derivative financial instruments:
Interest rate swap agreements	$	—	$	(707	)	$	—	$	(707	)
Commodity derivatives	$	—	$	(1,258	)	$	—	$	(1,258	)



	January 31, 2018
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expenses and other current assets	$	3,018	Other current liabilities	$	12,201
	Other assets, net	1,404		Other liabilities	5,216
		$	4,422		$	17,417



		Amount of Gain Recognized on Derivative				Amount of Interest Expense Recognized on Fixed-Rate Debt (Related Hedged Item)
Derivative Instrument	Location of Amounts Recognized on Derivative	For the three months ended January 31,				For the three months ended January 31,
		2018		2017		2018			2017
Interest rate swap agreements	Interest expense	$	88	$	328	$	(2,275	)	$	(2,275	)

		Amount of Gain Recognized on Derivative				Amount of Interest Expense Recognized on Fixed-Rate Debt (Related Hedged Item)
Derivative Instrument	Location of Amounts Recognized on Derivative	For the six months ended January 31,				For the six months ended January 31,
		2018		2017		2018			2017
Interest rate swap agreements	Interest expense	$	226	$	748	$	(4,550	)	$	(4,550	)



	For the three months ended January 31, 2018
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI		Location of Gain (Loss) Reclassified from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI		Location of Gain (Loss) Reclassified from AOCI into Income	Effective portion			Ineffective portion
Commodity derivatives	$	960	Cost of sales-propane and other gas liquids sales	$	9,886		$	—
Interest rate swap agreements	112		Interest expense	(143		)	—
	$	1,072		$	9,743		$	—

	For the three months ended January 31, 2017
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI		Location of Gain (Loss) Reclassified from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI		Location of Gain (Loss) Reclassified from AOCI into Income	Effective portion			Ineffective portion
Commodity derivatives	$	14,699	Cost of sales-propane and other gas liquids sales	$	73		$	—
Interest rate swap agreements	563		Interest expense	(587		)	—
	$	15,262		$	(514	)	$	—

	For the six months ended January 31, 2018
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI		Location of Gain (Loss) Reclassified from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI		Location of Gain (Loss) Reclassified from AOCI into Income	Effective portion			Ineffective portion
Commodity derivatives	$	23,283	Cost of sales-propane and other gas liquids sales	$	14,018		$	—
Interest rate swap agreements	238		Interest expense	(326		)	—
	$	23,521		$	13,692		$	—

	For the six months ended January 31, 2017
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI		Location of Gain (Loss) Reclassified from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI		Location of Gain (Loss) Reclassified from AOCI into Income	Effective portion			Ineffective portion
Commodity derivatives	$	19,572	Cost of sales-propane and other gas liquids sales	$	(3,523	)	$	—
Interest rate swap agreements	828		Interest expense	(1,229		)	—
	$	20,400		$	(4,752	)	$	—



	For the three months ended January 31, 2018
Derivatives Not Designated as Hedging Instruments	Amount of Gain (Loss) Recognized in Income			Location of Gain (Loss) Recognized in Income
Commodity derivatives - crude oil	$	(2,080	)	Cost of sales - midstream operations

	For the three months ended January 31, 2017
Derivatives Not Designated as Hedging Instruments	Amount of Gain (Loss) Recognized in Income			Location of Gain (Loss) Recognized in Income
Commodity derivatives - crude oil	$	(1,007	)	Cost of sales - midstream operations
Commodity derivatives - vehicle fuel	$	489		Operating expense

	For the six months ended January 31, 2018
Derivatives Not Designated as Hedging Instruments	Amount of Gain (Loss) Recognized in Income			Location of Gain (Loss) Recognized in Income
Commodity derivatives - crude oil	$	(3,470	)	Cost of sales - midstream operations

	For the six months ended January 31, 2017
Derivatives Not Designated as Hedging Instruments	Amount of Gain (Loss) Recognized in Income			Location of Gain (Loss) Recognized in Income
Commodity derivatives - crude oil	$	(2,248	)	Cost of sales - midstream operations
Commodity derivatives - vehicle fuel	$	1,516		Operating expense



	For the six months ended January 31,
Gains and losses on derivatives included in AOCI	2018			2017
Beginning balance	$	14,648		$	(9,815	)
Change in value of risk management commodity derivatives	23,283			19,572
Reclassification of (gains) and losses on commodity hedges to cost of sales - propane and other gas liquids sales, net	(14,018		)	3,523
Change in value of risk management interest rate derivatives	238			828
Reclassification of losses on interest rate hedges to interest expense	326			1,229
Ending balance	$	24,477		$	15,337



	Ratio of total distributions payable to:
Quarterly distribution per common unit	Common unitholder		General partner
$0.56 to $0.63	86.9	%	13.1	%
$0.64 to $0.82	76.8	%	23.2	%
$0.83 and above	51.5	%	48.5	%



	Three months ended January 31, 2018
	Propane operations and related equipment sales		Midstream operations		Corporate			Total
Segment revenues	$	637,880	$	117,276	$	—		$	755,156
Direct costs (1)	507,386		114,929		12,214			634,529
Adjusted EBITDA	$	130,494	$	2,347	$	(12,214	)	$	120,627

	Three months ended January 31, 2017
	Propane operations and related equipment sales		Midstream operations		Corporate			Total
Segment revenues	$	482,463	$	96,787	$	—		$	579,250
Direct costs (1)	370,175		93,718		10,327			474,220
Adjusted EBITDA	$	112,288	$	3,069	$	(10,327	)	$	105,030

	Six months ended January 31, 2018
	Propane operations and related equipment sales		Midstream operations		Corporate			Total
Segment revenues	$	971,775	$	238,036	$	—		$	1,209,811
Direct costs (1)	810,715		228,830		23,423			1,062,968
Adjusted EBITDA	$	161,060	$	9,206	$	(23,423	)	$	146,843

	Six months ended January 31, 2017
	Propane operations and related equipment sales		Midstream operations		Corporate			Total
Segment revenues	$	753,961	$	204,831	$	—		$	958,792
Direct costs (1)	607,189		196,491		21,063			824,743
Adjusted EBITDA	$	146,772	$	8,340	$	(21,063	)	$	134,049



	Three months ended January 31,						Six months ended January 31,
	2018			2017			2018			2017
Net earnings (loss) attributable to Ferrellgas Partners, L.P.	$	(1,843	)	$	38,098		$	(49,758	)	$	(4,975	)
Income tax expense (benefit)	(162		)	588			215			(2		)
Interest expense	42,673			36,819			83,480			72,247
Depreciation and amortization expense	25,485			25,607			51,217			51,809
EBITDA	66,153			101,112			85,154			119,079
Non-cash employee stock ownership plan compensation charge	4,031			2,945			7,993			6,699
Non-cash stock-based compensation charge	—			1,417			—			3,298
Asset impairments	10,005			—			10,005			—
Loss on asset sales and disposals	39,249			45			40,144			6,468
Other income, net	(684		)	(763		)	(1,195		)	(1,271		)
Severance costs	—			490			1,663			1,959
Professional fees	2,118			—			2,118			—
Unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments	(314		)	(646		)	1,293			(2,215		)
Net earnings (loss) attributable to noncontrolling interest	69			430			(332		)	32
Adjusted EBITDA	$	120,627		$	105,030		$	146,843		$	134,049



FERRELLGAS PARTNERS FINANCE CORP.
(a wholly-owned subsidiary of Ferrellgas Partners, L.P.)
CONDENSED BALANCE SHEETS
(unaudited)
	January 31, 2018			July 31, 2017
ASSETS
Cash	$	1,000		$	1,000
Total assets	$	1,000		$	1,000

Contingencies and commitments (Note B)

STOCKHOLDER'S EQUITY
Common stock, $1.00 par value; 2,000 shares authorized; 1,000 shares issued and outstanding	$	1,000		$	1,000
Additional paid in capital	25,330			25,055
Accumulated deficit	(25,330		)	(25,055		)
Total stockholder's equity	$	1,000		$	1,000
See notes to condensed financial statements.



FERRELLGAS PARTNERS FINANCE CORP.
(a wholly-owned subsidiary of Ferrellgas Partners, L.P.)
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)

	For the three months ended January 31,					For the six months ended January 31,
	2018			2017		2018			2017

General and administrative expense	$	225		$	—	$	275		$	92

Net loss	$	(225	)	$	—	$	(275	)	$	(92	)
See notes to condensed financial statements.



FERRELLGAS PARTNERS FINANCE CORP.
(a wholly-owned subsidiary of Ferrellgas Partners, L.P.)
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
	For the six months ended January 31,
	2018			2017
Cash flows from operating activities:
Net loss	$	(275	)	$	(92	)
Cash used in operating activities	(275		)	(92		)

Cash flows from financing activities:
Capital contribution	275			92
Cash provided by financing activities	275			92

Net change in cash	—			—
Cash - beginning of period	1,000			1,000
Cash - end of period	$	1,000		$	1,000
See notes to condensed financial statements.



	Asset (Liability)
	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)		Total
January 31, 2018:
Assets:
Derivative financial instruments:
Commodity derivatives	$	—	$	25,725		$	—	$	25,725
Liabilities:
Derivative financial instruments:
Interest rate swap agreements	$	—	$	(2,423	)	$	—	$	(2,423	)
Commodity derivatives	$	—	$	(1,417	)	$	—	$	(1,417	)

July 31, 2017:
Assets:
Derivative financial instruments:
Interest rate swap agreements	$	—	$	583		$	—	$	583
Commodity derivatives	$	—	$	16,212		$	—	$	16,212
Liabilities:
Derivative financial instruments:
Interest rate swap agreements	$	—	$	(707	)	$	—	$	(707	)
Commodity derivatives	$	—	$	(1,258	)	$	—	$	(1,258	)



FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
(in thousands)
	As of January 31, 2018
	Ferrellgas, L.P. (Parent and Co-Issuer)			Ferrellgas Finance Corp. (Co-Issuer)		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	13,954		$	1	$	216		$	—		$	—		$	14,171
Accounts and notes receivable, net	(3,004		)	—		23,832			235,150			—			255,978
Intercompany receivables	37,988			—		—			—			(37,988		)	—
Inventories	95,097			—		14,995			—			—			110,092
Assets held for sale	—			—		52,200			—			—			52,200
Prepaid expenses and other current assets	33,630			—		7,762			1			—			41,393
Total current assets	177,665			1		99,005			235,151			(37,988		)	473,834

Property, plant and equipment, net	547,441			—		98,886			—			—			646,327
Goodwill, net	246,098			—		—			—			—			246,098
Intangible assets, net	127,316			—		115,763			—			—			243,079
Intercompany receivables	450,000			—		—			—			(450,000		)	—
Investments in consolidated subsidiaries	(80,685		)	—		—			—			80,685			—
Other assets, net	39,847			—		37,432			433			—			77,712
Total assets	$	1,507,682		$	1	$	351,086		$	235,584		$	(407,303	)	$	1,687,050

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Current liabilities:
Accounts payable	$	78,054		$	—	$	3,926		$	92		$	—		$	82,072
Short-term borrowings	261,200			—		—			—			—			261,200
Collateralized note payable	—			—		—			166,000			—			166,000
Intercompany payables	—			—		44,259			(6,271		)	(37,988		)	—
Other current liabilities	132,047			—		4,074			470			—			136,591
Total current liabilities	471,301			—		52,259			160,291			(37,988		)	645,863

Long-term debt	1,462,936			—		450,037			—			(450,000		)	1,462,973
Other liabilities	30,653			—		4,769			—			—			35,422
Contingencies and commitments

Partners' capital (deficit):
Partners' equity	(481,801		)	1		(155,979		)	75,293			80,685			(481,801		)
Accumulated other comprehensive income	24,593			—		—			—			—			24,593
Total partners' capital (deficit)	(457,208		)	1		(155,979		)	75,293			80,685			(457,208		)
Total liabilities and partners' capital (deficit)	$	1,507,682		$	1	$	351,086		$	235,584		$	(407,303	)	$	1,687,050



FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(in thousands)

	For the three months ended January 31, 2018
	Ferrellgas, L.P. (Parent and Co-Issuer)			Ferrellgas Finance Corp. (Co-Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

Revenues:
Propane and other gas liquids sales	$	592,275		$	—		$	(36	)	$	—		$	—		$	592,239
Midstream operations	—			—			117,276			—			—			117,276
Other	22,707			—			22,934			—			—			45,641
Total revenues	614,982			—			140,174			—			—			755,156

Costs and expenses:
Cost of sales - propane and other gas liquids sales	362,927			—			(9		)	—			—			362,918
Cost of sales - midstream operations	—			—			107,067			—			—			107,067
Cost of sales - other	2,853			—			17,934			—			—			20,787
Operating expense	114,096			—			9,795			1,833			(2,008		)	123,716
Depreciation and amortization expense	18,521			—			6,893			71			—			25,485
General and administrative expense	13,833			3			1,054			—			—			14,890
Equipment lease expense	6,862			—			92			—			—			6,954
Non-cash employee stock ownership plan compensation charge	4,031			—			—			—			—			4,031
Asset impairments	—			—			10,005			—			—			10,005
Loss on asset sales and disposals	555			—			38,694			—			—			39,249

Operating income (loss)	91,304			(3		)	(51,351		)	(1,904		)	2,008			40,054

Interest expense	(21,212		)	—			(11,739		)	(1,107		)	—			(34,058		)
Other income (expense), net	408			—			276			2,008			(2,008		)	684

Earnings (loss) before income taxes	70,500			(3		)	(62,814		)	(1,003		)	—			6,680

Income tax expense (benefit)	82			—			(249		)	—			—			(167		)
Equity in earnings (loss) of subsidiary	(63,571		)	—			—			—			63,571			—

Net earnings (loss)	6,847			(3		)	(62,565		)	(1,003		)	63,571			6,847

Other comprehensive loss	(8,671		)	—			—			—			—			(8,671		)

Comprehensive income (loss)	$	(1,824	)	$	(3	)	$	(62,565	)	$	(1,003	)	$	63,571		$	(1,824	)



FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(in thousands)

	For the six months ended January 31, 2018
	Ferrellgas, L.P. (Parent and Co-Issuer)			Ferrellgas Finance Corp. (Co-Issuer)			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	(57,734	)	$	(5	)	$	13,335		$	120,563		$	(97,000	)	$	(20,841	)

Cash flows from investing activities:
Business acquisitions, net of cash acquired	(14,862		)	—			—			—			—			(14,862		)
Capital expenditures	(34,391		)	—			(1,302		)	—			—			(35,693		)
Proceeds from sale of assets	4,207			—			—			—			—			4,207
Cash collected for purchase of interest in accounts receivable	—			—			—			574,783			(574,783		)	—
Cash remitted to Ferrellgas, L.P for accounts receivable	—			—			—			(671,783		)	671,783			—
Net changes in advances with consolidated entities	132,748			—			—			—			(132,748		)	—
Net cash provided by (used in) investing activities	87,702			—			(1,302		)	(97,000		)	(35,748		)	(46,348		)

Cash flows from financing activities:
Distributions	(35,380		)	—			—			—			—			(35,380		)
Proceeds from increase in long-term debt	23,580			—			—			—			—			23,580
Payments on long-term debt	(1,267		)	—			—			—			—			(1,267		)
Net reductions in short-term borrowings	(7,879		)	—			—			—			—			(7,879		)
Net additions to collateralized short-term borrowings	—			—			—			97,000			—			97,000
Net changes in advances with parent	—			5			(12,190		)	(120,563		)	132,748			—
Cash paid for financing costs	(395		)	��			—			—			—			(395		)
Net cash provided by (used in) financing activities	(21,341		)	5			(12,190		)	(23,563		)	132,748			75,659

Increase (decrease) in cash and cash equivalents	8,627			—			(157		)	—			—			8,470
Cash and cash equivalents - beginning of year	5,327			1			373			—			—			5,701
Cash and cash equivalents - end of year	$	13,954		$	1		$	216		$	—		$	—		$	14,171



	Distributable Cash Flow to equity investors		Cash reserves (deficiency) approved by our General Partner			Cash distributions paid to equity investors		DCF ratio
Six months ended January 31, 2018	$	59,903	$	39,919		$	19,984
For the year ended July 31, 2017	77,182		(3,601		)	80,783
Less: Six months ended January 31, 2017	62,650		1,850			60,800
Twelve months ended January 31, 2018	$	74,435	$	34,468		$	39,967	1.86

Twelve months ended October 31, 2017	64,041		24,152			39,889		1.61
Change	$	10,394	$	10,316		$	78	0.25



	Common unit ownership at	Distributions (in thousands) paid during the six months ended
	January 31, 2018	January 31, 2018
Ferrell Companies (1)	22,529,361	$	4,506
FCI Trading Corp. (2)	195,686	40
Ferrell Propane, Inc. (3)	51,204	10
James E. Ferrell (4)	4,763,475	952