Inventories consist of the following:


	January 31, 2019		July 31, 2018
Propane gas and related products	$	74,964	$	71,180
Appliances, parts and supplies, and other		14,820		12,514
Inventories	$	89,784	$	83,694

April 30, 2018 July 31, 2017
Propane gas and related products $ 58,142
$ 67,049
Appliances, parts and supplies, and other 26,920
25,503
Inventories $ 85,062
$ 92,552

In addition to inventories on hand, Ferrellgas 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 ~~April 30, 2018~~,January 31, 2019, Ferrellgas had committed, for supply procurement purposes, to take delivery of approximately ~~70.7~~14 million gallons of propane at fixed prices.

Other assets, net consist of the following:


	January 31, 2019		July 31, 2018
Notes receivable, less current portion	$	27,646	$	27,491
Other		44,893		47,097
Other assets, net	$	72,539	$	74,588

Table of Contents

April 30, 2018 July 31, 2017
Notes receivable, less current portion $ 33,962
$ 32,500
Other 38,132
41,557
Other assets, net $ 72,094
$ 74,057

Other current liabilities consist of the following:


	January 31, 2019		July 31, 2018
Accrued interest	$	21,963	$	22,222
Customer deposits and advances		26,323		22,829
Other		98,967		96,974
Other current liabilities	$	147,253	$	142,025

April 30, 2018 July 31, 2017
Accrued interest
$ 50,586
$ 18,671
Customer deposits and advances 18,956
25,541
Other 89,333
82,012
Other current liabilities $ 158,875
$ 126,224

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


	For the three months ended January 31,				For the six months ended January 31,
	2019		2018		2019		2018
Operating expense	$	60,279	$	54,613	$	107,721	$	97,928
Depreciation and amortization expense		1,389		1,123		2,462		2,235
Equipment lease expense		7,869		6,296		15,388		12,364
	$	69,537	$	62,032	$	125,571	$	112,527

For the three months ended April 30, For the nine months ended April 30,
2018 2017 2018 2017
Operating expense $ 48,351
$ 44,309
$ 146,279
$ 134,090
Depreciation and amortization expense 1,340
957
3,575
2,979
Equipment lease expense 6,507
6,564
18,872
19,882
Total shipping and handling expenses $ 56,198
$ 51,830
$ 168,726
$ 156,951

During 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 recognized a loss on assets held for sale of $35.5 million. During the quarter ended April 30, 2018, Ferrellgas completed the sale of all 1,292 rail cars and received approximately $51.3 million in cash. For the nine months ended April 30, 2018, "Loss on asset sales and disposals" includes a loss of $36.8 million related to the sale of these rail cars. 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, included in the Midstream operations segment, in exchange for an $8.5 million secured promissory note due in May 2020. For the nine months ended April 30, 2018, "Loss on asset sales and disposals" includes a loss of $3.8 million related to this sale.

~~"Loss on asset sales and disposals" during the three and nine months ended April 30, 2018 and 2017 consists of:~~

For the three months ended April 30, For the nine months ended April 30,
2018 2017 2018 2017
Loss on sale of assets classified as held for sale $ 1,237
$ —
$ 36,752
$ —
Loss on sale of assets and other 5,033
2,393
9,662
8,861
Loss on asset sales and disposals $ 6,270
$ 2,393
$ 46,414
$ 8,861

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


	For the six months ended January 31,
	2019		2018
Cash paid for:
Interest	$	82,941	$	78,682
Income taxes	$	2	$	12
Non-cash investing and financing activities:
Liabilities incurred in connection with acquisitions	$	1,174	$	1,508
Change in accruals for property, plant and equipment additions	$	2,815	$	47

For the nine months ended April 30,
2018 2017
Cash paid (refunded) for:
Interest $ 85,171
$ 73,276
Income taxes $ (458 ) $ 28
Non-cash investing and financing activities:
Liabilities incurred in connection with acquisitions $ 1,508
$ 856
Change in accruals for property, plant and equipment additions $ 386
$ (111 )

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

As discussed further in Note M - Subsequent events, on May 14, 2018, the operating partnership entered into an amendment which extended the maturity date of its accounts receivable securitization facility by three years and increased the maximum borrowing capacity from $225.0 million to $250.0 million. The accounts receivable securitization facility disclosures below pertain to the facility that was in place as of April 30, 2018.

Accounts and notes receivable, net consist of the following:


	January 31, 2019		July 31, 2018
Accounts receivable pledged as collateral	$	201,717	$	120,079
Accounts receivable		4,651		8,272
Note receivable - current portion		126		132
Other		27		26
Less: Allowance for doubtful accounts		(3,357)		(2,455)
Accounts and notes receivable, net	$	203,164	$	126,054

April 30, 2018 July 31, 2017
Accounts receivable pledged as collateral $ 182,486
$ 109,407
Accounts receivable 13,131
47,346
Note receivable - current portion 10,000
10,000
Other 232
307
Less: Allowance for doubtful accounts (3,122 ) (1,976 )
Accounts and notes receivable, net $ 202,727
$ 165,084

At ~~April 30, 2018, $182.5~~January 31, 2019, $201.7 million of trade accounts receivable were pledged as collateral against ~~$104.0~~$140.0 million of collateralized notes payable due to ~~the~~a commercial paper conduit. At July 31, ~~2017, $109.4~~2018, $120.1 million of trade accounts receivable were pledged as collateral against ~~$69.0~~$58.0 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 ~~April 30, 2018~~,January 31, 2019, Ferrellgas had received cash proceeds of ~~$104.0~~$140.0 million from trade accounts receivables securitized, with ~~$19.0 million of~~no remaining capacity to receive additional ~~proceeds.~~proceeds or issue letters of credit. As of July 31, ~~2017,~~ 2018,

Table of Contents

Ferrellgas had received cash proceeds of ~~$69.0~~$58.0 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 ~~4.2%~~5.3% and ~~4.0%~~5.2% as of ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017~~,2018, respectively.

E.Debt

As discussed further in Note M - Subsequent events, on May 4, 2018, the operating partnership entered into a new $575.0 million senior secured credit facility, which replaced the $575.0 million secured credit facility that was scheduled to mature in October 2018. Credit facility disclosures below pertain to the secured credit facility that was in place as of April 30, 2018.

Short-term borrowings

Ferrellgas classifies ~~as short-term~~borrowings on the revolving line of credit portion of its ~~secured credit facility borrowings that were~~Senior Secured Credit Facility as short-term because they are used to fund working capital needs ~~and~~ that management intends to pay down within the 12twelve month period following the balance sheet date. As of ~~April 30, 2018,~~January 31, 2019, there were no amounts classified as short-term ~~borrowings because all amounts outstanding were refinanced on May 4, 2018 under the five-year term loan discussed in Note M - Subsequent events.~~borrowings. As of July 31, ~~2017, $59.8~~2018, $32.8 million was classified as short-term borrowings. For further discussion see the ~~senior~~ secured credit facility section below.

Secured credit facilities

As of January 31, 2019, the operating partnership had borrowings of $275.0 million under the Term Loan at a rate of 8.27%, which was classified as long-term debt, and no borrowings under the Revolving Facility. As of January 31, 2019, the operating partnership had available borrowing capacity under its Revolving Facility of $196.2 million. As of July 31, 2018, the operating partnership had borrowings of $275.0 million under the Term Loan at a rate of 7.86%, which was classified as long-term debt, and $32.8 million under the Revolving Facility at a rate of 9.75%, which was classified as short-term borrowings. As of July 31, 2018, the operating partnership had available borrowing capacity under its Revolving Facility of $159.3 million.

Letters of credit outstanding at January 31, 2019 and July 31, 2018 totaled $103.8 million and $107.9 million, respectively, and were used to secure insurance arrangements, product purchases and commodity hedges. At January 31, 2019, Ferrellgas had available letter of credit remaining capacity of $21.2 million. At July 31, 2018, Ferrellgas had available letter of credit remaining capacity of $17.1 million.

Debt and interest expense reduction and refinancing strategy

Ferrellgas continues to execute on a strategy to further reduce its debt and interest expense. This strategy included entering into the new Senior Secured Credit Facility and amending its accounts receivable securitization facility in May 2018 and certain asset sales during fiscal 2018. Ferrellgas continues to evaluate its options to address its leverage.

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'~~Partners’ ability and ~~its~~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 isare those related to the consolidated fixed charge coverage ratio, as defined in the indenture governing the outstanding notes of Ferrellgas ~~Partners.~~

Partners, and the consolidated fixed charge coverage ratio, as defined in the indentures governing the outstanding notes of the operating partnership.

Consolidated fixed charge coverage ratio

~~Before~~ - Ferrellgas Partners, L.P., the master limited partnership

Under the Ferrellgas Partners indenture, before a restricted payment (as defined in the ~~Ferrellgas Partners~~ indenture) can be made by Ferrellgas Partners, Ferrellgas Partners must ~~be in compliance with the~~satisfy a consolidated fixed charge coverage ratio ~~covenant~~requirement or have unused capacity under a limited exception to the ~~Ferrellgas Partners indenture.~~ratio requirement. If Ferrellgas Partners is unable to make restricted payments, Ferrellgas Partners will not have the ability to make distributions to Ferrellgas Partners common unitholders.

~~This~~

Table of Contents

subject to its ability to make restricted payments under the ~~indenture) can be made by Ferrellgas Partners.~~limited exception described below. If this pro forma ratio ~~were to drop~~is below 1.75x, ~~the indenture allows~~ Ferrellgas Partners tomay make restricted payments of up to $50.0 million in total over a 16sixteen quarter ~~period while below this ratio.~~period. As of ~~April 30, 2018,~~January 31, 2019, the ratio was ~~1.56x.~~1.38x. As a result ~~the $9.8 million distribution to be~~of distributions paid to common unitholders ~~on June 14, 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, December 2017, ~~and~~ March 2018, ~~leaves $10.8 million for~~June 2018, and September 2018, while this ratio was less than 1.75x, Ferrellgas Partners has used substantially all of its capacity under the limited exception and therefore is currently restricted by this covenant from making future restricted ~~payments.~~payments, including distributions to common unitholders. Accordingly, no distributions were paid to common unitholders in December 2018 for the three months ended October 31, 2018 and no distributions will be paid for the three months ended January 31, 2019. Unless ~~the~~this indenture ~~governing the outstanding notes~~ is amended or ~~refinanced, if~~replaced, or our consolidated fixed charge coverage ratio ~~does not improve~~improves to at least 1.75x ~~and we continue our current quarterly distribution rate of $0.10 per common unit,~~ this covenant will ~~not allow~~continue to restrict us ~~to make~~from making common unit ~~distributions for our quarter ending October 31, 2018 and beyond.~~distributions.

Consolidated fixed charge coverage ratio - Ferrellgas, L.P., the operating partnership

Under the operating partnership indentures, before a restricted payment (as defined in the indentures) can be made by the operating partnership to Ferrellgas Partners, ~~is presently considering potential solutions to cure~~ the ~~limitation on distributions under the~~operating partnership must satisfy a consolidated fixed charge ~~covenant~~coverage ratio ~~related~~requirement or have unused capacity under a limited exception to the ~~outstanding~~ratio requirement. If the operating partnership is unable to make restricted payments, Ferrellgas Partners will not have the ability to make distributions to Ferrellgas Partners common unitholders or make interest payments on Ferrellgas Partners’ unsecured ~~bonds~~senior notes due ~~in June~~ 2020.

The ~~potential solutions, among others, include~~restricted payment covenants require that, for the operating partnership to make a ~~refinancing or a transaction~~restricted payment, the ratio of trailing four quarters EBITDA to ~~exchange new bonds~~interest expense (both as adjusted for ~~some or all~~certain, specified items) of the ~~bonds due June 2020.~~

~~Debt and interest expense reduction strategy~~

~~Ferrellgas continues to execute~~operating partnership be at least 1.75x on a ~~strategy~~pro forma basis giving effect to ~~further reduce~~the restricted payment and, if applicable, certain other specified events, subject to its ~~debt and interest expense. This strategy included amending our secured credit facility and accounts receivable securitization facility, as discussed~~ability to make restricted payments under the limited exception described below. If this pro forma ratio is below 1.75x, the operating partnership may make restricted payments in Note M - Subsequent events, as well as certain asset sales executed to date, and may include refinancing existing debt agreements, additional asset sales, a reduction in Ferrellgas Partners' annual distribution rate orlimited amounts determined under 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.

~~Senior secured credit facility~~

indentures. As of ~~April 30, 2018,~~January 31, 2019, the ratio was 1.67x. As a result, it’s likely the distribution that will be made by the operating partnership on June 15, 2019 for payment of interest on Ferrellgas ~~had total borrowings outstanding under its secured credit facility of $184.9 million, all of which was classified as long-term debt. Ferrellgas had $252.3 million of~~Partners’ unsecured senior notes due 2020 will be made from capacity under the ~~secured credit facility as of April 30, 2018. As of July 31, 2017, Ferrellgas had total borrowings outstanding under~~limited exception to the ratio requirement. The operating partnership believes that 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~~remaining capacity under the ~~secured credit facility as~~limited exception to the ratio requirement will allow it to make distributions to Ferrellgas Partners sufficient to cover interest payments on Ferrellgas Partners’ unsecured senior notes due 2020 through maturity of ~~July~~those notes.

F. Partners’ deficit

As of January 31, ~~2017. Borrowings outstanding at April 30, 2018~~2019 and July 31, ~~2017 under the secured credit facility had weighted average interest rates of 6.7% and 6.0%, respectively.~~

~~Letters of credit outstanding at April 30,~~ 2018, totaled $111.8 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 April 30, 2018, Ferrellgas had remaining letter of credit capacity of $88.2 million. At July 31, 2017, Ferrellgas had remaining letter of credit capacity of $60.8 million.

F. ~~Partners' deficit~~

~~As of April 30, 2018 and July 31, 2017,~~ Ferrellgas Partners limited partner units, which are listed on the New York Stock Exchange under the symbol “FGP,” were beneficially owned by the following:


	January 31, 2019	July 31, 2018
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 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 of 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, 2019.

(2)

FCI Trading is an affiliate of the general partner and thus 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 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 4,758,859 of these common 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 4,616 common units are held by Ferrell Resources

Table of Contents

April 30, 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

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.

(1) Ferrell Companies is 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 of 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 April 30, 2018.

~~(2) FCI Trading is an affiliate of the general partner and thus a related party.~~

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

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.

Partnership distributions ~~paid~~

Ferrellgas Partners has ~~paid~~recognized the following distributions:


	For the three months ended January 31,				For the six months ended January 31,
	2019		2018		2019		2018
Public common unitholders	$	—	$	6,962	$	6,962	$	13,923
Ferrell Companies		—		2,253		2,253		4,506
FCI Trading Corp.		—		20		20		40
Ferrell Propane, Inc.		—		5		5		10
James E. Ferrell		—		476		476		952
General partner		—		98		98		196
	$	—	$	9,814	$	9,814	$	19,627

For the three months ended April 30, For the nine months ended April 30,
2018 2017 2018 2017
Public common unitholders $ 6,961
$ 6,961
$ 20,884
$ 49,600
Ferrell Companies 2,253
2,253
6,759
16,052
FCI Trading Corp. 20
20
60
140
Ferrell Propane, Inc. 5
5
15
36
James E. Ferrell 476
476
1,428
3,393
General partner 98
98
294
699
$ 9,813
$ 9,813
$ 29,440
$ 69,920

~~On May 24, 2018,~~

Ferrellgas Partners ~~declared~~paid cash distributions as detailed in the table above. Ferrellgas Partners did not declare a cash distribution ~~of $0.10 per common unit for~~related to the three months ended ~~April 30,~~October 31, 2018 ~~which is expected~~or related to ~~be paid on June 14, 2018. Included~~the three months ended January 31, 2019. As discussed in ~~this cash distribution are~~Note E – Debt, Ferrellgas Partners was not permitted, pursuant to the ~~following amounts~~consolidated fixed charge coverage ratio under its note indenture, to ~~be paid~~make restricted payments, including distributions to ~~related parties:~~

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

unitholders.

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

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

See Note HI – Derivative instruments and hedging activities – for details regarding changes in the fair value of risk management financial derivatives recorded within AOCI for the three and ~~nine~~six months ended ~~April 30, 2018~~January 31, 2019 and ~~2017.~~

2018.

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 concurrent with the issuance of other additional equity.

During the ~~nine~~six months ended ~~April 30,~~January 31, 2019, the general partner made non-cash contributions of $0.1 million to Ferrellgas to maintain its effective 2% general partner interest.

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

~~During the~~ ~~nine months endedApril 30, 2017, the general partner made cash contributions of $1.7 million and non-cash contributions of $0.3 million to Ferrellgas to maintain its effective 2% general partner interest.~~

G. Revenue from contracts with customers

Ferrellgas adopted ASU 2014‑09 beginning on August 1, 2018 using the modified retrospective method. Ferrellgas earns revenue from contracts with customers primarily through the distribution of propane, as well as through the sale of propane related equipment and supplies. Revenues from propane and other gas liquids sales are comprised of revenue earned from the delivery of propane to tanks on customers’ premises, delivery of propane filled cylinders to customers, or from the sale of portable propane tanks to nationwide and local retailers and end use customers. Other revenues primarily include sales of appliances and other materials as well as other fees charged to customers. Upon adoption, Ferrellgas applied ASU 2014‑09 only to contracts that were not completed.

Table of Contents

Contracts with customers

Ferrellgas’ contracts with customers are principally for the bulk delivery of propane to tanks, delivery of propane filled cylinders or the delivery of portable propane tanks to retailers. Ferrellgas sells propane to a wide variety of customers, including residential, industrial/commercial, portable tank exchange, agricultural, wholesale and others. Ferrellgas’ performance obligations in these contracts are generally limited to the delivery of propane thus revenues from these contracts are earned at the time product is delivered or in the case of some of Ferrellgas’ portable tank exchange retailers who have consignment agreements, at the time the tanks are sold to the end use customer. Payment is generally due within 30 days. Revenues from sales of propane are included in Propane and other gas liquids sales on the consolidated statements of operations.

Typically, Ferrellgas bills customers upon delivery and payment is generally due within 30 days. With its residential customers, Ferrellgas offers customers the ability to spread their annual heating costs over a longer period, typically twelve months. Customers who opt to spread their heating costs over a longer period are referred to as “even-pay” customers.

Ferrellgas charges other amounts to customers associated with the delivery of propane including hazardous materials fees and fuel surcharge fees. In some regions, Ferrellgas also sells appliances and related parts and fittings as well as other retail propane related services. Ferrellgas charges on an annual basis tank and equipment rental charges for customers that are using our equipment to store propane. Other revenues associated with deliveries of propane are earned at the time product is delivered. Revenues associated with sales of appliances and other materials or services are earned at the time of delivery or installation. Revenues associated with tank and equipment rentals are generally recognized on a straight-line basis over one year.

Accounting estimates related to recognition of revenue require that Ferrellgas make estimates and assumptions about various factors including credits issued for completed sales, future returns and total consideration payable in instances where we have customer incentives payable to the customer.

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 January 31,				For the six months ended January 31,
	2019		2018		2019		2018
Retail - Sales to End Users	$	415,827	$	417,472	$	633,591	$	601,266
Wholesale - Sales to Resellers		115,392		128,654		209,336		227,083
Other Gas Sales		18,893		46,113		42,151		66,648
Other		23,265		45,641		40,608		76,778
Propane and related equipment revenues	$	573,377	$	637,880	$	925,686	$	971,775

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

Table of Contents

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, thus Ferrellgas does not capitalize these costs.

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


	January 31, 2019		July 31, 2018
Accounts receivable	$	189,151	$	119,818
Contract assets	$	18,519	$	8,691
Contract liabilities
Deferred revenue (1)	$	35,609	$	29,933

(1)

Of the beginning balance of deferred revenue, $17.1 million was recognized as revenue during the six months ended January 31, 2019.

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.

H. 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 ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017~~:2018:


	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
January 31, 2019:
Assets:
Derivative financial instruments:
Commodity derivatives	$	—	$	5,848	$	—	$	5,848
Liabilities:
Derivative financial instruments:
Commodity derivatives	$	—	$	(15,148)	$	—	$	(15,148)

July 31, 2018:
Assets:
Derivative financial instruments:
Commodity derivatives	$	—	$	22,470	$	—	$	22,470
Liabilities:
Derivative financial instruments:
Commodity derivatives	$	—	$	(1,910)	$	—	$	(1,910)

Table of Contents

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
April 30, 2018:
Assets:
Derivative financial instruments:
Interest rate swap agreements $ —
$ 41
$ —
$ 41
Commodity derivatives $ —
$ 19,750
$ —
$ 19,750
Liabilities:
Derivative financial instruments:
Interest rate swap agreements $ —
$ (3,222 ) $ —
$ (3,222 )
Commodity derivatives $ —
$ (2,239 ) $ —
$ (2,239 )

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 )

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.~~

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 note receivable financial instruments classified in "Other assets, net" on the condensed consolidated balance sheets, are approximately ~~$29.3~~$24.2 million, or ~~$4.7~~$3.4 million less than their carrying amount as of ~~April 30, 2018.~~January 31, 2019. The estimated fair values of these notes receivable were calculated using a discounted cash flow method which relied on significant unobservable inputs. At ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017,~~2018, the estimated fair value of Ferrellgas’ long-term debt instruments was ~~$1,890.1~~$1,825.1 million and ~~$1,966.6~~$1,935.1 million, respectively. Ferrellgas 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 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.

H.I. 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 were 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 ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018, ~~and 2017,~~ 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 in Ferrellgas’ condensed consolidated balance sheets as of ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017~~: 2018:


	January 31, 2019
	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	$	5,408	Other current liabilities	$	13,859
Commodity derivatives-propane	Other assets, net		440	Other liabilities		1,289
	Total	$	5,848	Total	$	15,148

Table of Contents

April 30, 2018

July 31, 2018

Asset Derivatives

Liability Derivatives

Asset Derivatives

Liability Derivatives

Derivative Instrument

Location

Fair value

Location

Fair value

Location

Fair value

Location

Fair value

Derivatives designated as hedging instruments

Commodity derivatives-propane

Prepaid expenses and other current assets

14,449

Other current liabilities

2,207

Prepaid expenses and other current assets

17,123

Other current liabilities

1,832

Commodity derivatives-propane

Other assets, net

5,301

Other liabilities

Other assets, net

5,347

Other liabilities

Interest rate swap agreements

Prepaid expenses and other current assets

Other current liabilities

738

Interest rate swap agreements

Other assets, net

—

Other liabilities

2,484

Total

19,791

Total

5,461

Total

22,470

Total

1,910

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

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

~~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 ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017,~~2018, respectively:


	January 31, 2019
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expense and other current assets	$	10,977	Other current liabilities	$	1,734
	Other assets, net		2,617	Other liabilities		3
		$	13,594		$	1,737


	July 31, 2018
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expense and other current assets	$	2,851	Other current liabilities	$	12,308
	Other assets, net		927	Other liabilities		4,235
		$	3,778		$	16,543

April 30, 2018
Assets Liabilities
Description Location Amount Location Amount
Margin Balances Prepaid expenses and other current assets $ 1,623
Other current liabilities $ 8,434
Other assets, net 1,405
Other liabilities 3,631
$ 3,028
$ 12,065

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~~table provides a summary of the effect on ~~Ferrellgas'~~Ferrellgas’ condensed consolidated statements of operations for the three and ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and~~ ~~2017~~ due to derivatives that were designated as fair value hedging instruments:


						Amount of Interest Expense
		Amount of Gain Recognized on				Recognized on Fixed-Rated Debt
	Location of Gain	Derivative				(Related Hedged Item)
	Recognized on	For the three months ended January 31,				For the three months ended January 31,
Derivative Instrument	Derivative	2019		2018		2019		2018
Interest rate swap agreements	Interest expense	$	—	$	88	$	—	$	(2,275)


						Amount of Interest Expense
		Amount of Gain Recognized on				Recognized on Fixed-Rated Debt
	Location of Amounts	Derivative				(Related Hedged Item)
	Recognized on	For the six months ended January 31,				For the six months ended January 31,
Derivative Instrument	Derivative	2019		2018		2019		2018
Interest rate swap agreements	Interest expense	$	—	$	226	$	—	$	(4,550)

Table of Contents

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 April 30, For the three months ended April 30,
2018 2017 2018 2017
Interest rate swap agreements Interest expense $ 40
$ 323
$ (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 nine months ended April 30, For the nine months ended April 30,
2018 2017 2018 2017
Interest rate swap agreements Interest expense $ 266
$ 1,071
$ (6,825 ) $ (6,825 )

The following tables provide a summary of the effect on Ferrellgas’ condensed consolidated statements of comprehensive income (loss) for the three and ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and~~ ~~2017~~ due to derivatives designated as cash flow hedging instruments:


	For the three months ended January 31, 2019
				Amount of Gain (Loss)
	Amount of Gain		Location of Gain (Loss)	Reclassified from
	(Loss) Recognized in		Reclassified from	AOCI into Income
Derivative Instrument	AOCI		AOCI into Income	Effective portion		Ineffective portion
Commodity derivatives	$	(21,080)	Cost of product sold- propane and other gas liquids sales	$	3,807	$	—
	$	(21,080)		$	3,807	$	—


	For the three months ended January 31, 2018
				Amount of Gain (Loss)
	Amount of Gain (Loss)		Location of Gain (Loss)	Reclassified from
	Recognized in		Reclassified from	AOCI into Income
Derivative Instrument	AOCI		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 six months ended January 31, 2019
				Amount of Gain (Loss)
	Amount of Gain (Loss)		Location of Gain (Loss)	Reclassified from
	Recognized in		Reclassified from	AOCI into Income
Derivative Instrument	AOCI		AOCI into Income	Effective portion		Ineffective portion
Commodity derivatives	$	(29,234)	Cost of sales-propane and other gas liquids sales	$	(626)	$	—
	$	(29,234)		$	(626)	$	—


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

For the three months ended April 30, 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 $ (169 ) Cost of sales-propane and other gas liquids sales $ 6,628
$ —
Interest rate swap agreements 10
Interest expense (60 ) —
$ (159 ) $ 6,568
$ —

For the three months ended April 30, 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 $ (6,642 ) Cost of sales-propane and other gas liquids sales $ 2,411
$ —
Interest rate swap agreements 146
Interest expense (478 ) —
$ (6,496 ) $ 1,933
$ —

For the nine months ended April 30, 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 $ 23,114
Cost of sales-propane and other gas liquids sales $ 20,646
$ —
Interest rate swap agreements 248
Interest expense (386 ) —
$ 23,362
$ 20,260
$ —

For the nine months ended April 30, 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 $ 12,930
Cost of sales-propane and other gas liquids sales $ (1,112 ) $ —
Interest rate swap agreements 974
Interest expense (1,707 ) —
$ 13,904
$ (2,819 ) $ —

The following ~~tables provide~~table provides a summary of the effect on ~~Ferrellgas'~~Ferrellgas’ condensed consolidated statements of operations for the three and ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~ due to the change in fair value of derivatives not designated as hedging instruments:


	For the three months ended January 31, 2019
	Amount of Gain (Loss)		Location of Gain (Loss)
Derivatives Not Designated as Hedging Instruments	Recognized in Income		Reclassified in Income
Commodity derivatives - crude oil	$	—	Cost of sales - midstream operations

Table of Contents

For the three months ended April 30, 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 $ —
Cost of sales - midstream operations

For the three months ended April 30, 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 $ 1,464
Cost of sales - midstream operations
Commodity derivatives - vehicle fuel $ (393 ) Operating expense

For the nine months ended April 30, 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 nine months ended April 30, 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 $ (784 ) Cost of sales - midstream operations
Commodity derivatives - vehicle fuel $ 1,123
Operating expense


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


	For the six months ended January 31, 2019
	Amount of Gain (Loss)		Location of Gain (Loss)
Derivatives Not Designated as Hedging Instruments	Recognized in Income		Reclassified in Income
Commodity derivatives - crude oil	$	—	Cost of sales - midstream operations


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

The changes in derivatives included in AOCI for the ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~ were as follows:


	For the six months ended January 31,
Gains and losses on derivatives included in AOCI	2019		2018
Beginning balance	$	20,560	$	14,648
Change in value of risk management commodity derivatives		(29,234)		23,283
Reclassification of gains on commodity hedges to cost of sales - propane and other gas liquids sales, net		(626)		(14,018)
Change in value of risk management interest rate derivatives		—		238
Reclassification of losses on interest rate hedges to interest expense		—		326
Ending balance	$	(9,300)	$	24,477

For the nine months ended April 30,
Gains and losses on derivatives included in AOCI 2018 2017
Beginning balance $ 14,648
$ (9,815 )
Change in value of risk management commodity derivatives 23,114
12,930
Reclassification of (gains) and losses on commodity hedges to cost of sales - propane and other gas liquids sales, net (20,646 ) 1,112
Change in value of risk management interest rate derivatives 248
974
Reclassification of losses on interest rate hedges to interest expense 386
1,707
Ending balance $ 17,750
$ 6,908

Ferrellgas expects to reclassify net ~~gains~~losses related to the risk management commodity derivatives of approximately ~~$12.2~~$8.5 million to earnings during the next 12 months. These net ~~gains~~losses are expected to be offset by ~~decreased~~increased margins on propane sales commitments Ferrellgas has with its customers that qualify for the normal purchase normal sales exception.

During the ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018, ~~and 2017,~~ 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 ~~April 30, 2018~~,January 31, 2019, Ferrellgas had financial derivative contracts covering ~~2.3~~3.9 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 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 ~~April 30, 2018,~~January 31, 2019, the maximum amount of loss due to credit risk that Ferrellgas would incur is ~~$5.7~~$0.5 million, which is based upon the gross fair values of the derivative financial instruments.

Table of Contents

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 no open derivative contracts with credit-risk-related contingent features as of ~~April 30, 2018.~~

January 31, 2019.

I.J. Transactions with related parties

Ferrellgas has no 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 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,
	2019		2018		2019		2018
Operating expense	$	69,285	$	65,291	$	129,243	$	122,642

General and administrative expense	$	7,197	$	8,422	$	13,309	$	15,930

For the three months ended April 30, For the nine months ended April 30,
2018 2017 2018 2017
Operating expense $ 58,842
$ 53,747
$ 181,484
$ 170,953

General and administrative expense $ 5,707
$ 6,913
$ 21,637
$ 23,713

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

J.K. 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.~~resulted in the court of appeals affirming the dismissal of the federal claims and remanding the case to the district court to decide whether to exercise supplemental jurisdiction over the remaining state law claims. 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

Table of Contents

current and former officers and directors as defendants. On April 2, 2018, the securities class action lawsuits were dismissed with prejudice. On April 30, 2018, the plaintiffs filed a notice of appeal to the United States Court of Appeals for the Second Circuit.The parties have completed briefing and are preparing for oral argument. At this time the derivative lawsuits remain stayed by agreement. 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, 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 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 the arbitration. Eddystone also alleges that JTS was an “alter ego” of Bridger and Ferrellgas. 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 of damages that Eddystone is seeking; however, Ferrellgas believes that the amount of such damage claims, if ultimately owed to Eddystone, 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. 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~~which, among other things, resulted in a dismissal of the claims against the Third-Party Defendants from the lawsuit. On January 25, 2019, Ferrellgas, Bridger Logistics, LLC and all other defendants filed ~~motions~~a Motion to ~~dismiss the third-party complaint~~Dismiss Plaintiff’s First Amended Complaint for ~~alleged lack~~Lack of ~~personal jurisdiction, failure to state claim, and forum non-conveniens. Ferrellgas is vigorously opposing these motions.~~

Subject Matter Jurisdiction.

K.L. Net earnings (loss) per common unit

Below is a calculation of the basic and diluted net earnings (loss) per common unit in the condensed consolidated statements of operations for the periods indicated. Ferrellgas calculates net earnings (loss) per common unit for each period presented according to distributions declared and participation rights in undistributed earnings, as if all of the earnings or loss for the period had been distributed according to the incentive distribution rights in the Ferrellgas partnership agreement. Due to the seasonality of the propane business, 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 to the two-class method results in an increased allocation of undistributed earnings to the general partner 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 no dilutive effect resulting from this method based on basic and diluted net earnings (loss) per common unit for the three and ~~nine~~six months ended ~~April 30, 2018~~January 31, 2019 or ~~2017.~~

2018.

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.

Table of Contents



	For the three months ended April 30,				For the nine months ended April 30,					For the three months ended January 31,				For the six months ended January 31,
	2018		2017		2018			2017		2019		2018		2019		2018
	(in thousands, except per common unit amounts)									(in thousands, except per common unit amounts)
Common unitholders’ interest in net earnings (loss)	$	10,752	$	6,470	$	(38,508	)	$	1,545	$	42,911	$	(1,824)	$	(13,534)	$	(49,260)

Weighted average common units outstanding - basic and diluted	97,152.7		97,152.7		97,152.7			97,255.4

Weighted average common units outstanding (in thousands)											97,152.7		97,152.7		97,152.7		97,152.7
Basic and diluted net earnings (loss) per common unit	$	0.11	$	0.07	$	(0.40	)	$	0.02	$	0.44	$	(0.02)	$	(0.14)	$	(0.51)

L.M. Segment reporting

As of January 31, 2019, Ferrellgas has ~~two primary operations that result in two~~one reportable operating ~~segments:~~segment: propane operations and related equipment ~~sales~~sales. All remaining activities are included in Corporate 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.

other.

Following is a summary of segment information for the three and ~~nine~~six months ended ~~April 30, 2018~~January 31, 2019 and ~~2017:~~2018:


	Three months ended January 31, 2019
	Propane operations
	and related equipment		Corporate and
	sales		other		Total
Segment revenues	$	573,377	$	—	$	573,377
Direct costs (1)		443,533		10,188		453,721
Adjusted EBITDA	$	129,844	$	(10,188)	$	119,656


	Three months ended January 31, 2018
	Propane operations
	and related equipment		Corporate and
	sales		other		Total
Segment revenues	$	637,880	$	117,276	$	755,156
Direct costs (1)		507,386		127,143		634,529
Adjusted EBITDA	$	130,494	$	(9,867)	$	120,627


	Six months ended January 31, 2019
	Propane operations
	and related equipment		Corporate and
	sales		other		Total
Segment revenues	$	925,686	$	—	$	925,686
Direct costs (1)		767,127		21,062		788,189
Adjusted EBITDA	$	158,559	$	(21,062)	$	137,497


	Six months ended January 31, 2018
	Propane operations
	and related equipment		Corporate and
	sales		other		Total
Segment revenues	$	971,775	$	238,036	$	1,209,811
Direct costs (1)		810,715		252,253		1,062,968
Adjusted EBITDA	$	161,060	$	(14,217)	$	146,843

(1)

Direct costs are comprised of "cost of sales-propane and other gas liquids sales", "cost of sales- midstream operations", "cost of sales-other", "operating expense", "general and administrative expense", and "equipment lease expense" less "severance charge", "legal fees and settlements", "unrealized (non-cash) losses on changes in fair value of derivatives not designated as hedging instruments" and "multi-employer pension plan withdrawal settlement".

Table of Contents

Three months ended April 30, 2018
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 493,215
$ 22,595
$ —
$ 515,810
Direct costs (1) 397,568
21,593
9,727
428,888
Adjusted EBITDA $ 95,647
$ 1,002
$ (9,727 ) $ 86,922

Three months ended April 30, 2017
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 411,433
$ 126,676
$ —
$ 538,109
Direct costs (1) 324,442
127,223
9,654
461,319
Adjusted EBITDA $ 86,991
$ (547 ) $ (9,654 ) $ 76,790

Nine months ended April 30, 2018
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 1,464,990
$ 260,631
$ —
$ 1,725,621
Direct costs (1) 1,208,283
250,423
33,150
1,491,856
Adjusted EBITDA $ 256,707
$ 10,208
$ (33,150 ) $ 233,765

Nine months ended April 30, 2017
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 1,165,394
$ 331,507
$ —
$ 1,496,901
Direct costs (1) 931,631
323,714
30,717
1,286,062
Adjusted EBITDA $ 233,763
$ 7,793
$ (30,717 ) $ 210,839

(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", and "unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments".

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


	Three months ended January 31,				Six months ended January 31,
	2019		2018		2019		2018
Net earnings (loss) attributable to Ferrellgas Partners, L.P.	$	43,344	$	(1,843)	$	(13,671)	$	(49,758)
Income tax expense (benefit)		3		(162)		161		215
Interest expense		44,891		42,673		88,769		83,480
Depreciation and amortization expense		19,605		25,485		38,597		51,217
EBITDA		107,843		66,153		113,856		85,154
Non-cash employee stock ownership plan compensation charge		1,944		4,031		4,692		7,993
Asset impairments		—		10,005		—		10,005
Loss on asset sales and disposals		2,216		39,249		6,720		40,144
Other income, net		(86)		(684)		(105)		(1,195)
Severance costs		1,600		—		1,600		1,663
Legal fees and settlements		5,608		2,118		9,172		2,118
Unrealized (non-cash) loss on changes in fair value of derivatives not designated as hedging instruments		—		(314)		—		1,293
Multi-employer pension plan withdrawal settlement		—		—		1,524		—
Net earnings (loss) attributable to noncontrolling interest		531		69		38		(332)
Adjusted EBITDA	$	119,656	$	120,627	$	137,497	$	146,843

Three months ended April 30, Nine months ended April 30,
2018 2017 2018 2017
Net earnings (loss) attributable to Ferrellgas Partners, L.P. $ 10,861
$ 6,536
$ (38,897 ) $ 1,561
Income tax expense (benefit) 67
(192 ) 282
(194 )
Interest expense 40,375
39,860
123,855
112,107
Depreciation and amortization expense 25,348
25,737
76,565
77,546
EBITDA 76,651
71,941
161,805
191,020
Non-cash employee stock ownership plan compensation charge 2,738
4,697
10,731
11,396
Non-cash stock-based compensation charge —
—
—
3,298
Asset impairments —
—
10,005
—
Loss on asset sales and disposals 6,270
2,393
46,414
8,861
Other income, net (227 ) (162 ) (1,422 ) (1,433 )
Severance costs —
—
1,663
1,959
Professional fees 1,289
—
3,407
—
Unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments —
(2,234 ) 1,293
(4,449 )
Net earnings (loss) attributable to noncontrolling interest 201
155
(131 ) 187
Adjusted EBITDA $ 86,922
$ 76,790
$ 233,765
$ 210,839

Following are total assets by segment:


Assets	January 31, 2019		July 31, 2018
Propane operations and related equipment sales	$	1,315,233	$	1,196,084
Corporate and other		72,887		167,197
Total consolidated assets	$	1,388,120	$	1,363,281

Assets April 30, 2018 July 31, 2017
Propane operations and related equipment sales $ 1,274,360
$ 1,194,905
Midstream operations 244,523
399,356
Corporate 13,693
15,708
Total consolidated assets $ 1,532,576
$ 1,609,969

Following are capital expenditures by segment:


	Six months ended January 31, 2019
	Propane operations and
	related equipment sales		Corporate and other		Total
Capital expenditures:
Maintenance	$	31,460	$	549	$	32,009
Growth		23,316		—		23,316
Total	$	54,776	$	549	$	55,325


	Six months ended January 31, 2018
	Propane operations and
	related equipment sales		Corporate and other		Total
Capital expenditures:
Maintenance	$	12,016	$	1,427	$	13,443
Growth		18,311		1,013		19,324
Total	$	30,327	$	2,440	$	32,767

Nine months ended April 30, 2018
Propane operations and related equipment sales Midstream operations Corporate Total
Capital expenditures:
Maintenance $ 17,556
$ 210
$ 1,492
$ 19,258
Growth 34,784
1,265
—
36,049
Total $ 52,340
$ 1,475
$ 1,492
$ 55,307

Nine months ended April 30, 2017
Propane operations and related equipment sales Midstream operations Corporate Total
Capital expenditures:
Maintenance $ 8,533
$ 241
$ 1,905
$ 10,679
Growth 21,246
—
—
21,246
Total $ 29,779
$ 241
$ 1,905
$ 31,925

Table of Contents

M.N. 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 recognition or disclosure in its condensed consolidated financial statements.

~~New $575.0 million senior secured credit facility~~

On May 4, 2018, the operating partnership entered into a new $575.0 million senior secured credit facility to replace its previous $575.0 million senior secured credit facility that was scheduled to mature in October 2018. This new facility consists of a $300.0 million revolving line of credit as well as a $275.0 million term loan, both priced at LIBOR + 5.75% and maturing May 4, 2023. The revolving line of credit includes a $125.0 million sublimit for the issuance of letters of credit. Borrowings under this facility are available for working capital needs, capital expenditures and other general partnership purposes, including the refinancing of existing indebtedness and acquisitions. At closing, the following transactions occurred: 1) the proceeds of the term loan were used to repay and terminate the operating partnership’s then existing credit facility, thus, no revolving credit loans were outstanding, 2) approximately $100 million of letters of credit were issued to replace the letters of credit under the operating partnership's then existing credit facility, and 3) the operating partnership held approximately $75 million of surplus cash.

The term loan does not include any scheduled principal payments and the revolving credit facility does not have any scheduled commitment reductions before maturity; however, the credit facility requires prepayments pursuant to the following: 1) certain asset sales, 2) 50% of any excess cash flow, as defined in the credit agreement, in any fiscal year beginning with fiscal year 2019, 3) certain insurance proceeds, and 4) certain tax refunds.

This new senior secured credit facility is secured with substantially all of the assets of the operating partnership and its subsidiaries, and Ferrellgas Partners’ and the general partner’s partnership interests in the operating partnership, and contains various affirmative and negative covenants and default provisions, as well as requirements with respect to the maintenance of specified financial ratios and limitations on the making of loans and investments.

~~Amended accounts receivable securitization facility~~

On May 14, 2018, the operating partnership entered into a seventh amendment to its accounts receivable securitization facility which extends the maturity date by three years, as well as increases the size of the facility from a maximum borrowing capacity of $225.0 million to $250.0 million at a discount rate of LIBOR plus 200 basis points. The amended accounts receivable securitization facility also includes provisions for the issuance of letters of credit with a $50.0 million sublimit. The facility continues to contain provisions where maximum purchase levels are reduced during periods of the year when working capital requirements are lower to efficiently reduce unused capacity fees.

Table of Contents

FERRELLGAS PARTNERS FINANCE CORP.
(a wholly-owned subsidiary of Ferrellgas Partners, L.P.)
CONDENSED BALANCE SHEETS
(unaudited)
April 30, 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 27,170
25,055
Accumulated deficit (27,170 ) (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 April 30, For the nine months ended April 30,
2018 2017 2018 2017

General and administrative expense $ 1,840
$ 3,225
$ 2,115
$ 3,317

Net loss $ (1,840 ) $ (3,225 ) $ (2,115 ) $ (3,317 )
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 nine months ended April 30,
2018 2017
Cash flows from operating activities:
Net loss $ (2,115 ) $ (3,317 )
Cash used in operating activities (2,115 ) (3,317 )

Cash flows from financing activities:
Capital contribution 2,115
3,317
Cash provided by financing activities 2,115
3,317

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)


	January 31, 2019		July 31, 2018
ASSETS
Cash	$	1,000	$	1,000
Prepaid expenses and other current assets		—		1,850
Total assets	$	1,000	$	2,850

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		29,111		29,020
Accumulated deficit		(29,111)		(27,170)
Total stockholder’s equity	$	1,000	$	2,850

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 January 31,				For the six months ended January 31,
	2019		2018		2019		2018
General and administrative expense	$	1,941	$	225	$	1,941	$	275

Net loss	$	(1,941)	$	(225)	$	(1,941)	$	(275)

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 six months ended January 31,
	2019		2018
Cash flows from operating activities:
Net loss	$	(1,941)	$	(275)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		1,850		—
Cash used in operating activities		(91)		(275)

Cash flows from financing activities:
Capital contribution		91		275
Cash provided by financing activities		91		275

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.

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”).

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 to the condensed financial statements were of a normal recurring nature.

The Finance Corp. has nominal assets, does not conduct any operations and has no employees.

B. Contingencies and commitments

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

The indenture governing the senior unsecured notes contains various restrictive covenants applicable to the Partnership and its subsidiaries, the most restrictive relating to additional indebtedness and restricted payments. As of ~~April 30, 2018,~~January 31, 2019, the Partnership is in compliance with all requirements, tests, limitations and covenants related to this debt agreement, except for the consolidated fixed charge coverage ratio.

The indenture governing the outstanding notes of the Partnership includes a consolidated fixed charge coverage ratio test for the incurrence of debt and the making of restricted payments. ~~This~~The restricted payments covenant requires that, for the Partnership to make a restricted payment, 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~~on a pro forma basis giving effect to the restricted payment ~~(as defined in~~and, if applicable, certain other specified events, subject to its ability to make restricted payments under the ~~indenture) can be made by the Partnership.~~limited exception described below. If this pro forma ratio ~~were to drop~~is below 1.75x, the ~~indenture allows the~~ Partnership tomay make restricted payments of up to $50.0 million in total over a 16 quarter ~~period while below this ratio.~~period. As of ~~April 30, 2018,~~January 31, 2019, the ratio was ~~1.56x.~~1.67x. As a result of distributions paid to common unitholders in September 2017, December 2017, March 2018, June 2018, and September 2018 while this ratio was less than 1.75x, the ~~$9.8 million distribution~~Partnership has used substantially all of its capacity under the limited exception and therefore is currently restricted by this covenant from making future restricted payments, including distributions to common unitholders. Accordingly, no distributions will be paid to common unitholders ~~on June 14,~~in December 2018 ~~will be taken from~~for 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, December 2017~~three and ~~March 2018, leaves $10.8 million for future restricted payments.~~six months ended January 31, 2019. Unless ~~the~~this indenture ~~governing the outstanding notes~~ is amended or ~~refinanced, if~~replaced, or the ~~Partnership's~~Partnership’s consolidated fixed charge coverage ratio ~~does not improve~~improves 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~~continue to restrict the Partnership ~~to make~~from making common unit distributions for the quarter ending October 31, 2018 and beyond. The Partnership is presently considering potential solutions to cure the limitation on distributions under the consolidated fixed charge covenant ratio related to the outstanding unsecured bonds due in June 2020. The potential solutions, among others, include a refinancing or a transaction to exchange new bonds for some or alldistributions.

Table of ~~the bonds due June 2020.~~

Contents

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

April 30, 2018 July 31, 2017
ASSETS
Current assets:
Cash and cash equivalents $ 9,491
$ 5,701
Accounts and notes receivable, net (including $182,486 and $109,407 of accounts receivable pledged as collateral at April 30, 2018 and July 31, 2017, respectively) 202,727
165,084
Inventories 85,062
92,552
Prepaid expenses and other current assets 44,059
33,426
Total current assets 341,339
296,763

Property, plant and equipment, net 637,688
731,923
Goodwill, net 246,098
256,103
Intangible assets (net of accumulated amortization of $460,011 and $436,428 at April 30, 2018 and July 31, 2017, respectively) 235,318
251,102
Other assets, net 72,094
74,057
Total assets $ 1,532,537
$ 1,609,948

LIABILITIES AND PARTNERS' DEFICIT

Current liabilities:

Accounts payable $ 52,472
$ 85,561
Short-term borrowings —
59,781
Collateralized note payable 104,000
69,000
Other current liabilities 147,243
122,016
Total current liabilities 303,715
336,358

Long-term debt 1,646,069
1,649,270
Other liabilities 34,225
31,118
Contingencies and commitments (Note J)

Partners' deficit:

Limited partner (464,761 ) (417,467 )
General partner (4,577 ) (4,095 )
Accumulated other comprehensive income 17,866
14,764
Total partners' deficit (451,472 ) (406,798 )
Total liabilities and partners' deficit $ 1,532,537
$ 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 April 30, For the nine months ended April 30,
2018 2017 2018 2017
Revenues:
Propane and other gas liquids sales $ 451,302
$ 369,437
$ 1,346,299
$ 1,049,211

Midstream operations 22,595
126,676
260,631
331,507

Other 41,913
41,996
118,691
116,183

Total revenues 515,810
538,109
1,725,621
1,496,901

Costs and expenses:
Cost of sales - propane and other gas liquids sales 260,419
197,487
802,852
551,728

Cost of sales - midstream operations 14,518
118,767
229,710
300,433

Cost of sales - other 19,850
20,810
54,339
53,213

Operating expense 116,579
104,773
350,757
322,935

Depreciation and amortization expense 25,348
25,737
76,565
77,546

General and administrative expense 11,546
9,869
39,600
36,416

Equipment lease expense 7,133
7,270
20,828
22,035

Non-cash employee stock ownership plan compensation charge 2,738
4,697
10,731
11,396

Asset impairments —
—
10,005
—

Loss on asset sales and disposals 6,270
2,393
46,414
8,861

Operating income 51,409
46,306
83,820
112,338

Interest expense (31,739 ) (31,270 ) (97,993 ) (95,416 )
Other income, net 227
162
1,422
1,433

Earnings (loss) before income taxes 19,897
15,198
(12,751 ) 18,355

Income tax expense (benefit) 57
(197 ) 261
(200 )

Net earnings (loss) $ 19,840
$ 15,395
$ (13,012 ) $ 18,555

See notes to condensed consolidated financial statements.

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,
2018 2017 2018 2017

Net earnings (loss) $ 19,840
$ 15,395
$ (13,012 ) $ 18,555

Other comprehensive income (loss):
Change in value of risk management derivatives (159 ) (6,496 ) 23,362
13,904

Reclassification of (gains) losses on derivatives to earnings, net (6,568 ) (1,933 ) (20,260 ) 2,819

Other comprehensive income (loss) (6,727 ) (8,429 ) 3,102
16,723

Comprehensive income (loss) $ 13,113
$ 6,966
$ (9,910 ) $ 35,278

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 10,623
108
—
10,731
Distributions (45,036 ) (459 ) —
(45,495 )
Net loss (12,881 ) (131 ) —
(13,012 )
Other comprehensive income —
—
3,102
3,102
Balance at April 30, 2018 $ (464,761 ) $ (4,577 ) $ 17,866
$ (451,472 )
See notes to condensed consolidated financial statements.

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
For the nine months ended April 30,
2018 2017
Cash flows from operating activities:
Net earnings (loss) $ (13,012 ) $ 18,555
Reconciliation of net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization expense 76,565
77,546
Non-cash employee stock ownership plan compensation charge 10,731
11,396
Non-cash stock-based compensation charge —
3,298
Asset impairments 10,005
—
Loss on asset sales and disposals 46,414
8,861
Unrealized gain on derivative instruments (91 ) (3,888 )
Provision for doubtful accounts 1,906
39
Deferred income tax expense 423
45
Other 3,987
4,147
Changes in operating assets and liabilities, net of effects from business acquisitions:
Accounts and notes receivable, net of securitization (46,771 ) (58,923 )
Inventories 7,755
(2,163 )
Prepaid expenses and other current assets (4,001 ) 12,111
Accounts payable (18,429 ) 18,830
Accrued interest expense 24,217
24,428
Other current liabilities (809 ) 5,047
Other assets and liabilities (4,944 ) 5,070
Net cash provided by operating activities 93,946
124,399

Cash flows from investing activities:
Business acquisitions, net of cash acquired (14,862 ) (3,539 )
Capital expenditures (58,961 ) (35,412 )
Proceeds from sale of assets 57,802
4,721
Other —
(37 )
Net cash used in investing activities (16,021 ) (34,267 )

Cash flows from financing activities:
Distributions (45,495 ) (94,413 )
Contributions from partners —
167,640
Proceeds from issuance of long-term debt 23,580
52,354
Payments on long-term debt (1,892 ) (173,471 )
Net reductions in short-term borrowings (84,179 ) (62,902 )
Net additions to collateralized short-term borrowings 35,000
27,000
Cash paid for financing costs (1,149 ) (2,064 )
Net cash used in financing activities (74,135 ) (85,856 )

Net change in cash and cash equivalents 3,790
4,276
Cash and cash equivalents - beginning of period 5,701
4,890
Cash and cash equivalents - end of period $ 9,491
$ 9,166
See notes to condensed consolidated financial statements.

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)


	January 31, 2019		July 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	40,552	$	119,308
Accounts and notes receivable, net (including $201,717 and $120,079 of accounts receivable pledged as collateral at January 31, 2019 and July 31, 2018, respectively)		203,164		126,054
Inventories		89,784		83,694
Prepaid expenses and other current assets		36,553		34,830
Total current assets		370,053		363,886

Property, plant and equipment, net		584,334		557,723
Goodwill		247,478		246,098
Intangible assets (net of accumulated amortization of $407,795 and $399,629 at January 31, 2019 and July 31, 2018, respectively)		113,558		120,951
Other assets, net		72,539		74,588
Total assets	$	1,387,962	$	1,363,246

LIABILITIES AND PARTNERS' DEFICIT

Current liabilities:
Accounts payable	$	63,639	$	46,820
Short-term borrowings		—		32,800
Collateralized note payable		140,000		58,000
Other current liabilities		143,319		138,091
Total current liabilities		346,958		275,711

Long-term debt		1,730,468		1,728,137
Other liabilities		37,547		39,476
Contingencies and commitments (Note K)

Partners’ deficit:
Limited partner		(710,796)		(693,896)
General partner		(7,088)		(6,915)
Accumulated other comprehensive income (loss)		(9,127)		20,733
Total partners’ deficit		(727,011)		(680,078)
Total liabilities and partners’ deficit	$	1,387,962	$	1,363,246

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 January 31,				For the six months ended January 31,
	2019		2018		2019		2018

Revenues:
Propane and other gas liquids sales	$	550,112	$	592,239	$	885,078	$	894,997
Midstream operations		—		117,276		—		238,036
Other		23,265		45,641		40,608		76,778
Total revenues		573,377		755,156		925,686		1,209,811

Costs and expenses:
Cost of sales - propane and other gas liquids sales		311,531		362,918		515,667		542,433
Cost of sales - midstream operations		—		107,067		—		215,192
Cost of sales - other		3,422		20,787		6,469		34,489
Operating expense		121,219		123,716		231,550		234,178
Depreciation and amortization expense		19,605		25,485		38,597		51,217
General and administrative expense		16,341		14,890		30,516		28,054
Equipment lease expense		8,415		6,954		16,278		13,695
Non-cash employee stock ownership plan compensation charge		1,944		4,031		4,692		7,993
Asset impairments		—		10,005		—		10,005
Loss on asset sales and disposals		2,216		39,249		6,720		40,144

Operating income		88,684		40,054		75,197		32,411

Interest expense		(36,150)		(34,058)		(71,345)		(66,254)
Other income, net		86		684		105		1,195

Earnings (loss) before income taxes		52,620		6,680		3,957		(32,648)

Income tax expense (benefit)		3		(167)		154		204

Net earnings (loss)	$	52,617	$	6,847	$	3,803	$	(32,852)

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 January 31,				For the six months ended January 31,
	2019		2018		2019		2018

Net earnings (loss)	$	52,617	$	6,847	$	3,803	$	(32,852)
Other comprehensive income (loss):
Change in value of risk management derivatives		(21,080)		1,072		(29,234)		23,521
Reclassification of (gains) losses on derivatives to earnings, net		3,807		(9,743)		(626)		(13,692)
Other comprehensive income (loss)		(17,273)		(8,671)		(29,860)		9,829
Comprehensive income (loss)	$	35,344	$	(1,824)	$	(26,057)	$	(23,023)

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 (loss)		deficit

Balance at July 31, 2018	$	(693,896)	$	(6,915)	$	20,733	$	(680,078)
Contributions in connection with non-cash ESOP compensation charges		4,645		47		—		4,692
Distributions		(25,310)		(258)		—		(25,568)
Net earnings		3,765		38		—		3,803
Other comprehensive loss		—		—		(29,860)		(29,860)
Balance at January 31, 2019	$	(710,796)	$	(7,088)	$	(9,127)	$	(727,011)

See notes to condensed consolidated financial statements.

Table of Contents

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	For the six months ended January 31,
	2019		2018
Cash flows from operating activities:
Net earnings (loss)	$	3,803	$	(32,852)
Reconciliation of net earnings (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization expense		38,597		51,217
Non-cash employee stock ownership plan compensation charge		4,692		7,993
Asset impairments		—		10,005
Loss on asset sales and disposals		6,720		40,144
Unrealized gain on derivative instruments		—		(91)
Provision for doubtful accounts		1,576		1,688
Deferred income tax expense		141		364
Other		4,736		2,650
Changes in operating assets and liabilities, net of effects from business acquisitions:
Accounts and notes receivable, net of securitization		(78,686)		(102,315)
Inventories		(6,090)		(17,275)
Prepaid expenses and other current assets		(16,321)		(4,637)
Accounts payable		16,441		11,510
Accrued interest expense		(259)		304
Other current liabilities		(8,944)		13,662
Other assets and liabilities		(6,120)		(3,208)
Net cash used in operating activities		(39,714)		(20,841)

Cash flows from investing activities:
Business acquisitions, net of cash acquired		(5,069)		(14,862)
Capital expenditures		(58,330)		(35,693)
Proceeds from sale of assets		1,960		4,207
Net cash used in investing activities		(61,439)		(46,348)

Cash flows from financing activities:
Distributions		(25,568)		(35,380)
Proceeds from issuance of long-term debt		—		23,580
Payments on long-term debt		(1,014)		(1,267)
Net reductions in short-term borrowings		(32,800)		(7,879)
Net additions to collateralized short-term borrowings		82,000		97,000
Cash paid for financing costs		(221)		(395)
Net cash provided by financing activities		22,397		75,659

Net change in cash and cash equivalents		(78,756)		8,470
Cash and cash equivalents - beginning of period		119,308		5,701
Cash and cash equivalents - end of period	$	40,552	$	14,171

See notes to condensed consolidated financial statements.

Table of Contents

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. 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. Ferrellgas Partners, L.P. (“Ferrellgas Partners”), a publicly traded limited partnership, holds 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% general partner interest in Ferrellgas, L.P. and performs all management functions required by Ferrellgas, L.P.

Ferrellgas, L.P. 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 issued by Ferrellgas, L.P.

Ferrellgas, L.P. 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 ~~nine~~six months ended ~~April 30, 2018~~January 31, 2019 are not necessarily indicative of the results to be expected for the full fiscal year ending July 31, ~~2018.~~

2019.

The condensed consolidated financial statements of Ferrellgas, L.P. 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~~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~~10‑K for fiscal ~~2017~~2018.

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 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, fair value of reporting units, recoverability of long-lived assets, assumptions used to value business combinations, fair values of derivative contracts and stock-based compensation calculations.

(2) New accounting standards:

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

2014‑09

In May 2014, the Financial Accounting Standards Board ~~("FASB")~~(FASB) issued Accounting Standard Update ("ASU") ~~2014-09,~~ 2014‑09, Revenue from Contracts with ~~Customers.~~Customers (“ASU 2014‑09”). 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

Table of Contents

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~~Upon adoption, Ferrellgas, L.P. ~~for its annual reporting period~~applied ASU 2014‑09 only to contracts that were not completed, referred to as open contracts.

Ferrellgas, L.P. adopted ASU 2014‑09 beginning on August 1, 2018 ~~including interim~~using the modified retrospective method. This method requires that the cumulative effect of initially applying ASU 2014‑09 be recognized in partner’s deficit at the date of adoption, August 1, 2018. ASU 2014‑09 has not materially impacted Ferrellgas, L.P.’s consolidated financial statements, and as a result there was no cumulative effect to record as of the date of adoption. Results for reporting periods ~~within that reporting period. Entities~~beginning after August 1, 2018 are ~~allowed to transition to the new standard by either recasting~~presented under ASU 2014‑09, while amounts reported for prior periods ~~or recognizing the cumulative effect. Ferrellgas, L.P. is~~have not been adjusted and continue to be reported under accounting standards 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~~effect for those periods. See Note G - Revenue 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 for additional information related to revenues and contract costs, including qualitative and quantitative disclosures required under 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. Ferrellgas, L.P. expects to utilize the modified retrospective transition method, which recognizes the cumulative effect upon adoption, when it adopts the new standard, effective August 1, 2018.

ASU 2014‑09.

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~~

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 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The new standard requires lessees to apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. An entity may elect the transition relief option in ASU 2018-11, “Leases: Targeted Improvements” which, among other things, provides entities with an option to recognize the cumulative-effect adjustment from the modified retrospective application to the opening balance of retained earnings in the period of adoption and consequently, continue to report comparative periods in compliance with the prior guidance (ASC 840). Ferrellgas, L.P. expects to elect this additional transition method.

Ferrellgas, L.P. is ~~currently evaluating~~continuing to evaluate the impact of ~~our~~its pending adoption of ASU 2016-02 on the consolidated financial statements. Ferrellgas, L.P. has ~~formed an~~made significant progress in assessing the impact of the standard and planning for the adoption and implementation. The implementation team has completed ~~training on the new standard,~~initial scoping and is ~~working~~substantially complete in the data gathering process of our current lease portfolio. Ferrellgas, L.P. is currently performing a completeness assessment over the lease population, analyzing the financial statement impact of adopting the standards, and evaluating the impact of adoption on ~~an initial assessment.~~

our existing accounting policies and disclosures. Ferrellgas, L.P. believes that the adoption of this standard, which will be effective for Ferrellgas, L.P. August 1, 2019, will result in material increases to right of use assets and lease liabilities on our consolidated balance sheet.

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

2016‑13

In June 2016, the FASB issued ASU ~~2016-13,~~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~~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~~

2017‑12

In August 2017, the FASB issued ASU ~~2017-12,~~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~~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.

Table of Contents

FASB Accounting Standard Update No. 2018‑15

In August 2018, the FASB issued ASU 2018‑15, Intangibles - Goodwill and Other - Internal-use Software (Subtopic 350‑40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract which is intended to clarify the accounting for implementation costs related to a cloud computing arrangement that is a service contract. This standard is effective for fiscal years beginning after December 15, 2019, 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.

C. Supplemental financial statement information

Inventories consist of the following:


	January 31, 2019		July 31, 2018
Propane gas and related products	$	74,964	$	71,180
Appliances, parts and supplies, and other		14,820		12,514
Inventories	$	89,784	$	83,694

April 30, 2018 July 31, 2017
Propane gas and related products $ 58,142
$ 67,049
Appliances, parts and supplies, and other 26,920
25,503
Inventories $ 85,062
$ 92,552

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 ~~April 30, 2018,~~January 31, 2019, Ferrellgas, L.P. had committed, for supply procurement purposes, to take delivery of approximately ~~70.7~~14 million gallons of propane at fixed prices.

Other assets, net consist of the following:


	January 31, 2019		July 31, 2018
Notes receivable, less current portion	$	27,646	$	27,491
Other		44,893		47,097
Other assets, net	$	72,539	$	74,588

April 30, 2018 July 31, 2017
Notes receivable, less current portion $ 33,962
$ 32,500
Other 38,132
41,557
Other assets, net $ 72,094
$ 74,057

Other current liabilities consist of the following:


	January 31, 2019		July 31, 2018
Accrued interest		18,029		18,288
Customer deposits and advances		26,323		22,829
Other		98,967		96,974
Other current liabilities	$	143,319	$	138,091

April 30, 2018 July 31, 2017
Accrued interest $ 38,954
$ 14,737
Customer deposits and advances 18,956
25,541
Other 89,333
81,738
Other current liabilities $ 147,243
$ 122,016

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


	For the three months ended January 31,				For the six months ended January 31,
	2019		2018		2019		2018
Operating expense	$	60,279	$	54,613	$	107,721	$	97,928
Depreciation and amortization expense		1,389		1,123		2,462		2,235
Equipment lease expense		7,869		6,296		15,388		12,364
	$	69,537	$	62,032	$	125,571	$	112,527

Table of Contents

During the quarter ended January 31, 2018, Ferrellgas, L.P. committed to a plan to dispose of all of its rail cars utilized in the Midstream operations segment and recognized a loss on assets held for sale of $35.5 million. During the quarter ended April 30, 2018, Ferrellgas, L.P. completed the sale of all 1,292 of these rail cars and received approximately $51.3 million in cash. For the nine months ended April 30, 2018, "Loss on asset sales and disposals" includes a loss of $36.8 million related to the sale of these rail cars. 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, included in the Midstream operations segment, in exchange for an $8.5 million secured promissory note due in May 2020. For the nine months ended April 30, 2018, "Loss on asset sales and disposals" includes a loss of $3.8 million related to this sale.

~~"Loss on asset sales and disposals" during the three and nine months ended April 30, 2018 and 2017 consists of:~~

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


	For the six months ended January 31,
	2019		2018
Cash paid for:
Interest	$	67,546	$	63,286
Income taxes	$	9	$	1
Non-cash investing and financing activities:
Liabilities incurred in connection with acquisitions	$	1,174	$	1,508
Change in accruals for property, plant and equipment additions	$	2,815	$	47

For the nine months ended April 30,
2018 2017
Cash paid (refunded) for:
Interest $ 69,775
$ 67,314
Income taxes $ (479 ) $ 23
Non-cash investing and financing activities:
Liabilities incurred in connection with acquisitions $ 1,508
$ 856
Change in accruals for property, plant and equipment additions $ 386
$ (111 )

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

As discussed further in Note M - Subsequent events, on May 14, 2018, Ferrellgas, L.P. entered into an amendment which extended the maturity date of its accounts receivable securitization facility by three years and increased the maximum borrowing capacity from $225.0 million to $250.0 million. The accounts receivable securitization facility disclosures below pertain to the facility that was in place as of April 30, 2018.

Accounts and notes receivable, net consist of the following:


	January 31, 2019		July 31, 2018
Accounts receivable pledged as collateral	$	201,717	$	120,079
Accounts receivable		4,651		8,272
Note receivable - current portion		126		132
Other		27		26
Less: Allowance for doubtful accounts		(3,357)		(2,455)
Accounts and notes receivable, net	$	203,164	$	126,054

At ~~April 30, 2018, $182.5~~January 31, 2019, $201.7 million of trade accounts receivable were pledged as collateral against ~~$104.0~~$140.0 million of collateralized notes payable due to a commercial paper conduit. At July 31, ~~2017, $109.4~~2018, $120.1 million of trade accounts receivable were pledged as collateral against ~~$69.0~~$58.0 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 ~~April 30,~~January 31, 2019, Ferrellgas, L.P. had received cash proceeds of $140.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds or issue letters of credit. As of July 31, 2018, Ferrellgas, L.P. had received cash proceeds of $104.0 million from trade accounts receivables securitized, with $19.0 million of remaining capacity to receive additional proceeds. As of July 31, 2017, Ferrellgas, L.P. had received cash proceeds of $69.0$58.0 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 ~~4.2%~~5.3% and ~~4.0%~~5.2% as of ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017~~,2018, respectively.

E. Debt

As discussed further in Note M - Subsequent events, on May 4, 2018, Ferrellgas, L.P. entered into a new $575.0 million senior secured credit facility, which replaced the $575.0 million secured credit facility that was scheduled to mature in October 2018. Credit facility disclosures below pertain to the secured credit facility that was in place as of April 30, 2018.

Short-term borrowings

Ferrellgas, L.P. classifies ~~as short-term~~borrowings on the revolving line of credit portion of its ~~secured credit facility borrowings that were~~Senior Secured Credit Facility as short-term because they are used to fund working capital needs ~~and~~ that management intends to pay down within the 12twelve month period following the balance sheet date. As of ~~April 30, 2018,~~January 31, 2019, there were no amounts classified as short-term ~~borrowings because all amounts outstanding were refinanced on May 4, 2018 under the five-year term loan discussed in Note M - Subsequent events.~~borrowings. As of July 31, ~~2017, $59.8~~2018, $32.8 million was classified as short-term borrowings. For further discussion see the ~~senior~~ secured credit facility section below.

Secured credit facilities

As of January 31, 2019, Ferrellgas, L.P. had borrowings of $275.0 million under the Term Loan at a rate of 8.27%, which was classified as long-term debt, and no borrowings under the Revolving Facility. As of January 31, 2019, Ferrellgas, L.P. had available borrowing capacity under its Revolving Facility of $196.2 million. As of July 31, 2018, Ferrellgas, L.P. had borrowings of $275.0 million under the Term Loan at a rate of 7.86%, which was classified as long-

Table of Contents

term debt, and $32.8 million under the Revolving Facility at a rate of 9.75%, which was classified as short-term borrowings. As of July 31, 2018, Ferrellgas, L.P. had available borrowing capacity under its Revolving Facility of $159.3 million.

Letters of credit outstanding at January 31, 2019 and July 31, 2018 totaled $103.8 million and $107.9 million, respectively, and were used to secure insurance arrangements, product purchases and commodity hedges. At January 31, 2019, Ferrellgas, L.P. had available letter of credit remaining capacity of $21.2 million. At July 31, 2018, Ferrellgas, L.P. had available letter of credit remaining capacity of $17.1 million.

Debt and interest expense reduction and refinancing strategy

Ferrellgas, L.P. continues to execute on a strategy to further reduce its debt and interest expense. This strategy included entering into the new Senior Secured Credit Facility and amending ~~our secured credit facility and~~its accounts receivable securitization facility ~~as discussed~~ in ~~Note M - Subsequent events, as well as~~May 2018 and certain asset sales ~~executed~~during fiscal 2018. Ferrellgas, L.P. continues to ~~date,~~evaluate its options to address its leverage.

Financial covenants

The agreements governing Ferrellgas, L.P.’s indebtedness contain various covenants that limit Ferrellgas, L.P.’s 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 those related to the consolidated fixed charge coverage ratio, as defined in the indentures governing the outstanding notes of Ferrellgas, L.P.

Under the indentures governing the outstanding notes of Ferrellgas, L.P., before a restricted payment (as defined in the indentures) can be made by Ferrellgas, L.P. to Ferrellgas Partners, Ferrellgas, L.P. must be satisfy a consolidated fixed charge coverage ratio requirement or have unused capacity under a limited exception to the ratio requirement. If Ferrellgas, L.P. is unable to make restricted payments, Ferrellgas Partners will not have the ability to make distributions to its common unitholders or make interest payments on its unsecured senior notes due 2020.

The restricted payments covenants require that, for Ferrellgas, L.P. to make a restricted payment, the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of Ferrellgas, L.P. be at least 1.75x on a pro forma basis giving effect to the restricted payment and, if applicable, certain other specified events, subject to its ability to make restricted payments under the limited exception described below. If this pro forma ratio is below 1.75x, Ferrellgas, L.P. may ~~include refinancing existing debt agreements, additional asset sales,~~make restricted payments in limited amounts determined under the indentures. As of January 31, 2019, the ratio was 1.67x. As a ~~reduction in~~result, it’s likely the distribution that will be made by Ferrellgas, ~~Partners' annual distribution rate or~~L.P. on June 15, 2019 for payment of interest on Ferrellgas Partners’ unsecured senior notes due 2020 will be made from capacity under the ~~issuance of equity.~~limited exception to the ratio requirement. 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~~that its ~~business.~~

~~Senior secured credit facility~~

As of April 30, 2018, Ferrellgas, L.P. had total borrowings outstanding under its secured credit facility of $184.9 million, all of which was classified as long-term. Ferrellgas, L.P. had $252.3 million ofremaining capacity under the ~~secured credit facility as~~limited exception to the ratio requirement will allow it to make distributions to Ferrellgas Partners’ to cover interest payments on Ferrellgas Partners’ unsecured senior notes due 2020 through the maturity of April 30, 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. Borrowings outstanding at April 30, 2018 and July 31, 2017 under the secured credit facility had weighted average interest rates of 6.7% and 6.0%, respectively.

Letters of credit outstanding at April 30, 2018 totaled $111.8 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 April 30, 2018, Ferrellgas, L.P. had remaining letter of credit capacity of $88.2 million. At July 31, 2017, Ferrellgas, L.P. had remaining letter of credit capacity of $60.8 million.

those notes.

F. Partners’ 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,
	2019		2018		2019		2018
Ferrellgas Partners	$	15,396	$	25,210	$	25,310	$	35,023
General partner		157		257		258		357
	$	15,553	$	25,467	$	25,568	$	35,380

For the three months ended April 30, For the nine months ended April 30,
2018 2017 2018 2017
Ferrellgas Partners $ 10,013
$ 9,813
$ 45,036
$ 93,620
General partner 102
100
459
793
$ 10,115
$ 9,913
$ 45,495
$ 94,413

On May 24, 2018, Ferrellgas, L.P. declared distributions for the three months ended April 30, 2018 to Ferrellgas Partners and the general partner of $25.3 million and $0.3 million, respectively, which are expected to be paid on June 14, 2018.

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

Table of Contents

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

2018.

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 concurrent with the issuance of other additional equity.

During the ~~nine~~six months ended ~~April 30,~~January 31, 2019, the general partner made non-cash contributions of $0.1 million to Ferrellgas, L.P. to maintain its 1.0101% general partner interest.

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

~~During the nine months ended April 30, 2017, the general partner made cash contributions of $1.7 million and non-cash contributions of $0.1 million to~~

G. Revenue from contracts with customers

Ferrellgas, L.P. adopted ASU 2014‑09 beginning on August 1, 2018 using the modified retrospective method. Ferrellgas, L.P. earns revenue from contracts with customers primarily through the distribution of propane, as well as through the sale of propane related equipment and supplies. Revenues from propane and other gas liquids sales are comprised of revenue earned from the delivery of propane to ~~maintain~~tanks on customers’ premises, delivery of propane filled cylinders to customers, or from the sale of portable propane tanks to nationwide and local retailers and end use customers. Other revenues primarily include sales of appliances and other materials as well as other fees charged to customers. Upon adoption, Ferrellgas, L.P. applied ASU 2014‑09 only to contracts that were not completed.

Contracts with customers

Ferrellgas, L.P.’s contracts with customers are principally for the bulk delivery of propane to tanks, delivery of propane filled cylinders or the delivery of portable propane tanks to retailers. Ferrellgas, L.P. sells propane to a wide variety of customers, including residential, industrial/commercial, portable tank exchange, agricultural, wholesale and others. Ferrellgas, L.P.’s performance obligations in these contracts are generally limited to the delivery of propane thus revenues from these contracts are earned at the time product is delivered or in the case of some of Ferrellgas, L.P.’s portable tank exchange retailers who have consignment agreements, at the time the tanks are sold to the end use customer. Payment is generally due within 30 days. Revenues from sales of propane are included in Propane and other gas liquids sales on the consolidated statements of operations.

Typically, Ferrellgas, L.P. bills customers upon delivery and payment is generally due within 30 days. With its ~~1.0101% general partner interest.~~residential customers, Ferrellgas, L.P offers customers the ability to spread their annual heating costs over a longer period, typically twelve months. Customers who opt to spread their heating costs over a longer period are referred to as “even-pay” customers.

Ferrellgas, L.P. charges other amounts to customers associated with the delivery of propane including hazardous materials fees and fuel surcharge fees. In some regions, Ferrellgas, L.P. also sells appliances and related parts and fittings as well as other retail propane related services. Ferrellgas, L.P. charges on an annual basis tank and equipment rental charges for customers that are using our equipment to store propane. Other revenues associated with deliveries of propane are earned at the time product is delivered. Revenues associated with sales of appliances and other materials or services are earned at the time of delivery or installation. Revenues associated with tank and equipment rentals are generally recognized on a straight-line basis over one year.

Accounting estimates related to recognition of revenue require that Ferrellgas, L.P. make estimates and assumptions about various factors including credits issued for completed sales, future returns and total consideration payable in instances where we have customer incentives payable to the customer.

Table of Contents

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 January 31,				For the six months ended January 31,
	2019		2018		2019		2018
Retail - Sales to End Users	$	415,827	$	417,472	$	633,591	$	601,266
Wholesale - Sales to Resellers		115,392		128,654		209,336		227,083
Other Gas Sales		18,893		46,113		42,151		66,648
Other		23,265		45,641		40,608		76,778
Propane and related equipment revenues	$	573,377	$	637,880	$	925,686	$	971,775

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, thus 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:


	January 31, 2019		July 31, 2018
Accounts receivable	$	189,151	$	119,818
Contract assets	$	18,519	$	8,691
Contract liabilities
Deferred revenue (1)	$	35,609	$	29,933

(1)

Of the beginning balance of deferred revenue, $17.1 million was recognized as revenue during the six months ended January 31, 2019.

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, L.P. expects that these balances will be recognized within a year or less as the customer takes delivery of propane.

Table of Contents

G.H. 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 ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017~~:2018:


	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
January 31, 2019:
Assets:
Derivative financial instruments:
Commodity derivatives	$	—	$	5,848	$	—	$	5,848
Liabilities:
Derivative financial instruments:
Commodity derivatives	$	—	$	(15,148)	$	—	$	(15,148)

July 31, 2018:
Assets:
Derivative financial instruments:
Commodity derivatives	$	—	$	22,470	$	—	$	22,470
Liabilities:
Derivative financial instruments:
Commodity derivatives	$	—	$	(1,910)	$	—	$	(1,910)

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
April 30, 2018:
Assets:
Derivative financial instruments:
Interest rate swap agreements $ —
$ 41
$ —
$ 41
Commodity derivatives $ —
$ 19,750
$ —
$ 19,750
Liabilities:
Derivative financial instruments:
Interest rate swap agreements $ —
$ (3,222 ) $ —
$ (3,222 )
Commodity derivatives $ —
$ (2,239 ) $ —
$ (2,239 )

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 )

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.~~

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 note receivable financial instruments classified in "Other assets, net" on the condensed consolidated balance sheets, are approximately ~~$29.3~~$24.2 million, or ~~$4.7~~$3.4 million less than their carrying amount as of ~~April 30, 2018.~~January 31, 2019. The estimated fair values of these notes receivable were calculated using a discounted cash flow method which relied on significant unobservable inputs. At ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017,~~2018, the estimated fair value of Ferrellgas, L.P.’s long-term debt instruments was ~~$1,560.8~~$1,560.0 million and ~~$1,645.3~~$1,591.5 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.

H.I. 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

Table of Contents

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 were 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.

Derivative instruments and hedging activity

During the ~~nine~~six months ended ~~April 30,~~ January 31, 2019 and 2018, ~~and 2017,~~ 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 in Ferrellgas, L.P.’s condensed consolidated balance sheets as of ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017:~~ 2018:


	January 31, 2019
	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	$	5,408	Other current liabilities	$	13,859
Commodity derivatives-propane	Other assets, net		440	Other liabilities		1,289
	Total	$	5,848	Total	$	15,148


	July 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	$	17,123	Other current liabilities	$	1,832
Commodity derivatives-propane	Other assets, net		5,347	Other liabilities		78
	Total	$	22,470	Total	$	1,910

April 30, 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 $ 14,449
Other current liabilities $ 2,207
  Commodity derivatives-propane Other assets, net 5,301
Other liabilities 32
  Interest rate swap agreements Prepaid expenses and other current assets 41
Other current liabilities 738
  Interest rate swap agreements Other assets, net —
Other liabilities 2,484
Total $ 19,791
Total $ 5,461

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

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 ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017~~,2018, respectively:


	January 31, 2019
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expense and other current assets	$	10,977	Other current liabilities	$	1,734
	Other assets, net		2,617	Other liabilities		3
		$	13,594		$	1,737


	July 31, 2018
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expense and other current assets	$	2,851	Other current liabilities	$	12,308
	Other assets, net		927	Other liabilities		4,235
		$	3,778		$	16,543

Table of Contents

The following ~~tables~~table provides a summary of the effect on Ferrellgas, L.P.’s condensed consolidated statements of operations for the three and ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and~~ ~~2017~~ due to derivatives that were designated as fair value hedging instruments:


						Amount of Interest Expense
	Location of Amounts	Amount of Gain Recognized on				Recognized on Fixed-Rated Debt
	Recognized on	Derivative				(Related Hedged Item)
Derivative Instrument	Derivative	For the three months ended January 31,				For the three months ended January 31,
		2019		2018		2019		2018
Interest rate swap agreements	Interest expense	$	—	$	88	$	—	$	(2,275)


						Amount of Interest Expense
	Location of Gain	Amount of Gain Recognized on				Recognized on Fixed-Rated Debt
	Recognized on	Derivative				(Related Hedged Item)
Derivative Instrument	Derivative	For the six months ended January 31,				For the six months ended January 31,
		2019		2018		2019		2018
Interest rate swap agreements	Interest expense	$	—	$	226	$	—	$	(4,550)

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 April 30, For the three months ended April 30,
2018 2017 2018 2017
Interest rate swap agreements Interest expense $ 40
$ 323
$ (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 nine months ended April 30, For the nine months ended April 30,
2018 2017 2018 2017
Interest rate swap agreements Interest expense $ 266
$ 1,071
$ (6,825 ) $ (6,825 )

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 ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and~~ ~~2017~~ due to derivatives designated as cash flow hedging instruments:


	For the three months ended January 31, 2019
				Amount of Gain (Loss)
			Location of Gain (Loss)	Reclassified from
	Amount of Gain (Loss)		Reclassified from AOCI	AOCI into Income
Derivative Instrument	Recognized in AOCI		into Income	Effective portion		Ineffective portion
Commodity derivatives	$	(21,080)	Cost of product sold- propane and other gas liquids sales	$	3,807	$	—
	$	(21,080)		$	3,807	$	—


	For the three months ended January 31, 2018
				Amount of Gain (Loss)
			Location of Gain (Loss)	Reclassified from
	Amount of Gain (Loss)		Reclassified from AOCI	AOCI into Income
Derivative Instrument	Recognized in 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 six months ended January 31, 2019
				Amount of Gain (Loss)
			Location of Gain (Loss)	Reclassified from
	Amount of Gain (Loss)		Reclassified from AOCI	AOCI into Income
Derivative Instrument	Recognized in AOCI		into Income	Effective portion		Ineffective portion
Commodity derivatives	$	(29,234)	Cost of sales-propane and other gas liquids sales	$	(626)	$	—
	$	(29,234)		$	(626)	$	—

Table of Contents



	For the three months ended April 30, 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				Effective portion				Ineffective portion
Commodity derivatives	$	(169	)	Location of Gain (Loss) Reclassified from AOCI into Income	Cost of sales-propane and other gas liquids sales		$	6,628			$	—
Interest rate swap agreements	10			Interest expense		(60		)		—
	$	(159	)			$	6,568			$	—

	For the three months ended April 30, 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				Effective portion				Ineffective portion
Commodity derivatives	$	(6,642	)	Location of Gain (Loss) Reclassified from AOCI into Income	Cost of sales-propane and other gas liquids sales		$	2,411			$	—
Interest rate swap agreements	146			Interest expense		(478		)		—
	$	(6,496	)			$	1,933			$	—		For the six months ended January 31, 2018
																		Amount of Gain (Loss)
																Location of Gain (Loss)		Reclassified from
	For the nine months ended April 30, 2018												Amount of Gain (Loss)			Reclassified from AOCI		AOCI into Income
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							Recognized in AOCI			into Income		Effective portion			Ineffective portion
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI				Effective portion				Ineffective portion
Commodity derivatives	$	23,114		Location of Gain (Loss) Reclassified from AOCI into Income	Cost of sales-propane and other gas liquids sales		$	20,646			$	—		$	23,283		Cost of product sold- propane and other gas liquids sales		$	14,018		$	—
Interest rate swap agreements	248			Interest expense		(386		)		—				238		Interest expense			(326)			—
	$	23,362				$	20,260			$	—		$	23,521				$	13,692		$	—

	For the nine months ended April 30, 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				Effective portion				Ineffective portion
Commodity derivatives	$	12,930		Location of Gain (Loss) Reclassified from AOCI into Income	Cost of sales-propane and other gas liquids sales		$	(1,112	)		$	—
Interest rate swap agreements	974			Interest expense		(1,707		)		—
	$	13,904				$	(2,819	)		$	—

The following ~~tables provide~~table provides a summary of the effect on Ferrellgas, L.P.'s’s condensed consolidated statements of operations for the three and ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~ due to the change in fair value of derivatives not designated as hedging instruments:


	For the three months ended January 31, 2019
	Amount of Gain (Loss)		Location of Gain (Loss)
DerivativesNotDesignatedasHedgingInstruments	Recognized in Income		Reclassified in Income
Commodity derivatives - crude oil	$	—	Cost of sales - midstream operations


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


	For the six months ended January 31, 2019
	Amount of Gain (Loss)		Location of Gain (Loss)
DerivativesNotDesignatedasHedgingInstruments	Recognized in Income		Reclassified in Income
Commodity derivatives - crude oil	$	—	Cost of sales - midstream operations


	For the six months ended January 31, 2018
	Amount of Gain (Loss)		Location of Gain (Loss)
DerivativesNotDesignatedasHedgingInstruments	Recognized in Income		Reclassified in Income
Commodity derivatives - crude oil	$	(3,470)	Cost of sales - midstream operations

The changes in derivatives included in AOCI for the ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~ were as follows:


	For the six months ended January 31,
Gains and losses on derivatives included in AOCI	2019		2018
Beginning balance	$	20,560	$	14,648
Change in value of risk management commodity derivatives		(29,234)		23,283
Reclassification of gains on commodity hedges to cost of sales - propane and other gas liquids sales, net		(626)		(14,018)
Change in value of risk management interest rate derivatives		—		238
Reclassification of losses on interest rate hedges to interest expense		—		326
Ending balance	$	(9,300)	$	24,477

Ferrellgas, L.P. expects to reclassify net ~~gains~~losses related to the risk management commodity derivatives of approximately ~~$12.2~~$8.5 million to earnings during the next 12 months. These net ~~gains~~losses are expected to be offset by ~~decreased~~increased margins on propane sales commitments Ferrellgas, L.P. has with its customers that qualify for the normal purchase normal sales exception.

During the ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018, ~~and 2017,~~ 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.

Table of Contents

As of ~~April 30, 2018,~~January 31, 2019, Ferrellgas, L.P. had financial derivative contracts covering ~~2.3~~3.9 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, 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 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 ~~April 30, 2018,~~January 31, 2019, the maximum amount of loss due to credit risk that Ferrellgas, L.P. would incur is ~~$5.7~~$0.5 million, which is based upon the gross fair values of the derivative financial instruments.

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 no open derivative contracts with credit-risk-related contingent features as of ~~April 30, 2018.~~

January 31, 2019.

I.J. Transactions with related parties

Ferrellgas, L.P. has no 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 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 January 31,				For the six months ended January 31,
	2019		2018		2019		2018
Operating expense	$	69,285	$	65,291	$	129,243	$	122,642

General and administrative expense	$	7,197	$	8,422	$	13,309	$	15,930

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

J.K. 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,

Table of Contents

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.~~resulted in the court of appeals affirming the dismissal of the federal claims and remanding the case to the district court to decide whether to exercise supplemental jurisdiction over the remaining state law claims. 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. On April 2, 2018, the securities class action lawsuits were dismissed with prejudice. On April 30, 2018, the plaintiffs filed a notice of appeal to the United States Court of Appeals for the Second Circuit. The parties have completed briefing and are preparing for oral argument. At this time the derivative lawsuits remain stayed by agreement. 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, 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 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 the arbitration. Eddystone also alleges that JTS was an “alter ego” of Bridger and ~~Ferrellgas.~~Ferrellgas, L.P. Ferrellgas, L.P. 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 of damages that Eddystone is seeking; however, Ferrellgas, L.P. believes that the amount of such damage claims, if ultimately owed to Eddystone, could be material to 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, L.P. entered into an agreement with the Third-Party Defendants ~~have~~which, among other things, resulted in a dismissal of the claims against the Third-Party Defendants from the lawsuit. On January 25, 2019, Ferrellgas, L.P., Bridger Logistics, LLC and all other defendants filed ~~motions~~a Motion to ~~dismiss the third-party complaint~~Dismiss Plaintiff’s First Amended Complaint for ~~alleged lack~~Lack of ~~personal jurisdiction, failure to state claim, and forum non-conveniens. Ferrellgas, L.P. is vigorously opposing these motions.~~

Subject Matter Jurisdiction.

K.L. Segment reporting

As of January 31, 2019, Ferrellgas, L.P. has ~~two primary operations that result in two~~one reportable operating ~~segments: Propane~~segment: propane operations and related equipment ~~sales~~sales. All remaining activities are included in Corporate and ~~Midstream operations. During the quarter ended January 31, 2018, Ferrellgas, L.P. recorded a goodwill impairment~~other.

Table 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.~~Contents

Following is a summary of segment information for the three and ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017:~~


	Three months ended January 31, 2019
	Propane operations
	and related equipment		Corporate and
	sales		other		Total
Segment revenues	$	573,377	$	—	$	573,377
Direct costs (1)		443,533		10,187		453,720
Adjusted EBITDA	$	129,844	$	(10,187)	$	119,657


	Three months ended January 31, 2018
	Propane operations
	and related equipment		Corporate and
	sales		other		Total
Segment revenues	$	637,880	$	117,276	$	755,156
Direct costs (1)		507,386		127,142		634,528
Adjusted EBITDA	$	130,494	$	(9,866)	$	120,628


	Six months ended January 31, 2019
	Propane operations
	and related equipment		Corporate and
	sales		other		Total
Segment revenues	$	925,686	$	—	$	925,686
Direct costs (1)		767,127		21,057		788,184
Adjusted EBITDA	$	158,559	$	(21,057)	$	137,502


	Six months ended January 31, 2018
	Propane operations
	and related equipment		Corporate and
	sales		other		Total
Segment revenues	$	971,775	$	238,036	$	1,209,811
Direct costs (1)		810,715		252,252		1,062,967
Adjusted EBITDA	$	161,060	$	(14,216)	$	146,844

(1)

Table of Contents

Three months ended April 30, 2018
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 493,215
$ 22,595
$ —
$ 515,810
Direct costs (1) 397,568
21,593
9,595
428,756
Adjusted EBITDA $ 95,647
$ 1,002
$ (9,595 ) $ 87,054

Three months ended April 30, 2017
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 411,433
$ 126,676
$ —
$ 538,109
Direct costs (1) 324,442
127,223
9,545
461,210
Adjusted EBITDA $ 86,991
$ (547 ) $ (9,545 ) $ 76,899

Nine months ended April 30, 2018
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 1,464,990
$ 260,631
$ —
$ 1,725,621
Direct costs (1) 1,208,283
250,423
33,017
1,491,723
Adjusted EBITDA $ 256,707
$ 10,208
$ (33,017 ) $ 233,898

Nine months ended April 30, 2017
Propane operations and related equipment sales Midstream operations Corporate Total
Segment revenues $ 1,165,394
$ 331,507
$ —
$ 1,496,901
Direct costs (1) 931,631
323,714
30,607
1,285,952
Adjusted EBITDA $ 233,763
$ 7,793
$ (30,607 ) $ 210,949

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


	Three months ended January 31,				Six months ended January 31,
	2019		2018		2019		2018

Net earnings (loss)	$	52,617	$	6,847	$	3,803	$	(32,852)
Income tax expense (benefit)		3		(167)		154		204
Interest expense		36,150		34,058		71,345		66,254
Depreciation and amortization expense		19,605		25,485		38,597		51,217
EBITDA		108,375		66,223		113,899		84,823
Non-cash employee stock ownership plan compensation charge		1,944		4,031		4,692		7,993
Asset impairments		—		10,005		—		10,005
Loss on asset sales and disposals		2,216		39,249		6,720		40,144
Other income, net		(86)		(684)		(105)		(1,195)
Severance costs		1,600		—		1,600		1,663
Legal fees and settlements		5,608		2,118		9,172		2,118
Unrealized (non-cash) loss on changes in fair value of derivatives not designated as hedging instruments		—		(314)		—		1,293
Multi-employer pension plan withdrawal settlement		—		—		1,524		—
Adjusted EBITDA	$	119,657	$	120,628	$	137,502	$	146,844

Three months ended April 30, Nine months ended April 30,
2018 2017 2018 2017
Net earnings (loss) $ 19,840
$ 15,395
$ (13,012 ) $ 18,555
Income tax expense (benefit) 57
(197 ) 261
(200 )
Interest expense 31,739
31,270
97,993
95,416
Depreciation and amortization expense 25,348
25,737
76,565
77,546
EBITDA 76,984
72,205
161,807
191,317
Non-cash employee stock ownership plan compensation charge 2,738
4,697
10,731
11,396
Non-cash stock-based compensation charge —
—
—
3,298
Asset impairments —
—
10,005
—
Loss on asset sales and disposals 6,270
2,393
46,414
8,861
Other income, net (227 ) (162 ) (1,422 ) (1,433 )
Severance costs —
—
1,663
1,959
Professional fees 1,289
—
3,407
—
Unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments —
(2,234 ) 1,293
(4,449 )
Adjusted EBITDA $ 87,054
$ 76,899
$ 233,898
$ 210,949

Following are total assets by segment:


	January 31, 2019		July 31, 2018
Assets
Propane operations and related equipment sales	$	1,315,233	$	1,196,084
Corporate and other		72,729		167,162
Total consolidated assets	$	1,387,962	$	1,363,246

Assets April 30, 2018 July 31, 2017
Propane operations and related equipment sales $ 1,274,360
$ 1,194,905
Midstream operations 244,523
399,356
Corporate 13,654
15,687
Total consolidated assets $ 1,532,537
$ 1,609,948

Following are capital expenditures by segment:


	Six months ended January 31, 2019
	Propane operations and
	related equipment sales		Corporate and other		Total
Capital expenditures:
Maintenance	$	31,460	$	549	$	32,009
Growth		23,316		—		23,316
Total	$	54,776	$	549	$	55,325


	Six months ended January 31, 2018
	Propane operations and
	related equipment sales		Corporate and other		Total
Capital expenditures:
Maintenance	$	12,016	$	1,427	$	13,443
Growth		18,311		1,013		19,324
Total	$	30,327	$	2,440	$	32,767

Table of Contents

L.M. 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.

Table of Contents

FERRELLGAS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
(in thousands)
As of April 30, 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 $ 9,126
$ 1
$ 364
$ —
$ —
$ 9,491
Accounts and notes receivable, net (3,346 ) —
23,493
182,580
—
202,727
Intercompany receivables 65,801
—
—
—
(65,801 ) —
Inventories 70,893
—
14,169
—
—
85,062
Prepaid expenses and other current assets 31,167
—
12,890
2
—
44,059
Total current assets 173,641
1
50,916
182,582
(65,801 ) 341,339

Property, plant and equipment, net 552,551
—
85,137
—
—
637,688
Goodwill, net 246,098
—
—
—
—
246,098
Intangible assets, net 123,177
—
112,141
—
—
235,318
Intercompany receivables 450,000
—
—
—
(450,000 ) —
Investments in consolidated subsidiaries (164,031 ) —
—
—
164,031
—
Other assets, net 36,744
—
34,987
363
—
72,094
Total assets $ 1,418,180
$ 1
$ 283,181
$ 182,945
$ (351,770 ) $ 1,532,537

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Current liabilities:

Accounts payable $ 50,164
$ —
$ 2,221
$ 87
$ —
$ 52,472
Short-term borrowings —
—
—
—
—
—
Collateralized note payable —
—
—
104,000
—
104,000
Intercompany payables —
—
45,554
20,247
(65,801 ) —
Other current liabilities 143,804
—
3,041
398
—
147,243
Total current liabilities 193,968
—
50,816
124,732
(65,801 ) 303,715

Long-term debt 1,646,069
—
450,000
—
(450,000 ) 1,646,069
Other liabilities 29,615
—
4,610
—
—
34,225
Contingencies and commitments

Partners' capital (deficit):

Partners' equity (469,338 ) 1
(222,245 ) 58,213
164,031
(469,338 )
Accumulated other comprehensive income 17,866
—
—
—
—
17,866
Total partners' capital (deficit) (451,472 ) 1
(222,245 ) 58,213
164,031
(451,472 )
Total liabilities and partners' capital (deficit) $ 1,418,180
$ 1
$ 283,181
$ 182,945
$ (351,770 ) $ 1,532,537

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)


	As of January 31, 2019
	Ferrellgas, L.P.		Ferrellgas
	(Parent and		Finance Corp.		Guarantor		Non-Guarantor
	Co-Issuer)		(Co-Issuer)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	40,305	$	1	$	246	$	—	$	—	$	40,552
Accounts and notes receivable, net		(3,661)		—		150		206,675		—		203,164
Intercompany receivables		(9,201)		—		—		—		9,201		—
Inventories		89,784		—		—		—		—		89,784
Prepaid expenses and other current assets		36,551		—		(1)		3		—		36,553
Total current assets		153,778		1		395		206,678		9,201		370,053

Property, plant and equipment, net		584,335		—		(1)		—		—		584,334
Goodwill, net		247,478		—		—		—		—		247,478
Intangible assets, net		113,558		—		—		—		—		113,558
Investments in consolidated subsidiaries		74,072		—		—		—		(74,072)		—
Other assets, net		68,659		—		2,875		1,005		—		72,539
Total assets	$	1,241,880	$	1	$	3,269	$	207,683	$	(64,871)	$	1,387,962

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Current liabilities:
Accounts payable	$	63,526	$	—	$	—	$	113	$	—	$	63,639
Collateralized note payable		—		—		—		140,000		—		140,000
Intercompany payables		—		—		(192)		(9,009)		9,201		—
Other current liabilities		137,417		—		388		5,514		—		143,319
Total current liabilities		200,943		—		196		136,618		9,201		346,958

Long-term debt		1,730,468		—		—		—		—		1,730,468
Other liabilities		37,480		—		67		—		—		37,547
Contingencies and commitments

Partners' capital (deficit):
Partners' equity		(717,884)		1		3,006		71,065		(74,072)		(717,884)
Accumulated other comprehensive loss		(9,127)		—		—		—		—		(9,127)
Total partners' capital (deficit)		(727,011)		1		3,006		71,065		(74,072)		(727,011)
Total liabilities and partners' capital (deficit)	$	1,241,880	$	1	$	3,269	$	207,683	$	(64,871)	$	1,387,962

Table of Contents

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 BALANCE SHEETS

(in thousands)


	As of July 31, 2018
	Ferrellgas, L.P.		Ferrellgas
	(Parent and		Finance Corp.		Guarantor		Non-Guarantor
	Co-Issuer)		(Co-Issuer)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	119,133	$	1	$	174	$	—	$	—	$	119,308
Accounts and notes receivable, net		(3,420)		—		9,395		120,079		—		126,054
Intercompany receivables		15,660		—		—		—		(15,660)		—
Inventories		83,694		—		—		—		—		83,694
Prepaid expenses and other current assets		34,050		—		775		5		—		34,830
Total current assets		249,117		1		10,344		120,084		(15,660)		363,886

Property, plant and equipment, net		557,689		—		34		—		—		557,723
Goodwill, net		246,098		—		—		—		—		246,098
Intangible assets, net		120,951		—		—		—		—		120,951
Investments in consolidated subsidiaries		59,937		—		—		—		(59,937)		—
Other assets, net		63,411		—		9,961		1,216		—		74,588
Total assets	$	1,297,203	$	1	$	20,339	$	121,300	$	(75,597)	$	1,363,246

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Current liabilities:
Accounts payable	$	45,171	$	—	$	1,547	$	102	$	—	$	46,820
Short-term borrowings		32,800		—		—		—		—		32,800
Collateralized note payable		—		—		—		58,000		—		58,000
Intercompany payables		—		—		(143)		15,803		(15,660)		—
Other current liabilities		131,702		—		6,036		353		—		138,091
Total current liabilities		209,673		—		7,440		74,258		(15,660)		275,711

Long-term debt		1,728,137		—		—		—		—		1,728,137
Other liabilities		39,471		—		5		—		—		39,476
Contingencies and commitments

Partners' capital (deficit):
Partners' equity		(700,811)		1		12,894		47,042		(59,937)		(700,811)
Accumulated other comprehensive income		20,733		—		—		—		—		20,733
Total partners' capital (deficit)		(680,078)		1		12,894		47,042		(59,937)		(680,078)
Total liabilities and partners' capital (deficit)	$	1,297,203	$	1	$	20,339	$	121,300	$	(75,597)	$	1,363,246

Table of Contents

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

For the three months ended April 30, 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 $ 451,212
$ —
$ 90
$ —
$ —
$ 451,302
Midstream operations —
—
22,595
—
—
22,595
Other 19,701
—
22,212
—
—
41,913
Total revenues 470,913
—
44,897
—
—
515,810

Costs and expenses:
Cost of sales - propane and other gas liquids sales 260,317
—
102
—
—
260,419
Cost of sales - midstream operations —
—
14,518
—
—
14,518
Cost of sales - other 2,328
—
17,522
—
—
19,850
Operating expense 108,291
—
9,262
1,459
(2,433 ) 116,579
Depreciation and amortization expense 19,105
—
6,171
72
—
25,348
General and administrative expense 10,460
—
1,086
—
—
11,546
Equipment lease expense 7,045
—
88
—
—
7,133
Non-cash employee stock ownership plan compensation charge 2,738
—
—
—
—
2,738
Loss on asset sales and disposals 2,243
—
4,027
—
—
6,270

Operating income (loss) 58,386
—
(7,879 ) (1,531 ) 2,433
51,409

Interest expense (20,297 ) —
(10,104 ) (1,338 ) —
(31,739 )
Other income (expense), net (133 ) —
360
2,433
(2,433 ) 227

Earnings (loss) before income taxes 37,956
—
(17,623 ) (436 ) —
19,897

Income tax expense (benefit) 102
—
(45 ) —
—
57
Equity in earnings (loss) of subsidiary (18,014 ) —
—
—
18,014
—

Net earnings (loss) 19,840
—
(17,578 ) (436 ) 18,014
19,840

Other comprehensive loss (6,727 ) —
—
—
—
(6,727 )

Comprehensive income (loss) $ 13,113
$ —
$ (17,578 ) $ (436 ) $ 18,014
$ 13,113

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)


	For the three months ended January 31, 2019
	Ferrellgas, L.P.		Ferrellgas
	(Parent and		Finance Corp.		Guarantor		Non-Guarantor
	Co-Issuer)		(Co-Issuer)		Subsidiaries		Subsidiaries		Eliminations		Consolidated

Revenues:
Propane and other gas liquids sales	$	550,112	$	—	$	—	$	—	$	—	$	550,112
Other		23,216		—		49		—		—		23,265
Total revenues		573,328		—		49		—		—		573,377

Costs and expenses:
Cost of sales - propane and other gas liquids sales		311,531		—		—		—		—		311,531
Cost of sales - other		3,308		—		114		—		—		3,422
Operating expense		121,180		—		39		1,884		(1,884)		121,219
Depreciation and amortization expense		19,493		—		—		112		—		19,605
General and administrative expense		16,338		3		—		—		—		16,341
Equipment lease expense		8,415		—		—		—		—		8,415
Non-cash employee stock ownership plan compensation charge		1,944		—		—		—		—		1,944
Loss on asset sales and disposals		2,045		—		171		—		—		2,216

Operating income (loss)		89,074		(3)		(275)		(1,996)		1,884		88,684

Interest expense		(34,655)		—		(38)		(1,457)		—		(36,150)
Other income (expense), net		96		—		(10)		2,916		(2,916)		86

Earnings (loss) before income taxes		54,515		(3)		(323)		(537)		(1,032)		52,620

Income tax expense		3		—		—		—		—		3
Equity in earnings (loss) of subsidiaries		(863)		—		—		—		863		—

Net earnings (loss)		53,649		(3)		(323)		(537)		(169)		52,617

Other comprehensive loss		(17,273)		—		—		—		—		(17,273)

Comprehensive income (loss)	$	36,376	$	(3)	$	(323)	$	(537)	$	(169)	$	35,344

Table of Contents

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

For the three months ended April 30, 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 $ 369,437
$ —
$ —
$ —
$ —
$ 369,437
Midstream operations —
—
126,676
—
—
126,676
Other 17,850
—
24,146
—
—
41,996
Total revenues 387,287
—
150,822
—
—
538,109

Costs and expenses:
Cost of sales - propane and other gas liquids sales 197,487
—
—
—
—
197,487
Cost of sales - midstream operations —
—
118,767
—
—
118,767
Cost of sales - other 1,992
—
18,818
—
—
20,810
Operating expense 96,264
—
8,594
1,315
(1,400 ) 104,773
Depreciation and amortization expense 18,261
—
7,418
58
—
25,737
General and administrative expense 8,930
—
939
—
—
9,869
Equipment lease expense 7,108
—
162
—
—
7,270
Non-cash employee stock ownership plan compensation charge 4,697
—
—
—
—
4,697
Loss on asset sales and disposals 2,146
—
247
—
—
2,393

Operating income (loss) 50,402
—
(4,123 ) (1,373 ) 1,400
46,306

Interest expense (19,452 ) —
(11,019 ) (799 ) —
(31,270 )
Other income (expense), net (157 ) —
319
1,400
(1,400 ) 162

Earnings (loss) before income taxes 30,793
—
(14,823 ) (772 ) —
15,198

Income tax expense (benefit) 97
—
(294 ) —
—
(197 )
Equity in earnings (loss) of subsidiary (15,301 ) —
—
—
15,301
—

Net earnings (loss) 15,395
—
(14,529 ) (772 ) 15,301
15,395

Other comprehensive income (8,429 ) —
—
—
—
(8,429 )

Comprehensive income (loss) $ 6,966
$ —
$ (14,529 ) $ (772 ) $ 15,301
$ 6,966

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)


	For the three months ended January 31, 2018
	Ferrellgas, L.P.		Ferrellgas
	(Parent and		Finance Corp.		Guarantor		Non-Guarantor
	Co-Issuer)		(Co-Issuer)		Subsidiaries		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 subsidiaries		(63,571)		—		—		—		63,571		—

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

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

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

Table of Contents

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

For the nine months ended April 30, 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 $ 1,345,604
$ —
$ 695
$ —
$ —
$ 1,346,299
Midstream operations —
—
260,631
—
—
260,631
Other 59,085
—
59,606
—
—
118,691
Total revenues 1,404,689
—
320,932
—
—
1,725,621

Costs and expenses:
Cost of sales - propane and other gas liquids sales 802,063
—
789
—
—
802,852
Cost of sales - midstream operations —
—
229,710
—
—
229,710
Cost of sales - other 7,890
—
46,449
—
—
54,339
Operating expense 323,619
—
28,320
4,474
(5,656 ) 350,757
Depreciation and amortization expense 55,973
—
20,377
215
—
76,565
General and administrative expense 35,048
5
4,547
—
—
39,600
Equipment lease expense 20,555
—
273
—
—
20,828
Non-cash employee stock ownership plan compensation charge 10,731
—
—
—
—
10,731
Asset impairments —
—
10,005
—
—
10,005
Loss on asset sales and disposals 3,706
—
42,708
—
—
46,414

Operating income (loss) 145,104
(5 ) (62,246 ) (4,689 ) 5,656
83,820

Interest expense (61,903 ) —
(33,028 ) (3,062 ) —
(97,993 )
Other income (expense), net 490
—
932
5,656
(5,656 ) 1,422

Earnings (loss) before income taxes 83,691
(5 ) (94,342 ) (2,095 ) —
(12,751 )

Income tax expense 174
—
87
—
—
261
Equity in earnings (loss) of subsidiary (96,529 ) —
—
—
96,529
—

Net earnings (loss) (13,012 ) (5 ) (94,429 ) (2,095 ) 96,529
(13,012 )

Other comprehensive income 3,102
—
—
—
—
3,102

Comprehensive income (loss) $ (9,910 ) $ (5 ) $ (94,429 ) $ (2,095 ) $ 96,529
$ (9,910 )

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)


	For the six months ended January 31, 2019
	Ferrellgas, L.P.		Ferrellgas
	(Parent and		Finance Corp.		Guarantor		Non-Guarantor
	Co-Issuer)		(Co-Issuer)		Subsidiaries		Subsidiaries		Eliminations		Consolidated

Revenues:
Propane and other gas liquids sales	$	885,078	$	—	$	—	$	—	$	—	$	885,078
Other		40,559		—		49		—		—		40,608
Total revenues		925,637		—		49		—		—		925,686

Costs and expenses:
Cost of sales - propane and other gas liquids sales		515,667		—		—		—		—		515,667
Cost of sales - other		6,355		—		114		—		—		6,469
Operating expense		231,511		—		39		2,901		(2,901)		231,550
Depreciation and amortization expense		38,374		—		—		223		—		38,597
General and administrative expense		30,511		5		—		—		—		30,516
Equipment lease expense		16,278		—		—		—		—		16,278
Non-cash employee stock ownership plan compensation charge		4,692		—		—		—		—		4,692
Asset impairments		—		—		—		—		—		—
Loss on asset sales and disposals		4,041		—		2,679		—		—		6,720

Operating income (loss)		78,208		(5)		(2,783)		(3,124)		2,901		75,197

Interest expense		(69,003)		—		(38)		(2,304)		—		(71,345)
Other income (expense), net		115		—		(10)		5,119		(5,119)		105

Earnings (loss) before income taxes		9,320		(5)		(2,831)		(309)		(2,218)		3,957

Income tax expense		154		—		—		—		—		154
Equity in earnings (loss) of subsidiary		(3,145)		—		—		—		3,145		—

Net earnings (loss)		6,021		(5)		(2,831)		(309)		927		3,803

Other comprehensive loss		(29,860)		—		—		—		—		(29,860)

Comprehensive income (loss)	$	(23,839)	$	(5)	$	(2,831)	$	(309)	$	927	$	(26,057)

Table of Contents

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

For the nine months ended April 30, 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 $ 1,049,211
$ —
$ —
$ —
$ —
$ 1,049,211
Midstream operations —
—
331,507
—
—
331,507
Other 56,785
—
59,398
—
—
116,183
Total revenues 1,105,996
—
390,905
—
—
1,496,901

Costs and expenses:
Cost of sales - propane and other gas liquids sales 551,728
—
—
—
—
551,728
Cost of sales - midstream operations —
—
300,433
—
—
300,433
Cost of sales - other 6,993
—
46,220
—
—
53,213
Operating expense 297,905
—
28,482
(251 ) (3,201 ) 322,935
Depreciation and amortization expense 54,552
—
22,817
177
—
77,546
General and administrative expense 32,886
5
3,525
—
—
36,416
Equipment lease expense 21,585
—
450
—
—
22,035
Non-cash employee stock ownership plan compensation charge 11,396
—
—
—
—
11,396
Loss on asset sales and disposals 3,666
—
5,195
—
—
8,861

Operating income (loss) 125,285
(5 ) (16,217 ) 74
3,201
112,338

Interest expense (60,893 ) —
(32,694 ) (1,826 ) (3 ) (95,416 )
Other income (expense), net 100
—
1,333
3,198
(3,198 ) 1,433

Earnings (loss) before income taxes 64,492
(5 ) (47,578 ) 1,446
—
18,355

Income tax expense (benefit) 171
—
(371 ) —
—
(200 )
Equity in earnings (loss) of subsidiary (45,766 ) —
—
—
45,766
—

Net earnings (loss) 18,555
(5 ) (47,207 ) 1,446
45,766
18,555

Other comprehensive income 16,723
—
—
—
—
16,723

Comprehensive income (loss) $ 35,278
$ (5 ) $ (47,207 ) $ 1,446
$ 45,766
$ 35,278

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)


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

Table of Contents

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

For the nine months ended April 30, 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 $ 65,604
$ (5 ) $ (3,531 ) $ 66,878
$ (35,000 ) $ 93,946

Cash flows from investing activities:
Business acquisitions, net of cash acquired (14,862 ) —
—
—
—
(14,862 )
Capital expenditures (57,158 ) —
(1,803 ) —
—
(58,961 )
Proceeds from sale of assets 2,479
—
55,323
—
—
57,802
Cash collected for purchase of interest in accounts receivable —
—
—
985,084
(985,084 ) —
Cash remitted to Ferrellgas, L.P. for accounts receivable —
—
—
(1,020,084 ) 1,020,084
—
Net changes in advances with consolidated entities 116,871
—
—
—
(116,871 ) —
Net cash provided by (used in) investing activities 47,330
—
53,520
(35,000 ) (81,871 ) (16,021 )

Cash flows from financing activities:
Distributions (45,495 ) —
—
—
—
(45,495 )
Proceeds from increase in long-term debt 23,580
—
—
—
—
23,580
Payments on long-term debt (1,892 ) —
—
—
—
(1,892 )
Net reductions in short-term borrowings (84,179 ) —
—
—
—
(84,179 )
Net additions to collateralized short-term borrowings —
—
—
35,000
—
35,000
Net changes in advances with parent —
5
(49,998 ) (66,878 ) 116,871
—
Cash paid for financing costs (1,149 ) —
—
—
—
(1,149 )
Net cash provided by (used in) financing activities (109,135 ) 5
(49,998 ) (31,878 ) 116,871
(74,135 )

Increase (decrease) in cash and cash equivalents 3,799
—
(9 ) —
—
3,790
Cash and cash equivalents - beginning of year 5,327
1
373
—
—
5,701
Cash and cash equivalents - end of year $ 9,126
$ 1
$ 364
$ —
$ —
$ 9,491

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)


	For the six months ended January 31, 2019
	Ferrellgas, L.P.		Ferrellgas
	(Parent and		Finance Corp.		Guarantor		Non-Guarantor
	Co-Issuer)		(Co-Issuer)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	98,494	$	(5)	$	24,696	$	(80,899)	$	(82,000)	$	(39,714)

Cash flows from investing activities:
Business acquisitions, net of cash acquired		(5,069)		—		—		—		—		(5,069)
Capital expenditures		(58,330)		—		—		—		—		(58,330)
Proceeds from sale of assets		1,960		—		—		—		—		1,960
Cash collected for purchase of interest in accounts receivable		—		—		—		710,497		(710,497)		—
Cash remitted to Ferrellgas, L.P. for accounts receivable		—		—		—		(792,497)		792,497		—
Net changes in advances with consolidated entities		(56,291)		—		—		—		56,291		—
Other		—		—		—		—		—		—
Net cash provided by (used in) investing activities		(117,730)		—		—		(82,000)		138,291		(61,439)

Cash flows from financing activities:
Distributions		(25,568)		—		—		—		—		(25,568)
Payments on long-term debt		(1,014)		—		—		—		—		(1,014)
Net reductions in short-term borrowings		(32,800)		—		—		—		—		(32,800)
Net additions to collateralized short-term borrowings		—		—		—		82,000		—		82,000
Net changes in advances with parent		—		5		(24,624)		80,910		(56,291)		—
Cash paid for financing costs		(210)		—		—		(11)		—		(221)
Net cash provided by (used in) financing activities		(59,592)		5		(24,624)		162,899		(56,291)		22,397

Net change in cash and cash equivalents		(78,828)		—		72		—		—		(78,756)
Cash and cash equivalents - beginning of year		119,133		1		174		—		—		119,308
Cash and cash equivalents - end of year	$	40,305	$	1	$	246	$	—	$	—	$	40,552

Table of Contents

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

For the nine months ended April 30, 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 $ 186,530
$ (5 ) $ (73,168 ) $ 38,042
$ (27,000 ) $ 124,399

Cash flows from investing activities:
Business acquisitions, net of cash acquired (3,539 ) —
—
—
—
(3,539 )
Capital expenditures (35,116 ) —
(296 ) —
—
(35,412 )
Proceeds from sale of assets 4,721
—
—
—
—
4,721
Cash collected for purchase of interest in accounts receivable —
—
—
803,109
(803,109 ) —
Cash remitted to Ferrellgas, L.P. for accounts receivable —
—
—
(830,109 ) 830,109
—
Net changes in advances with consolidated entities (35,476 ) —
—
244
35,232
—
Other (37 ) —
—
—
—
(37 )
Net cash provided by (used in) investing activities (69,447 ) —
(296 ) (26,756 ) 62,232
(34,267 )

Cash flows from financing activities:
Distributions (94,413 ) —
—
—
—
(94,413 )
Contributions from Partners 167,640
—
—
—
—
167,640
Proceeds from increase in long-term debt 52,354
—
—
—
—
52,354
Payments on long-term debt (173,471 ) —
—
—
—
(173,471 )
Net reductions in short-term borrowings (62,902 ) —
—
—
—
(62,902 )
Net additions to collateralized short-term borrowings —
—
—
27,000
—
27,000
Net changes in advances with parent —
5
73,269
(38,042 ) (35,232 ) —
Cash paid for financing costs (1,820 ) —
—
(244 ) —
(2,064 )
Net cash provided by (used in) financing activities (112,612 ) 5
73,269
(11,286 ) (35,232 ) (85,856 )

Increase (decrease) in cash and cash equivalents 4,471
—
(195 ) —
—
4,276
Cash and cash equivalents - beginning of year 4,472
1
417
—
—
4,890
Cash and cash equivalents - end of year $ 8,943
$ 1
$ 222
$ —
$ —
$ 9,166

FERRELLGAS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)


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

Net change 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

Table of Contents

M.N. Subsequent events

Ferrellgas, L.P. 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.

~~New $575.0 million senior secured credit facility~~

On May 4, 2018, Ferrellgas, L.P. entered into a new $575.0 million senior secured credit facility to replace its previous $575.0 million senior secured credit facility that was scheduled to mature in October 2018. This new facility consists of a $300.0 million revolving line of credit as well as a $275.0 million term loan, both priced at LIBOR + 5.75% and maturing May 4, 2023. The revolving line of credit includes a $125.0 million sublimit for the issuance of letters of credit. Borrowings under this facility are available for working capital needs, capital expenditures and other general partnership purposes, including the refinancing of existing indebtedness and acquisitions. At closing, the following transactions occurred: 1) the proceeds of the term loan were used to repay and terminate Ferrellgas, L.P.’s then existing credit facility, thus, no revolving credit loans were outstanding, 2) approximately $100 million of letters of credit were issued to replace the letters of credit under the operating partnership's then existing credit facility, and 3) Ferrellgas, L.P. held approximately $75 million of surplus cash.

This new senior secured credit facility is secured with substantially all of the assets of Ferrellgas, L.P. and its subsidiaries, and Ferrellgas Partners’ and the general partner’s partnership interests in Ferrellgas, L.P., and contains various affirmative and negative covenants and default provisions, as well as requirements with respect to the maintenance of specified financial ratios and limitations on the making of loans and investments.

~~Amended accounts receivable securitization facility~~

On May 14, 2018, Ferrellgas, L.P. entered into a seventh amendment to its accounts receivable securitization facility which extends the maturity date by three years, as well as increases the size of the facility from a maximum borrowing capacity of $225.0 million to $250.0 million at a discount rate of LIBOR plus 200 basis points. The amended accounts receivable securitization facility also includes provisions for the issuance of letters of credit with a $50.0 million sublimit. The facility continues to contain provisions where maximum purchase levels are reduced during periods of the year when working capital requirements are lower to efficiently reduce unused capacity fees.

Table of Contents

FERRELLGAS FINANCE CORP.
(a wholly-owned subsidiary of Ferrellgas, L.P.)
CONDENSED BALANCE SHEETS
(unaudited)
April 30, 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 April 30, For the nine months ended April 30,
2018 2017 2018 2017

General and administrative expense $ —
$ 225
$ 5,216
$ 5,175

Net loss $ —
$ (225 ) $ (5,216 ) $ (5,175 )
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 nine months ended April 30,
2018 2017
Cash flows from operating activities:
Net loss $ (5,216 ) $ (5,175 )
Changes in operating assets and liabilities:

Other current assets 1,500
1,500
Cash used in operating activities (3,716 ) (3,675 )

Cash flows from financing activities:
Capital contribution 3,716
3,675
Cash provided by financing activities 3,716
3,675

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)


		January 31, 2019		July 31, 2018
ASSETS
Cash		$	1,100	$	1,100
Prepaid expenses and 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			76,452		72,552
Accumulated deficit	��		(76,352)		(70,952)
Total stockholder's equity		$	1,100	$	2,600

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 January 31,				For the six months ended January 31,
	2019		2018		2019		2018
General and administrative expense	$	3,850	$	3,666	$	5,400	$	5,216

Net loss	$	(3,850)	$	(3,666)	$	(5,400)	$	(5,216)

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 six months ended January 31,
	2019		2018
Cash flows from operating activities:
Net loss	$	(5,400)	$	(5,216)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		1,500		1,500
Cash used in operating activities		(3,900)		(3,716)

Cash flows from financing activities:
Capital contribution		3,900		3,716
Cash provided by financing activities		3,900		3,716

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.

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 Finance Corp. has nominal assets, does not conduct any operations and has no 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. The restricted payments covenants require that, for the Partnership to make a restricted payment, 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 on a pro forma basis giving effect to the restricted payment and, if applicable, certain other specified events, subject to its ability to make restricted payments under the limited exception described below. If this pro forma ratio is below 1.75x, the Partnership may make restricted payments in limited amounts determined under the indentures. As of ~~April 30, 2018,~~January 31, 2019, the ratio was 1.67x. As a result, it’s likely the distribution that will be made by the Partnership ~~is in compliance with all requirements, tests, limitations and covenants related~~on June 15, 2019 for payment of interest on Ferrellgas Partners’ unsecured senior notes due 2020 will be made from capacity under the limited exception to ~~these debt agreements.~~the ratio requirement. the Partnership believes that its remaining capacity under the limited exception to the ratio requirement will allow it to make distributions to Ferrellgas Partners’ to cover interest payments on Ferrellgas Partners’ unsecured senior notes due 2020 through the maturity of those notes.


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

~~Overview~~

Table of Contents

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 the reduced disclosure format, a discussion of the results of operations, liquidity and capital resources of Ferrellgas Partners Finance Corp. and Ferrellgas Finance Corp. is not presented.

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

“us,” “we,” “our,” “ours,” “consolidated,” or "Ferrellgas" 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 used 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.;

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

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

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

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

"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;

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

“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;

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

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

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

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

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

~~“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

Table of Contents

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~~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 our historical financial condition and results of operations and should be read in conjunction with our historical consolidated financial statements and accompanying Notes thereto included in our Annual Report on Form 10‑K for fiscal 2018 and in our historical condensed consolidated financial statements and accompanying Notes thereto included elsewhere in this Quarterly Report on Form ~~10-Q.~~

10‑Q.

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~~exists one material ~~differences~~difference between Ferrellgas Partners and the operating ~~partnership. Those material differences are:~~

partnership: because Ferrellgas Partners has outstanding ~~$357.0~~$357 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~~indebtedness. See the statements of operations in their respective condensed consolidated financial ~~statements; and~~

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

statements.

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 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;

~~Ferrellgas’ ability to cure the limitation on distributions under the fixed charge covenant ratio related to the Ferrellgas Partners 2020 8.625% senior notes;~~

~~the effect~~

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

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, 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 and rail regulations;

~~increased trucking regulations;~~

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

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

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

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

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

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

the impact of pending and future legal proceedings;

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

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

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

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

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

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

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

disruptions in the capital and credit markets.

~~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~~10‑K for fiscal ~~2017 and under Part II, Item 1A "Risk Factors" of this Quarterly Report on Form 10-Q.~~2018. 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.~~

10‑Q.

Recent developments

~~New $575.0 million senior secured credit facility~~

~~On May 4, 2018,~~

Debt and interest expense reduction and refinancing strategy

We continue to execute on a strategy to further reduce our debt and interest expense. This strategy included entering into the ~~operating partnership entered into a~~ new $575.0 million senior secured credit facility to replace its previous $575.0 million senior secured credit facility that was scheduled to mature in October 2018. This new facility consists of a $300.0 million revolving line of credit as well as a $275.0 million term loan, both priced at LIBOR + 5.75%Senior Secured Credit Facility and maturing May 4, 2023. The revolving line of credit includes a $125.0 million sublimit for the issuance of letters of credit. Borrowings under this facility are available for working capital needs, capital expenditures and other general partnership purposes, including the refinancing of existing indebtedness and acquisitions. At closing, the following transactions occurred: 1) the proceeds of the term loan were used to repay and terminate the operating partnership’s then existing credit facility, thus, no revolving credit loans were outstanding, 2) approximately $100 million of letters of credit were issued to replace the letters of credit under the operating partnership's then existing credit facility, and 3) the operating partnership held approximately $75 million of surplus cash.

~~Amended accounts receivable securitization facility~~

~~On May 14, 2018, the operating partnership entered into a seventh amendment to~~amending its accounts receivable securitization facility ~~which extends~~in May 2018 and

Table of Contents

certain asset sales during fiscal 2018. We continue to evaluate our options to address our leverage. We are in the ~~maturity date by three years, as well as increases the size~~process of ~~the facility from~~engaging a ~~maximum borrowing capacity of $225.0 million~~financial advisor to $250.0 million at a discount rate of LIBOR plus 200 basis points. The amended accounts receivable securitization facility also includes provisions for the issuance of letters of credit with a $50.0 million sublimit. The facility continues to contain provisions where maximum purchase levels are reduced during periods of the year when working capital requirements are lower to efficiently reduce unused capacity fees.

~~Rail car sale~~

~~During the third quarter 2018, we sold 1,292 rail cars and received approximately $51.3 million~~assist us in ~~cash. The sale of the rail cars resulted in a $36.8 million loss. We used the proceeds to reduce borrowings under~~addressing our senior secured credit facility. 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. The benefits to our liquidity from the sale of these assets will be achieved without impacting our forecasted Adjusted EBITDA.

~~Bridger Energy, LLC sale~~

In January 2018 we completed the sale of Bridger Energy, LLC, a subsidiary of Bridger Logistics, which is a subsidiary of Ferrellgas, L.P. With the sale, we exited Bridger Energy's oil purchase and sale activity, and as a result realized approximately $80 million in reduced letters of credit issued on our senior secured credit facility, which were used to support Bridger Energy.

upcoming debt maturities.

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 and its subsidiaries to, among other things, make restricted payments and incur additional indebtedness. Our general partner believes that the most restrictive of these covenants isare those related to the consolidated fixed charge coverage ratio, as defined in the indenture governing the outstanding notes of Ferrellgas Partners.

Consolidated fixed charge coverage ratio

~~Before~~ - Ferrellgas Partners, L.P., the master limited partnership

~~indenture.~~ratio requirement. If Ferrellgas Partners is unable to make restricted payments, Ferrellgas Partners will not have the ability to make distributions to Ferrellgas Partners common unitholders.

~~This~~

The restricted payments covenant requires that, for Ferrellgas Partners to make a restricted payment, 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~~on a pro forma basis giving effect to the restricted payment ~~(as defined in~~and, if applicable, certain other specified events, subject to its ability to make restricted payments under the ~~indenture) can be made by Ferrellgas Partners.~~limited exception described below. If this pro forma ratio ~~were to drop~~is below 1.75x, ~~the indenture allows us to~~Ferrellgas Partners may make restricted payments of up to $50.0 million in total over a 16sixteen quarter ~~period while below this ratio.~~period. As of ~~April 30, 2018,~~January 31, 2019, the ratio was ~~1.56x.~~1.38x. As a result of distributions paid to common unitholders in September 2017, December 2017, March 2018, June 2018, and September 2018 while this ratio was less than 1.75x, Ferrellgas Partners has used substantially all of its capacity under the ~~$9.8 million distribution~~limited exception and therefore is currently restricted by this covenant from making future restricted payments, including distributions to common unitholders. Accordingly, no distributions will be paid to common unitholders in March 2019 for the three months ended January 31, 2019. Unless this indenture is amended or replaced, or our consolidated fixed charge coverage ratio improves to at least 1.75x, this covenant will continue to restrict us from making common unit distributions.

Consolidated fixed charge coverage ratio - Ferrellgas, L.P., the operating partnership

Under the operating partnership indentures, before a restricted payment (as defined in the indentures) can be made by the operating partnership to Ferrellgas Partners, the operating partnership must satisfy a consolidated fixed charge coverage ratio requirement or have unused capacity under a limited exception to the ratio requirement. If the operating partnership is unable to make restricted payments, Ferrellgas Partners will not have the ability to make distributions to Ferrellgas Partners common unitholders or make interest payments on Ferrellgas Partners’ unsecured senior notes due 2020.

The restricted payments covenants require that, for the operating partnership to make a restricted payment, the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of the operating partnership be at least 1.75x on a pro forma basis giving effect to the restricted payment and, if applicable, certain other specified events, subject to its ability to make restricted payments under the limited exception described below. If this pro forma ratio is below 1.75x, the operating partnership may make restricted payments in limited amounts determined under the indentures. As of January 31, 2019, the ratio was 1.67x. As a result, it’s likely the distribution that will be made by the operating partnership on June ~~14, 2018~~15, 2019 for payment of interest on Ferrellgas Partners’ unsecured senior notes due 2020 will be ~~taken~~made from capacity under the ~~$50.0 million restricted payment limitation, which after considering~~limited exception to the ~~$9.8 million deductions taken as a result~~ratio requirement. The operating partnership believes that its remaining capacity under the limited exception to the ratio requirement will allow it to make distributions to Ferrellgas Partners’ to cover interest payments on Ferrellgas Partners’ unsecured senior notes due 2020 through the maturity of those notes.

Table of Contents

Distributions

As discussed above, no distributions will be paid to common unitholders in March 2019 for the ~~distributions paid in September 2017, December 2017 and March 2018, leaves $10.8 million for future restricted payments.~~three months ended January 31, 2019. Unless the indenture governing the outstanding Ferrellgas Partners notes is amended or ~~refinanced,~~replaced, 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. While there can be no assurance of successfully resolving the distribution limitation, we are presently considering potential solutions to cure the limitation on distributions under the consolidated fixed charge covenant ratio related to the outstanding unsecured bonds due in June 2020. The potential solutions, among others, include a refinancing or a transaction to exchange new bonds for some or all of the bonds due June 2020.

~~Debt and interest expense reduction strategy~~

We continue to execute on a strategy to further reduce our debt and interest expense. This strategy included refinancing our secured credit facility and amending our accounts receivable securitization facility (see Recent Developments above for such actions taken since January 31, 2018), as well as certain asset sales executed to date, and may include refinancing existing debt agreements, additional asset sales, 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.~~

~~Distributions~~

On May 24, 2018 the board of directors of our general partner announced a quarterly distribution of $0.10, payable on June 14, 2018, to all unitholders of record as of June 7, 2018, which equates to an annual distribution rate of $0.40. On March 16, 2018, December 15, 2017, and September 14, 2017, we also paid a quarterly distribution of $0.10.

~~As discussed above, 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, this covenant will not allow us to make common unit distributions for our quarter ending ~~October~~January 31, ~~2018~~2019 and beyond.

~~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 will continue to analyze the 2017 Act to determine the full effects of the new law on its consolidated financial statements.

How We Evaluate Our Operations

We evaluate our overall business performance based primarily on Adjusted EBITDA. 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.

~~Segment disclosure~~

Propane operations and related equipment sales

Based on our propane sales volumes in fiscal ~~2017,~~2018, 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 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~~2019 and ~~2019~~2020 sales commitments and, as of ~~April 30, 2018,~~January 31, 2019, have experienced net mark-to-market ~~gains~~losses of approximately ~~$17.5~~$9.3 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 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

Table of Contents

statements of operations as the underlying inventory is sold. These financial derivative purchase commitment net ~~gains~~losses are expected to be offset by ~~decreased~~increased margins on propane sales commitments that qualify for the normal purchase normal sale exception. At ~~April 30, 2018,~~January 31, 2019, we estimate ~~64%~~78% 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 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.

Summary Discussion of Results of Operations:

Items Impacting the Comparability of Our Financial Results

Our current and future results of operations will not be comparable to our historical results of operations for the periods presented due to the following transactions:

During the fourth quarter of fiscal 2018, we completed the sale of a subsidiary and a group of assets within the Midstream operations segment. The subsidiary sold was Bridger Environmental LLC, which encompassed all saltwater disposal activities previously operated by us. The group of assets sold included all assets, excluding working capital, associated with the crude oil trucking operations previously operated by us. Additionally, the sale included two crude oil injection terminals.

During the third quarter of fiscal 2018, we sold all 1,292 rail tank cars utilized in our Midstream operations segment.

During the second quarter of fiscal 2018, we completed the sale of Bridger Energy, LLC, included in our Midstream operations segment.

During the fourth quarter of fiscal 2018, we completed the sale of a group of assets encompassing an immaterial reporting unit within our Propane operations segment that sold lower margin propane related equipment.

Operating loss and adjusted EBITDA associated with these divestitures in the three months ended January 31, 2018 was $51.4 million and $3.9 million, respectively. Operating loss and adjusted EBITDA associated with these divestitures in the six months ended January 31, 2018 was $54.4 million and $11.1 million, respectively.

For the three months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~

During the three months ended ~~April 30, 2018,~~January 31, 2019, we generated net earnings attributable to Ferrellgas Partners L.P. of ~~$10.9~~$43.3 million, compared to net ~~earnings~~loss attributable to Ferrellgas Partners L.P. of ~~$6.5~~$1.8 million during the three months ended ~~April 30, 2017.~~

January 31, 2018.

Our propane operations and related equipment sales segment generated operating income of ~~$74.5~~$108.1 million during the three months ended ~~April 30, 2018,~~January 31, 2019, compared to operating income of ~~$67.1~~$101.8 million earned during the three months ended January 31, 2018. The increase in operating income is primarily due to a $10.0 million impairment of goodwill related to an immaterial reporting unit that was not repeated in the current period and a $9.3 million increase in “Gross margin – Propane and other gas liquid sales”, partially offset by a $5.0 million decrease in “Gross margin – other”, a $3.9 million increase in "Operating, general and administrative expense", and a $1.7 million increase in "Equipment lease expense". The increase in "Operating, general and administrative expense" and "Gross margin - Propane and other gas liquid sales" primarily resulted from a 4% increase in retail customer count and related gallons sold. The impact of the sale of a group of assets that sold lower margin propane related equipment at the end of fiscal 2018 resulted in the decrease in "Gross margin - other". The increase in “Equipment lease expense” is due to both continued investment in new propane delivery trucks to serve our expanding customer base and to reduce the age of our fleet. In addition, we purchased new propane delivery trucks as discussed in “Distributable cash flow attributable to equity investors”.

Our corporate and other operations recognized an operating loss of $19.4 million during the three months ended April 30, 2017. The increase in operating income resulted from a $19.8 million increase in gross margin largely offset by an $11.3 million increase in operating, general and administrative expenses which is primarily the result of increased volumes sold. DueJanuary 31, 2019, compared 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.

~~Our midstream operations segment generated~~ an operating loss of ~~$8.5~~$61.7 million during the three months ended ~~April 30, 2018 compared to an operating loss~~January 31, 2018. This

Table of ~~$5.7 million during the three months ended April 30, 2017. This increase~~Contents

decrease in operating loss iswas primarily due to a ~~$3.0~~$42.3 million ~~loss on the closure of a salt water disposal well during the three months ended April 30, 2018.~~

~~Corporate operations recognized an~~ operating loss ~~of $14.7 million during the three months ended April 30, 2018, compared~~related to ~~an operating loss of $15.2 million recognized during the three months ended April 30, 2017. This decrease~~our midstream operations in operating loss is primarily due to a $2.0 million decrease in non-cash compensation charges and a $0.9 million decrease in corporate personnel costs, partially offset by a $1.6 million increase in legal costs.

fiscal 2018.

“Interest expense” for Ferrellgas increased ~~$0.5~~$2.2 million primarily due to increased interest rates on ~~the~~our secured credit ~~facility and accounts receivable securitization~~ facility.

Distributable cash flow attributable to equity investors ~~increased~~decreased to ~~$43.9~~$52.7 million in the current period from ~~$36.3~~$79.2 million in the prior period primarily due to ~~a $10.1~~an $21.5 million increase in our ~~Adjusted EBITDA, partially offset by a $2.3 million~~maintenance capital expenditures. This increase in maintenance capital ~~expenditures.~~

expenditures primarily relates to the purchase of new propane delivery trucks which have historically been leased.

Distributable cash flow excess ~~increased~~decreased to ~~$33.3~~$51.7 million in the current period from ~~$25.9~~$67.9 million in the prior period, primarily due to ~~a $10.1~~an $21.5 million increase in our ~~Adjusted EBITDA,~~maintenance capital expenditures, as discussed above, partially offset by a ~~$2.3~~$9.7 million ~~increase~~decrease in ~~maintenance capital expenditures.~~

distributions to common unitholders.

For the ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~

During the ~~nine~~six months ended ~~April 30, 2018,~~January 31, 2019, we generated net loss attributable to Ferrellgas Partners L.P. of ~~$38.9~~$13.7 million, compared to net ~~earnings~~loss attributable to Ferrellgas Partners L.P. of ~~$1.6~~$49.8 million during the ~~nine~~six months ended ~~April 30, 2017.~~

January 31, 2018.

Our propane operations and related equipment sales segment generated operating income of ~~$187.5~~$115.0 million during the ~~nine~~six months ended ~~April 30, 2018,~~January 31, 2019, compared to operating income of ~~$179.0~~$113.0 million earned during the ~~nine~~six months ended ~~April 30, 2017.~~January 31, 2018. The increase in operating income ~~resulted from the $47.3~~is primarily due to a $16.8 million increase in ~~gross~~“Gross margin ~~partially offset by a $28.3 million increase in operating, general~~– Propane and ~~administrative expenses both primarily the result of increased volumes sold~~other gas liquid sales” and a $10.0 million impairment of goodwill related to an immaterial reporting unit ~~recorded~~that was not repeated in the current period, partially offset by a $10.6 million increase in "Operating, general and administrative expense", a $8.2 million decrease in "Gross margin - other", and a $3.1 million increase in "Equipment lease expense". The increase in "Operating, general and administrative expense" and "Gross margin - Propane and other gas liquid sales" primarily resulted from a 4% increase in retail customer count. The impact of the sale of a group of assets that sold lower margin propane related equipment at the end of fiscal 2018 resulted in the decrease in "Gross margin - other". The increase in “Equipment lease expense” is due to both continued investment in new propane delivery trucks to serve our expanding customer base and to reduce the age of our fleet. In addition, we purchased new propane delivery trucks as discussed in “Distributable cash flow attributable to equity investors”.

Our corporate and other operations recognized an operating loss of $39.8 million during the ~~three~~six months ended January 31, 2018. 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.

~~Our midstream operations segment generated an operating loss of $53.6 million during the nine months ended April 30, 2018~~2019, compared to an operating loss of ~~$17.7~~$80.6 million recognized during the ~~nine~~six months ended ~~April 30, 2017.~~January 31, 2018. This ~~increase~~decrease in operating loss iswas primarily due to a ~~$36.8~~$42.4 million operating loss ~~on sale of rail car assets recognized~~related to our midstream operations in fiscal ~~2018.~~

~~Corporate operations recognized an operating loss of $50.2 million during the nine months ended April 30,~~ 2018, ~~compared to an operating loss of $49.1 million recognized during the nine months ended April 30, 2017. This increase in operating loss is primarily due to a $7.7 million increase in legal costs,~~ partially offset by ~~$4.0 million~~increased corporate costs of ~~decreased non-cash compensation charges and a $3.6 million decrease in corporate personnel costs.~~

$1.6 million.

“Interest expense” for Ferrellgas increased ~~$11.7~~$5.3 million primarily due to increased interest rates ~~associated with the $175.0 million of debt issued by Ferrellgas Partners in January 2017, which replaced a portion of the borrowings under the~~on our secured credit ~~facility, as well as increased interest rates on the secured credit facility and accounts receivable securitization~~ facility.

Distributable cash flow attributable to equity investors ~~of $103.8~~decreased to $25.3 million in the current period ~~increased~~ from ~~$99.0~~$59.9 million in the prior period primarily due to a ~~$22.9~~$18.2 million increase in our maintenance capital expenditures, a $9.2 million decrease in our Adjusted EBITDA ~~partially offset by~~related to midstream operations in fiscal 2018 and a ~~$10.2~~$4.8 million increase in ~~net~~ cash interest ~~expense and a $8.6 million increase in maintenance capital expenditures. The~~expense. This increase in maintenance capital expenditures ~~was~~ primarily ~~for~~relates to the purchase of new propane delivery ~~trucks.~~

trucks, which have historically been leased.

Distributable cash flow excess ~~increased~~decreased to ~~$72.6~~$15.1 million in the current period from ~~$27.8~~$39.3 million in the prior period, primarily due to a ~~$40.1~~$18.2 million increase in our maintenance capital expenditures, a $9.2 million decrease in our Adjusted EBITDA related to midstream operations in fiscal 2018 and a $4.8 million increase in cash interest expense, partially offset by a $9.7 million decrease in distributions ~~paid~~ to common unitholders and a $22.9 million increase in our Adjusted EBITDA, partially offset by a $10.2 million increase in net cash interest expense and a $8.6 million increase in maintenance capital expenditures.unitholders.

Table of Contents

Consolidated Results of Operations


	Three months ended January 31,				Six months ended January 31,
(amounts in thousands)	2019		2018		2019		2018
Total revenues	$	573,377	$	755,156	$	925,686	$	1,209,811

Total cost of sales		314,953		490,772		522,136		792,114

Operating expense		121,219		123,716		231,550		234,178
Depreciation and amortization expense		19,605		25,485		38,597		51,217
General and administrative expense		16,342		14,891		30,521		28,055
Equipment lease expense		8,415		6,954		16,278		13,695
Non-cash employee stock ownership plan compensation charge		1,944		4,031		4,692		7,993
Asset impairments		—		10,005		—		10,005
Loss on asset sales and disposals		2,216		39,249		6,720		40,144
Operating income		88,683		40,053		75,192		32,410
Interest expense		(44,891)		(42,673)		(88,769)		(83,480)
Other income, net		86		684		105		1,195
Earnings (loss) before income taxes		43,878		(1,936)		(13,472)		(49,875)
Income tax expense (benefit)		3		(162)		161		215
Net earnings (loss)		43,875		(1,774)		(13,633)		(50,090)
Net earnings (loss) attributable to noncontrolling interest		531		69		38		(332)
Net earnings (loss) attributable to Ferrellgas Partners, L.P.		43,344		(1,843)		(13,671)		(49,758)
Less: General partner's interest in net earnings (loss)		433		(19)		(137)		(498)
Common unitholders' interest in net earnings (loss)	$	42,911	$	(1,824)	$	(13,534)	$	(49,260)

Three months ended April 30, Nine months ended April 30,
(amounts in thousands) 2018 2017 2018 2017
Total revenues $ 515,810
$ 538,109
$ 1,725,621
$ 1,496,901

Total cost of sales 294,787
337,064
1,086,901
905,374

Operating expense 116,579
104,773
350,757
322,935
Depreciation and amortization expense 25,348
25,737
76,565
77,546
General and administrative expense 11,678
9,978
39,733
36,526
Equipment lease expense 7,133
7,270
20,828
22,035
Non-cash employee stock ownership plan compensation charge 2,738
4,697
10,731
11,396
Asset impairments —
—
10,005
—
Loss on asset sales and disposals 6,270
2,393
46,414
8,861
Operating income 51,277
46,197
83,687
112,228
Interest expense (40,375 ) (39,860 ) (123,855 ) (112,107 )
Other income, net 227
162
1,422
1,433
Earnings (loss) before income taxes 11,129
6,499
(38,746 ) 1,554
Income tax expense (benefit) 67
(192 ) 282
(194 )
Net earnings (loss) 11,062
6,691
(39,028 ) 1,748
Net earnings (loss) attributable to noncontrolling interest 201
155
(131 ) 187
Net earnings (loss) attributable to Ferrellgas Partners, L.P. 10,861
6,536
(38,897 ) 1,561
Less: General partner's interest in net earnings (loss) 109
66
(389 ) 16
Common unitholders' interest in net earnings (loss) $ 10,752
$ 6,470
$ (38,508 ) $ 1,545

Non-GAAP Financial Measures

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

Adjusted EBITDA. Adjusted EBITDA is calculated as net ~~earnings (loss)~~loss attributable to Ferrellgas Partners, L.P., less 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,~~ loss on asset sales and disposals, other income, net, severance costs, ~~professional~~legal fees and settlements, multi-employer pension withdrawal settlement, unrealized (non-cash) loss ~~(gain)~~ on changes in fair value of derivatives not designated as hedging instruments, and net ~~earnings (loss)~~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 it easier to compare its results with other companies that have different financing and capital structures. 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 taxes, plus proceeds from asset sales. Management considers distributable cash flow attributable to equity investors a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to equity investors. 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. 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.

Table of Contents

Distributable Cash Flow Attributable to Common Unitholders. Distributable cash flow attributable to common unitholders is calculated as Distributable cash flow attributable to equity investors minus distributable cash flow attributable to general partner and noncontrolling interest. Management considers distributable cash flow attributable to common unitholders a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to common unitholders. Distributable cash flow attributable to common 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. Items added into our calculation of distributable cash flow attributable to common 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 and should be viewed in conjunction with measurements that are computed in accordance with GAAP.

The following table summarizes EBITDA, Adjusted EBITDA, Distributable cash flow attributable to equity investors and Distributable cash flow attributable to common unitholders for the three and ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018, ~~and 2017,~~ respectively:


	Three months ended January 31,				Six months ended January 31,
(amounts in thousands)	2019		2018		2019		2018
Net earnings (loss) attributable to Ferrellgas Partners, L.P.	$	43,344	$	(1,843)	$	(13,671)	$	(49,758)
Income tax expense (benefit)		3		(162)		161		215
Interest expense		44,891		42,673		88,769		83,480
Depreciation and amortization expense		19,605		25,485		38,597		51,217
EBITDA		107,843		66,153		113,856		85,154
Non-cash employee stock ownership plan compensation charge		1,944		4,031		4,692		7,993
Assets impairments		—		10,005		—		10,005
Loss on asset sales and disposals		2,216		39,249		6,720		40,144
Other income, net		(86)		(684)		(105)		(1,195)
Severance costs		1,600		—		1,600		1,663
Legal fees and settlements		5,608		2,118		9,172		2,118
Multi-employer pension plan withdrawal settlement		—		—		1,524		—
Unrealized (non-cash) loss on changes in fair value of derivatives not designated as hedging instruments		—		(314)		—		1,293
Net earnings (loss) attributable to noncontrolling interest		531		69		38		(332)
Adjusted EBITDA		119,656		120,627		137,497		146,843
Net cash interest expense (a)		(41,679)		(39,734)		(82,578)		(77,791)
Maintenance capital expenditures (b)		(26,147)		(4,640)		(31,532)		(13,344)
Cash refund from (paid for) taxes		4		(6)		2		(12)
Proceeds from certain asset sales		899		2,999		1,960		4,207
Distributable cash flow attributable to equity investors		52,733		79,246		25,349		59,903
Distributable cash flow attributable to general partner and non-controlling interest		(1,055)		(1,585)		(507)		(1,198)
Distributable cash flow attributable to common unitholders		51,678		77,661		24,842		58,705
Less: Distributions paid to common unitholders		—		(9,716)		(9,715)		(19,431)
Distributable cash flow excess ( c)	$	51,678	$	67,945	$	15,127	$	39,274

Three months ended April 30, Nine months ended April 30,
(amounts in thousands) 2018 2017 2018 2017
Net earnings (loss) attributable to Ferrellgas Partners, L.P. $ 10,861
$ 6,536
$ (38,897 ) $ 1,561
Income tax expense (benefit) 67
(192 ) 282
(194 )
Interest expense 40,375
39,860
123,855
112,107
Depreciation and amortization expense 25,348
25,737
76,565
77,546
EBITDA 76,651
71,941
161,805
191,020
Non-cash employee stock ownership plan compensation charge 2,738
4,697
10,731
11,396
Non-cash stock-based compensation charge —
—
—
3,298
Asset impairments —
—
10,005

—
Loss on asset sales and disposals 6,270
2,393
46,414
8,861
Other income, net (227 ) (162 ) (1,422 ) (1,433 )
Severance costs —
—
1,663
1,959
Professional fees (d) 1,289
—
3,407
—
Unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments —
(2,234 ) 1,293
(4,449 )
Net earnings (loss) attributable to noncontrolling interest 201
155
(131 ) 187
Adjusted EBITDA 86,922
76,790
233,765
210,839
Net cash interest expense (a) (37,873 ) (37,140 ) (115,664 ) (105,470 )
Maintenance capital expenditures (b) (5,741 ) (3,442 ) (19,085 ) (10,518 )
Cash paid (refund) for taxes 470
(2 ) 458
(28 )
Proceeds from asset sales 148
130
4,355
4,163
Distributable cash flow attributable to equity investors 43,926
36,336
103,829
98,986
Distributable cash flow attributable to general partner and non-controlling interest 879
727
2,077
1,980
Distributable cash flow attributable to common unitholders 43,047
35,609
101,752
97,006
Less: Distributions paid to common unitholders 9,715
9,715
29,146
69,221
Distributable cash flow excess (c) $ 33,332
$ 25,894
$ 72,606
$ 27,785


(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 accounts receivable securitization facility.


(b)		Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment.


(c)		Distributable cash flow excess, if any, is retained to establish reserves ~~for future distributions,~~to 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.~~

Table of Contents

Segment Operating Results for the three months ended ~~April 30,~~January 31, 2019 and 2018 ~~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. During the quarter ended April 30, 2018, Ferrellgas completed the sale of all 1,292 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

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:


	2019		2018		Increase (Decrease)
As of January 31,
Retail customers		706,741		681,671		25,070	4	%
Tank exchange selling locations		53,740		48,791		4,949	10	%

(amounts in thousands)
Three months ended January 31,
Propane sales volumes (gallons):
Retail - Sales to End Users		239,044		235,071		3,973	2	%
Wholesale - Sales to Resellers		70,655		74,942		(4,287)	(6)	%
		309,699		310,013		(314)	(0)	%
Revenues -
Propane and other gas liquids sales:
Retail - Sales to End Users	$	415,827		417,472	$	(1,645)	(0)	%
Wholesale - Sales to Resellers		115,392		128,654		(13,262)	(10)	%
Other Gas Sales (a)		18,893		46,113		(27,220)	(59)	%
Other (b)		23,265		45,641		(22,376)	(49)	%
Propane and related equipment revenues	$	573,377	$	637,880	$	(64,503)	(10)	%

Gross Margin -
Propane and other gas liquids sales: (c)
Retail - Sales to End Users (a)	$	192,747	$	182,129	$	10,618	6	%
Wholesale - Sales to Resellers (a)		45,834		47,192		(1,358)	(3)	%
Other (b)		19,843		24,854		(5,011)	(20)	%
Propane and related equipment gross margin		258,424		254,175		4,249	2	%

Operating, general and administrative expense (d)		121,217		117,306		3,911	3	%
Equipment lease expense		8,053		6,375		1,678	26	%

Operating income		108,101		101,767		6,334	6	%
Depreciation and amortization expense		18,995		18,167		828	5	%
Loss on asset sales and disposals		2,058		555		1,503	NM
Asset impairments		—		10,005		(10,005)	NM
Severance costs		690		—		690	NM
Adjusted EBITDA	$	129,844	$	130,494	$	(650)	(0)	%

(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.

(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.

Table of Contents

(amounts in thousands)
Three months ended April 30, 2018 2017 Increase (Decrease)
Propane sales volumes (gallons):
Retail - Sales to End Users 189,183
160,326
28,857
18 %
Wholesale - Sales to Resellers 57,121
51,891
5,230
10 %
246,304
212,217
34,087
16 %

Revenues -
Propane and other gas liquids sales:
Retail - Sales to End Users $ 330,320
$ 258,292
$ 72,028
28 %
Wholesale - Sales to Resellers 97,689
90,313
7,376
8 %
Other Gas Sales (a) 23,293
20,832
2,461
12 %
Other (b) 41,913
41,996
(83 ) — %
Propane and related equipment revenues $ 493,215
$ 411,433
$ 81,782
20 %

Gross Margin -
Propane and other gas liquids sales: (c)
Retail - Sales to End Users (a) $ 151,084
$ 130,057
$ 21,027
16 %
Wholesale - Sales to Resellers (a) 39,799
41,893
(2,094 ) (5 )%
Other (b) 22,063
21,186
877
4 %
Propane and related equipment gross margin $ 212,946
$ 193,136
$ 19,810
10 %

Operating, general and administrative expense (d) $ 110,673
$ 99,416
$ 11,257
11 %
Equipment lease expense 6,626
6,503
123
2 %

Operating income $ 74,479
$ 67,119
$ 7,360
11 %
Depreciation and amortization expense 18,880
17,953
927
5 %
Loss on asset sales and disposals 2,288
2,146
142
7 %
Unrealized (non-cash) gains on changes in fair value of derivatives not designated as hedging instruments —
(227 ) 227
100 %
Adjusted EBITDA $ 95,647
$ 86,991
$ 8,656
10 %

~~(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.~~

(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 ~~April 30, 2018 increased 16% or 34.1 million gallons, from~~January 31, 2019 essentially remained even with the prior year period due to increased ~~gallon~~ sales ~~of 28.9 million and 5.2 million~~ to retail ~~and~~customers of 4.0 million gallons, offset by a decrease of 4.3 million gallons to wholesale customers. The increase in propane sales volumes to retail customers ~~respectively.~~

was primarily due to the 4% increase in retail customer count.

Weather in the more highly concentrated geographic areas we serve for the three months ended ~~April 30,~~January 31, 2018 was approximately 1%2% colder than normal, and ~~24%~~1% colder than the prior year ~~period; however, not all~~period. Retail gallons increased due to efforts to increase market share and to a lesser extent colder weather.

Our wholesale sales price per gallon largely correlates to the change in the wholesale market price of propane. The Mt. Belvieu, Texas major supply point during the three months ended January 31, 2019 averaged 26% less than the prior year period, while at the Conway, Kansas major supply point prices averaged 32% less than the prior period. The wholesale market price at Mt. Belvieu, Texas averaged $0.70 and $0.95 per gallon during the three months ended January 31, 2019 and 2018, respectively, while the wholesale market price at Conway, Kansas averaged $0.61 and $0.90 per gallon during the three months ended January 31, 2019 and 2018, respectively. We believe this decrease in the wholesale cost of propane contributed to our ~~gallons are weather sensitive, and~~decrease in revenues, but an increase in gross margin.

Revenues

Retail sales decreased $1.6 million compared to the prior period. This decrease resulted from an $8.7 million decrease in sales price per gallon, partially offset by $7.1 million in increased sales volumes, as discussed above.

Wholesale sales decreased $13.3 million compared to the prior period. This decrease primarily resulted from a $12.1 million decrease in sales price per gallon, as discussed above. Additionally, price per gallon decreased due to the impact of increased competitive pressures.

Other gas sales decreased $27.2 million compared to the prior year period primarily due to a decrease in sales volume.

Other revenues decreased $22.4 million compared to the ~~coldest weather occurred~~prior year period primarily due to the sale of our lower margin propane related equipment business at the end of fiscal 2018.

Gross margin - Propane and other gas liquids sales

Gross margin increased $9.3 million due to both the increase in gross margin per gallon and gallon sales, both as discussed above. The increase in retail gross margin of $10.6 million resulted from an increase in gross margin per gallon and to a lesser extent increases in retail customer counts, both as discussed above. The $1.3 million decrease in wholesale gross margin primarily relates to decreased gross margin per gallon due to the impact of increased competitive pressures on the sales price per gallon, as discussed above.

Gross margin - other

Gross margin decreased $5.0 million compared to the prior year period primarily due to the sale of our lower margin propane related equipment business at the end of fiscal 2018.

Operating income

Operating income increased $6.3 million primarily due to a $10.0 million impairment of goodwill related to an immaterial reporting unit that was not repeated in the ~~month~~current period and a $9.3 million increase in “Gross margin – Propane and other gas liquid sales”, as discussed above, partially offset by a $5.0 million decrease in “Gross margin – other” and a $3.9 million increase in "Operating, general and administrative expense", as discussed above, and a $1.7 million increase in "Equipment lease expense". "Operating, general and administrative expense" increased primarily due to a $5.9 million increase in field personnel costs and a $1.7 million increase in general liability and workers compensation costs, partially offset by $3.4 million of ~~April when there are fewer heating degree days.~~costs incurred in the prior year period related to a business sold in

Table of Contents

fiscal 2018. Equipment lease expense increased due to both continued investment in new propane delivery trucks to serve our expanding customer base and to reduce the age of our fleet.

Adjusted EBITDA

Adjusted EBITDA decreased $0.7 million primarily due to a $5.0 million decrease in “Gross margin – other”, a $3.5 million increase in "Operating, general and administrative expense", and a $1.7 million increase in "Equipment lease expense", partially offset by a $9.3 million increase in "Gross margin - Propane and other gas liquid sales", all as discussed above. "Operating, general and administrative expense" increased primarily due to a $5.2 million increase in field personnel costs, and a $1.7 million increase in general liability and worker compensation costs, partially offset by $3.4 million of costs incurred in the prior year period related to a business sold in fiscal 2018.

Corporate and other operations

The following table summarizes the financial results of our corporate operations for the periods indicated. Prior period amounts also include results of our midstream operations.


(amounts in thousands)
Three months ended January 31,	2019		2018		Increase (Decrease)
Volumes (barrels):
Crude oil hauled		—		11,065		(11,065)	NM
Crude oil sold		—		1,556		(1,556)	NM
Salt water volume processed		—		4,851		(4,851)	NM

Revenues -
Crude oil logistics	$	—	$	15,886	$	(15,886)	NM
Crude oil sales		—		97,646		(97,646)	NM
Other		—		3,744		(3,744)	NM
	$	—	$	117,276	$	(117,276)	NM
Gross margin (a) -
Crude oil logistics	$	—	$	6,550	$	(6,550)	NM
Crude oil sales		—		2,365		(2,365)	NM
Other		—		1,294		(1,294)	NM
		—		10,209		(10,209)	NM

Operating, general and administrative expense		16,344		21,301		(4,957)	(23)	%
Equipment lease expense		362		579		(217)	(37)	%

Operating loss		(19,418)		(61,714)		42,296	(69)	%
Depreciation and amortization expense		610		7,318		(6,708)	(92)	%
Non-cash employee stock ownership plan compensation charge		1,944		4,031		(2,087)	(52)	%
Loss on asset sales and disposals		158		38,694		(38,536)	NM
Severance costs		910		—		910	NM
Unrealized (non-cash) losses on changes in fair value of derivatives		—		(314)		314	NM
Legal fees and settlements		5,608		2,118		3,490	165	%
Adjusted EBITDA	$	(10,188)	$	(9,867)	$	(321)	3	%

NM - Not meaningful

(a)

Gross margin represents "Revenues - Midstream operations" less "Cost of sales - Midstream operations" and does not include depreciation and amortization.

In various dispositions that occurred during fiscal 2018, we sold our midstream businesses, thus much of the significant variances reported above result from the cessation of the midstream business by the end of fiscal 2018.

Table of Contents

Operating loss

Operating loss decreased by $42.3 million during the three months ended January 31, 2019 as compared to the three months ended January 31, 2018. This decrease in operating loss was primarily due to the $42.1 million operating loss related to our midstream operations in fiscal 2018 and decreased corporate costs of $0.2 million. Corporate costs decreased primarily due to a $2.1 million decrease in non-cash employee stock ownership plan compensation costs, $0.4 million decrease in depreciation and amortization, and $0.1 million decrease in equipment lease expense, partially offset by a $2.4 million increase in legal costs.

Adjusted EBITDA

Adjusted EBITDA decreased $0.3 million primarily due to the $2.3 million decrease in Adjusted EBITDA related to our midstream operations in fiscal 2018, offset by a $2.0 million increase in Adjusted EBITDA related to corporate costs. Corporate costs decreased primarily due to $1.1 million decrease in legal costs and $0.1 million decrease in equipment lease expense.

Table of Contents

Segment Operating Results for the six months ended January 31, 2019 and 2018

Propane operations and related equipment sales

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:


	2019		2018		Increase (Decrease)
As of January 31,
Retail customers		706,741		681,671		25,070	4	%
Tank exchange selling locations		53,740		48,791		4,949	10	%

(amounts in thousands)
Six months ended January 31,
Propane sales volumes (gallons):
Retail - Sales to End Users		368,711		354,365		14,346	4	%
Wholesale - Sales to Resellers		119,615		128,371		(8,756)	(7)	%
		488,326		482,736		5,590	1	%
Revenues -
Propane and other gas liquids sales:
Retail - Sales to End Users	$	633,591	$	601,266	$	32,325	5	%
Wholesale - Sales to Resellers		209,336		227,083		(17,747)	(8)	%
Other Gas Sales (a)		42,151		66,648		(24,497)	(37)	%
Other (b)		40,608		76,778		(36,170)	(47)	%
Propane and related equipment revenues	$	925,686	$	971,775	$	(46,089)	(5)	%

Gross Margin -
Propane and other gas liquids sales: (c)
Retail - Sales to End Users (a)	$	283,222	$	260,560	$	22,662	9	%
Wholesale - Sales to Resellers (a)		86,189		92,004		(5,815)	(6)	%
Other (b)		34,139		42,289		(8,150)	(19)	%
Propane and related equipment gross margin	$	403,550	$	394,853	$	8,697	2	%

Operating, general and administrative expense (d)	$	231,548	$	221,571	$	9,977	5	%
Equipment lease expense		15,657		12,580		3,077	24	%

Operating income	$	114,968	$	112,979	$	1,989	2	%
Depreciation and amortization expense		37,336		36,255		1,081	3	%
Loss on asset sales and disposals		4,041		1,463		2,578	176	%
Asset impairments		—		10,005		(10,005)	NM
Severance costs		690		358		332	93	%
Multi-employer pension plan withdrawal settlement		1,524		—		1,524	NM
Adjusted EBITDA	$	158,559	$	161,060	$	(2,501)	(2)	%

(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.

(c)

(d)

Table of Contents

Propane sales volumes during the six months ended January 31, 2019 increased 1% or 5.6 million gallons, from the prior year period due to increased sales to retail customers of 14.3 million gallons, partially offset by a decrease of 8.7 million gallons to wholesale customers. The increase in propane sales volumes to retail customers was primarily due to the 4% increase in retail customer count. The decrease in propane sales to wholesale customers relates to the impact of increased competitive pressures.

Weather in the more highly concentrated geographic areas we serve for the six months ended January 31, 2018 was approximately 3% colder than normal and 3% colder than the prior year period. Retail ~~and wholesale~~ gallons increased due ~~due~~ to ~~a combination of colder weather and~~ efforts to increase market ~~share.~~

share and to a lesser extent colder weather.

Our wholesale sales price per gallon largely 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~~six months ended ~~April 30, 2018~~January 31, 2019 averaged ~~21% and 11% greater~~6% less than the prior year period, ~~respectively.~~while at the Conway, Kansas major supply point prices averaged 19% less than the prior period. The wholesale market price at Mt. Belvieu, Texas averaged ~~$0.82~~$0.85 and ~~$0.68~~$0.90 per gallon during the ~~three~~six months ended ~~April 30,~~January 31, 2019 and 2018, ~~and 2017,~~ respectively, while the wholesale market price at Conway, Kansas averaged ~~$0.68~~$0.70 and ~~$0.61~~$0.86 per gallon during the ~~three~~six months ended ~~April 30,~~January 31, 2019 and 2018, ~~and 2017,~~ respectively.

We believe this decrease in the wholesale cost of propane contributed to our decrease in revenues, but an increase in gross margin.

Revenues

Retail sales increased ~~$72.0~~$32.3 million compared to the prior period. This increase resulted from ~~$45.9~~$24.3 million in increased sales volumes and ~~a $26.1~~an $8.0 million increase in sales price per gallon, both as discussed above.

Wholesale sales ~~increased $7.4~~decreased $17.7 million compared to the prior period. This ~~increase~~decrease primarily resulted from a ~~$4.3~~$13.9 million ~~increase in sales volumes and a $3.1 million increase~~decrease in sales price per gallon and $3.8 million due to decrease sales volumes, both as discussed above.

Additionally, we believe the decrease in sales price per gallon was caused by the impact of increased competitive pressures.

Other gas sales ~~increased $2.5~~decreased $24.5 million compared to the prior year period primarily due to ~~an increase in~~decreased sales ~~price per gallon, as discussed above, partially offset by a decrease in sales~~ volumes.

Other revenues decreased $36.2 million compared to the prior year period primarily due to the sale of our lower margin propane related equipment business at the end of fiscal 2018.

Gross margin - Propane and other gas liquids sales

Gross margin increased ~~$18.9~~$16.8 million primarily due to the ~~34.1 million~~ increase in gallon sales, as discussed above, ~~partially offset by~~and to a ~~decrease in~~lesser extent increased gross margin per gallon. The increase in retail gross margin of ~~$21.0~~$22.7 million resulted from an increase in gross margin per gallon and to a ~~combination of colder weather and efforts to increase market share.~~lesser extent increases in retail customer counts, both as discussed above. The $5.9 million decrease in wholesale gross margin primarily relates to decreased gross margin per gallon ~~partially offset by~~due to the impact of increased ~~volumes~~competitive pressures on the sales price per gallon, as discussed above.

Gross margin - other

Gross margin decreased $8.2 million compared to the prior year period primarily due to the sale of our lower margin propane related equipment business at the end of fiscal 2018.

Operating income

Operating income increased ~~$7.4~~$2.0 million primarily due to a ~~$18.9~~$16.8 million increase in ~~Gross~~"Gross margin - Propane and other gas liquid ~~sales,~~sales", as discussed above, partially offset by a ~~$11.3~~$10.6 million increase in "Operating, general and administrative expense", a $10.0 million impairment of goodwill related to an immaterial reporting unit that was not repeated in the current period, an $8.2 million decrease in "Gross margin - other", as discussed above, and a $3.1 million increase in "Equipment lease expense". "Operating, general and administrative expense" increased primarily due to a ~~$4.9~~$10.3 million increase in field personnel costs, ~~and~~ a ~~$1.8~~$1.9 million increase in vehicle fuel costs, ~~both related to~~a $1.5 million pension

Table of Contents

settlement charge associated with the ~~increase in gallons sold as discussed above,~~withdrawal from a multi-employer pension plan and a ~~$1.4~~$2.6 million increase in ~~plant~~general liability and ~~office expenses.~~

worker compensation costs, partially offset by $6.4 million of costs incurred in the prior year period related to a business sold in fiscal 2018. Equipment lease expense increased due to both continued investment in new propane delivery trucks to serve our expanding customer base and to reduce the age of our fleet.

Adjusted EBITDA

Adjusted EBITDA ~~increased $8.7~~decreased $2.5 million primarily due to ~~a $18.9~~an $8.1 million increase in ~~Gross~~"Operating, general and administrative expense", an $8.2 million decrease in "Gross margin - other" and a $3.1 million increase in "Equipment lease expense", partially offset by a $16.8 million increase in "Gross margin - Propane and other gas liquid ~~sales, partially offset by a $11.0 million increase in "Operating, general and administrative expense".~~sales", all as discussed above. "Operating, general and administrative expense" increased primarily due to a ~~$4.9~~$10.0 million increase in field personnel costs, ~~and~~ a ~~$1.6~~$1.9 million increase in vehicle fuel costs ~~both related to the increase in gallons sold as discussed above~~ and a ~~$1.4~~$2.6 million increase in ~~plant~~general liability and ~~office expenses.~~

~~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 April 30, 2018 2017 Increase (Decrease)
Volumes (barrels):
Crude oil hauled 11,640
12,280
(640 ) (5 )%
Crude oil sold 27
2,110
(2,083 ) (99 )%
Salt water volume processed 4,761
4,635
126
3 %

Revenues -
Crude oil and other logistics $ 17,500
$ 22,135
$ (4,635 ) (21 )%
Crude oil sales 1,619
100,957
(99,338 ) (98 )%
Other 3,476
3,584
(108 ) (3 )%

$ 22,595
$ 126,676
$ (104,081 ) (82 )%

Gross margin - (a)
Crude oil and other logistics $ 5,540
$ 1,676
$ 3,864
231 %
Crude oil sales 1,400
4,163
(2,763 ) (66 )%
Other 1,137
2,070
(933 ) (45 )%

$ 8,077
$ 7,909
$ 168
2 %

Operating, general, and administrative expenses (b) $ 6,692
$ 6,296
$ 396
6 %
Equipment lease expense 83
153
(70 ) (46 )%

Operating loss $ (8,540 ) $ (5,704 ) $ (2,836 ) (50 )%
Depreciation and amortization expense 5,560
6,917
(1,357 ) (20 )%
Loss on asset sales and disposals 3,982
247
3,735
NM
Unrealized (non-cash) gain on changes in fair value of derivatives not designated as hedging instruments —
(2,007 ) 2,007
NM
Adjusted EBITDA $ 1,002
$ (547 ) $ 1,549
NM

~~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 during the three months ended April 30, 2018 decreased 5%, or 0.6 million barrels, from that of the prior period primarily due to decreased short haul trucking volumes.~~

~~Revenues~~

Crude oil sales decreased 98% or $99.3 million compared to the prior period, while crude oil and other logistics revenue decreased 21% or $4.6 million. The decrease in crude oil sales reflects the completion of the sale of Bridger Energy, LLC, a subsidiary of Bridger Logistics, which is a subsidiary of Ferrellgas, L.P. in the quarter ended January 31, 2018. With the sale, we exited Bridger Energy's oil purchase and sale activity. Our water solutions business continues to sell crude oil as part of its normal operations. The decrease in crude oil and other logistics revenues is driven by an overall decline in short haul trucking volumes, particularly in the Permian West region, due to increased utilization of pipelines and continued trucking industry related labor shortages.

~~Gross margin~~

~~Gross margin increased 2% or $0.2 million compared to the prior period, primarily due to a $3.9 million increase related to crude oil and other logistics hauling,~~worker compensation costs, partially offset by ~~a $2.8~~$6.4 million ~~decrease related to crude oil sales. Despite decreased volumes and revenues, crude oil and other logistics gross margin increased primarily due to~~of costs incurred in the ~~benefits from the cessation of barge operations~~prior year period related to a ~~transportation and logistics agreement with Jamex Marketing, LLC (the "Jamex TLA"). Crude oil sales gross margin decreased primarily due to the sale of Bridger Energy, LLC, which resulted~~business sold in ~~cessation of all oil purchase and sale activity, except for minimal crude oil sales as part of the normal operations of our water solutions business.~~

~~Operating loss~~

Operating loss increased by $2.8 million during the three months ended April 30, 2018 as compared to the three months ended April 30, 2017. This increase in operating loss was primarily due to a $3.0 million loss on the closure of a salt water disposal well during the three months ended April 30,fiscal 2018.

~~Adjusted EBITDA~~

~~Adjusted EBITDA increased $1.5 million primarily due to $2.2 million increase in gross margin, due to a $3.9 million increase related to crude oil~~

Corporate and other ~~logistics hauling, as discussed above, partially offset by a $0.9 million decrease in other gross margin and a $0.8 million decrease in gross margin related to crude oil sales.~~

~~Corporate~~

operations

The following table summarizes the financial results of our corporate operations for the periods ~~indicated:~~indicated. Prior period amounts also include results of our midstream operations.


(amounts in thousands)
Six months ended January 31,	2019		2018		Increase (Decrease)
Volumes (barrels):
Crude oil hauled		—		23,215		(23,215)	NM
Crude oil sold		—		3,385		(3,385)	NM
Salt water volume processed		—		9,791		(9,791)	NM

Revenues -
Crude oil logistics	$	—	$	33,227	$	(33,227)	NM
Crude oil sales		—		196,665		(196,665)	NM
Other		—		8,144		(8,144)	NM
	$	—	$	238,036	$	(238,036)	NM
Gross margin (a) -
Crude oil logistics	$	—	$	17,506	$	(17,506)	NM
Crude oil sales		—		3,014		(3,014)	NM
Other		—		2,324		(2,324)	NM
	$	—	$	22,844	$	(22,844)	NM

Operating, general, and administrative expenses	$	30,521	$	40,662	$	(10,141)	(25)	%
Equipment lease expense		621		1,115		(494)	(44)	%

Operating loss	$	(39,776)	$	(80,569)	$	40,793	(51)	%
Depreciation and amortization expense		1,261		14,962		(13,701)	(92)	%
Non-cash employee stock ownership plan compensation charge		4,692		7,993		(3,301)	(41)	%
Loss on asset sales and disposals		2,679		38,681		(36,002)	(93)	%
Legal fees and settlements		9,172		2,118		7,054	333	%
Severance costs		910		1,305		(395)	(30)	%
Unrealized (non-cash) gain on changes in fair value of derivatives not designated as hedging instruments		—		1,293		(1,293)	NM
Adjusted EBITDA	$	(21,062)	$	(14,217)	$	(6,845)	48	%

NM - Not meaningful

(a)

Gross margin represents "Revenues - Midstream operations" less "Cost of sales - Midstream operations" and does not include depreciation and amortization.

Table of Contents

(amounts in thousands)
Three months ended April 30, 2018 2017 Increase (Decrease)

Operating, general and administrative expense (a) $ 10,592
$ 9,039
$ 1,553
17 %
Equipment lease expense 424
614
(190 ) (31 )%

Operating loss $ (14,662 ) $ (15,218 ) $ 556
4 %
Depreciation and amortization expense 908
867
41
5 %
Non-cash employee stock ownership plan compensation charge 2,738
4,697
(1,959 ) (42 )%
Professional fees (b) 1,289
—
1,289
NM
Adjusted EBITDA $ (9,727 ) $ (9,654 ) $ (73 ) (1 )%

~~(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~~

Operating loss ~~of $14.7~~decreased by $40.8 million during the three months ended April 30, 2018, compared to an operating loss of $15.2 million recognized during the three months ended April 30, 2017. This decrease in operating loss is primarily due to a $2.0 million decrease in non-cash compensation charges and a $0.9 million decrease in corporate personnel costs, partially offset by a $1.6 million increase in legal costs.

~~Adjusted EBITDA~~

The Adjusted EBITDA loss within "Corporate" increased by $0.1 million primarily due to $0.3 million in increased legal costs, partially offset by a $0.9 million reduction in corporate personnel expenses, both as discussed above.

~~Segment Operating Results for the nine months ended April 30, 2018 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. During the quarter ended, April 30, 2018, Ferrellgas completed the sale of all 1,292 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. Thus, this sale of rail cars will not significantly affect future revenues or operating income within the midstream reporting segment.

~~Propane operations and related equipment sales~~

~~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:~~

(amounts in thousands)
Nine months ended April 30, 2018 2017 Increase (Decrease)
Propane sales volumes (gallons):
Retail - Sales to End Users 543,548
473,094
70,454
15 %
Wholesale - Sales to Resellers 185,492
170,033
15,459
9 %
729,040
643,127
85,913
13 %

Revenues -
Propane and other gas liquids sales:
Retail - Sales to End Users $ 931,495
$ 720,078
$ 211,417
29 %
Wholesale - Sales to Resellers 324,863
277,755
47,108
17 %
Other Gas Sales (a) 89,941
51,378
38,563
75 %
Other (b) 118,691
116,183
2,508
2 %
Propane and related equipment other revenues $ 1,464,990
$ 1,165,394
$ 299,596
26 %

Gross Margin -
Propane and other gas liquids sales: (c)
Retail - Sales to End Users (a) $ 411,644
$ 369,811
$ 41,833
11 %
Wholesale - Sales to Resellers (a) 131,803
127,672
4,131
3 %
Other (b) 64,352
62,970
1,382
2 %
Propane and related equipment gross margin $ 607,799
$ 560,453
$ 47,346
8 %

Operating, general and administrative expense (d) $ 332,244
$ 303,926
$ 28,318
9 %
Equipment lease expense 19,206
19,780
(574 ) (3 )%

Operating income $ 187,458
$ 178,979
$ 8,479
5 %
Depreciation and amortization expense 55,135
54,103
1,032
2 %
Loss on asset sales and disposals 3,751
3,666
85
2 %
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 —
(3,238 ) 3,238
NM
Adjusted EBITDA $ 256,707
$ 233,763
$ 22,944
10 %

~~(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.~~

Propane sales volumes during the nine months ended April 30, 2018 increased 13% or 85.9 million gallons, from that of the prior year period due to 70.5 million and 15.5 million of increased gallon sales to retail and wholesale customers, respectively.

Weather in the more highly concentrated geographic areas we serve for the nine months ended April 30, 2018 was approximately 4% warmer than normal, but 17% colder than the prior year period. Retail and wholesale gallons increased due to a combination of efforts to increase market share and colder weather.

Our wholesale sales price per gallon largely 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 nine months ended April 30, 2018 both averaged 43% greater than the prior year period. The wholesale market price at Mt. Belvieu, Texas averaged $0.87 and $0.61 per gallon during the nine months ended April 30, 2018 and 2017, respectively, while the wholesale market price at Conway, Kansas averaged $0.80 and $0.56 per gallon during the nine months ended April 30, 2018 and 2017, respectively.

~~Revenues~~

Retail sales increased $211.4 million compared to the prior period. This increase resulted from $107.2 million in increased sales volumes and from a $104.2 million increase in sales price per gallon, both as discussed above.

Wholesale sales increased $47.1 million compared to the prior period. This increase resulted from a $26.5 million increase in sales price per gallon and $20.6 million from increased sales volumes, both as discussed above.

~~Other gas sales increased $38.6 million compared to the prior year period primarily due to increased sales price per gallon.~~

~~Other revenues increased $2.5 million compared to the prior year period, primarily due to an increase in the sales of certain lower margin equipment.~~

~~Gross margin - Propane and other gas liquids sales~~

Gross margin increased $46.0 million primarily due to the 85.9 million increase in gallon sales as discussed above, partially offset by a decrease in gross margin per gallon. The increase in retail gross margin of $41.8 million resulted from efforts to increase market share and colder weather, partially offset by a decrease in gross margin per gallon. The increase in wholesale gross margin primarily relates to increased volumes as discussed above, partially offset by decreased gross margin per gallon resulting from efforts to increase market share.

~~Operating income~~

Operating income increased $8.5 million primarily due to a $46.0 million increase in Gross margin - Propane and other gas liquids sales, partially offset by a $28.3 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 $11.8 million increase in personnel costs and a $7.5 million increase in vehicle costs, both related to the increase in gallons sold as discussed above, a $2.1 million increase in plant and office expenses and a $1.8 million increase in bad debt expense. The "Asset impairments" relates to an impairment of goodwill of an immaterial reporting unit during the threesix months ended January 31, ~~2018.~~

~~Adjusted EBITDA~~

Adjusted EBITDA increased $22.9 million primarily due to a $46.0 million increase in Gross margin - Propane and other gas liquids sales, partially offset by a $25.0 million increase in "Operating, general and administrative expense". "Operating, general and administrative expense" increased primarily due to an $11.7 million increase in personnel costs and a $4.3 million increase in vehicle costs, both related to the increase in gallons sold2019 as ~~discussed above, a $2.1 million increase in plant and office expenses and a $1.8 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)
Nine months ended April 30, 2018 2017 Increase (Decrease)
Volumes (barrels):
Crude oil hauled 34,855
36,549
(1,694 ) (5 )%
Crude oil sold 3,412
5,228
(1,816 ) (35 )%
Salt water volume processed 14,552
12,340
2,212
18 %

Revenues -
Crude oil logistics $ 50,727
$ 62,750
$ (12,023 ) (19 )%
Crude oil sales 198,283
258,724
(60,441 ) (23 )%
Other 11,620
10,033
1,587
16 %
$ 260,630
$ 331,507
$ (70,877 ) (21 )%

Gross margin (a)
Crude oil logistics $ 23,046
$ 12,671
$ 10,375
82 %
Crude oil sales 4,414
11,835
(7,421 ) (63 )%
Other 3,461
6,568
(3,107 ) (47 )%
$ 30,921
$ 31,074
$ (153 ) — %

Operating, general, and administrative expenses (b) $ 23,060
$ 21,888
$ 1,172
5 %
Equipment lease expense 251
423
(172 ) (41 )%

Operating loss $ (53,593 ) $ (17,651 ) $ (35,942 ) (204 )%
Depreciation and amortization expense 18,540
21,233
(2,693 ) (13 )%
Loss on asset sales and disposals 42,663
5,195
37,468
721 %
Severance costs 1,305
227
1,078
475 %
Unrealized (non-cash) (gain) loss on changes in fair value of derivatives not designated as hedging instruments 1,293
(1,211 ) 2,504
NM
Adjusted EBITDA $ 10,208
$ 7,793
$ 2,415
31 %

~~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 nine months ended April 30, 2018 decreased 5%, or 1.7 million barrels, from that of the prior period primarily due to decreased short haul trucking volumes.~~

~~Revenues~~

~~Crude oil sales decreased 23% or $60.4 million~~ compared to the prior period, while crude oil and other logistics revenue decreased 19% or $12.0 million. The decrease in crude oil sales reflects the completion of the sale of Bridger Energy, LLC, a subsidiary of Bridger Logistics, which is a subsidiary of Ferrellgas, L.P. in the quartersix months ended January 31, 2018. ~~With the sale, we exited Bridger Energy's oil purchase and sale activity. Our water solutions business continues to sell crude oil as part of its normal operations. The~~This decrease ~~in crude oil and other logistics revenues is driven by increased utilization of pipelines and the continued trucking industry related labor shortages.~~

~~Gross margin~~

Gross margin decreased $0.2 million compared to the prior period, primarily due to a $7.4 million decrease related to crude oil sales and $3.1 million decrease in other gross margin, partially offset by a $10.4 million increase related to crude oil and other logistics hauling. Crude oil sales gross margin decreased due to the sale of Bridger Energy, LLC in the second fiscal quarter, and the resulting exit of Bridger Energy's oil purchase and sale activity. Crude oil and other logistics hauling 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 $35.9 million during the nine months ended April 30, 2018 as compared to the nine months ended April 30, 2017. This increase~~ in operating loss was primarily due to ~~a $36.8~~the $42.4 million operating loss ~~on the sale of rail car assets recognized~~related to our midstream operations in fiscal ~~2018.~~

~~Adjusted EBITDA~~

~~Adjusted EBITDA~~2018, partially offset by increased ~~$2.4 million~~corporate costs of $1.6 million. Corporate costs increased primarily due to a $10.4 million increase in gross margin related to crude oil and other logistics hauling, partially offset by a $4.9 million decrease in gross margin related to crude oil sales, both as discussed above, and $3.1 million decrease in other gross margin.

~~Corporate~~

~~The following table summarizes the financial results of our corporate operations for the periods indicated:~~

(amounts in thousands)
Nine months ended April 30, 2018 2017 Increase (Decrease)

Operating, general and administrative expense (a) $ 35,186
$ 33,660
$ 1,526
5 %
Equipment lease expense 1,371
1,832
(461 ) (25 )%

Operating loss $ (50,178 ) $ (49,100 ) $ (1,078 ) (2 )%
Depreciation and amortization expense 2,890
2,210
680
31 %
Non-cash employee stock ownership plan compensation charge 10,731
11,396
(665 ) (6 )%
Non-cash stock based compensation charge —
3,298
(3,298 ) NM
Severance costs —
1,479
(1,479 ) NM
Professional fees (b) 3,407
—
3,407
NM
Adjusted EBITDA $ (33,150 ) $ (30,717 ) $ (2,433 ) (8 )%

~~(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 $50.2 million during the nine months ended April 30, 2018, compared to an operating loss of $49.1 million recognized during the nine months ended April 30, 2017. This increase in operating loss is primarily due to an increase of $7.7 million in legal costs and $0.7 million increase in depreciation and amortization expense, partially offset by $4.0 million of decreased non-cash compensation charges and a $3.6 million decrease in corporate personnel costs.

~~Adjusted EBITDA~~

~~The Adjusted EBITDA loss within "Corporate" increased by $2.4 million primarily due to a $4.3~~$5.5 million increase in legal costs, partially offset by a ~~$2.1~~$3.3 million ~~reduction~~decrease in non-cash employee stock ownership plan compensation costs and a $0.3 million decrease in equipment lease expense.

Adjusted EBITDA

Adjusted EBITDA decreased $6.8 million primarily due to the $9.2 million in Adjusted EBITDA related to our midstream operations in fiscal 2018, partially offset by a $2.4 million decrease in corporate ~~personnel expenses.~~

costs. Corporate costs decreased primarily due to a $1.6 million decrease in legal costs and a $0.3 million decrease in equipment lease expense.

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 and funds received from sales of debt and equity securities. As of January 31, 2019, our total liquidity was $236.8 million, which is comprised of $40.6 million in cash and $196.2 million of availability under our secured credit facility. These sources of liquidity and short term capital resources are intended to fund our working capital requirements, letter of credit requirements, ~~debt service payments,~~and acquisition and capital ~~expenditures and distributions~~expenditures. Our access to ~~our unitholders. Our liquidity and~~long term capital resources, in order to address our leverage, may be affected by our ability to access the capital markets, covenants in our debt agreements, unforeseen demands on cash, or other events beyond our control.

~~As more fully described~~ We are in ~~Item 2. Management's Discussion and Analysis under~~ the ~~subheading "Recent Developments", on May 4, 2018, the operating partnership entered into~~process of engaging a ~~new $575.0 million senior secured credit facility, which replaced the $575.0 million secured credit facility that was scheduled~~financial advisor to ~~mature~~assist us in ~~October 2018. Credit facility disclosures below pertain to the secured credit facility that was in place as of April 30, 2018.~~

As more fully described in Item 2. Management's Discussion and Analysis under the subheading "Recent Developments", on May 14, 2018, the operating partnership entered into an amendment which extended the maturity date of its accounts receivable securitization facility by three years and increased the maximum borrowing capacity from $225.0 million to $250.0 million. The accounts receivable securitization facility disclosures below pertain to the facility that was in place as of April 30, 2018.

addressing our upcoming debt maturities.

Financial Covenants

As more fully described in Item 2. Management’s Discussion and Analysis 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 of 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, we ~~may~~will continue to be restricted from making distribution payments to our common unitholders.

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;

~~significantly warmer than normal temperatures during the winter heating season;~~

a more volatile energy commodity cost environment;

~~significant and sustained increases in the wholesale cost~~

an unexpected downturn in business operations;

Table of ~~propane that we are unable to pass along to our customers;~~Contents

~~a more volatile energy commodity cost environment;~~

a significant delay in the collection of accounts or notes receivable;

~~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 and refinancing 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.

We may seek additional capital as part of our debt ~~and interest expense~~ reduction ~~initiatives;~~

~~a change in customer retention~~strategy.

As discussed above, no distributions will be paid to common unitholders for the three months ended January 31, 2019. Unless the indenture governing the outstanding notes is amended or ~~purchasing patterns due~~replaced, or the Ferrellgas Partners’ consolidated fixed charge coverage ratio does improves 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 May 24, 2018, the board of directors of our general partner announced a quarterly distribution of $0.10 per~~at least 1.75x, this covenant will continue to restrict us from making common unit ~~payable on June 14, 2018, to all unitholders of record as of June 7, 2018, which equates to an annual distribution rate of $0.40 per common unit.~~

distributions.

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~~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 ~~April 30, 2018~~January 31, 2019 to the twelve months ended ~~January~~October 31, 2018 is as follows (in thousands):


	Distributable		Cash reserves		Cash distributions
	Cash Flow to		(deficiency) approved		paid to
	equity investors		by our General Partner		equity investors		DCF ratio
Six months ended January 31, 2019	$	25,349	$	15,277	$	10,072
For the year ended July 31, 2018		62,904		22,934		39,970
Less: Six months ended January 31, 2018		59,903		39,919		19,984
Twelve months ended January 31, 2019	$	28,350	$	(1,708)	$	30,058	0.94

Twelve months ended October 31, 2018		54,863		14,891		39,972	1.37
Change	$	(26,513)	$	(16,599)	$	(9,914)	(0.43)

Distributable Cash Flow to equity investors Cash reserves (deficiency) approved by our General Partner Cash distributions paid to equity investors DCF ratio
Nine months ended April 30, 2018 $ 103,829
$ 73,930
$ 29,899

For the year ended July 31, 2017 77,182
(3,601 ) 80,783

Less: Nine months ended April 30, 2017 98,986
28,273
70,713

Twelve months ended April 30, 2018 $ 82,025
$ 42,056
$ 39,969
2.05

Twelve months ended January 31, 2018 74,435
34,468
39,967
1.86
Change $ 7,590
$ 7,588
$ 2
0.19

For the twelve months ended ~~April 30, 2018,~~January 31, 2019, distributable cash flow attributable to equity investors ~~increased $7.6~~decreased $26.5 million compared to the twelve months ended ~~January~~October 31, 2018, primarily due to ~~a $10.1 million increase in Adjusted EBITDA for~~ the three months ended April 30, 2018 compared to the three months ended April 30, 2017, partially offset by a $2.3 million increase in maintenance capital expenditures during the three months ended April 30, 2018 compared to the three months ended April 30, 2017. The increase in Adjusted EBITDA is primarily due to an $8.7 million increase in our Propane operations and related equipment sales segment and a $1.5 million increase in our Midstream operations segment, both as discussed above. The increase in maintenance capital expenditures is primarily due to increases in our Propane operations and related equipment sales segment.purchase of new propane delivery trucks funded through cash on hand. Cash distributions paid to equity investors ~~were unchanged~~decreased by $9.9 million during that twelve month period because no distributions have been made for the ~~number of common units outstanding and our annual distribution rate has not changed.~~six months ended January 31, 2019. Our distribution coverage ratio ~~increased~~decreased to ~~2.05~~0.94 for the twelve months ended ~~April 30,~~January 31, 2019, compared with the twelve months ended October 31, 2018. Cash reserves, which we utilize to meet future anticipated expenditures, ~~increased~~decreased by ~~$42.1~~$1.7 million during the twelve months ended ~~April 30, 2018~~January 31, 2019 compared to an increase of ~~$34.5~~$14.9 million in the twelve months ended ~~January~~October 31, 2018.

We believe that the liquidity available from our cash on hand, cash flows from operating activities, our ~~new~~ senior secured credit facility, and the ~~amended~~ 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.

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.

Table of Contents

Our working capital requirements are subject to, among other things, the price of propane, 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 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.~~

operations.

Operating Activities

Ferrellgas Partners

Net cash ~~provided by~~used in operating activities was ~~$78.3~~$55.1 million for the ~~nine~~six months ended ~~April 30, 2018,~~January 31, 2019, compared to net cash ~~provided by~~used in operating activities of ~~$118.3~~$36.3 million for the ~~nine~~six months ended ~~April 30, 2017.~~January 31, 2018. This decrease in cash provided by operating activities was primarily due to a ~~$39.7~~$20.8 million ~~increase~~decrease in ~~working capital requirements~~cash flow from operations and a ~~$9.7~~$3.2 million ~~unfavorable impact in~~outflow associated with other assets ~~net, primarily due to an increase in crude oil barrels in linefill prior to the sale of Bridger Energy in January 2018,~~and other liabilities, partially offset by a ~~$9.3~~$5.2 million ~~increase~~decrease in ~~cash flow from operations.~~

working capital requirements.

The ~~increase~~decrease in cash flow from operations is primarily due to a ~~$22.9~~$14.1 million decrease in gross margin, as well as a net increase in ~~Adjusted EBITDA, as discussed above by segment, partially offset by an $11.7~~"General and administrative expense" and "Equipment lease expense" of $5.0 million, and a $5.3 million increase in "Interest ~~expense", as discussed above.~~

expense," due to increased interest rates on our secured credit facility.

The ~~increase~~decrease in working capital requirements for the ~~nine~~six months ended ~~April 30, 2018~~January 31, 2019 compared to the ~~nine~~six months ended ~~April 30, 2017~~January 31, 2018 was primarily due to a ~~$40.2~~$23.6 million ~~increase~~decrease in requirements for accounts receivable in our propane operations and related equipment sales segment due to declining propane prices in the current quarter partially offset by increases in the ~~the number of gallons sold and the average selling price~~volume of propane ~~gas,~~sold, a ~~$16.2~~$11.2 million decrease in requirements for inventory primarily resulting from increases in crude oil inventory in the six months ended January 31, 2018, and a $4.9 million increase in ~~requirements for prepaid expenses and other assets due primarily to a decrease in margin deposits returned to us~~accounts payable, partially offset by ~~our counterparties during the nine months ended April 30, 2018, a $6.1~~$22.3 million increase in requirements for other current liabilities due primarily to ~~a decrease~~an increase in margin deposits paid toby us during the ~~nine~~six months ended ~~April 30, 2018~~January 31, 2019 compared to the ~~nine~~six months ended ~~April 30, 2017, partially offset by~~January 31, 2018 and a ~~$9.9~~$11.7 million ~~decrease~~increase in ~~requirements for inventory primarily from our propane operations~~prepaid expenses and related equipment sales segment due to decreases in inventory driven by increases in gallons sold, and an approximate $16.0 million decrease in requirements for accounts receivable and accounts payable in our Midstream segment resulting primarily from the sale of Bridger Energy.

other current assets.

The operating partnership

Net cash ~~provided by~~used in operating activities was ~~$93.9~~$39.7 million for the ~~nine~~six months ended ~~April 30, 2018,~~January 31, 2019, compared to net cash ~~provided by~~used in operating activities of ~~$124.4~~$20.8 million for the ~~nine~~six months ended ~~April 30, 2017.~~January 31, 2018. This decrease in cash provided by operating activities was primarily due to a ~~$37.4~~$20.9 million ~~increase~~decrease in ~~working capital requirements~~cash flow from operations and ~~an $10.0~~a $2.9 million ~~unfavorable impact in~~outflow associated with other assets ~~net, primarily due to an increase in crude oil barrels in linefill prior to the sale of Bridger Energy in January 2018,~~and other liabilities, partially offset by a ~~$16.9~~$4.9 million ~~increase~~decrease in ~~cash flow from operations.~~

working capital requirements.

The ~~increase~~decrease in cash flow from operations is primarily due to a ~~$22.9~~$14.1 million decrease in gross margin, as well as a net increase in ~~Adjusted EBITDA, as discussed above by segment, partially offset by~~"General and administrative expense" and "Equipment lease expense" of $5.0 million, and a ~~$2.6~~$5.1 million increase in "Interest ~~expense"~~expense," due to increased interest rates on ~~the~~our secured credit facility.

The increase in working capital requirements for the ~~nine~~six months ended ~~April 30, 2018~~January 31, 2019 compared to the ~~nine~~six months ended ~~April 30, 2017~~January 31, 2018 was primarily due to a ~~$40.2~~$23.6 million ~~increase~~decrease in requirements for accounts receivable in our propane operations and related equipment sales segment due to declining propane prices in the current quarter partially offset by increases in the ~~the number of gallons sold and the average selling price~~volume of propane ~~gas,~~sold, a ~~$16.1~~$11.2 million decrease in requirements for inventory primarily

Table of Contents

resulting from increases in crude oil inventory in the six months ended January 31, 2018, and a $4.9 million increase in ~~requirements for prepaid expenses and other assets due primarily to a decrease in margin deposits returned to us~~accounts payable, partially offset by ~~our counterparties during the nine months ended April 30, 2018, a $5.9~~$22.6 million increase in requirements for other current liabilities due primarily to ~~a decrease~~an increase in margin deposits paid toby us during the ~~nine~~six months ended ~~April 30, 2018~~January 31, 2019 compared to the ~~nine~~six months ended ~~April 30, 2017, partially offset by~~January 31, 2018 and a ~~$9.9~~$11.7 million ~~decrease~~increase in ~~requirements for inventory primarily from our propane operations~~prepaid expenses and related equipment sales segment due to decreases in inventory driven by increases in gallons sold, and an approximate $16.0 million decrease in requirements for accounts receivable and accounts payable in our Midstream segment resulting primarily from the sale of Bridger Energy.

other current assets.

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 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

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.

~~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 ~~$16.0~~$61.4 million for the ~~nine~~six months ended ~~April 30, 2018,~~January 31, 2019, compared to net cash used in investing activities of ~~$34.3~~$46.3 million for the ~~nine~~six months ended ~~April 30, 2017.~~January 31, 2018. This ~~decrease~~increase in net cash used in investing activities is primarily due to a ~~$53.1~~$22.6 million increase in ~~"Proceeds from sale of assets" which is primarily due to the sale of our midstream rail cars during the three months ended April 30, 2018,~~"Capital expenditures", partially offset by a ~~$23.5~~$9.8 million ~~increase in "Capital expenditures" and an $11.3 million increase~~decrease in "Business acquisitions, net of cash ~~acquired."~~

acquired".

The increase in "Capital expenditures" is primarily due to ~~increases~~an increase in maintenance capital expenditures, and to a lesser extent an increase in growth capital expenditures, in our Propane operations and related equipment sales segment during the ~~nine~~six months ended ~~April 30, 2018.~~January 31, 2019. The increase in maintenance capital expenditures is primarily related to the purchase of new propane delivery ~~trucks.~~trucks funded through cash on hand, compared to the six months ended January 31, 2018. Funding for these trucks has historically been secured through lease financing. The increase in growth capital expenditures is primarily ~~related~~due to anthe construction of new Blue Rhino production plants in the first quarter. The increase is also due to the continued rise in the number of cylinders and cages purchased to support increases in tank exchange sales and selling ~~locations.~~

locations, as well as the number of cylinders purchased for industrial and commercial forklift sales.

The ~~increase~~decrease in "Business acquisitions, net of cash acquired" is attributable to ~~four~~five immaterial acquisitions by our Propane operations and related equipment sales segment during the ~~nine~~six months ended ~~April 30,~~January 31, 2019 compared to the acquisitions completed 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.

On February 20, 2019, we received full payment for our $8.5 million secured promissory note due in May 2020 from Bridger Energy, LLC.

The operating partnership

The investing activities discussed above also apply to the operating partnership.

Table of Contents

Financing Activities

Ferrellgas Partners

Net cash ~~used in~~provided by financing activities was ~~$58.6~~$37.9 million for the ~~nine~~six months ended ~~April 30, 2018,~~January 31, 2019, compared to net cash ~~used in~~provided by financing activities of ~~$79.5~~$91.1 million for the ~~nine~~six months ended ~~April 30, 2017.~~January 31, 2018. This decrease in cash flow ~~used in~~provided by financing activities was primarily due to a ~~$40.5~~$23.6 million ~~reduction in distributions, a $15.9 million reduction in common unit repurchases, partially offset by a $25.2 million net reduction~~decrease in proceeds from long-term debt and a ~~$13.3~~$24.9 million net ~~increase~~decrease in proceeds from short-term borrowings.

Distributions

During the ~~nine~~six months ended ~~April 30, 2018,~~January 31, 2019, Ferrellgas Partners paid quarterly a per unit ~~distributions~~distribution on all common units of $0.10 in connection with the distributions declared for the three month ~~periods~~period ended July 31, ~~2017,~~2018. No distribution on common units or the related general partner distribution was made for the three month period ended October 31, ~~2017, and January 31,~~ 2018.

Total distributions paid to common unitholders during the ~~nine~~six months ended ~~April 30, 2018,~~January 31, 2019, including the related general partner distributions, was ~~$29.4~~$9.8 million. ~~The quarterly~~As discussed above, no distribution ~~of $0.10~~ on ~~all~~ common units ~~and~~or the related general partner distribution was made in December 2018 and will not be made in March 2019 for the ~~three~~six months ended ~~April 30, 2018 totaling $9.8 million are expected to be paid on June 14, 2018 to holders~~January 31, 2019 or for any future quarterly period until Ferrellgas Partners’ fixed charge coverage ratio is at least 1.75x, or the indenture governing the notes of ~~record on June 7, 2018.~~

Ferrellgas Partners is amended or replaced.

Secured credit facility

~~As discussed further in "Recent Developments"~~

The Senior Secured Credit Facility consists of a $300.0 million revolving line of credit (the "Revolving Facility") as well as a $275.0 million term loan (the "Term Loan"), which mature on May 4, ~~2018,~~2023. Revolving Facility borrowings bear interest at the ~~operating partnership entered into~~Prime Rate + 4.75% and Term Loan borrowings bear interest at LIBOR + 5.75%. The Revolving Facility includes a ~~new $575.0~~$125.0 million ~~senior secured credit facility, which replaced~~sublimit for the ~~$575.0 million secured credit facility that was scheduled to mature in October 2018.~~issuance of letters of credit. Borrowings under the Senior Secured Credit ~~facility disclosures below pertain to the secured credit facility that was in place as of April 30, 2018.~~

~~Ferrellgas classifies as short-term the portion of its secured credit facility borrowings that were used to fund~~Facility are available for working capital needs, capital expenditures and ~~that management intends~~other general partnership purposes, including the refinancing of existing indebtedness and acquisitions, within certain limits.

The Term Loan does not include any scheduled principal payments and the Revolving Facility does not have any scheduled commitment reductions before maturity; however, the Term Loan requires prepayments pursuant to ~~pay down within~~ the ~~12 month period following~~following: 1) certain asset sales, 2) 50% of any excess cash flow, as defined by the balance sheet date. As of April 30, 2018, there were no amounts classified as short-term borrowings because all amounts outstanding were refinanced on May 4, 2018 under the five-year term loan discussedTerm Loan, in ~~Item 2. Management's Discussion~~any fiscal year beginning with fiscal year 2019, 3) certain insurance proceeds, and ~~Analysis under the subheading "Recent Developments". Additionally, Ferrellgas had $252.3 million of capacity under our~~4) certain tax refunds.

The Senior Secured Credit Facility is secured ~~credit facility as of April 30, 2018.~~

Borrowings outstanding at April 30, 2018 under the secured credit facility had a weighted average interest rate of 6.7%. 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 April 30, 2018, the federal funds rate and Bank of America’s prime rate were 1.69% and 4.75%, respectively. As of April 30, 2018, the one-month and three-month LIBOR Rates were 1.91% and 2.36%, 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~~with substantially all of the assets of the operating partnership and its subsidiaries, and Ferrellgas Partners’ and the general ~~partner and certain subsidiaries of~~partner’s partnership interests in the operating partnership, ~~but specifically excluding (a) assets that are subject~~and contains various affirmative and negative covenants and default provisions, as well as requirements with respect to the ~~operating partnership’s accounts receivable securitization facility, (b)~~maintenance of specified financial ratios and limitations on the ~~general partner’s equity interest in Ferrellgas Partners~~making of loans and ~~(c) equity interest in certain unrestricted subsidiaries. Such obligations are also guaranteed by the general partner and certain subsidiaries~~investments.

As of January 31, 2019, the operating ~~partnership.~~

partnership had borrowings of $275.0 million under the Term Loan at a rate of 8.27%, which was classified as long-term debt, and no borrowings under the Revolving Facility. As of January 31, 2019, Ferrellgas had available borrowing capacity under the Revolving Facility of $196.2 million. As of July 31, 2018, the operating partnership had borrowings of $275.0 million under the Term Loan at a rate of 7.86%, which was classified as long-term debt, and $32.8 million under the Revolving Facility at a rate of 9.75%, which was classified as short-term borrowings. As of July 31, 2018, Ferrellgas had available borrowing capacity under its Revolving Facility of $159.3 million.

Letters of credit outstanding at ~~April 30, 2018~~January 31, 2019 totaled ~~$111.8~~$103.8 million and were used to secure ~~commodity hedges,~~insurance arrangements, product purchases, and ~~insurance arrangements.~~commodity hedges. At ~~April 30, 2018,~~January 31, 2019, we had remaining letter of credit capacity of ~~$88.2~~$21.2 million.

~~All standby letter~~

Table of credit commitments under our secured credit facility bear a per annum rate varying from 1.75% to 4.00% (as of April 30, 2018, the rate was 3.75%) 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.Contents

Accounts receivable securitization

As discussed further in "Recent Developments", on May 14, 2018, the operating partnership entered into an amendment which extended the maturity date of its accounts receivable securitization facility by three years and increased the maximum borrowing capacity from $225.0 million to $250.0 million. The accounts receivable securitization facility disclosures below pertain to the facility that was in place as of April 30, 2018.

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 $8.0~~decreased $15.0 million, as we received net funding of ~~$35.0~~$82.0 million from this facility during the ~~nine~~six months ended ~~April 30, 2018~~January 31, 2019 as compared to receiving net funding of ~~$27.0~~$97.0 million from this facility during the ~~nine~~six months ended ~~April 30, 2017.~~

January 31, 2018.

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 ~~April 30, 2018,~~January 31, 2019, we had received cash proceeds of ~~$104.0~~$140.0 million related to the securitization of our trade accounts receivable, with no remaining capacity ~~of $19.0 million to~~ receive additional proceeds. As of ~~April 30, 2018,~~January 31, 2019, the weighted average interest rate was ~~4.2%~~5.3%. 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, as discussed below.

Distributions

The operating partnership paid cash distributions of ~~$45.5~~$25.6 million and ~~$94.4~~$35.4 million during the ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018, ~~and 2017,~~ respectively. The operating partnership ~~expects~~will not make any distributions related to ~~pay cash distributions of $25.6 million on June 14, 2018, which includes distributions to Ferrellgas Partners to allow it to pay its semi-annual interest on its 8.625% senior notes.~~

the three month period ended January 31, 2019.

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 ~~$203.1~~$76.5 million for the ~~nine~~six months ended ~~April 30, 2018,~~January 31, 2019, 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 the following:


		Distributions
	Common unit	(in thousands)
	ownership at	paid during the six months ended
	January 31, 2019	January 31, 2019
Ferrell Companies (1)	22,529,361	$	2,253
FCI Trading Corp. (2)	195,686		20
Ferrell Propane, Inc. (3)	51,204		5
James E. Ferrell (4)	4,763,475		476

(1)

(2)

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

Table of Contents

Common unit ownership at Distributions (in thousands) paid during the nine months ended
April 30, 2018 April 30, 2018
Ferrell Companies (1) 22,529,361
$ 6,759
FCI Trading Corp. (2) 195,686
60
Ferrell Propane, Inc. (3) 51,204
15
James E. Ferrell (4) 4,763,475
1,428

(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 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 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.

~~(2) FCI Trading is an affiliate of the general partner and thus 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 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 ~~nine~~six months ended ~~April 30, 2018,~~January 31, 2019, Ferrellgas Partners and the operating partnership together paid the general partner distributions of ~~$0.8~~$0.4 million.

~~On June 14, 2018,~~

As discussed previously, Ferrellgas Partners ~~expects~~was not in compliance with the consolidated fixed charge coverage ratio under its note indenture, and thus was unable to ~~pay~~make restricted payments, including distributions to Ferrell Companies, FCI Trading Corp., Ferrell Propane, Inc., James E. Ferrell (indirectly), and the general partner of $2.3 million, $20 thousand, $5 thousand, $0.5 million, and $0.1 million, respectively.

~~Contractual Obligations~~

~~In the performance of our operations, we are bound by certain contractual obligations.~~

The following table summarizes our long-term debt contractual obligations at April 30, 2018, adjusted for the effects of the new senior secured credit facility entered into by the operating partnership on May 4, 2018, as discussed in Item 2. Management's Discussion and Analysis under the subheading "Recent Developments".

Payment or settlement due by fiscal year
(in thousands) 2018 2019 2020 2021 2022 Thereafter Total
Long-term debt, including current portion (1) $ 794
$ 2,380
$ 358,557
$ 501,392
$ 475,707
$ 775,624
$ 2,114,454

~~(1)~~

We have long and short-term payment obligations under agreements such as our senior notes and our new senior secured credit facility. Amounts shown in the table represent our scheduled future maturities of long-term debt (including current maturities thereof) for the periods indicated. For additional information regarding our debt obligations, please see “Liquidity and Capital Resources – Financing Activities.”

~~The operating partnership~~

~~In the performance of our operations, we are bound by certain contractual obligations.~~

The following table summarizes our contractual obligations related to long-term debt at April 30, 2018, adjusted for the effects of the new senior secured credit facility entered into by the operating partnership on May 4, 2018, as discussed in Item 2. Management's Discussion and Analysis under the subheading "Recent Developments".

Payment or settlement due by fiscal year
(in thousands) 2018 2019 2020 2021 2022 Thereafter Total
Long-term debt, including current portion (1) $ 794
$ 2,380
$ 1,557
$ 501,392
$ 475,707
$ 775,624
$ 1,757,454

~~(1)~~

unitholders.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We did not enter into any risk management trading activities during the ~~nine~~six months ended ~~April 30, 2018.~~January 31, 2019. 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. 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 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 swaps, options, futures and basis swaps 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. 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.

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 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 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.

Table of Contents

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 ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017,~~2018, 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 ~~$13.0~~$11.4 million and ~~$16.8~~$13.7 million as of ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017,~~2018, 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 overall credit risk. These policies include an evaluation of counterparties’ financial condition (including credit ratings), and entering into agreements with counterparties that govern credit guidelines.

Our other counterparties consist of major energy companies who are suppliers, marketers, wholesalers, retailers, end users and 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 of agreements with Jamex which, among other things, Jamex agreed to execute 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 million guarantee approximate the $35.0 million note receivable as of April 30, 2018.

Interest rate risk

At ~~April 30, 2018,~~January 31, 2019, we had a total of ~~$288.9~~$415.0 million in variable rate secured credit facility and collateralized note payable borrowings. 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 ~~$2.9~~$4.2 million for the twelve months ending ~~April 30,~~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. Our results of operations, cash flows and financial condition could be materially adversely affected by significant increases in interest rates. Although we had an interest rate swap that hedged a portion of the interest rate risk associated with our variable rate borrowings as of April 30, 2018, this swap was terminated on May 3, 2018. Thus we did not consider the effect of this swap on our sensitivity analysis.

As of April 30, 2018, we managed a portion of our interest rate exposure associated with our fixed rate debt by utilizing an interest rate swap. We terminated this swap on May 3, 2018. Thus we did not compute a sensitivity analysis related to this hedge instrument.

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)~~13a‑15(e) or ~~15d-15(e)~~15d‑15(e) under the Exchange Act, were effective.

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

Table of Contents

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 ~~April 30, 2018,~~January 31, 2019, that our disclosure controls and procedures are effective in achieving that level of reasonable assurance.

During the most recent fiscal quarter ended ~~April 30, 2018,~~January 31, 2019, there have been no changes in our internal control over financial reporting (as defined in Rule ~~13a-15(f)~~13a‑15(f) or Rule ~~15d-15(f)~~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, prior to the sales of midstream operations in fiscal 2018, 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 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 our consolidated financial condition, results of operations and cash flows.

We have 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 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.~~resulted in the court appeals affirming the dismissal of the federal claims and remanding the case to the district court to decide whether to exercise supplemental jurisdiction over the remaining state law claims. 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. On April 2, 2018, the securities class action lawsuits were dismissed with prejudice. On April 30, 2018, the plaintiffs filed a notice of appeal to the United States Court of Appeals for the Second Circuit. The parties have completed briefing and are preparing for oral argument. At this time the derivative lawsuits remain stayed by agreement. 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

Table of Contents

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~~On June 25, 2018, we entered into an agreement with the Third-Party Defendants ~~have~~which, among other things, resulted in a dismissal of the claims against the Third-Party Defendants from the lawsuit. On January 25, 2019, Ferrellgas, Bridger Logistics, LLC and all other defendants filed ~~motions~~a Motion to ~~dismiss the third-party complaint~~Dismiss Plaintiff’s First Amended Complaint for ~~alleged lack~~Lack of ~~personal jurisdiction, failure to state claim, and forum non-conveniens. Ferrellgas is vigorously opposing these motions.~~

Subject Matter Jurisdiction.

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" in our Annual Report on Form ~~10-K~~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 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.

2018.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


~~ITEM 2.~~	~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

~~None.~~

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

~~Amendment to Agreement~~

Table of ~~Limited Partnership.~~Contents

The Board of Directors of Ferrellgas, Inc., the general partner, approved the Fifth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. (the “Partnership Agreement”) This amends and restates the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. (the “Prior Agreement”) to (1) incorporate the previous four amendments to the Prior Agreement and (2) modify the mechanism by which the capital accounts of all partners are maintained when the general partner’s incentive distribution rights (“IDRs”) are valued. The amendments were effective June 5, 2018.

ITEM 6. EXHIBITS

The exhibits listed below are furnished as part of this Quarterly Report on Form ~~10-Q.~~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
3.1	~~Exhibit~~ ~~Number~~	~~Description~~
	~~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~~10‑K filed September 29, 2015.
3.2	~~3.2~~	~~Fourth~~Fifth 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 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 ~~December~~June 7, ~~2017.~~2018.
3.3	~~3.7~~	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~~S‑3 filed March 6, 2009.
3.4	~~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~~S‑3 filed March 6, 2009.
3.5	~~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~~10‑K filed September 29, 2015.
3.6	~~3.10~~	Third Amended and Restated Agreement of Limited Partnership of Ferrellgas, L.P. dated as of April 7, 2004. Incorporated by reference to Exhibit 3.5 to our registration statement on Form ~~S-3~~S‑3 filed March 6, 2009.
3.7	~~3.11~~	First Amendment to the Third Amended and Restated Agreement of Limited Partnership of Ferrellgas, L.P. Incorporated by reference to Exhibit 3.12 to our Quarterly Report on Form 10-Q filed December 7, 2017.
	~~3.12~~	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~~S‑3 filed March 6, 2009.
3.8	~~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~~S‑3 filed March 6, 2009.
* 4.1	~~3.14~~	~~Fifth Amended and Restated Agreement of Limited Partnership Agreement of Ferrellgas Partners, L.P.~~
	~~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 on Form ~~S-3~~S‑3 filed March 6, 2009.
4.2	~~4.2~~	Indenture dated as of November 4, 2013 with form of Note attached, by and among Ferrellgas, L.P., Ferrellgas Finance Corp. 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. Incorporated by reference to Exhibit 4.1 to our Current Report on Form ~~8-K~~8‑K filed November 5, ~~2013.~~2013; File No. 001‑11331; 000‑50182; 000‑50183 and 333‑06693.
4.3	~~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~~8‑K filed April 13, 2010; File No. ~~001-11331; 000-50182; 000-50183~~001‑11331; 000‑50182; 000‑50183 and ~~333-06693.~~333‑06693.
4.4	~~4.4~~	First Supplemental Indenture dated as of April 13, 2010, with form of Note attached, by and among Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp. and U.S. Bank National Association, as ~~trustee.~~trustee, relating to $280 million aggregate amount of the Registrant’s 8 5/8% Senior Notes due 2020. Incorporated by reference to Exhibit 4.2 to our Current Report on Form ~~8-K~~8‑K filed April 13, 2010; File No. ~~001-11331; 000-50182; 000-50183~~001‑11331; 000‑50182; 000‑50183 and ~~333-06693.~~333‑06693.
4.5	~~4.5~~	Second Supplemental Indenture dated as of January 30, 2017, by and among Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp. and U.S. Bank National Association, as trustee. Incorporated by reference to Exhibit 4.3 to our Current Report on Form ~~8-K~~8‑K filed January 30, ~~2017; File No. 001-11331; 000-50182; 000-50183 and 333-06693.~~2017.
4.6	~~4.6~~	Indenture dated as of November 24, 2010, by and among Ferrellgas, L.P., Ferrellgas Finance Corp. 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. Incorporated by reference to Exhibit 4.1 to our Current Report on Form ~~8-K~~8‑K filed November 30, 2010; File No. ~~001-11331; 000-50182; 000-50183~~001‑11331; 000‑50182; 000‑50183 and ~~333-06693.~~333‑06693.


4.7
	~~4.7~~	Registration Rights Agreement dated as of December 17, 1999, by and between Ferrellgas Partners, L.P. and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 4.6 to our Annual Report on Form ~~10-K~~10‑K filed September 29, 2014.

Table of Contents

4.8		~~4.8~~	First Amendment to Registration Rights Agreement dated as of March 14, 2000, by and between Ferrellgas Partners, L.P. and Williams Natural Gas Liquids, Inc. Incorporated by reference to Exhibit 4.7 to our Annual Report on Form ~~10-K~~10‑K filed September 29, 2014.
4.9		~~4.9~~	Second Amendment to Registration Rights Agreement dated as of April 6, 2001, by and between Ferrellgas Partners, L.P. and The Williams Companies, Inc. Incorporated by reference to Exhibit 4.8 to our Annual Report on Form ~~10-K~~10‑K filed September 29, 2014.
4.10		~~4.10~~	Third Amendment to Registration Rights Agreement dated as of June 29, 2005, by and between Ferrellgas Partners, L.P. and JEF Capital Management, Inc. Incorporated by reference to Exhibit 4.13 to our Quarterly Report on Form ~~10-Q~~10‑Q filed June 9, 2010; File No. ~~001-11331; 000-50182; 000-50183~~001‑11331; 000‑50182; 000‑50183 and ~~333-06693.~~333‑06693.
4.11		~~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~~8‑K filed June 8, 2015.
4.12		~~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~~8‑K filed January 30, 2017.
10.1		~~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~~10‑K filed September 29, 2014.
10.2		~~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~~10‑K filed September 26, 2011; File No. ~~001-11331; 000-50182; 000-50183~~001‑11331; 000‑50182; 000‑50183 and ~~333-06693.~~333‑06693.
10.3		~~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~~8‑K filed October 23, ~~2013.~~2013; File No. 001‑11331; 000‑50182; 000‑50183 and 333‑06693.
10.4		~~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~~8‑K filed June 9, 2014.
10.5		~~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~~10‑Q filed June 9, 2015.
10.6		~~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.
	#	~~10.12~~	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.
	#	~~10.13~~	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.



	#	~~10.14~~	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.
	#	~~10.15~~	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.
	#	~~10.19~~	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.~~
	#	~~10.21~~	Employment agreement dated July 10, 2015 by and between Ferrellgas, Inc. as the company and Alan C. Heitmann as the executive. Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed July 15, 2015.
		~~10.22~~	Employment agreement dated as of May 29, 2015 by 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. Incorporated by reference to Exhibit 10.27 to our Annual Report on Form 10-K filed September 29, 2015.
	+	~~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 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, 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~~10‑K filed September 28, 2016.
10.7		~~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~~8‑K filed May 2, 2017.
+10.8		~~10.38~~ Financing Agreement, dated as of May 4, 2018, among Ferrellgas, L.P., Ferrellgas, Inc., as the general partner of Ferrellgas, L.P., certain subsidiaries of Ferrellgas, L.P., as guarantors, the lenders party thereto, TPG Specialty Lending, Inc. as administrative agent, collateral agent and lead arranger, and PNC Bank, National Association, as syndication agent. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8‑K filed September 7, 2018.

Table of Contents

10.9		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.
10.10		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.
10.11		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.
10.12		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.
10.13		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.
10.14		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.
10.15		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~~8‑K filed May 2, 2017.


+ 10.16
	#	~~10.39~~	~~Tod D. Brown~~Amendment No. 7 to Receivables Purchase Agreement, dated as of May 14, 2018, among Ferrellgas Receivables, LLC, as seller, Ferrellgas, L.P., as servicer, the purchasers party thereto, Fifth Third Bank and ~~Release.~~PNC Bank, National Association, as co-agents, and Wells Fargo Bank, N.A. as administrative agent. Incorporated by reference to Exhibit ~~10.1~~10.2 to our Current Report on Form ~~8-K~~8‑K filed ~~January 19, 2017.~~September 7, 2018.
# 10.17	#	~~10.40~~ 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.
# 10.18		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.
# 10.19		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.
# 10.20		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.
# 10.21		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.
# 10.22		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.

Table of Contents

# 10.23		Employment agreement dated July 10, 2015 by and between Ferrellgas, Inc. as the company and Alan C. Heitmann as the executive. Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8‑K filed July 15, 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. Incorporated by reference to Exhibit 10.27 to our Annual Report on Form 10‑K filed September 29, 2015.
# 10.25		Thomas M. Van Buren Agreement and Release. Incorporated by reference to Exhibit 10.1 to our Current Report on Form ~~8-K~~8‑K filed September 15, 2017.
10.26		~~10.41~~	Purchase Agreement dated January 24, 2017 by and among Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P., Ferrellgas, Inc. and the initial purchasers named therein. Incorporated by reference to Exhibit 10.1 to our Current Report on Form ~~8-K~~8‑K filed January 30, 2017.
# 10.27		~~10.42~~	Settlement Agreement and Release dated September 25, 2017 by and between Julio E. Rios, II, and Ferrellgas, Inc. Incorporated by reference to Exhibit 10.42 to our Annual Report on Form 10-K filed September 28, 2017.
		~~10.43~~	Settlement Agreement and Release dated September 25, 2017 by and between Jeremy Gamboa, and Ferrellgas, Inc. Incorporated by reference to Exhibit 10.42 to our Annual Report on Form 10-K filed September 28, 2017.
	#	~~10.44~~	Doran N. Schwartz offer letter dated as of September 8, 2017. Incorporated by reference to Exhibit 10.1 to our Current Report on Form ~~8-K~~8‑K filed September 22, 2017.
# 10.28	#	~~10.45~~	Voluntary Retirement and Release dated March 8, 2018 by and between Randy V. Schott and Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P. Incorporated by reference to Exhibit ~~10.44~~10.45 to our Quarterly Report on Form ~~10-Q~~10‑Q filed March 8, ~~2018~~2018.
* 10.29		~~31.1~~ Separation Agreement and release dated December 1, 2018 by and between Doran Schwartz and Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P.
* 10.30		Separation Agreement and release dated December 1, 2018 by and between Trenton D. Hampton and Ferrellgas, Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P.
* 31.1		Certification of Ferrellgas Partners, L.P. pursuant to Rule ~~13a-14(a)~~13a‑14(a) or Rule ~~15d-14(a)~~15d‑14(a) of the Exchange Act.
* 31.2		~~31.2~~	Certification of Ferrellgas Partners Finance Corp. pursuant to Rule ~~13a-14(a)~~13a‑14(a) or Rule ~~15d-14(a)~~15d‑14(a) of the Exchange Act.
* 31.3		~~31.3~~	Certification of Ferrellgas, L.P. pursuant to Rule ~~13a-14(a)~~13a‑14(a) or Rule ~~15d-14(a)~~15d‑14(a) of the Exchange Act.
* 31.4		~~31.4~~	Certification of Ferrellgas Finance Corp. pursuant to Rule ~~13a-14(a)~~13a‑14(a) or Rule ~~15d-14(a)~~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.
* 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.

		*	~~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.~~

*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.

~~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 behalf by the undersigned, thereunto duly authorized.



		FERRELLGAS PARTNERS, L.P.
		By Ferrellgas, Inc. (General Partner)

Date:	~~June 7, 2018~~ March 8, 2019	By	/s/ ~~Doran N. Schwartz~~William E. Ruisinger
			~~Doran N. Schwartz~~ William E. Ruisinger
			~~Senior Vice President;~~
			Interim Chief Financial Officer; Treasurer (Principal Financial and Accounting Officer)


		FERRELLGAS PARTNERS FINANCE CORP.

Date:	~~June 7, 2018~~ March 8, 2019	By	/s/ ~~Doran N. Schwartz~~William E. Ruisinger
			~~Doran N. Schwartz~~ William E. Ruisinger
			Interim Chief Financial Officer and Sole Director


		FERRELLGAS, L.P.
		By Ferrellgas, Inc. (General Partner)

Date:	~~June 7, 2018~~ March 8, 2019	By	/s/ ~~Doran N. Schwartz~~William E. Ruisinger
			~~Doran N. Schwartz~~ William E. Ruisinger
			~~Senior Vice President;~~ Interim Chief Financial Officer; Treasurer (Principal Financial and Accounting Officer)


		FERRELLGAS FINANCE CORP.

Date:	~~June 7, 2018~~ March 8, 2019	By	/s/ ~~Doran N. Schwartz~~William E. Ruisinger
			~~Doran N. Schwartz~~ William E. Ruisinger
			Interim Chief Financial Officer and Sole Director

~~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~~ 43‑1698481
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		66210
(Address of principal executive office)		(Zip Code)



Ferrellgas Partners, L.P.:
Large accelerated filer x ☐	Accelerated filer o☒	Non-accelerated filer o ~~(do not check if a smaller reporting company)~~ ☐	Smaller reporting company o ☐
			Emerging growth company ☐



Ferrellgas Partners Finance Corp, Ferrellgas, L.P. and Ferrellgas Finance Corp.:
Large accelerated filer o ☐	Accelerated filer o ☐	Non-accelerated filer x☒ ~~(do not check if a smaller reporting company)~~	Smaller reporting company o ☐
			Emerging growth company ☐



Ferrellgas Partners, L.P.	97,152,665	~~97,152,665~~	~~Common��~~ Common 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


☒
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended ~~April 30, 2018~~January 31, 2019

	Page

	PART I - FINANCIAL INFORMATION	~~Page~~
ITEM 1.	FINANCIAL STATEMENTS (unaudited)

	Ferrellgas Partners, L.P. and Subsidiaries
	Condensed Consolidated Balance Sheets – ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017~~2018	4 2
	Condensed Consolidated Statements of Operations – Three and ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~	5 3
	Condensed Consolidated Statements of Comprehensive Loss – Three and ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~	6 4
	Condensed Consolidated Statement of Partners’ Deficit – ~~Nine~~Six months ended ~~April 30, 2018~~January 31, 2019	7 5
	Condensed Consolidated Statements of Cash Flows – ~~Nine~~Six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~	8 6
	Notes to Condensed Consolidated Financial Statements	9 7

	Ferrellgas Partners Finance Corp.
	Condensed Balance Sheets – ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017~~2018	27 25
	Condensed Statements of Operations – Three and ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~	27 26
	Condensed Statements of Cash Flows – ~~Nine~~Six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~	28 27
	Notes to Condensed Financial Statements	29 28

	Ferrellgas, L.P. and Subsidiaries
	Condensed Consolidated Balance Sheets – ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017~~2018	30 29
	Condensed Consolidated Statements of Operations – Three and ~~nine~~six months ended ~~April 30, 2018~~January 31, 2019 and ~~2017~~2018	31 30
	Condensed Consolidated Statements of Comprehensive Loss – Three and ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~	32 31
	Condensed Consolidated Statement of Partners’ Deficit – ~~Nine~~Six months ended ~~April 30, 2018~~January 31, 2019	33 32
	Condensed Consolidated Statements of Cash Flows – ~~Nine~~Six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~	34 33
	Notes to Condensed Consolidated Financial Statements	35 34

	Ferrellgas Finance Corp.
	Condensed Balance Sheets – ~~April 30, 2018~~January 31, 2019 and July 31, ~~2017~~2018	58 59
	Condensed Statements of Operations – Three and ~~nine~~six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~	58

60

		Condensed Statements of Cash Flows – ~~Nine~~Six months ended ~~April 30,~~January 31, 2019 and 2018 ~~and 2017~~		59 61
		Notes to Condensed Financial Statements		60 62

ITEM 2.		~~MANAGEMENT'S~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		61 63
ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		87 85
ITEM 4.		CONTROLS AND PROCEDURES		88 86

			PART II - OTHER INFORMATION
ITEM 1.		LEGAL PROCEEDINGS		89 87
ITEM 1A.		RISK FACTORS		89 88
ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		90 88
ITEM 3.		DEFAULTS UPON SENIOR SECURITIES		90 88
ITEM 4.		MINE SAFETY DISCLOSURES		90 88
ITEM 5.		OTHER INFORMATION		90 88
ITEM 6.	EXHIBITS	~~EXHIBITS~~		~~E-1~~ 89



FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
(unaudited)
	April 30, 2018			July 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	9,499		$	5,760
Accounts and notes receivable, net (including $182,486 and $109,407 of accounts receivable pledged as collateral at April 30, 2018 and July 31, 2017, respectively)	202,727			165,084
Inventories	85,062			92,552
Prepaid expenses and other current assets	44,090			33,388
Total current assets	341,378			296,784

Property, plant and equipment, net	637,688			731,923
Goodwill, net	246,098			256,103
Intangible assets (net of accumulated amortization of $460,011 and $436,428 at April 30, 2018 and July 31, 2017, respectively)	235,318			251,102
Other assets, net	72,094			74,057
Total assets	$	1,532,576		$	1,609,969

LIABILITIES AND PARTNERS' DEFICIT
Current liabilities:
Accounts payable	$	52,472		$	85,561
Short-term borrowings	—			59,781
Collateralized note payable	104,000			69,000
Other current liabilities	158,875			126,224
Total current liabilities	315,347			340,566

Long-term debt	1,995,608			1,995,795
Other liabilities	34,225			31,118
Contingencies and commitments (Note J)

Partners' deficit:
Common unitholders (97,152,665 units outstanding at April 30, 2018 and July 31, 2017)	(758,325		)	(701,188		)
General partner unitholder (989,926 units outstanding at April 30, 2018 and July 31, 2017)	(67,568		)	(66,991		)
Accumulated other comprehensive income	17,672			14,601
Total Ferrellgas Partners, L.P. partners' deficit	(808,221		)	(753,578		)
Noncontrolling interest	(4,383		)	(3,932		)
Total partners' deficit	(812,604		)	(757,510		)
Total liabilities and partners' deficit	$	1,532,576		$	1,609,969
See notes to condensed consolidated financial statements.


	Number of units						Accumulated		Total Ferrellgas
		General			General		other		Partner, L.P.
	Common	Partner	Common		Partner		comprehensive		partners’		Non-controlling		Total partners’
	unitholders	unitholder	unitholders		unitholder		income (loss)		deficit		interest		deficit
Balance at July 31, 2018	97,152.7	989.9	$	(978,503)	$	(69,792)	$	20,510	$	(1,027,785)	$	(6,692)	$	(1,034,477)
Contributions in connection with non-cash ESOP compensation charges	—	—		4,599		46		—		4,645		47		4,692
Distributions	—	—		(9,716)		(98)		—		(9,814)		(258)		(10,072)
Net earnings (loss)	—	—		(13,534)		(137)		—		(13,671)		38		(13,633)
Other comprehensive loss	—	—		—		—		(29,559)		(29,559)		(301)		(29,860)
Balance at January 31, 2019	97,152.7	989.9	$	(997,154)	$	(69,981)	$	(9,049)	$	(1,076,184)	$	(7,166)	$	(1,083,350)



	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
April 30, 2018:
Assets:
Derivative financial instruments:
Interest rate swap agreements	$	—	$	41		$	—	$	41
Commodity derivatives	$	—	$	19,750		$	—	$	19,750
Liabilities:
Derivative financial instruments:
Interest rate swap agreements	$	—	$	(3,222	)	$	—	$	(3,222	)
Commodity derivatives	$	—	$	(2,239	)	$	—	$	(2,239	)


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	)



		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 April 30,				For the three months ended April 30,
		2018		2017		2018			2017
Interest rate swap agreements	Interest expense	$	40	$	323	$	(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 nine months ended April 30,				For the nine months ended April 30,
		2018		2017		2018			2017
Interest rate swap agreements	Interest expense	$	266	$	1,071	$	(6,825	)	$	(6,825	)



	For the three months ended April 30, 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	$	—		Cost of sales - midstream operations

	For the three months ended April 30, 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	$	1,464		Cost of sales - midstream operations
Commodity derivatives - vehicle fuel	$	(393	)	Operating expense

	For the nine months ended April 30, 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 nine months ended April 30, 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	$	(784	)	Cost of sales - midstream operations
Commodity derivatives - vehicle fuel	$	1,123		Operating expense



	Three months ended April 30, 2018
	Propane operations and related equipment sales		Midstream operations			Corporate			Total
Segment revenues	$	493,215	$	22,595		$	—		$	515,810
Direct costs (1)	397,568		21,593			9,727			428,888
Adjusted EBITDA	$	95,647	$	1,002		$	(9,727	)	$	86,922

	Three months ended April 30, 2017
	Propane operations and related equipment sales		Midstream operations			Corporate			Total
Segment revenues	$	411,433	$	126,676		$	—		$	538,109
Direct costs (1)	324,442		127,223			9,654			461,319
Adjusted EBITDA	$	86,991	$	(547	)	$	(9,654	)	$	76,790

	Nine months ended April 30, 2018
	Propane operations and related equipment sales		Midstream operations			Corporate			Total
Segment revenues	$	1,464,990	$	260,631		$	—		$	1,725,621
Direct costs (1)	1,208,283		250,423			33,150			1,491,856
Adjusted EBITDA	$	256,707	$	10,208		$	(33,150	)	$	233,765

	Nine months ended April 30, 2017
	Propane operations and related equipment sales		Midstream operations			Corporate			Total
Segment revenues	$	1,165,394	$	331,507		$	—		$	1,496,901
Direct costs (1)	931,631		323,714			30,717			1,286,062
Adjusted EBITDA	$	233,763	$	7,793		$	(30,717	)	$	210,839



	Three months ended April 30,						Nine months ended April 30,
	2018			2017			2018			2017
Net earnings (loss) attributable to Ferrellgas Partners, L.P.	$	10,861		$	6,536		$	(38,897	)	$	1,561
Income tax expense (benefit)	67			(192		)	282			(194		)
Interest expense	40,375			39,860			123,855			112,107
Depreciation and amortization expense	25,348			25,737			76,565			77,546
EBITDA	76,651			71,941			161,805			191,020
Non-cash employee stock ownership plan compensation charge	2,738			4,697			10,731			11,396
Non-cash stock-based compensation charge	—			—			—			3,298
Asset impairments	—			—			10,005			—
Loss on asset sales and disposals	6,270			2,393			46,414			8,861
Other income, net	(227		)	(162		)	(1,422		)	(1,433		)
Severance costs	—			—			1,663			1,959
Professional fees	1,289			—			3,407			—
Unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments	—			(2,234		)	1,293			(4,449		)
Net earnings (loss) attributable to noncontrolling interest	201			155			(131		)	187
Adjusted EBITDA	$	86,922		$	76,790		$	233,765		$	210,839



	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
April 30, 2018:
Assets:
Derivative financial instruments:
Interest rate swap agreements	$	—	$	41		$	—	$	41
Commodity derivatives	$	—	$	19,750		$	—	$	19,750
Liabilities:
Derivative financial instruments:
Interest rate swap agreements	$	—	$	(3,222	)	$	—	$	(3,222	)
Commodity derivatives	$	—	$	(2,239	)	$	—	$	(2,239	)

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	)



	Distributable Cash Flow to equity investors		Cash reserves (deficiency) approved by our General Partner			Cash distributions paid to equity investors		DCF ratio
Nine months ended April 30, 2018	$	103,829	$	73,930		$	29,899
For the year ended July 31, 2017	77,182		(3,601		)	80,783
Less: Nine months ended April 30, 2017	98,986		28,273			70,713
Twelve months ended April 30, 2018	$	82,025	$	42,056		$	39,969	2.05

Twelve months ended January 31, 2018	74,435		34,468			39,967		1.86
Change	$	7,590	$	7,588		$	2	0.19



	Common unit ownership at	Distributions (in thousands) paid during the nine months ended
	April 30, 2018	April 30, 2018
Ferrell Companies (1)	22,529,361	$	6,759
FCI Trading Corp. (2)	195,686	60
Ferrell Propane, Inc. (3)	51,204	15
James E. Ferrell (4)	4,763,475	1,428