Guarantor financial information | Guarantor financial information The $500.0 million aggregate principal amount of 6.75% senior notes due 2023 co-issued by Ferrellgas, L.P. and Ferrellgas Finance Corp. are fully and unconditionally and jointly and severally guaranteed by all of Ferrellgas, L.P.’s 100% owned subsidiaries except: i) Ferrellgas Finance Corp; ii) certain special purposes subsidiaries formed for use in connection with our accounts receivable securitization; and iii) foreign subsidiaries. Guarantees of these senior notes will be released under certain circumstances, including (i) in connection with any sale or other disposition of (a) all or substantially all of the assets of a guarantor or (b) all of the capital stock of such guarantor (including by way of merger or consolidation), in each case, to a person that is not Ferrellgas, L.P. or a restricted subsidiary of Ferrellgas, L.P., (ii) if Ferrellgas, L.P. designates any restricted subsidiary that is a guarantor as an unrestricted subsidiary, (iii) upon defeasance or discharge of the notes, (iv) upon the liquidation or dissolution of such guarantor, or (v) at such time as such guarantor ceases to guarantee any other indebtedness of either of the issuers and any other guarantor. The guarantor financial information discloses in separate columns the financial position, results of operations and the cash flows of Ferrellgas, L.P. (Parent), Ferrellgas Finance Corp. (co-issuer), Ferrellgas L.P.’s guarantor subsidiaries on a combined basis, and Ferrellgas L.P.’s non-guarantor subsidiaries on a combined basis. The dates and the periods presented in the guarantor financial information are consistent with the periods presented in Ferrellgas, L.P.’s condensed consolidated financial statements. FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) As of April 30, 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 $ 8,943 $ 1 $ 222 $ — $ — $ 9,166 Accounts and notes receivable (18,782 ) — 87,986 139,325 — 208,529 Intercompany receivables 39,603 — — — (39,603 ) — Inventories 72,024 — 20,733 — — 92,757 Prepaid expenses and other current assets 21,689 — 8,858 2 — 30,549 Total current assets 123,477 1 117,799 139,327 (39,603 ) 341,001 Property, plant and equipment, net 546,063 — 197,445 — — 743,508 Goodwill 246,098 — 10,005 — — 256,103 Intangible assets, net 132,547 — 126,739 — — 259,286 Intercompany receivables 450,000 — — — (450,000 ) — Investments in consolidated subsidiaries (973 ) — — — 973 — Other assets, net 32,914 — 45,458 645 — 79,017 Total assets $ 1,530,126 $ 1 $ 497,446 $ 139,972 $ (488,630 ) $ 1,678,915 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 40,752 $ — $ 45,894 $ — $ — $ 86,646 Short-term borrowings 38,389 — — — — 38,389 Collateralized note payable — — — 91,000 — 91,000 Intercompany payables — — 39,411 192 (39,603 ) — Other current liabilities 132,900 — 6,203 360 — 139,463 Total current liabilities 212,041 — 91,508 91,552 (39,603 ) 355,498 Long-term debt 1,637,554 — 451,048 — (450,000 ) 1,638,602 Other liabilities 26,745 — 4,059 225 — 31,029 Contingencies and commitments Partners' capital (deficit): Partners' equity (352,377 ) 1 (48,522 ) 47,870 651 (352,377 ) Accumulated other comprehensive income (loss) 6,163 — (647 ) 325 322 6,163 Total partners' capital (deficit) (346,214 ) 1 (49,169 ) 48,195 973 (346,214 ) Total liabilities and partners' capital (deficit) $ 1,530,126 $ 1 $ 497,446 $ 139,972 $ (488,630 ) $ 1,678,915 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) As of July 31, 2016 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 $ 4,472 $ 1 $ 417 $ — $ — $ 4,890 Accounts and notes receivable (2,703 ) — 45,822 106,464 — 149,583 Intercompany receivables 34,089 — — — (34,089 ) — Inventories 71,422 — 19,172 — — 90,594 Prepaid expenses and other current assets 27,922 2 12,029 2 — 39,955 Total current assets 135,202 3 77,440 106,466 (34,089 ) 285,022 Property, plant and equipment, net 557,460 — 217,220 — — 774,680 Goodwill 246,098 — 10,005 — — 256,103 Intangible assets, net 141,794 — 138,391 — — 280,185 Intercompany receivables 450,000 — — — (450,000 ) — Investments in consolidated subsidiaries 3,630 — — — (3,630 ) — Other assets, net 37,742 — 49,016 465 — 87,223 Total assets $ 1,571,926 $ 3 $ 492,072 $ 106,931 $ (487,719 ) $ 1,683,213 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 33,781 $ — $ 34,147 $ — $ — $ 67,928 Short-term borrowings 101,291 — — — — 101,291 Collateralized note payable — — — 64,000 — 64,000 Intercompany payables — — 35,491 (1,402 ) (34,089 ) — Other current liabilities 119,048 — 7,754 150 — 126,952 Total current liabilities 254,120 — 77,392 62,748 (34,089 ) 360,171 Long-term debt 1,759,868 — 451,013 — (450,000 ) 1,760,881 Other liabilities 27,351 — 3,998 225 — 31,574 Contingencies and commitments Partners' capital (deficit): Partners' equity (458,853 ) 3 (39,684 ) 43,633 (3,952 ) (458,853 ) Accumulated other comprehensive income (loss) (10,560 ) — (647 ) 325 322 (10,560 ) Total partners' capital (deficit) (469,413 ) 3 (40,331 ) 43,958 (3,630 ) (469,413 ) Total liabilities and partners' capital (deficit) $ 1,571,926 $ 3 $ 492,072 $ 106,931 $ (487,719 ) $ 1,683,213 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 disposal 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 (benefit) expense 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 loss (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 April 30, 2016 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 $ 338,929 $ — $ — $ — $ — $ 338,929 Midstream operations — — 105,424 — — 105,424 Other 19,739 — 45,380 — — 65,119 Total revenues 358,668 — 150,804 — — 509,472 Costs and expenses: Cost of sales - propane and other gas liquids sales 152,261 — — — — 152,261 Cost of sales - midstream operations — — 71,852 — — 71,852 Cost of sales - other 2,009 — 39,194 — — 41,203 Operating expense 100,998 — 13,999 1,376 (1,102 ) 115,271 Depreciation and amortization expense 18,247 — 19,918 187 — 38,352 General and administrative expense 11,884 — 1,330 — — 13,214 Equipment lease expense 7,127 — 117 — — 7,244 Non-cash employee stock ownership plan compensation charge 9,978 — — — — 9,978 Loss on asset sales and disposal 1,775 — 4,004 — — 5,779 Operating income (loss) 54,389 — 390 (1,563 ) 1,102 54,318 Interest expense (19,316 ) — (10,499 ) (536 ) 11 (30,340 ) Other income (expense), net 331 — — 1,113 (1,113 ) 331 Earnings (loss) before income taxes 35,404 — (10,109 ) (986 ) — 24,309 Income tax expense 395 — 865 — — 1,260 Equity in earnings (loss) of subsidiary (11,960 ) — — — 11,960 — Net earnings (loss) 23,049 — (10,974 ) (986 ) 11,960 23,049 Other comprehensive income 20,819 — — — — 20,819 Comprehensive income (loss) $ 43,868 $ — $ (10,974 ) $ (986 ) $ 11,960 $ 43,868 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 disposal 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 (benefit) expense 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 nine months ended April 30, 2016 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 $ 961,086 $ — $ — $ — $ — $ 961,086 Midstream operations — — 487,427 — — 487,427 Other 58,687 — 122,656 — — 181,343 Total revenues 1,019,773 — 610,083 — — 1,629,856 Costs and expenses: Cost of sales - propane and other gas liquids sales 448,841 — — — — 448,841 Cost of sales - midstream operations — — 373,899 — — 373,899 Cost of sales - other 6,804 — 104,621 — — 111,425 Operating expense 299,660 — 46,380 3,981 (2,554 ) 347,467 Depreciation and amortization expense 55,602 — 56,909 187 — 112,698 General and administrative expense 37,619 3 4,410 — — 42,032 Equipment lease expense 21,170 — 384 — — 21,554 Non-cash employee stock ownership plan compensation charge 18,375 — — — — 18,375 Asset impairments — — 29,316 — — 29,316 Loss on asset sales and disposal 5,420 — 17,800 — — 23,220 Operating income (loss) 126,282 (3 ) (23,636 ) (4,168 ) 2,554 101,029 Interest expense (57,467 ) — (31,819 ) (1,669 ) 156 (90,799 ) Other income (expense), net (89 ) — — 2,710 (2,710 ) (89 ) Earnings (loss) before income taxes 68,726 (3 ) (55,455 ) (3,127 ) — 10,141 Income tax expense 673 — 768 — — 1,441 Equity in earnings (loss) of subsidiary (59,353 ) — — — 59,353 — Net earnings (loss) 8,700 (3 ) (56,223 ) (3,127 ) 59,353 8,700 Other comprehensive income 26,492 — — — — 26,492 Comprehensive income (loss) $ 35,192 $ (3 ) $ (56,223 ) $ (3,127 ) $ 59,353 $ 35,192 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 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 Reductions in 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 period 4,472 1 417 — — 4,890 Cash and cash equivalents - end of period $ 8,943 $ 1 $ 222 $ — $ — $ 9,166 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the nine months ended April 30, 2016 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 $ 193,703 $ (3 ) $ 57,450 $ (13,656 ) $ (7,000 ) $ 230,494 Cash flows from investing activities: Business acquisitions, net of cash acquired (13,894 ) — — — — (13,894 ) Capital expenditures (44,330 ) — (64,057 ) — — (108,387 ) Proceeds from sale of assets 11,862 — — — — 11,862 Cash collected for purchase of interest in accounts receivable — — — 763,604 (763,604 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (770,604 ) 770,604 — Net changes in advances with consolidated entities (20,740 ) — — — 20,740 — Other (499 ) — — — — (499 ) Net cash used in investing activities (67,601 ) — (64,057 ) (7,000 ) 27,740 (110,918 ) Cash flows from financing activities: Distributions (210,158 ) — — — — (210,158 ) Contributions from Partners 30 — — — — 30 Proceeds from increase in long-term debt 159,814 — — — — 159,814 Reductions in long-term debt (8,739 ) — — — — (8,739 ) Net reductions in short-term borrowings (66,248 ) — — — — (66,248 ) Net additions to collateralized short-term borrowings — — — 7,000 — 7,000 Net changes in advances with parent — 3 7,079 13,658 (20,740 ) — Cash paid for financing costs (640 ) — — — — (640 ) Net cash provided by (used in) financing activities (125,941 ) 3 7,079 20,658 (20,740 ) (118,941 ) Effect of exchange rate changes on cash 2 — — (2 ) — — Increase in cash and cash equivalents 163 — 472 — — 635 Cash and cash equivalents - beginning of period 5,579 1 20 — — 5,600 Cash and cash equivalents - end of period $ 5,742 $ 1 $ 492 $ — $ — $ 6,235 |