Guarantor financial information | 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. FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) As of April 30, 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 $ 45,364 $ 1 $ — $ — $ — $ 45,365 Accounts and notes receivable, net (9,208) — 150 166,287 — 157,229 Intercompany receivables 49,313 — — — (49,313) — Inventories 78,449 — — — — 78,449 Prepaid expenses and other current assets 25,427 — (1) 1 — 25,427 Total current assets 189,345 1 149 166,288 (49,313) 306,470 Property, plant and equipment, net 603,924 — (1) — — 603,923 Goodwill, net 247,508 — — — — 247,508 Intangible assets, net 109,634 — — — — 109,634 Investments in consolidated subsidiaries 52,776 — — — (52,776) — Other assets, net 58,557 — 2,875 894 — 62,326 Total assets $ 1,261,744 $ 1 $ 3,023 $ 167,182 $ (102,089) $ 1,329,861 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 41,296 $ — $ — $ 112 $ — $ 41,408 Collateralized note payable — — — 62,000 — 62,000 Intercompany payables — — (192) 49,505 (49,313) — Other current liabilities 142,937 — 267 5,671 — 148,875 Total current liabilities 184,233 — 75 117,288 (49,313) 252,283 Long-term debt 1,730,874 — — — — 1,730,874 Other liabilities 35,812 — 67 — — 35,879 Contingencies and commitments Partners' capital (deficit): Partners' equity (688,334) 1 2,881 49,894 (52,776) (688,334) Accumulated other comprehensive loss (841) — — — — (841) Total partners' capital (deficit) (689,175) 1 2,881 49,894 (52,776) (689,175) Total liabilities and partners' capital (deficit) $ 1,261,744 $ 1 $ 3,023 $ 167,182 $ (102,089) $ 1,329,861 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 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the three months ended April 30, 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 $ 459,556 $ — $ — $ — $ — $ 459,556 Other 20,069 — — — — 20,069 Total revenues 479,625 — — — — 479,625 Costs and expenses: Cost of sales - propane and other gas liquids sales 250,389 — — — — 250,389 Cost of sales - other 2,320 — — — — 2,320 Operating expense 124,078 — (3) 968 (5,052) 119,991 Depreciation and amortization expense 20,506 — — 111 — 20,617 General and administrative expense 11,511 1 — — — 11,512 Equipment lease expense 8,319 — — — — 8,319 Non-cash employee stock ownership plan compensation charge (4) — — — — (4) Loss on asset sales and disposals 1,683 — — — — 1,683 Operating income (loss) 60,823 (1) 3 (1,079) 5,052 64,798 Interest expense (34,206) — — (1,189) — (35,395) Other income (expense), net 278 — (27) 2,834 (2,834) 251 Earnings (loss) before income taxes 26,895 (1) (24) 566 2,218 29,654 Income tax expense (benefit) (49) — 149 — — 100 Equity in earnings (loss) of subsidiaries 392 — — — (392) — Net earnings (loss) 27,336 (1) (173) 566 1,826 29,554 Other comprehensive loss 8,286 — — — — 8,286 Comprehensive income (loss) $ 35,622 $ (1) $ (173) $ 566 $ 1,826 $ 37,840 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the three months ended April 30, 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 $ 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 subsidiaries (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 nine months ended April 30, 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 $ 1,344,634 $ — $ — $ — $ — $ 1,344,634 Other 60,628 — 49 — — 60,677 Total revenues 1,405,262 — 49 — — 1,405,311 Costs and expenses: Cost of sales - propane and other gas liquids sales 766,056 — — — — 766,056 Cost of sales - other 8,675 — 114 — — 8,789 Operating expense 355,589 — 36 3,869 (7,953) 351,541 Depreciation and amortization expense 58,880 — — 334 — 59,214 General and administrative expense 42,022 6 — — — 42,028 Equipment lease expense 24,597 — — — — 24,597 Non-cash employee stock ownership plan compensation charge 4,688 — — — — 4,688 Loss on asset sales and disposals 5,724 — 2,679 — — 8,403 Operating income (loss) 139,031 (6) (2,780) (4,203) 7,953 139,995 Interest expense (103,209) — (38) (3,493) — (106,740) Other income (expense), net 393 — (37) 7,953 (7,953) 356 Earnings (loss) before income taxes 36,215 (6) (2,855) 257 — 33,611 Income tax expense 105 — 149 — — 254 Equity in earnings (loss) of subsidiary (2,753) — — — 2,753 — Net earnings (loss) 33,357 (6) (3,004) 257 2,753 33,357 Other comprehensive loss (21,574) — — — — (21,574) Comprehensive income (loss) $ 11,783 $ (6) $ (3,004) $ 257 $ 2,753 $ 11,783 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the nine months ended April 30, 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 $ 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 CASH FLOWS (in thousands) For the nine months ended April 30, 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 $ 111,008 $ (6) $ 24,589 $ (45,384) $ (4,000) $ 86,207 Cash flows from investing activities: Business acquisitions, net of cash acquired (11,351) — — — — (11,351) Capital expenditures (94,660) — — — — (94,660) Proceeds from sale of assets 2,416 — — — — 2,416 Cash collected for purchase of interest in accounts receivable — — — 1,052,947 (1,052,947) — Cash remitted to Ferrellgas, L.P. for accounts receivable — — — (1,056,947) 1,056,947 — Net changes in advances with consolidated entities — — — — — — Intercompany loan to affiliate (20,638) — — — 20,638 — Other — — — — — — Net cash provided by (used in) investing activities (124,233) — — (4,000) 24,638 (103,595) Cash flows from financing activities: Distributions (25,568) — — — — (25,568) Reductions in long-term debt (1,656) — — — — (1,656) Net reductions in short-term borrowings (32,800) — — — — (32,800) Net additions to collateralized short-term borrowings — — — 4,000 — 4,000 Net changes in advances with consolidated entities — 6 (24,763) 45,395 (20,638) — Cash paid for financing costs (520) — — (11) — (531) Net cash provided by (used in) financing activities (60,544) 6 (24,763) 49,384 (20,638) (56,555) Net change in cash and cash equivalents (73,769) — (174) — — (73,943) Cash and cash equivalents - beginning of year 119,133 1 174 — — 119,308 Cash and cash equivalents - end of year $ 45,364 $ 1 $ — $ — $ — $ 45,365 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the nine months ended April 30, 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 $ 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) Net change 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 |