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 January 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 $ 13,344 $ 1 $ 312 $ — $ — $ 13,657 Accounts and notes receivable (3,155 ) — 48,987 178,146 — 223,978 Intercompany receivables 25,054 — — — (25,054 ) — Inventories 79,375 — 35,487 — — 114,862 Prepaid expenses and other current assets 25,653 — 12,192 2 — 37,847 Total current assets 140,271 1 96,978 178,148 (25,054 ) 390,344 Property, plant and equipment, net 545,198 — 201,847 — — 747,045 Goodwill 246,098 — 10,005 — — 256,103 Intangible assets, net 133,580 — 130,585 — — 264,165 Intercompany receivables 450,000 — — — (450,000 ) — Investments in consolidated subsidiaries 5,393 — — — (5,393 ) — Other assets, net 38,069 — 48,370 589 — 87,028 Total assets $ 1,558,609 $ 1 $ 487,785 $ 178,737 $ (480,447 ) $ 1,744,685 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 66,984 $ — $ 41,287 $ — $ — $ 108,271 Short-term borrowings 65,599 — — — — 65,599 Collateralized note payable — — — 133,000 — 133,000 Intercompany payables — — 38,105 (13,051 ) (25,054 ) — Other current liabilities 123,536 — 6,342 289 — 130,167 Total current liabilities 256,119 — 85,734 120,238 (25,054 ) 437,037 Long-term debt 1,621,146 — 451,038 — (450,000 ) 1,622,184 Other liabilities 29,308 — 3,895 225 — 33,428 Contingencies and commitments Partners' capital (deficit): Partners' equity (362,556 ) 1 (52,235 ) 57,949 (5,715 ) (362,556 ) Accumulated other comprehensive income (loss) 14,592 — (647 ) 325 322 14,592 Total partners' capital (deficit) (347,964 ) 1 (52,882 ) 58,274 (5,393 ) (347,964 ) Total liabilities and partners' capital (deficit) $ 1,558,609 $ 1 $ 487,785 $ 178,737 $ (480,447 ) $ 1,744,685 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 January 31, 2017 Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Propane and other gas liquids sales $ 437,375 $ — $ — $ — $ — $ 437,375 Midstream operations — — 96,787 — — 96,787 Other 21,609 — 23,479 — — 45,088 Total revenues 458,984 — 120,266 — — 579,250 Costs and expenses: Cost of sales - propane and other gas liquids sales 235,029 — — — — 235,029 Cost of sales - midstream operations — — 87,024 — — 87,024 Cost of sales - other 2,571 — 18,086 — — 20,657 Operating expense 103,986 — 9,642 539 (1,091 ) 113,076 Depreciation and amortization expense 18,014 — 7,527 66 — 25,607 General and administrative expense 11,093 3 1,182 — — 12,278 Equipment lease expense 7,267 — 149 — — 7,416 Non-cash employee stock ownership plan compensation charge 2,945 — — — — 2,945 Loss on asset sales and disposal 73 — (28 ) — — 45 Operating income (loss) 78,006 (3 ) (3,316 ) (605 ) 1,091 75,173 Interest expense (21,089 ) — (11,002 ) (657 ) — (32,748 ) Other income (expense), net 304 — 459 1,091 (1,091 ) 763 Earnings (loss) before income taxes 57,221 (3 ) (13,859 ) (171 ) — 43,188 Income tax expense 103 — 485 — — 588 Equity in earnings (loss) of subsidiary (14,518 ) — — — 14,518 — Net earnings (loss) 42,600 (3 ) (14,344 ) (171 ) 14,518 42,600 Other comprehensive income 15,776 — — — — 15,776 Comprehensive income (loss) $ 58,376 $ (3 ) $ (14,344 ) $ (171 ) $ 14,518 $ 58,376 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the three months ended January 31, 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 $ 376,856 $ — $ — $ — $ — $ 376,856 Midstream operations — — 188,333 — — 188,333 Other 21,571 — 62,478 — — 84,049 Total revenues 398,427 — 250,811 — — 649,238 Costs and expenses: Cost of sales - propane and other gas liquids sales 174,832 — (3 ) — — 174,829 Cost of sales - midstream operations — — 148,443 — — 148,443 Cost of sales - other 2,257 — 53,517 — — 55,774 Operating expense 101,688 — 14,722 235 (648 ) 115,997 Depreciation and amortization expense 18,805 — 18,562 — — 37,367 General and administrative expense 8,306 — 1,368 — — 9,674 Equipment lease expense 7,161 — 117 — — 7,278 Non-cash employee stock ownership plan compensation charge 3,141 — — — — 3,141 Loss on asset sales and disposal 2,100 — 424 — — 2,524 Operating income (loss) 80,137 — 13,661 (235 ) 648 94,211 Interest expense (19,630 ) — (10,632 ) (692 ) 253 (30,701 ) Other income (expense), net (298 ) — — 901 (901 ) (298 ) Earnings (loss) before income taxes 60,209 — 3,029 (26 ) — 63,212 Income tax expense 110 — 915 — — 1,025 Equity in earnings (loss) of subsidiary 2,088 — — — (2,088 ) — Net earnings (loss) 62,187 — 2,114 (26 ) (2,088 ) 62,187 Other comprehensive loss (2,937 ) — — — — (2,937 ) Comprehensive income (loss) $ 59,250 $ — $ 2,114 $ (26 ) $ (2,088 ) $ 59,250 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the six months ended January 31, 2017 Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Propane and other gas liquids sales $ 679,774 $ — $ — $ — $ — $ 679,774 Midstream operations — — 204,831 — — 204,831 Other 38,935 — 35,252 — — 74,187 Total revenues 718,709 — 240,083 — — 958,792 Costs and expenses: Cost of sales - propane and other gas liquids sales 354,241 — — — — 354,241 Cost of sales - midstream operations — — 181,666 — — 181,666 Cost of sales - other 5,001 — 27,402 — — 32,403 Operating expense 201,641 — 19,888 (1,566 ) (1,801 ) 218,162 Depreciation and amortization expense 36,291 — 15,399 119 — 51,809 General and administrative expense 23,956 5 2,586 — — 26,547 Equipment lease expense 14,477 — 288 — — 14,765 Non-cash employee stock ownership plan compensation charge 6,699 — — — — 6,699 Loss on asset sales and disposal 1,520 — 4,948 — — 6,468 Operating income (loss) 74,883 (5 ) (12,094 ) 1,447 1,801 66,032 Interest expense (41,441 ) — (21,675 ) (1,027 ) (3 ) (64,146 ) Other income (expense), net 257 — 1,014 1,798 (1,798 ) 1,271 Earnings (loss) before income taxes 33,699 (5 ) (32,755 ) 2,218 — 3,157 Income tax (expense) benefit 74 — (77 ) — — (3 ) Equity in earnings (loss) of subsidiary (30,465 ) — — — 30,465 — Net earnings (loss) 3,160 (5 ) (32,678 ) 2,218 30,465 3,160 Other comprehensive income 25,152 — — — — 25,152 Comprehensive income (loss) $ 28,312 $ (5 ) $ (32,678 ) $ 2,218 $ 30,465 $ 28,312 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the six months ended January 31, 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 $ 622,157 $ — $ — $ — $ — $ 622,157 Midstream operations — — 382,003 — — 382,003 Other 38,948 — 77,276 — — 116,224 Total revenues 661,105 — 459,279 — — 1,120,384 Costs and expenses: Cost of sales - propane and other gas liquids sales 296,580 — — — — 296,580 Cost of sales - midstream operations — — 302,047 — — 302,047 Cost of sales - other 4,795 — 65,427 — — 70,222 Operating expense 198,662 — 32,381 2,605 (1,452 ) 232,196 Depreciation and amortization expense 37,355 — 36,991 — — 74,346 General and administrative expense 25,735 3 3,080 — — 28,818 Equipment lease expense 14,043 — 267 — — 14,310 Non-cash employee stock ownership plan compensation charge 8,397 — — — — 8,397 Asset impairments — — 29,316 — — 29,316 Loss on asset sales and disposal 3,645 — 13,796 — — 17,441 Operating income (loss) 71,893 (3 ) (24,026 ) (2,605 ) 1,452 46,711 Interest expense (38,151 ) — (21,320 ) (1,133 ) 145 (60,459 ) Other income (expense), net (420 ) — — 1,597 (1,597 ) (420 ) Earnings (loss) before income taxes 33,322 (3 ) (45,346 ) (2,141 ) — (14,168 ) Income tax expense (benefit) 278 — (97 ) — — 181 Equity in earnings (loss) of subsidiary (47,393 ) — — — 47,393 — Net loss (14,349 ) (3 ) (45,249 ) (2,141 ) 47,393 (14,349 ) Other comprehensive income 5,673 — — — — 5,673 Comprehensive income (loss) $ (8,676 ) $ (3 ) $ (45,249 ) $ (2,141 ) $ 47,393 $ (8,676 ) FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the six months ended January 31, 2017 Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net cash provided by (used in) operating activities $ 85,916 $ (5 ) $ (47,221 ) $ 75,611 $ (69,000 ) $ 45,301 Cash flows from investing activities: Capital expenditures (19,686 ) — (82 ) — — (19,768 ) Proceeds from sale of assets 4,591 — — — — 4,591 Cash collected for purchase of interest in accounts receivable — — — 469,600 (469,600 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (538,600 ) 538,600 — Net changes in advances with consolidated entities 28,408 — — — (28,408 ) — Other (37 ) — — — — (37 ) Net cash provided by (used in) investing activities 13,276 — (82 ) (69,000 ) 40,592 (15,214 ) Cash flows from financing activities: Distributions (84,500 ) — — — — (84,500 ) Contributions from Partners 167,640 — — — — 167,640 Proceeds from increase in long-term debt 36,444 — — — — 36,444 Reductions in long-term debt (172,790 ) — — — — (172,790 ) Net reductions in short-term borrowings (35,692 ) — — — — (35,692 ) Net additions to collateralized short-term borrowings — — — 69,000 — 69,000 Net changes in advances with parent — 5 47,198 (75,611 ) 28,408 — Cash paid for financing costs (1,422 ) — — — — (1,422 ) Net cash provided by (used in) financing activities (90,320 ) 5 47,198 (6,611 ) 28,408 (21,320 ) Effect of exchange rate changes on cash — — — — — — Increase (decrease) in cash and cash equivalents 8,872 — (105 ) — — 8,767 Cash and cash equivalents - beginning of year 4,472 1 417 — — 4,890 Cash and cash equivalents - end of year $ 13,344 $ 1 $ 312 $ — $ — $ 13,657 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the six months ended January 31, 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 $ 141,275 $ (3 ) $ (8,728 ) $ (19,083 ) $ (49,000 ) $ 64,461 Cash flows from investing activities: Business acquisitions, net of cash acquired (12,718 ) — — — — (12,718 ) Capital expenditures (26,102 ) — (13,359 ) — — (39,461 ) Proceeds from sale of assets 6,441 — — — — 6,441 Cash collected for purchase of interest in accounts receivable — — — 453,652 (453,652 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (502,652 ) 502,652 — Net changes in advances with consolidated entities (42,301 ) — — — 42,301 — Other (28 ) — — — — (28 ) Net cash provided by (used in) investing activities (74,708 ) — (13,359 ) (49,000 ) 91,301 (45,766 ) Cash flows from financing activities: Distributions (158,907 ) — — — — (158,907 ) Contributions from Partners 30 — — — — 30 Proceeds from increase in long-term debt 92,959 — — — — 92,959 Reductions in long-term debt (6,149 ) — — — — (6,149 ) Net additions to short-term borrowings 10,881 — — — — 10,881 Net reductions in collateralized short-term borrowings — — — 49,000 — 49,000 Net changes in advances with parent — 3 23,213 19,085 (42,301 ) — Cash paid for financing costs (398 ) — — — — (398 ) Net cash provided by (used in) financing activities (61,584 ) 3 23,213 68,085 (42,301 ) (12,584 ) Effect of exchange rate changes on cash 2 — — (2 ) — — Increase in cash and cash equivalents 4,985 — 1,126 — — 6,111 Cash and cash equivalents - beginning of year 5,579 1 20 — — 5,600 Cash and cash equivalents - end of year $ 10,564 $ 1 $ 1,146 $ — $ — $ 11,711 |