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 October 31, 2018 Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 62,786 $ 1 $ 306 $ — $ — $ 63,093 Accounts and notes receivable, net (3,710 ) — 263 139,636 — 136,189 Intercompany receivables (8,469 ) — — — 8,469 — Inventories 106,560 — — — — 106,560 Prepaid expenses and other current assets 31,491 — 2,446 3 — 33,940 Total current assets 188,658 1 3,015 139,639 8,469 339,782 Property, plant and equipment, net 566,044 — 34 — — 566,078 Goodwill, net 247,478 — — — — 247,478 Intangible assets, net 117,452 — — — — 117,452 Intercompany receivables — — — — — — Investments in consolidated subsidiaries 59,917 — — — (59,917 ) — Other assets, net 68,850 — 2,875 1,117 — 72,842 Total assets $ 1,248,399 $ 1 $ 5,924 $ 140,756 $ (51,448 ) $ 1,343,632 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 59,552 $ — $ — $ 112 $ — $ 59,664 Short-term borrowings — — — — — — Collateralized note payable — — — 90,000 — 90,000 Intercompany payables — — (192 ) (8,277 ) 8,469 — Other current liabilities 169,282 — 2,660 2,394 — 174,336 Total current liabilities 228,834 — 2,468 84,229 8,469 324,000 Long-term debt 1,729,724 — — — — 1,729,724 Other liabilities 38,587 — 67 — — 38,654 Contingencies and commitments Partners' capital (deficit): Partners' equity (756,892 ) 1 3,389 56,527 (59,917 ) (756,892 ) Accumulated other comprehensive income 8,146 — — — — 8,146 Total partners' capital (deficit) (748,746 ) 1 3,389 56,527 (59,917 ) (748,746 ) Total liabilities and partners' capital (deficit) $ 1,248,399 $ 1 $ 5,924 $ 140,756 $ (51,448 ) $ 1,343,632 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) As of July 31, 2018 Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 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 Intercompany receivables — — — — — — 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 October 31, 2018 Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenues: Propane and other gas liquids sales $ 334,966 $ — $ — $ — $ — $ 334,966 Other 17,343 — — — — 17,343 Total revenues 352,309 — — — — 352,309 Costs and expenses: Cost of sales - propane and other gas liquids sales 204,136 — — — — 204,136 Cost of sales - other 3,047 — — — — 3,047 Operating expense 110,331 — — 1,017 (1,017 ) 110,331 Depreciation and amortization expense 18,881 — — 111 — 18,992 General and administrative expense 14,173 2 — — — 14,175 Equipment lease expense 7,863 — — — — 7,863 Non-cash employee stock ownership plan compensation charge 2,748 — — — — 2,748 Loss on asset sales and disposals 1,996 — 2,508 — — 4,504 Operating loss (10,866 ) (2 ) (2,508 ) (1,128 ) 1,017 (13,487 ) Interest expense (34,348 ) — — (847 ) — (35,195 ) Other income, net 19 — — 2,203 (2,203 ) 19 Earnings (loss) before income taxes (45,195 ) (2 ) (2,508 ) 228 (1,186 ) (48,663 ) Income tax expense 151 — — — — 151 Equity in earnings of subsidiary (2,282 ) — — — 2,282 — Net earnings (loss) (47,628 ) (2 ) (2,508 ) 228 1,096 (48,814 ) Other comprehensive loss (12,587 ) — — — — (12,587 ) Comprehensive income (loss) $ (60,215 ) $ (2 ) $ (2,508 ) $ 228 $ 1,096 $ (61,401 ) FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the three months ended October 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 $ 302,117 $ — $ 641 $ — $ — $ 302,758 Midstream operations — — 120,760 — — 120,760 Other 16,677 — 14,460 — — 31,137 Total revenues 318,794 — 135,861 — — 454,655 Costs and expenses: Cost of sales - propane and other gas liquids sales 178,819 — 696 — — 179,515 Cost of sales - midstream operations — — 108,125 — — 108,125 Cost of sales - other 2,709 — 10,993 — — 13,702 Operating expense 101,232 — 9,263 1,182 (1,215 ) 110,462 Depreciation and amortization expense 18,347 — 7,313 72 — 25,732 General and administrative expense 10,755 2 2,407 — — 13,164 Equipment lease expense 6,648 — 93 — — 6,741 Non-cash employee stock ownership plan compensation charge 3,962 — — — — 3,962 Loss on asset sales and disposals 908 — (13 ) — — 895 Operating loss (4,586 ) (2 ) (3,016 ) (1,254 ) 1,215 (7,643 ) Interest expense (20,394 ) — (11,185 ) (617 ) — (32,196 ) Other income, net 215 — 296 1,215 (1,215 ) 511 Loss before income taxes (24,765 ) (2 ) (13,905 ) (656 ) — (39,328 ) Income tax expense (benefit) (10 ) — 381 — — 371 Equity in loss of subsidiary (14,944 ) — — — 14,944 — Net loss (39,699 ) (2 ) (14,286 ) (656 ) 14,944 (39,699 ) Other comprehensive income 18,500 — — — — 18,500 Comprehensive loss $ (21,199 ) $ (2 ) $ (14,286 ) $ (656 ) $ 14,944 $ (21,199 ) FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the three months ended October 31, 2018 Ferrellgas, L.P. (Parent and Co-Issuer) Ferrellgas Finance Corp. (Co-Issuer) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net cash provided by (used in) operating activities $ 11,666 $ (2 ) $ 19,961 $ (17,231 ) $ (32,000 ) $ (17,606 ) Cash flows from investing activities: Business acquisitions, net of cash acquired (4,625 ) — — — — (4,625 ) Capital expenditures (23,433 ) — — — — (23,433 ) Proceeds from sale of assets 1,061 — — — — 1,061 Cash collected for purchase of interest in accounts receivable — — — 242,912 (242,912 ) — Cash remitted to Ferrellgas, L.P. for accounts receivable — — — (274,912 ) 274,912 — Net changes in advances with consolidated entities 2,585 — — — (2,585 ) — Other (292 ) — — — — (292 ) Net cash used in investing activities (24,704 ) — — (32,000 ) 29,415 (27,289 ) Cash flows from financing activities: Distributions (10,015 ) — — — — (10,015 ) Payments on long-term debt (281 ) — — — — (281 ) Net reductions in short-term borrowings (32,800 ) — — — — (32,800 ) Net additions to collateralized short-term borrowings — — — 32,000 — 32,000 Net changes in advances with parent — 2 (19,829 ) 17,242 2,585 — Cash paid for financing costs (213 ) — — (11 ) — (224 ) Net cash provided by (used in) financing activities (43,309 ) 2 (19,829 ) 49,231 2,585 (11,320 ) Net change in cash and cash equivalents (56,347 ) — 132 — — (56,215 ) Cash and cash equivalents - beginning of year 119,133 1 174 — — 119,308 Cash and cash equivalents - end of year $ 62,786 $ 1 $ 306 $ — $ — $ 63,093 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the three months ended October 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 $ 23,305 $ (2 ) $ (22,294 ) $ 25,981 $ (19,000 ) $ 7,990 Cash flows from investing activities: Business acquisitions, net of cash acquired (13,867 ) — — — — (13,867 ) Capital expenditures (19,429 ) — (725 ) — — (20,154 ) Proceeds from sale of assets 1,208 — — — — 1,208 Cash collected for purchase of interest in accounts receivable — — — 203,291 (203,291 ) — Cash remitted to Ferrellgas, L.P. for accounts receivable — — — (222,291 ) 222,291 — Net changes in advances with consolidated entities 3,088 — — — (3,088 ) — Net cash provided by (used in) investing activities (29,000 ) — (725 ) (19,000 ) 15,912 (32,813 ) Cash flows from financing activities: Distributions (9,913 ) — — — — (9,913 ) Proceeds from increase in long-term debt 23,580 — — — — 23,580 Payments on long-term debt (281 ) — — — — (281 ) Net reductions in short-term borrowings (5,879 ) — — — — (5,879 ) Net additions to collateralized short-term borrowings — — — 19,000 — 19,000 Net changes in advances with parent — 2 22,891 (25,981 ) 3,088 — Cash paid for financing costs (287 ) — — — — (287 ) Net cash provided by (used in) financing activities 7,220 2 22,891 (6,981 ) 3,088 26,220 Net change in cash and cash equivalents 1,525 — (128 ) — — 1,397 Cash and cash equivalents - beginning of year 5,327 1 373 — — 5,701 Cash and cash equivalents - end of year $ 6,852 $ 1 $ 245 $ — $ — $ 7,098 |