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 January 31, 2020 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 $ 13,642 $ 1 $ — $ — $ — $ 13,643 Accounts and notes receivable, net 9,646 — 24 172,774 — 182,444 Intercompany receivables (12,388) — — — 12,388 — Inventories 78,474 — — — — 78,474 Prepaid expenses and other current assets 47,703 — — — — 47,703 Total current assets 137,077 1 24 172,774 12,388 322,264 Property, plant and equipment, net 594,007 — — — — 594,007 Goodwill, net 247,195 — — — — 247,195 Intangible assets, net 106,214 — — — — 106,214 Investments in consolidated subsidiaries 69,194 — — — (69,194) — Operating lease right-of-use assets 120,423 — — — — 120,423 Other assets, net 78,184 — 2,255 559 — 80,998 Total assets $ 1,352,294 $ 1 $ 2,279 $ 173,333 $ (56,806) $ 1,471,101 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 46,125 $ — $ — $ — $ — $ 46,125 Short-term borrowings 40,000 — — — — 40,000 Collateralized note payable — — — 121,000 — 121,000 Intercompany payables — — — (12,388) 12,388 — Current portion of long-term debt 2,157 — — — — 2,157 Current operating lease liabilities 33,263 — — — — 33,263 Other current liabilities 153,599 — 13 (2,206) — 151,406 Total current liabilities 275,144 — 13 106,406 12,388 393,951 Long-term debt 1,731,197 — — — — 1,731,197 Operating lease liabilities 84,546 — — — — 84,546 Other liabilities 45,259 — — — — 45,259 Contingencies and commitments Partners' capital (deficit): Partners' equity (760,502) 1 2,266 66,927 (69,194) (760,502) Accumulated other comprehensive loss (23,350) — — — — (23,350) Total partners' capital (deficit) (783,852) 1 2,266 66,927 (69,194) (783,852) Total liabilities and partners' capital (deficit) $ 1,352,294 $ 1 $ 2,279 $ 173,333 $ (56,806) $ 1,471,101 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) As of July 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 $ 11,045 $ 1 $ — $ — $ — $ 11,046 Accounts and notes receivable, net (3,912) — 35 111,473 — 107,596 Intercompany receivables (5,650) — — — 5,650 — Inventories 80,454 — — — — 80,454 Prepaid expenses and other current assets 42,158 — (1) — — 42,157 Total current assets 124,095 1 34 111,473 5,650 241,253 Property, plant and equipment, net 596,724 — (1) — — 596,723 Goodwill, net 247,195 — — — — 247,195 Intangible assets, net 108,557 — — — — 108,557 Investments in consolidated subsidiaries 52,999 — — — (52,999) — Other assets, net 65,447 — 2,875 783 — 69,105 Total assets $ 1,195,017 $ 1 $ 2,908 $ 112,256 $ (47,349) $ 1,262,833 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 33,252 $ — $ — $ 112 $ — $ 33,364 Short-term borrowings 43,000 — — — — 43,000 Collateralized note payable — — — 62,000 — 62,000 Intercompany payables — — (192) (5,458) 5,650 — Current portion of long-term debt 277,029 — — — — 277,029 Other current liabilities 128,666 — 20 5,617 — 134,303 Total current liabilities 481,947 — (172) 62,271 5,650 549,696 Long-term debt 1,457,004 — — — — 1,457,004 Other liabilities 36,469 — 67 — — 36,536 Contingencies and commitments Partners' capital (deficit): Partners' equity (765,756) 1 3,013 49,985 (52,999) (765,756) Accumulated other comprehensive income (14,647) — — — — (14,647) Total partners' capital (deficit) (780,403) 1 3,013 49,985 (52,999) (780,403) Total liabilities and partners' capital (deficit) $ 1,195,017 $ 1 $ 2,908 $ 112,256 $ (47,349) $ 1,262,833 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the three months ended January 31, 2020 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 $ 485,247 $ — $ — $ — $ — $ 485,247 Other 25,586 — — — — 25,586 Total revenues 510,833 — — — — 510,833 Costs and expenses: Cost of sales - propane and other gas liquids sales 237,843 — — — — 237,843 Cost of sales - other 3,353 — — — — 3,353 Operating expense - personnel, vehicle, plant and other 128,233 — — 1,050 (1,050) 128,233 Depreciation and amortization expense 19,684 — — 111 — 19,795 General and administrative expense 14,082 3 — — — 14,085 Operating expense - equipment lease expense 8,261 — — — — 8,261 Non-cash employee stock ownership plan compensation charge 630 — — — — 630 Loss on asset sales and disposals 2,148 — — — — 2,148 Operating income (loss) 96,599 (3) — (1,161) 1,050 96,485 Interest expense (37,778) — — (912) — (38,690) Other income (expense), net 76 — — 1,882 (1,882) 76 Earnings (loss) before income taxes 58,897 (3) — (191) (832) 57,871 Income tax expense 115 — — — — 115 Equity in earnings (loss) of subsidiaries (194) — — — 194 — Net earnings (loss) 58,588 (3) — (191) (638) 57,756 Other comprehensive loss (2,555) — — — — (2,555) Comprehensive income (loss) $ 56,033 $ (3) $ — $ (191) $ (638) $ 55,201 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 subsidiary (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 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the six months ended January 31, 2020 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 $ 758,632 $ — $ — $ — $ — $ 758,632 Other 45,415 — — — — 45,415 Total revenues 804,047 — — — — 804,047 Costs and expenses: Cost of sales - propane and other gas liquids sales 371,871 — — — — 371,871 Cost of sales - other 7,034 — — — — 7,034 Operating expense - personnel, vehicle, plant and other 242,776 — — 1,935 (1,935) 242,776 Depreciation and amortization expense 38,791 — — 223 — 39,014 General and administrative expense 23,777 4 — — — 23,781 Operating expense - equipment lease expense 16,649 — — — — 16,649 Non-cash employee stock ownership plan compensation charge 1,425 — — — — 1,425 Loss on asset sales and disposals 4,383 — — — — 4,383 Operating income (loss) 97,341 (4) — (2,158) 1,935 97,114 Interest expense (73,469) — — (2,098) — (75,567) Other income (expense), net (56) — — 2,602 (2,602) (56) Earnings (loss) before income taxes 23,816 (4) — (1,654) (667) 21,491 Income tax expense 633 — — — — 633 Equity in earnings (loss) of subsidiary (1,658) — — — 1,658 — Net earnings (loss) 21,525 (4) — (1,654) 991 20,858 Other comprehensive loss (8,703) — — — — (8,703) Comprehensive income (loss) $ 12,822 $ (4) $ — $ (1,654) $ 991 $ 12,155 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 - personnel, vehicle, plant and other 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 Operating expense - equipment lease expense 16,278 — — — — 16,278 Non-cash employee stock ownership plan compensation charge 4,692 — — — — 4,692 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 subsidiaries (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) FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the six months ended January 31, 2020 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 $ 80,433 $ (4) $ 512 $ (5,941) $ (59,000) $ 16,000 Cash flows from investing activities: Business acquisitions, net of cash acquired (6,400) — — — — (6,400) Capital expenditures (33,422) — — — — (33,422) Proceeds from sale of assets 1,659 — — — — 1,659 Cash collected for purchase of interest in accounts receivable — — — 416,325 (416,325) — Cash remitted to Ferrellgas, L.P. for accounts receivable — — — (475,325) 475,325 — Intercompany loan to affiliate (5,433) — — — 5,433 — Cash payments to construct assets in connection with future lease transactions (30,307) — — — — (30,307) Cash receipts in connection with leased vehicles 19,929 — — — — 19,929 Net cash used in investing activities (53,974) — — (59,000) 64,433 (48,541) Cash flows from financing activities: Distributions (15,654) — — — — (15,654) Reductions in long-term debt (972) — — — — (972) Net reductions to short-term borrowings (3,000) — — — — (3,000) Net additions to collateralized short-term borrowings — — — 59,000 — 59,000 Net changes in advances with consolidated entities — 4 (512) 5,941 (5,433) — Cash paid for financing costs and other (4,236) — — — — (4,236) Net cash provided by (used in) financing activities (23,862) 4 (512) 64,941 (5,433) 35,138 Net change in cash and cash equivalents 2,597 — — — — 2,597 Cash and cash equivalents - beginning of year 11,045 1 — — — 11,046 Cash and cash equivalents - end of year $ 13,642 $ 1 $ — $ — $ — $ 13,643 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 — 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) Proceeds from increase in long-term debt — — — — — — 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 |