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, 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 $ 13,954 $ 1 $ 216 $ — $ — $ 14,171 Accounts and notes receivable, net (3,004 ) — 23,832 235,150 — 255,978 Intercompany receivables 37,988 — — — (37,988 ) — Inventories 95,097 — 14,995 — — 110,092 Assets held for sale — — 52,200 — — 52,200 Prepaid expenses and other current assets 33,630 — 7,762 1 — 41,393 Total current assets 177,665 1 99,005 235,151 (37,988 ) 473,834 Property, plant and equipment, net 547,441 — 98,886 — — 646,327 Goodwill, net 246,098 — — — — 246,098 Intangible assets, net 127,316 — 115,763 — — 243,079 Intercompany receivables 450,000 — — — (450,000 ) — Investments in consolidated subsidiaries (80,685 ) — — — 80,685 — Other assets, net 39,847 — 37,432 433 — 77,712 Total assets $ 1,507,682 $ 1 $ 351,086 $ 235,584 $ (407,303 ) $ 1,687,050 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 78,054 $ — $ 3,926 $ 92 $ — $ 82,072 Short-term borrowings 261,200 — — — — 261,200 Collateralized note payable — — — 166,000 — 166,000 Intercompany payables — — 44,259 (6,271 ) (37,988 ) — Other current liabilities 132,047 — 4,074 470 — 136,591 Total current liabilities 471,301 — 52,259 160,291 (37,988 ) 645,863 Long-term debt 1,462,936 — 450,037 — (450,000 ) 1,462,973 Other liabilities 30,653 — 4,769 — — 35,422 Contingencies and commitments Partners' capital (deficit): Partners' equity (481,801 ) 1 (155,979 ) 75,293 80,685 (481,801 ) Accumulated other comprehensive income 24,593 — — — — 24,593 Total partners' capital (deficit) (457,208 ) 1 (155,979 ) 75,293 80,685 (457,208 ) Total liabilities and partners' capital (deficit) $ 1,507,682 $ 1 $ 351,086 $ 235,584 $ (407,303 ) $ 1,687,050 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) As of July 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 $ 5,327 $ 1 $ 373 $ — $ — $ 5,701 Accounts and notes receivable, net (3,132 ) — 58,618 109,598 — 165,084 Intercompany receivables 39,877 — — — (39,877 ) — Inventories 78,963 — 13,589 — — 92,552 Prepaid expenses and other current assets 26,106 — 7,314 6 — 33,426 Total current assets 147,141 1 79,894 109,604 (39,877 ) 296,763 Property, plant and equipment, net 537,582 — 194,341 — — 731,923 Goodwill, net 246,098 — 10,005 — — 256,103 Intangible assets, net 128,209 — 122,893 — — 251,102 Intercompany receivables 450,000 — — — (450,000 ) — Investments in consolidated subsidiaries (53,915 ) — — — 53,915 — Other assets, net 35,862 — 37,618 577 — 74,057 Total assets $ 1,490,977 $ 1 $ 444,751 $ 110,181 $ (435,962 ) $ 1,609,948 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 44,026 $ — $ 41,345 $ 190 $ — $ 85,561 Short-term borrowings 59,781 — — — — 59,781 Collateralized note payable — — — 69,000 — 69,000 Intercompany payables — — 41,645 (1,768 ) (39,877 ) — Other current liabilities 118,039 — 3,776 201 — 122,016 Total current liabilities 221,846 — 86,766 67,623 (39,877 ) 336,358 Long-term debt 1,649,139 — 450,131 — (450,000 ) 1,649,270 Other liabilities 26,790 — 4,300 28 — 31,118 Contingencies and commitments Partners' capital (deficit): Partners' equity (421,562 ) 1 (96,446 ) 42,530 53,915 (421,562 ) Accumulated other comprehensive income 14,764 — — — — 14,764 Total partners' capital (deficit) (406,798 ) 1 (96,446 ) 42,530 53,915 (406,798 ) Total liabilities and partners' capital (deficit) $ 1,490,977 $ 1 $ 444,751 $ 110,181 $ (435,962 ) $ 1,609,948 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the three months ended January 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 $ 592,275 $ — $ (36 ) $ — $ — $ 592,239 Midstream operations — — 117,276 — — 117,276 Other 22,707 — 22,934 — — 45,641 Total revenues 614,982 — 140,174 — — 755,156 Costs and expenses: Cost of sales - propane and other gas liquids sales 362,927 — (9 ) — — 362,918 Cost of sales - midstream operations — — 107,067 — — 107,067 Cost of sales - other 2,853 — 17,934 — — 20,787 Operating expense 114,096 — 9,795 1,833 (2,008 ) 123,716 Depreciation and amortization expense 18,521 — 6,893 71 — 25,485 General and administrative expense 13,833 3 1,054 — — 14,890 Equipment lease expense 6,862 — 92 — — 6,954 Non-cash employee stock ownership plan compensation charge 4,031 — — — — 4,031 Asset impairments — — 10,005 — — 10,005 Loss on asset sales and disposals 555 — 38,694 — — 39,249 Operating income (loss) 91,304 (3 ) (51,351 ) (1,904 ) 2,008 40,054 Interest expense (21,212 ) — (11,739 ) (1,107 ) — (34,058 ) Other income (expense), net 408 — 276 2,008 (2,008 ) 684 Earnings (loss) before income taxes 70,500 (3 ) (62,814 ) (1,003 ) — 6,680 Income tax expense (benefit) 82 — (249 ) — — (167 ) Equity in earnings (loss) of subsidiary (63,571 ) — — — 63,571 — Net earnings (loss) 6,847 (3 ) (62,565 ) (1,003 ) 63,571 6,847 Other comprehensive loss (8,671 ) — — — — (8,671 ) Comprehensive income (loss) $ (1,824 ) $ (3 ) $ (62,565 ) $ (1,003 ) $ 63,571 $ (1,824 ) 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 disposals 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 six months ended January 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 $ 894,392 $ — $ 605 $ — $ — $ 894,997 Midstream operations — — 238,036 — — 238,036 Other 39,384 — 37,394 — — 76,778 Total revenues 933,776 — 276,035 — — 1,209,811 Costs and expenses: Cost of sales - propane and other gas liquids sales 541,746 — 687 — — 542,433 Cost of sales - midstream operations — — 215,192 — — 215,192 Cost of sales - other 5,562 — 28,927 — — 34,489 Operating expense 215,328 — 19,058 3,015 (3,223 ) 234,178 Depreciation and amortization expense 36,868 — 14,206 143 — 51,217 General and administrative expense 24,588 5 3,461 — — 28,054 Equipment lease expense 13,510 — 185 — — 13,695 Non-cash employee stock ownership plan compensation charge 7,993 — — — — 7,993 Asset impairments — — 10,005 — — 10,005 Loss on asset sales and disposals 1,463 — 38,681 — — 40,144 Operating income (loss) 86,718 (5 ) (54,367 ) (3,158 ) 3,223 32,411 Interest expense (41,606 ) — (22,924 ) (1,724 ) — (66,254 ) Other income (expense), net 623 — 572 3,223 (3,223 ) 1,195 Earnings (loss) before income taxes 45,735 (5 ) (76,719 ) (1,659 ) — (32,648 ) Income tax expense 72 — 132 — — 204 Equity in earnings (loss) of subsidiary (78,515 ) — — — 78,515 — Net earnings (loss) (32,852 ) (5 ) (76,851 ) (1,659 ) 78,515 (32,852 ) Other comprehensive income 9,829 — — — — 9,829 Comprehensive income (loss) $ (23,023 ) $ (5 ) $ (76,851 ) $ (1,659 ) $ 78,515 $ (23,023 ) 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 disposals 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 CASH FLOWS (in thousands) For the six months ended January 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 $ (57,734 ) $ (5 ) $ 13,335 $ 120,563 $ (97,000 ) $ (20,841 ) Cash flows from investing activities: Business acquisitions, net of cash acquired (14,862 ) — — — — (14,862 ) Capital expenditures (34,391 ) — (1,302 ) — — (35,693 ) Proceeds from sale of assets 4,207 — — — — 4,207 Cash collected for purchase of interest in accounts receivable — — — 574,783 (574,783 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (671,783 ) 671,783 — Net changes in advances with consolidated entities 132,748 — — — (132,748 ) — Net cash provided by (used in) investing activities 87,702 — (1,302 ) (97,000 ) (35,748 ) (46,348 ) Cash flows from financing activities: Distributions (35,380 ) — — — — (35,380 ) Proceeds from increase in long-term debt 23,580 — — — — 23,580 Payments on long-term debt (1,267 ) — — — — (1,267 ) Net reductions in short-term borrowings (7,879 ) — — — — (7,879 ) Net additions to collateralized short-term borrowings — — — 97,000 — 97,000 Net changes in advances with parent — 5 (12,190 ) (120,563 ) 132,748 — Cash paid for financing costs (395 ) — — — — (395 ) Net cash provided by (used in) financing activities (21,341 ) 5 (12,190 ) (23,563 ) 132,748 75,659 Increase (decrease) in cash and cash equivalents 8,627 — (157 ) — — 8,470 Cash and cash equivalents - beginning of year 5,327 1 373 — — 5,701 Cash and cash equivalents - end of year $ 13,954 $ 1 $ 216 $ — $ — $ 14,171 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 Payments on 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 ) 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 |