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 April 30, 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 $ 9,126 $ 1 $ 364 $ — $ — $ 9,491 Accounts and notes receivable, net (3,346 ) — 23,493 182,580 — 202,727 Intercompany receivables 65,801 — — — (65,801 ) — Inventories 70,893 — 14,169 — — 85,062 Prepaid expenses and other current assets 31,167 — 12,890 2 — 44,059 Total current assets 173,641 1 50,916 182,582 (65,801 ) 341,339 Property, plant and equipment, net 552,551 — 85,137 — — 637,688 Goodwill, net 246,098 — — — — 246,098 Intangible assets, net 123,177 — 112,141 — — 235,318 Intercompany receivables 450,000 — — — (450,000 ) — Investments in consolidated subsidiaries (164,031 ) — — — 164,031 — Other assets, net 36,744 — 34,987 363 — 72,094 Total assets $ 1,418,180 $ 1 $ 283,181 $ 182,945 $ (351,770 ) $ 1,532,537 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 50,164 $ — $ 2,221 $ 87 $ — $ 52,472 Short-term borrowings — — — — — — Collateralized note payable — — — 104,000 — 104,000 Intercompany payables — — 45,554 20,247 (65,801 ) — Other current liabilities 143,804 — 3,041 398 — 147,243 Total current liabilities 193,968 — 50,816 124,732 (65,801 ) 303,715 Long-term debt 1,646,069 — 450,000 — (450,000 ) 1,646,069 Other liabilities 29,615 — 4,610 — — 34,225 Contingencies and commitments Partners' capital (deficit): Partners' equity (469,338 ) 1 (222,245 ) 58,213 164,031 (469,338 ) Accumulated other comprehensive income 17,866 — — — — 17,866 Total partners' capital (deficit) (451,472 ) 1 (222,245 ) 58,213 164,031 (451,472 ) Total liabilities and partners' capital (deficit) $ 1,418,180 $ 1 $ 283,181 $ 182,945 $ (351,770 ) $ 1,532,537 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 April 30, 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 $ 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 subsidiary (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 three months ended April 30, 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 $ 369,437 $ — $ — $ — $ — $ 369,437 Midstream operations — — 126,676 — — 126,676 Other 17,850 — 24,146 — — 41,996 Total revenues 387,287 — 150,822 — — 538,109 Costs and expenses: Cost of sales - propane and other gas liquids sales 197,487 — — — — 197,487 Cost of sales - midstream operations — — 118,767 — — 118,767 Cost of sales - other 1,992 — 18,818 — — 20,810 Operating expense 96,264 — 8,594 1,315 (1,400 ) 104,773 Depreciation and amortization expense 18,261 — 7,418 58 — 25,737 General and administrative expense 8,930 — 939 — — 9,869 Equipment lease expense 7,108 — 162 — — 7,270 Non-cash employee stock ownership plan compensation charge 4,697 — — — — 4,697 Loss on asset sales and disposals 2,146 — 247 — — 2,393 Operating income (loss) 50,402 — (4,123 ) (1,373 ) 1,400 46,306 Interest expense (19,452 ) — (11,019 ) (799 ) — (31,270 ) Other income (expense), net (157 ) — 319 1,400 (1,400 ) 162 Earnings (loss) before income taxes 30,793 — (14,823 ) (772 ) — 15,198 Income tax expense (benefit) 97 — (294 ) — — (197 ) Equity in earnings (loss) of subsidiary (15,301 ) — — — 15,301 — Net earnings (loss) 15,395 — (14,529 ) (772 ) 15,301 15,395 Other comprehensive income (8,429 ) — — — — (8,429 ) Comprehensive income (loss) $ 6,966 $ — $ (14,529 ) $ (772 ) $ 15,301 $ 6,966 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the nine months ended April 30, 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 $ 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 OPERATIONS (in thousands) For the nine months ended April 30, 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 $ 1,049,211 $ — $ — $ — $ — $ 1,049,211 Midstream operations — — 331,507 — — 331,507 Other 56,785 — 59,398 — — 116,183 Total revenues 1,105,996 — 390,905 — — 1,496,901 Costs and expenses: Cost of sales - propane and other gas liquids sales 551,728 — — — — 551,728 Cost of sales - midstream operations — — 300,433 — — 300,433 Cost of sales - other 6,993 — 46,220 — — 53,213 Operating expense 297,905 — 28,482 (251 ) (3,201 ) 322,935 Depreciation and amortization expense 54,552 — 22,817 177 — 77,546 General and administrative expense 32,886 5 3,525 — — 36,416 Equipment lease expense 21,585 — 450 — — 22,035 Non-cash employee stock ownership plan compensation charge 11,396 — — — — 11,396 Loss on asset sales and disposals 3,666 — 5,195 — — 8,861 Operating income (loss) 125,285 (5 ) (16,217 ) 74 3,201 112,338 Interest expense (60,893 ) — (32,694 ) (1,826 ) (3 ) (95,416 ) Other income (expense), net 100 — 1,333 3,198 (3,198 ) 1,433 Earnings (loss) before income taxes 64,492 (5 ) (47,578 ) 1,446 — 18,355 Income tax expense (benefit) 171 — (371 ) — — (200 ) Equity in earnings (loss) of subsidiary (45,766 ) — — — 45,766 — Net earnings (loss) 18,555 (5 ) (47,207 ) 1,446 45,766 18,555 Other comprehensive income 16,723 — — — — 16,723 Comprehensive income (loss) $ 35,278 $ (5 ) $ (47,207 ) $ 1,446 $ 45,766 $ 35,278 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the nine months ended April 30, 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 $ 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 ) Increase (decrease) 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 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the nine months ended April 30, 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 $ 186,530 $ (5 ) $ (73,168 ) $ 38,042 $ (27,000 ) $ 124,399 Cash flows from investing activities: Business acquisitions, net of cash acquired (3,539 ) — — — — (3,539 ) Capital expenditures (35,116 ) — (296 ) — — (35,412 ) Proceeds from sale of assets 4,721 — — — — 4,721 Cash collected for purchase of interest in accounts receivable — — — 803,109 (803,109 ) — Cash remitted to Ferrellgas, L.P. for accounts receivable — — — (830,109 ) 830,109 — Net changes in advances with consolidated entities (35,476 ) — — 244 35,232 — Other (37 ) — — — — (37 ) Net cash provided by (used in) investing activities (69,447 ) — (296 ) (26,756 ) 62,232 (34,267 ) Cash flows from financing activities: Distributions (94,413 ) — — — — (94,413 ) Contributions from Partners 167,640 — — — — 167,640 Proceeds from increase in long-term debt 52,354 — — — — 52,354 Payments on long-term debt (173,471 ) — — — — (173,471 ) Net reductions in short-term borrowings (62,902 ) — — — — (62,902 ) Net additions to collateralized short-term borrowings — — — 27,000 — 27,000 Net changes in advances with parent — 5 73,269 (38,042 ) (35,232 ) — Cash paid for financing costs (1,820 ) — — (244 ) — (2,064 ) Net cash provided by (used in) financing activities (112,612 ) 5 73,269 (11,286 ) (35,232 ) (85,856 ) Increase (decrease) in cash and cash equivalents 4,471 — (195 ) — — 4,276 Cash and cash equivalents - beginning of year 4,472 1 417 — — 4,890 Cash and cash equivalents - end of year $ 8,943 $ 1 $ 222 $ — $ — $ 9,166 |