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, 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 $ 40,305 $ 1 $ 246 $ — $ — $ 40,552 Accounts and notes receivable, net (3,661) — 150 206,675 — 203,164 Intercompany receivables (9,201) — — — 9,201 — Inventories 89,784 — — — — 89,784 Prepaid expenses and other current assets 36,551 — (1) 3 — 36,553 Total current assets 153,778 1 395 206,678 9,201 370,053 Property, plant and equipment, net 584,335 — (1) — — 584,334 Goodwill, net 247,478 — — — — 247,478 Intangible assets, net 113,558 — — — — 113,558 Investments in consolidated subsidiaries 74,072 — — — (74,072) — Other assets, net 68,659 — 2,875 1,005 — 72,539 Total assets $ 1,241,880 $ 1 $ 3,269 $ 207,683 $ (64,871) $ 1,387,962 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 63,526 $ — $ — $ 113 $ — $ 63,639 Collateralized note payable — — — 140,000 — 140,000 Intercompany payables — — (192) (9,009) 9,201 — Other current liabilities 137,417 — 388 5,514 — 143,319 Total current liabilities 200,943 — 196 136,618 9,201 346,958 Long-term debt 1,730,468 — — — — 1,730,468 Other liabilities 37,480 — 67 — — 37,547 Contingencies and commitments Partners' capital (deficit): Partners' equity (717,884) 1 3,006 71,065 (74,072) (717,884) Accumulated other comprehensive loss (9,127) — — — — (9,127) Total partners' capital (deficit) (727,011) 1 3,006 71,065 (74,072) (727,011) Total liabilities and partners' capital (deficit) $ 1,241,880 $ 1 $ 3,269 $ 207,683 $ (64,871) $ 1,387,962 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) As of July 31, 2018 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 $ 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 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 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 subsidiaries (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 three months ended January 31, 2018 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 $ 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 subsidiaries (63,571) — — — 63,571 — Net earnings (loss) 6,847 (3) (62,565) (1,003) 63,571 6,847 Other comprehensive income (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 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 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 Equipment lease expense 16,278 — — — — 16,278 Non-cash employee stock ownership plan compensation charge 4,692 — — — — 4,692 Asset impairments — — — — — — 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 subsidiary (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 OPERATIONS (in thousands) For the six months ended January 31, 2018 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 $ 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 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 — Other — — — — — — 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) 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 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the six months ended January 31, 2018 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 $ (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 Net change 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 |