Guarantor financial information | Guarantor financial information The $500.0 million aggregate principal amount of unregistered 6.75% senior notes due 2023 co-issued by Ferrellgas, L.P. and Ferrellgas Finance Corp. are, and any notes registered under the Securities Act of 1933 and issued in exchange for such unregistered notes will be, fully and unconditionally and joint 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 consolidated financial statements. FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) As of April 30, 2016 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 $ 5,742 $ 1 $ 492 $ — $ — $ 6,235 Accounts and notes receivable (3,863 ) — 66,079 130,488 — 192,704 Intercompany receivables 44,309 — — — (44,309 ) — Inventories 63,313 — 24,426 — — 87,739 Prepaid expenses and other current assets 26,155 — 9,818 2 — 35,975 Total current assets 135,656 1 100,815 130,490 (44,309 ) 322,653 Property, plant and equipment, net 566,750 — 414,703 — — 981,453 Goodwill 243,598 — 202,735 — — 446,333 Intangible assets, net 145,188 — 406,184 — — 551,372 Intercompany receivables 450,000 — — — (450,000 ) — Investments in consolidated subsidiaries 640,282 — — — (640,282 ) — Assets held for sale — — 845 — — 845 Other assets, net 60,773 — 7,676 179 — 68,628 Total assets $ 2,242,247 $ 1 $ 1,132,958 $ 130,669 $ (1,134,591 ) $ 2,371,284 LIABILITIES AND PARTNERS' CAPITAL Current liabilities: Accounts payable $ 42,536 $ — $ 35,527 $ — $ — $ 78,063 Short-term borrowings 9,071 — — — — 9,071 Collateralized note payable — — — 77,000 — 77,000 Intercompany payables — — 34,210 10,099 (44,309 ) — Other current liabilities 144,259 — 11,012 193 — 155,464 Total current liabilities 195,866 — 80,749 87,292 (44,309 ) 319,598 Long-term debt 1,777,331 — 451,000 — (450,000 ) 1,778,331 Other liabilities 29,042 — 4,080 225 — 33,347 Contingencies and commitments Partners' capital: Partners' equity 252,834 1 597,776 42,827 (640,604 ) 252,834 Accumulated other comprehensive income (loss) (12,826 ) — (647 ) 325 322 (12,826 ) Total partners' capital 240,008 1 597,129 43,152 (640,282 ) 240,008 Total liabilities and partners' capital $ 2,242,247 $ 1 $ 1,132,958 $ 130,669 $ (1,134,591 ) $ 2,371,284 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) As of July 31, 2015 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 $ 5,579 $ 1 $ 20 $ — $ — $ 5,600 Accounts and notes receivable (2,858 ) — 80,657 119,119 — 196,918 Intercompany receivables 39,238 — — — (39,238 ) — Inventories 78,132 — 18,622 — — 96,754 Prepaid expenses and other current assets 42,069 — 22,140 2 — 64,211 Total current assets 162,160 1 121,439 119,121 (39,238 ) 363,483 Property, plant and equipment, net 569,640 — 395,577 — — 965,217 Goodwill 246,116 — 232,631 — — 478,747 Intangible assets, net 155,659 — 424,384 — — 580,043 Intercompany receivables 450,000 — — — (450,000 ) — Investments in consolidated subsidiaries 661,081 — — — (661,081 ) — Other assets, net 62,019 — 10,087 366 — 72,472 Total assets $ 2,306,675 $ 1 $ 1,184,118 $ 119,487 $ (1,150,319 ) $ 2,459,962 LIABILITIES AND PARTNERS' CAPITAL Current liabilities: Accounts payable $ 40,210 $ — $ 43,764 $ — $ — $ 83,974 Short-term borrowings 75,319 — — — — 75,319 Collateralized note payable — — — 70,000 — 70,000 Intercompany payables — — 30,289 8,949 (39,238 ) — Other current liabilities 142,137 — 33,903 136 — 176,176 Total current liabilities 257,666 — 107,956 79,085 (39,238 ) 405,469 Long-term debt 1,621,439 — 450,953 — (450,000 ) 1,622,392 Other liabilities 37,444 — 4,306 225 — 41,975 Contingencies and commitments Partners' capital: Partners' equity 429,444 1 621,550 39,852 (661,403 ) 429,444 Accumulated other comprehensive income (loss) (39,318 ) — (647 ) 325 322 (39,318 ) Total partners' capital 390,126 1 620,903 40,177 (661,081 ) 390,126 Total liabilities and partners' capital $ 2,306,675 $ 1 $ 1,184,118 $ 119,487 $ (1,150,319 ) $ 2,459,962 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS (in thousands) For the three months ended April 30, 2016 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 $ 338,929 $ — $ — $ — $ — $ 338,929 Midstream operations — — 105,424 — — 105,424 Other 19,739 — 45,380 — — 65,119 Total revenues 358,668 — 150,804 — — 509,472 Costs and expenses: Cost of sales - propane and other gas liquids sales 152,261 — — — — 152,261 Cost of sales - midstream operations — — 71,852 — — 71,852 Cost of sales - other 2,009 — 39,194 — — 41,203 Operating expense 100,998 — 13,999 1,376 (1,102 ) 115,271 Depreciation and amortization expense 18,247 — 19,918 187 — 38,352 General and administrative expense 11,884 — 1,330 — — 13,214 Equipment lease expense 7,127 — 117 — — 7,244 Non-cash employee stock ownership plan compensation charge 9,978 — — — — 9,978 Loss on disposal of assets 1,775 — 4,004 — — 5,779 Operating income (loss) 54,389 — 390 (1,563 ) 1,102 54,318 Interest expense (19,316 ) — (10,499 ) (536 ) 11 (30,340 ) Other income (expense), net 331 — — 1,113 (1,113 ) 331 Earnings (loss) before income taxes 35,404 — (10,109 ) (986 ) — 24,309 Income tax expense 395 — 865 — — 1,260 Equity in earnings of subsidiary (11,960 ) — — — 11,960 — Net earnings (loss) 23,049 — (10,974 ) (986 ) 11,960 23,049 Other comprehensive income 20,819 — — — — 20,819 Comprehensive income (loss) $ 43,868 $ — $ (10,974 ) $ (986 ) $ 11,960 $ 43,868 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS (in thousands) For the three months ended April 30, 2015 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 $ 445,667 $ — $ — $ — $ — $ 445,667 Midstream operations — — 5,293 — — 5,293 Other 18,893 — 62,698 — — 81,591 Total revenues 464,560 — 67,991 — — 532,551 Costs and expenses: Cost of sales - propane and other gas liquids sales 253,684 — — — — 253,684 Cost of sales - midstream operations — — 1,877 — — 1,877 Cost of sales - other 1,626 — 56,083 — — 57,709 Operating expense 100,155 — 7,135 2,171 (2,043 ) 107,418 Depreciation and amortization expense 18,675 — 4,462 187 — 23,324 General and administrative expense 10,902 — — — — 10,902 Equipment lease expense 6,327 — 20 — — 6,347 Non-cash employee stock ownership plan compensation charge 8,566 — — — — 8,566 Loss on disposal of assets 2,199 — 4 — — 2,203 Operating income (loss) 62,426 — (1,590 ) (2,358 ) 2,043 60,521 Interest expense (16,969 ) — (1,256 ) (750 ) (501 ) (19,476 ) Other income (expense), net 212 — — 1,542 (1,542 ) 212 Earnings (loss) before income taxes 45,669 — (2,846 ) (1,566 ) — 41,257 Income tax expense 86 — 767 — — 853 Equity in earnings of subsidiary (5,179 ) — — — 5,179 — Net earnings (loss) 40,404 — (3,613 ) (1,566 ) 5,179 40,404 Other comprehensive income 18,826 — — — — 18,826 Comprehensive income (loss) $ 59,230 $ — $ (3,613 ) $ (1,566 ) $ 5,179 $ 59,230 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS (in thousands) For the nine months ended April 30, 2016 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 $ 961,086 $ — $ — $ — $ — $ 961,086 Midstream operations — — 487,427 — — 487,427 Other 58,687 — 122,656 — — 181,343 Total revenues 1,019,773 — 610,083 — — 1,629,856 Costs and expenses: Cost of sales - propane and other gas liquids sales 448,841 — — — — 448,841 Cost of sales - midstream operations — — 373,899 — — 373,899 Cost of sales - other 6,804 — 104,621 — — 111,425 Operating expense 299,660 — 46,380 3,981 (2,554 ) 347,467 Depreciation and amortization expense 55,602 — 56,909 187 — 112,698 General and administrative expense 37,619 3 4,410 — — 42,032 Equipment lease expense 21,170 — 384 — — 21,554 Non-cash employee stock ownership plan compensation charge 18,375 — — — — 18,375 Goodwill impairment — — 29,316 — — 29,316 Loss on disposal of assets 5,420 — 17,800 — — 23,220 Operating income (loss) 126,282 (3 ) (23,636 ) (4,168 ) 2,554 101,029 Interest expense (57,467 ) — (31,819 ) (1,669 ) 156 (90,799 ) Other income (expense), net (89 ) — — 2,710 (2,710 ) (89 ) Earnings (loss) before income taxes 68,726 (3 ) (55,455 ) (3,127 ) — 10,141 Income tax expense 673 — 768 — — 1,441 Equity in earnings of subsidiary (59,353 ) — — — 59,353 — Net earnings (loss) 8,700 (3 ) (56,223 ) (3,127 ) 59,353 8,700 Other comprehensive income 26,492 — — — — 26,492 Comprehensive income (loss) $ 35,192 $ (3 ) $ (56,223 ) $ (3,127 ) $ 59,353 $ 35,192 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS (in thousands) For the nine months ended April 30, 2015 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 $ 1,400,895 $ — $ — $ — $ — $ 1,400,895 Midstream operations — — 20,362 — — 20,362 Other 59,480 — 161,142 — — 220,622 Total revenues 1,460,375 — 181,504 — — 1,641,879 Costs and expenses: Cost of sales - propane and other gas liquids sales 849,190 — — — — 849,190 Cost of sales - midstream operations — — 6,064 — — 6,064 Cost of sales - other 5,624 — 142,048 — — 147,672 Operating expense 306,184 — 14,460 5,211 (4,792 ) 321,063 Depreciation and amortization expense 57,529 — 12,860 187 — 70,576 General and administrative expense 45,166 3 — — — 45,169 Equipment lease expense 17,642 — 32 — — 17,674 Non-cash employee stock ownership plan compensation charge 16,728 — — — — 16,728 Loss on disposal of assets 4,574 — 4 — — 4,578 Operating income (loss) 157,738 (3 ) 6,036 (5,398 ) 4,792 163,165 Interest expense (54,217 ) — (3,639 ) (1,883 ) 44 (59,695 ) Other income (expense), net (415 ) — — 4,836 (4,836 ) (415 ) Earnings (loss) before income taxes 103,106 (3 ) 2,397 (2,445 ) — 103,055 Income tax expense 249 — 1,130 — — 1,379 Equity in earnings of subsidiary (1,181 ) — — — 1,181 — Net earnings (loss) 101,676 (3 ) 1,267 (2,445 ) 1,181 101,676 Other comprehensive loss (33,769 ) — — — — (33,769 ) Comprehensive income (loss) $ 67,907 $ (3 ) $ 1,267 $ (2,445 ) $ 1,181 $ 67,907 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the nine months ended April 30, 2016 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 $ 193,703 $ (3 ) $ 57,450 $ (13,656 ) $ (7,000 ) $ 230,494 Cash flows from investing activities: Business acquisitions, net of cash acquired (13,894 ) — — — — (13,894 ) Capital expenditures (44,330 ) — (64,057 ) — — (108,387 ) Proceeds from sale of assets 11,862 — — — — 11,862 Cash collected for purchase of interest in accounts receivable — — — 763,604 (763,604 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (770,604 ) 770,604 — Net changes in advances with consolidated entities (20,740 ) — — — 20,740 — Other (499 ) — — — — (499 ) Net cash used in investing activities (67,601 ) — (64,057 ) (7,000 ) 27,740 (110,918 ) Cash flows from financing activities: Distributions (210,158 ) — — — — (210,158 ) Contributions from Partners 30 — — — — 30 Proceeds from increase in long-term debt 159,814 — — — — 159,814 Reductions in long-term debt (8,739 ) — — — — (8,739 ) Net reductions in short-term borrowings (66,248 ) — — — — (66,248 ) Net additions to collateralized short-term borrowings — — — 7,000 — 7,000 Net changes in advances with parent — 3 7,079 13,658 (20,740 ) — Cash paid for financing costs (640 ) — — — — (640 ) Net cash provided by (used in) financing activities (125,941 ) 3 7,079 20,658 (20,740 ) (118,941 ) Effect of exchange rate changes on cash 2 — — (2 ) — — Increase in cash and cash equivalents 163 — 472 — — 635 Cash and cash equivalents - beginning of year 5,579 1 20 — — 5,600 Cash and cash equivalents - end of year $ 5,742 $ 1 $ 492 $ — $ — $ 6,235 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the nine months ended April 30, 2015 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 $ 241,141 $ (3 ) $ 12,307 $ (24,327 ) $ (26,000 ) $ 203,118 Cash flows from investing activities: Business acquisitions, net of cash acquired (68,901 ) — (1 ) — — (68,902 ) Capital expenditures (42,854 ) — (8,467 ) — — (51,321 ) Proceeds from sale of assets 4,060 — — — — 4,060 Cash collected for purchase of interest in accounts receivable — — — 1,079,031 (1,079,031 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (1,105,031 ) 1,105,031 — Net changes in advances with consolidated entities (20,087 ) — — — 20,087 — Other — — — — — — Net cash used in investing activities (127,782 ) — (8,468 ) (26,000 ) 46,087 (116,163 ) Cash flows from financing activities: Distributions (134,535 ) — — — — (134,535 ) Contributions from Partners 42,655 — — — — 42,655 Proceeds from increase in long-term debt 107,951 — — — — 107,951 Reductions in long-term debt (60,216 ) — — — — (60,216 ) Net reductions in short-term borrowings (69,519 ) — — — — (69,519 ) Net additions to collateralized short-term borrowings — — — 26,000 — 26,000 Net changes in advances with parent — 3 (4,245 ) 24,329 (20,087 ) — Cash paid for financing costs (204 ) — — — — (204 ) Net cash provided by (used in) financing activities (113,868 ) 3 (4,245 ) 50,329 (20,087 ) (87,868 ) Effect of exchange rate changes on cash — — — (2 ) — (2 ) Decrease in cash and cash equivalents (509 ) — (406 ) — — (915 ) Cash and cash equivalents - beginning of year 7,798 1 484 — — 8,283 Cash and cash equivalents - end of year $ 7,289 $ 1 $ 78 $ — $ — $ 7,368 |