Guarantor financial information | Guarantor financial information The $500.0 million aggregate principal amount of registered 6.75% senior notes due 2023 co-issued by Ferrellgas, L.P. and Ferrellgas Finance Corp. are 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 July 31, 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 $ 4,472 $ 1 $ 417 $ — $ — $ 4,890 Accounts and notes receivable (2,703 ) — 45,822 106,464 — 149,583 Intercompany receivables 34,089 — — — (34,089 ) — Inventories 71,422 — 19,172 — — 90,594 Prepaid expenses and other current assets 27,922 2 12,029 2 — 39,955 Total current assets 135,202 3 77,440 106,466 (34,089 ) 285,022 Property, plant and equipment, net 557,460 — 217,220 — — 774,680 Goodwill 246,098 — 10,005 — — 256,103 Intangible assets, net 141,794 — 138,391 — — 280,185 Intercompany receivables 450,000 — — — (450,000 ) — Investments in consolidated subsidiaries 3,630 — — — (3,630 ) — Assets held for sale — — 780 — — 780 Other assets, net (1) 37,742 — 48,236 465 — 86,443 Total assets $ 1,571,926 $ 3 $ 492,072 $ 106,931 $ (487,719 ) $ 1,683,213 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 33,781 $ — $ 34,147 $ — $ — $ 67,928 Short-term borrowings 101,291 — — — — 101,291 Collateralized note payable — — — 64,000 — 64,000 Intercompany payables — — 35,491 (1,402 ) (34,089 ) — Other current liabilities 119,048 — 7,754 150 — 126,952 Total current liabilities 254,120 — 77,392 62,748 (34,089 ) 360,171 Long-term debt (1) 1,759,868 — 451,013 — (450,000 ) 1,760,881 Other liabilities 27,351 — 3,998 225 — 31,574 Contingencies and commitments Partners' capital (deficit): Partners' equity (458,853 ) 3 (39,684 ) 43,633 (3,952 ) (458,853 ) Accumulated other comprehensive income (loss) (10,560 ) — (647 ) 325 322 (10,560 ) Total partners' capital (deficit) (469,413 ) 3 (40,331 ) 43,958 (3,630 ) (469,413 ) Total liabilities and partners' capital (deficit) $ 1,571,926 $ 3 $ 492,072 $ 106,931 $ (487,719 ) $ 1,683,213 (1) Revised to reclassify debt issuance costs for our senior notes from other assets to long-term debt for all balance sheet dates presented (see Note B to our consolidated financial statements included in this Annual Report). 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 (1) 37,660 — 10,087 366 — 48,113 Total assets $ 2,282,316 $ 1 $ 1,184,118 $ 119,487 $ (1,150,319 ) $ 2,435,603 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) 1,597,080 — 450,953 — (450,000 ) 1,598,033 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 $ 2,282,316 $ 1 $ 1,184,118 $ 119,487 $ (1,150,319 ) $ 2,435,603 (1) Revised to reclassify debt issuance costs for our senior notes from other assets to long-term debt for all balance sheet dates presented (see Note B to our consolidated financial statements included in this Annual Report). FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the year ended July 31, 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 $ 1,202,368 $ — $ — $ — $ — $ 1,202,368 Midstream operations — — 625,238 — — 625,238 Other 73,200 — 138,561 — — 211,761 Total revenues 1,275,568 — 763,799 — — 2,039,367 Costs and expenses: Cost of sales - propane and other gas liquids sales 564,433 — — — — 564,433 Cost of sales - midstream operations (1,545 ) — 472,779 — — 471,234 Cost of sales - other 8,867 — 117,370 — — 126,237 Operating expense 399,680 — 58,789 4,028 (3,319 ) 459,178 Depreciation and amortization expense 75,059 — 75,212 242 — 150,513 General and administrative expense 50,592 7 5,516 — — 56,115 Equipment lease expense 28,322 — 511 — — 28,833 Non-cash employee stock ownership plan compensation charge 27,595 — — — — 27,595 Asset impairments — — 658,118 — — 658,118 Loss on asset sales and disposal 9,180 — 21,655 — — 30,835 Operating income (loss) 113,385 (7 ) (646,151 ) (4,270 ) 3,319 (533,724 ) — — Interest expense (77,493 ) — (42,325 ) (2,186 ) 186 (121,818 ) Other income (expense), net 110 — — 3,505 (3,505 ) 110 Earnings (loss) before income taxes 36,002 (7 ) (688,476 ) (2,951 ) — (655,432 ) Income tax expense (benefit) 839 — (880 ) — — (41 ) Equity in earnings (loss) of subsidiaries (690,554 ) — — — 690,554 — Net earnings (loss) (655,391 ) (7 ) (687,596 ) (2,951 ) 690,554 (655,391 ) Other comprehensive income 28,758 — — — — 28,758 Comprehensive income (loss) $ (626,633 ) $ (7 ) $ (687,596 ) $ (2,951 ) $ 690,554 $ (626,633 ) FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the year ended July 31, 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 $ 1,657,016 $ — $ — $ — $ — $ 1,657,016 Midstream operations — — 107,189 — — 107,189 Other 73,704 — 186,481 — — 260,185 Total revenues 1,730,720 — 293,670 — — 2,024,390 Costs and expenses: Cost of sales - propane and other gas liquids sales 977,224 — — — — 977,224 Cost of sales - midstream operations — — 76,590 — — 76,590 Cost of sales - other 7,649 — 163,048 — — 170,697 Operating expense 413,112 — 25,189 5,206 (6,154 ) 437,353 Depreciation and amortization expense 75,834 — 22,745 — — 98,579 General and administrative expense 76,250 4 984 — — 77,238 Equipment lease expense 24,213 — 60 — — 24,273 Non-cash employee stock ownership plan compensation charge 24,713 — — — — 24,713 Loss on asset sales and disposal 7,095 — 4 — — 7,099 Operating income (loss) 124,630 (4 ) 5,050 (5,206 ) 6,154 130,624 — — Interest expense (72,765 ) — (8,499 ) (2,622 ) (341 ) (84,227 ) Other income (expense), net (354 ) — — 5,813 (5,813 ) (354 ) Earnings (loss) before income taxes 51,511 (4 ) (3,449 ) (2,015 ) — 46,043 Income tax expense (benefit) 292 — (676 ) — — (384 ) Equity in earnings (loss) of subsidiaries (4,792 ) — — — 4,792 — Net earnings (loss) 46,427 (4 ) (2,773 ) (2,015 ) 4,792 46,427 Other comprehensive income (loss) (45,576 ) — 2 (4 ) 2 (45,576 ) Comprehensive income (loss) $ 851 $ (4 ) $ (2,771 ) $ (2,019 ) $ 4,794 $ 851 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the year ended July 31, 2014 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 $ 2,147,343 $ — $ — $ — $ — $ 2,147,343 Midstream operations — — 7,435 — — 7,435 Other 77,460 — 173,622 — — 251,082 Total revenues 2,224,803 — 181,057 — — 2,405,860 Costs and expenses: Cost of sales - propane and other gas liquids sales 1,456,388 — — — — 1,456,388 Cost of sales - midstream operations — — 1,970 — — 1,970 Cost of sales - other 7,640 — 148,542 — — 156,182 Operating expense 429,089 — 20,919 7,057 (5,514 ) 451,551 Depreciation and amortization expense 79,255 — 4,947 — — 84,202 General and administrative expense 64,824 5 327 — — 65,156 Equipment lease expense 17,745 — — — — 17,745 Non-cash employee stock ownership plan compensation charge 21,789 — — — — 21,789 Loss on asset sales and disposal 6,492 — (6 ) — — 6,486 Operating income (loss) 141,581 (5 ) 4,358 (7,057 ) 5,514 144,391 Interest expense (64,508 ) — (4,839 ) (2,824 ) 1,839 (70,332 ) Loss on extinguishment of debt (21,202 ) — — — — (21,202 ) Other income (expense), net (479 ) — — 7,353 (7,353 ) (479 ) Earnings (loss) before income taxes 55,392 (5 ) (481 ) (2,528 ) — 52,378 Income tax expense 703 — 1,768 — — 2,471 Equity in earnings (loss) of subsidiaries (4,782 ) — — — 4,782 — Net earnings (loss) 49,907 (5 ) (2,249 ) (2,528 ) 4,782 49,907 Other comprehensive income (loss) 4,530 — (145 ) — 145 4,530 Comprehensive income (loss) $ 54,437 $ (5 ) $ (2,394 ) $ (2,528 ) $ 4,927 $ 54,437 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the year ended July 31, 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 $ 102,569 $ (9 ) $ 89,728 $ 14,456 $ 6,000 $ 212,744 Cash flows from investing activities: Business acquisitions, net of cash acquired (15,144 ) — — — — (15,144 ) Capital expenditures (52,501 ) — (65,017 ) — — (117,518 ) Proceeds from sale of assets 17,089 — — — — 17,089 Cash collected for purchase of interest in accounts receivable — — — 946,804 (946,804 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (940,804 ) 940,804 — Net changes in advances with consolidated entities 38,759 — — — (38,759 ) — Other (286 ) — — — — (286 ) Net cash provided by (used in) investing activities (12,083 ) — (65,017 ) 6,000 (44,759 ) (115,859 ) Cash flows from financing activities: Distributions (269,541 ) — — — — (269,541 ) Contributions from Partners 30 — — — — 30 Proceeds from increase in long-term debt 168,117 — — — — 168,117 Payments on long-term debt (14,959 ) — — — — (14,959 ) Net additions short-term borrowings 25,972 — — — — 25,972 Net reductions in collateralized short-term borrowings — — — (6,000 ) — (6,000 ) Net changes in advances with parent — 9 (24,314 ) (14,454 ) 38,759 — Cash paid for financing costs (1,214 ) — — — — (1,214 ) Net cash provided by (used in) financing activities (91,595 ) 9 (24,314 ) (20,454 ) 38,759 (97,595 ) Effect of exchange rate changes on cash 2 — — (2 ) — — Decrease in cash and cash equivalents (1,107 ) — 397 — — (710 ) Cash and cash equivalents - beginning of year 5,579 1 20 — — 5,600 Cash and cash equivalents - end of year $ 4,472 $ 1 $ 417 $ — $ — $ 4,890 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the year ended July 31, 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 $ 197,740 $ (4 ) $ (12,875 ) $ 10,627 $ 21,000 $ 216,488 Cash flows from investing activities: Business acquisitions, net of cash acquired (71,750 ) — (7,177 ) — — (78,927 ) Capital expenditures (56,955 ) — (15,526 ) — — (72,481 ) Proceeds from sale of assets 5,905 — — — — 5,905 Cash collected for purchase of interest in accounts receivable — — — 1,299,325 (1,299,325 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (1,278,325 ) 1,278,325 — Net changes in advances with consolidated entities (24,493 ) — — — 24,493 — Other (14 ) — — — — (14 ) Net cash used in investing activities (147,307 ) — (22,703 ) 21,000 3,493 (145,517 ) Cash flows from financing activities: Distributions (607,875 ) — — — — (607,875 ) Contributions from Partners 51,047 — — — — 51,047 Proceeds from increase in long-term debt 628,134 — — — — 628,134 Reductions in long-term debt (119,457 ) — — — — (119,457 ) Net additions to short-term borrowings 5,800 — — — — 5,800 Net additions to collateralized short-term borrowings — — — (21,000 ) — (21,000 ) Net changes in advances with parent — 4 35,114 (10,625 ) (24,493 ) — Cash paid for financing costs (10,301 ) — — — — (10,301 ) Net cash provided by (used in) financing activities (52,652 ) 4 35,114 (31,625 ) (24,493 ) (73,652 ) Effect of exchange rate changes on cash — — — (2 ) — (2 ) Increase in cash and cash equivalents (2,219 ) — (464 ) — — (2,683 ) Cash and cash equivalents - beginning of year 7,798 1 484 — — 8,283 Cash and cash equivalents - end of year $ 5,579 $ 1 $ 20 $ — $ — $ 5,600 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the year ended July 31, 2014 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 $ 188,218 $ (5 ) $ (17,339 ) $ (20,424 ) $ (9,000 ) $ 141,450 Cash flows from investing activities: Business acquisitions, net of cash acquired (33,569 ) — (128,450 ) — — (162,019 ) Capital expenditures (49,509 ) — (3,063 ) — — (52,572 ) Proceeds from sale of assets 4,524 — — — — 4,524 Cash collected for purchase of interest in accounts receivable — — — 1,578,597 (1,578,597 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (1,587,597 ) 1,587,597 — Net changes in advances with consolidated entities (169,708 ) — — — 169,708 — Other (23 ) — — — — (23 ) Net cash used in investing activities (248,285 ) — (131,513 ) (9,000 ) 178,708 (210,090 ) Cash flows from financing activities: Distributions (178,426 ) — — — — (178,426 ) Contributions from Partners 51,626 — — — — 51,626 Proceeds from increase in long-term debt 750,351 — — — — 750,351 Reductions in long-term debt (569,841 ) — — — — (569,841 ) Net reductions in short-term borrowings 19,465 — — — — 19,465 Net additions to collateralized short-term borrowings — — — 9,000 — 9,000 Net changes in advances with parent — 5 149,279 20,424 (169,708 ) — Cash paid for financing costs (11,414 ) — — — — (11,414 ) Net cash provided by (used in) financing activities 61,761 5 149,279 29,424 (169,708 ) 70,761 Effect of exchange rate changes on cash (145 ) — — — — (145 ) Increase (decrease) in cash and cash equivalents 1,549 — 427 — — 1,976 Cash and cash equivalents - beginning of year 6,249 1 57 — — 6,307 Cash and cash equivalents - end of year $ 7,798 $ 1 $ 484 $ — $ — $ 8,283 |