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 consolidated financial statements. FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in thousands) As of October 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 $ 12,368 $ 1 $ 196 $ — $ — $ 12,565 Accounts and notes receivable (9,133 ) — 56,051 101,365 — 148,283 Intercompany receivables 21,421 — — — (21,421 ) — Inventories 79,814 — 20,482 — — 100,296 Prepaid expenses and other current assets 22,616 — 9,185 2 — 31,803 Total current assets 127,086 1 85,914 101,367 (21,421 ) 292,947 Property, plant and equipment, net 550,113 — 207,827 — — 757,940 Goodwill 246,098 — 10,005 — — 256,103 Intangible assets, net 137,625 — 134,406 — — 272,031 Intercompany receivables 450,000 — — — (450,000 ) — Investments in consolidated subsidiaries 1,890 — — — (1,890 ) — Other assets, net 38,168 — 49,282 653 — 88,103 Total assets $ 1,550,980 $ 1 $ 487,434 $ 102,020 $ (473,311 ) $ 1,667,124 LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Current liabilities: Accounts payable $ 41,161 $ — $ 33,627 $ — $ — $ 74,788 Short-term borrowings 96,824 — — — — 96,824 Collateralized note payable — — — 74,000 — 74,000 Intercompany payables — — 36,798 (15,377 ) (21,421 ) — Other current liabilities 161,172 — 3,293 132 — 164,597 Total current liabilities 299,157 — 73,718 58,755 (21,421 ) 410,209 Long-term debt 1,783,634 — 451,026 — (450,000 ) 1,784,660 Other liabilities 28,689 — 3,841 225 — 32,755 Contingencies and commitments Partners' capital (deficit): Partners' equity (559,316 ) 1 (40,504 ) 42,715 (2,212 ) (559,316 ) Accumulated other comprehensive income (loss) (1,184 ) — (647 ) 325 322 (1,184 ) Total partners' capital (deficit) (560,500 ) 1 (41,151 ) 43,040 (1,890 ) (560,500 ) Total liabilities and partners' capital (deficit) $ 1,550,980 $ 1 $ 487,434 $ 102,020 $ (473,311 ) $ 1,667,124 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 ) — Other assets, net 37,742 — 49,016 465 — 87,223 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 1,759,868 — 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 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the three months ended October 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 $ 242,399 $ — $ — $ — $ — $ 242,399 Midstream operations — — 108,044 — — 108,044 Other 17,326 — 11,773 — — 29,099 Total revenues 259,725 — 119,817 — — 379,542 Costs and expenses: Cost of sales - propane and other gas liquids sales 119,212 — — — — 119,212 Cost of sales - midstream operations — — 94,642 — — 94,642 Cost of sales - other 2,430 — 9,316 — — 11,746 Operating expense 97,655 — 10,246 (2,105 ) (710 ) 105,086 Depreciation and amortization expense 18,277 — 7,872 53 — 26,202 General and administrative expense 12,863 2 1,404 — — 14,269 Equipment lease expense 7,210 — 139 — — 7,349 Non-cash employee stock ownership plan compensation charge 3,754 — — — — 3,754 Loss on asset sales and disposal 1,447 — 4,976 — — 6,423 Operating income (loss) (3,123 ) (2 ) (8,778 ) 2,052 710 (9,141 ) Interest expense (20,352 ) — (10,673 ) (370 ) (3 ) (31,398 ) Other income (expense), net (47 ) — 555 707 (707 ) 508 Earnings (loss) before income taxes (23,522 ) (2 ) (18,896 ) 2,389 — (40,031 ) Income tax benefit (29 ) — (562 ) — — (591 ) Equity in earnings of subsidiary (15,947 ) — — — 15,947 — Net earnings (loss) (39,440 ) (2 ) (18,334 ) 2,389 15,947 (39,440 ) Other comprehensive income 9,376 — — — — 9,376 Comprehensive income (loss) $ (30,064 ) $ (2 ) $ (18,334 ) $ 2,389 $ 15,947 $ (30,064 ) FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the three months ended October 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 $ 245,301 $ — $ — $ — $ — $ 245,301 Midstream operations — — 193,670 — — 193,670 Other 17,377 — 14,798 — — 32,175 Total revenues 262,678 — 208,468 — — 471,146 Costs and expenses: Cost of sales - propane and other gas liquids sales 121,748 — 3 — — 121,751 Cost of sales - midstream operations — — 153,604 — — 153,604 Cost of sales - other 2,538 — 11,910 — — 14,448 Operating expense 96,974 — 17,659 2,370 (804 ) 116,199 Depreciation and amortization expense 18,550 — 18,429 — — 36,979 General and administrative expense 17,429 3 1,712 — — 19,144 Equipment lease expense 6,882 — 150 — — 7,032 Non-cash employee stock ownership plan compensation charge 5,256 — — — — 5,256 Asset impairments — — 29,316 — — 29,316 Loss on asset sales and disposal 1,545 — 13,372 — — 14,917 Operating income (loss) (8,244 ) (3 ) (37,687 ) (2,370 ) 804 (47,500 ) Interest expense (18,521 ) — (10,688 ) (441 ) (108 ) (29,758 ) Other income (expense), net (122 ) — — 696 (696 ) (122 ) Loss before income taxes (26,887 ) (3 ) (48,375 ) (2,115 ) — (77,380 ) Income tax expense (benefit) 168 — (1,012 ) — — (844 ) Equity in earnings of subsidiary (49,481 ) — — — 49,481 — Net earnings (loss) (76,536 ) (3 ) (47,363 ) (2,115 ) 49,481 (76,536 ) Other comprehensive income 8,610 — — — — 8,610 Comprehensive income (loss) $ (67,926 ) $ (3 ) $ (47,363 ) $ (2,115 ) $ 49,481 $ (67,926 ) FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the three months ended October 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 $ 79,220 $ (2 ) $ (15,354 ) $ 687 $ (10,000 ) $ 54,551 Cash flows from investing activities: Capital expenditures (10,000 ) — (5 ) — — (10,005 ) Proceeds from sale of assets 2,279 — — — — 2,279 Cash collected for purchase of interest in accounts receivable — — — 183,939 (183,939 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (193,939 ) 193,939 — Net changes in advances with consolidated entities (14,453 ) — — — 14,453 — Net cash provided by (used in) investing activities (22,174 ) — (5 ) (10,000 ) 24,453 (7,726 ) Cash flows from financing activities: Distributions (66,658 ) — — — — (66,658 ) Proceeds from increase in long-term debt 25,626 — — — — 25,626 Reductions in long-term debt (2,261 ) — — — — (2,261 ) Net reductions in short-term borrowings (4,467 ) — — — — (4,467 ) Net additions to collateralized short-term borrowings — — — 10,000 — 10,000 Net changes in advances with parent — 2 15,138 (687 ) (14,453 ) — Cash paid for financing costs (1,390 ) — — — — (1,390 ) Net cash provided by (used in) financing activities (49,150 ) 2 15,138 9,313 (14,453 ) (39,150 ) Effect of exchange rate changes on cash — — — — — — Increase (decrease) in cash and cash equivalents 7,896 — (221 ) — — 7,675 Cash and cash equivalents - beginning of year 4,472 1 417 — — 4,890 Cash and cash equivalents - end of year $ 12,368 $ 1 $ 196 $ — $ — $ 12,565 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the three months ended October 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 $ 12,807 $ (3 ) $ 22,041 $ 5,801 $ 2,000 $ 42,646 Cash flows from investing activities: Business acquisitions, net of cash acquired — — — — — — Capital expenditures (14,674 ) — (10,933 ) — — (25,607 ) Proceeds from sale of assets 1,013 — 2,562 — — 3,575 Cash collected for purchase of interest in accounts receivable — — — 186,280 (186,280 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (184,280 ) 184,280 — Net changes in advances with consolidated entities 16,908 — — — (16,908 ) — Other (14 ) — — — — (14 ) Net cash provided by (used in) investing activities 3,233 — (8,371 ) 2,000 (18,908 ) (22,046 ) Cash flows from financing activities: Distributions (52,493 ) — — — — (52,493 ) Contributions from Partners 30 — — — — 30 Proceeds from increase in long-term debt 21,321 — — — — 21,321 Reductions in long-term debt (4,380 ) — — — — (4,380 ) Net additions to short-term borrowings 20,072 — — — — 20,072 Net reductions in collateralized short-term borrowings — — — (2,000 ) — (2,000 ) Net changes in advances with parent — 3 (11,112 ) (5,799 ) 16,908 — Cash paid for financing costs (142 ) — — — — (142 ) Net cash provided by (used in) financing activities (15,592 ) 3 (11,112 ) (7,799 ) 16,908 (17,592 ) Effect of exchange rate changes on cash 2 — — (2 ) — — Increase in cash and cash equivalents 450 — 2,558 — — 3,008 Cash and cash equivalents - beginning of year 5,579 1 20 — — 5,600 Cash and cash equivalents - end of year $ 6,029 $ 1 $ 2,578 $ — $ — $ 8,608 |