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, 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 $ 119,133 $ 1 $ 174 $ — $ — $ 119,308 Accounts and notes receivable (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 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 (deficit) (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 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 (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 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 (deficit) (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 year ended July 31, 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 $ 1,642,155 $ — $ 821 $ — $ — $ 1,642,976 Midstream operations — — 282,319 — — 282,319 Other 72,954 — 74,893 — — 147,847 Total revenues 1,715,109 — 358,033 — — 2,073,142 Costs and expenses: Cost of sales - propane and other gas liquids sales 972,467 — 947 — — 973,414 Cost of sales - midstream operations — — 255,559 — — 255,559 Cost of sales - other 10,111 — 58,543 — — 68,654 Operating expense 436,962 — 37,617 4,755 (7,586 ) 471,748 Depreciation and amortization expense 75,163 — 26,317 315 — 101,795 General and administrative expense 48,337 5 5,922 — — 54,264 Equipment lease expense 27,939 — 333 — — 28,272 Non-cash employee stock ownership plan compensation charge 13,859 — — — — 13,859 Asset impairments — — 10,005 — — 10,005 Loss on asset sales and disposals 8,978 — 178,421 — — 187,399 Operating income (loss) 121,293 (5 ) (215,631 ) (5,070 ) 7,586 (91,827 ) Interest expense (86,646 ) — (43,247 ) (4,053 ) — (133,946 ) Other income (expense), net (234 ) — 1,162 7,586 (7,586 ) 928 Earnings (loss) before income taxes 34,413 (5 ) (257,716 ) (1,537 ) — (224,845 ) Income tax expense (benefit) 222 — (2,921 ) — — (2,699 ) Equity in earnings (loss) of subsidiaries (256,337 ) — — — 256,337 — Net earnings (loss) (222,146 ) (5 ) (254,795 ) (1,537 ) 256,337 (222,146 ) Other comprehensive income 5,969 — — — — 5,969 Comprehensive income (loss) $ (216,177 ) $ (5 ) $ (254,795 ) $ (1,537 ) $ 256,337 $ (216,177 ) FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in thousands) For the year ended July 31, 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 $ 1,318,412 $ — $ — $ — $ — $ 1,318,412 Midstream operations — — 466,703 — — 466,703 Other 69,962 — 75,200 — — 145,162 Total revenues 1,388,374 — 541,903 — — 1,930,277 Costs and expenses: Cost of sales - propane and other gas liquids sales 694,155 — — — — 694,155 Cost of sales - midstream operations — — 429,439 — — 429,439 Cost of sales - other 8,473 — 58,794 — — 67,267 Operating expense 398,584 — 38,188 95 (4,455 ) 432,412 Depreciation and amortization expense 72,919 — 30,183 249 — 103,351 General and administrative expense 44,810 5 4,663 — — 49,478 Equipment lease expense 28,560 — 564 — — 29,124 Non-cash employee stock ownership plan compensation charge 15,088 — — — — 15,088 Loss on asset sales and disposals 9,198 — 5,259 — — 14,457 Operating income (loss) 116,587 (5 ) (25,187 ) (344 ) 4,455 95,506 Interest expense (80,866 ) — (43,839 ) (2,480 ) (3 ) (127,188 ) Other income (expense), net 850 — 624 4,452 (4,452 ) 1,474 Earnings (loss) before income taxes 36,571 (5 ) (68,402 ) 1,628 — (30,208 ) Income tax expense (benefit) 217 — (1,366 ) — — (1,149 ) Equity in earnings (loss) of subsidiaries (65,413 ) — — — 65,413 — Net earnings (loss) (29,059 ) (5 ) (67,036 ) 1,628 65,413 (29,059 ) Other comprehensive income 25,324 — — — — 25,324 Comprehensive income (loss) $ (3,735 ) $ (5 ) $ (67,036 ) $ 1,628 $ 65,413 $ (3,735 ) 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 disposals 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 (loss) 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 CASH FLOWS (in thousands) For the year ended July 31, 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 $ 139,294 $ (5 ) $ (48,708 ) $ 3,573 $ 11,000 $ 105,154 Cash flows from investing activities: Business acquisitions, net of cash acquired (18,141 ) — — — — (18,141 ) Capital expenditures (81,114 ) — (3,805 ) — — (84,919 ) Proceeds from sale of assets, dispositions and other 7,327 — 145,260 — — 152,587 Cash collected for purchase of interest in accounts receivable — — — 1,226,211 (1,226,211 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (1,215,211 ) 1,215,211 — Net changes in advances with consolidated entities 96,514 — — — (96,514 ) — Other — — — — — — Net cash provided by (used in) investing activities 4,586 — 141,455 11,000 (107,514 ) 49,527 Cash flows from financing activities: Distributions (70,962 ) — — — — (70,962 ) Proceeds from issuance of long-term debt 323,680 — — — — 323,680 Payments on long-term debt (212,920 ) — — — — (212,920 ) Net reductions in short-term borrowings (51,379 ) — — — — (51,379 ) Net additions to collateralized short-term borrowings — — — (11,000 ) — (11,000 ) Net changes in advances with parent — 5 (92,946 ) (3,573 ) 96,514 — Cash paid for financing costs (18,493 ) — — — — (18,493 ) Net cash provided by (used in) financing activities (30,074 ) 5 (92,946 ) (14,573 ) 96,514 (41,074 ) Increase (decrease) in cash and cash equivalents 113,806 — (199 ) — — 113,607 Cash and cash equivalents - beginning of year 5,327 1 373 — — 5,701 Cash and cash equivalents - end of year $ 119,133 $ 1 $ 174 $ — $ — $ 119,308 FERRELLGAS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in thousands) For the year ended July 31, 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 $ 185,640 $ (5 ) $ (36,297 ) $ 4,410 $ (5,000 ) $ 148,748 Cash flows from investing activities: Business acquisitions, net of cash acquired (3,539 ) — — — — (3,539 ) Capital expenditures (49,107 ) — (1,365 ) — — (50,472 ) Proceeds from sale of assets, dispositions and other 8,510 — — — — 8,510 Cash collected for purchase of interest in accounts receivable — — — 1,011,244 (1,011,244 ) — Cash remitted to Ferrellgas, L.P for accounts receivable — — — (1,016,244 ) 1,016,244 — Net changes in advances with consolidated entities (33,573 ) — — 360 33,213 — Other (37 ) — — — — (37 ) Net cash used in investing activities (77,746 ) — (1,365 ) (4,640 ) 38,213 (45,538 ) Cash flows from financing activities: Distributions (119,879 ) — — — — (119,879 ) Contributions 167,843 — — — — 167,843 Proceeds from issuance of long-term debt 62,864 — — — — 62,864 Payments on long-term debt (174,292 ) — — — — (174,292 ) Net reductions to short-term borrowings (41,510 ) — — — — (41,510 ) Net additions in collateralized short-term borrowings — — — 5,000 — 5,000 Net changes in advances with parent — 5 37,618 (4,410 ) (33,213 ) — Cash paid for financing costs (2,065 ) — — (360 ) — (2,425 ) Net cash provided by (used in) financing activities (107,039 ) 5 37,618 230 (33,213 ) (102,399 ) Increase (decrease) in cash and cash equivalents 855 — (44 ) — — 811 Cash and cash equivalents - beginning of year 4,472 1 417 — — 4,890 Cash and cash equivalents - end of year $ 5,327 $ 1 $ 373 $ — $ — $ 5,701 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, dispositions and other 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 30 — — — — 30 Proceeds from issuance of long-term debt 168,117 — — — — 168,117 Payments on long-term debt (14,959 ) — — — — (14,959 ) Net additions to 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 ) — — Increase (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 |