Segment Reporting Segment Reporting

3 Months Ended

Oct. 31, 2017

Segment Reporting Disclosure

Segment reporting

Ferrellgas has two primary operations that result in two reportable operating segments: propane operations and related equipment sales and midstream operations.

Until April 2017, Ferrellgas utilized a structure that included two reportable segments which included propane operations and related equipment sales segment and the midstream operations - crude oil logistics segment. The results from midstream operations - water solutions segment were reported within Corporate and other. As a result of a change in the way management is evaluating results and allocating resources, results of the water solutions business are now included in the Midstream operations segment for all periods presented.

Following is a summary of segment information for the three months ended October 31, 2017 and 2016:

	Three months ended October 31, 2017
	Propane operations and related equipment sales		Midstream operations		Corporate			Total
Segment revenues	$	333,895	$	120,760	$	—		$	454,655
Direct costs (1)	303,329		113,901		11,209			428,439
Adjusted EBITDA	$	30,566	$	6,859	$	(11,209	)	$	26,216
	Three months ended October 31, 2016
	Propane operations and related equipment sales		Midstream operations		Corporate			Total
Segment revenues	$	271,498	$	108,044	$	—		$	379,542
Direct costs (1)	237,014		102,773		10,736			350,523
Adjusted EBITDA	$	34,484	$	5,271	$	(10,736	)	$	29,019

(1) Direct costs are comprised of "cost of products sold-propane and other gas liquids sales", "cost of products sold-midstream operations", "cost of products sold-other", "operating expense", "general and administrative expense", and "equipment lease expense" less "non-cash stock-based compensation charge", "change in fair value of contingent consideration", "severance charge", "litigation accrual and related legal fees associated with a class action lawsuit", "unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments" and "acquisition and transition expenses".

Following is a reconciliation of Ferrellgas' total segment performance measure to condensed consolidated net earnings (loss):

	Three months ended October 31,
	2017			2016
Net loss attributable to Ferrellgas Partners, L.P.	$	(47,915	)	$	(43,073	)
Income tax expense (benefit)	377			(590		)
Interest expense	40,807			35,428
Depreciation and amortization expense	25,732			26,202
EBITDA	19,001			17,967
Non-cash employee stock ownership plan compensation charge	3,962			3,754
Non-cash stock-based compensation charge	—			1,881
Loss on asset sales and disposal	895			6,423
Other income, net	(511		)	(508		)
Severance costs	1,663			1,469
Unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments	1,607			(1,569		)
Net loss attributable to noncontrolling interest	(401		)	(398		)
Adjusted EBITDA	$	26,216		$	29,019

Following are total assets by segment:

Assets	October 31, 2017		July 31, 2017
Propane operations and related equipment sales	$	1,292,686	$	1,194,905
Midstream operations	397,653		399,356
Corporate and unallocated	14,615		15,708
Total consolidated assets	$	1,704,954	$	1,609,969

Following are capital expenditures by segment:

	Three months ended October 31, 2017
	Propane operations and related equipment sales		Midstream operations		Corporate		Total
Capital expenditures:
Maintenance	$	8,351	$	3	$	239	$	8,593
Growth	9,688		664		—		10,352
Total	$	18,039	$	667	$	239	$	18,945
	Three months ended October 31, 2016
	Propane operations and related equipment sales		Midstream operations		Corporate		Total
Capital expenditures:
Maintenance	$	1,831	$	127	$	1,306	$	3,264
Growth	5,414		—		—		5,414
Total	$	7,245	$	127	$	1,306	$	8,678

Ferrellgas, L.P. [Member]

Segment Reporting Disclosure

Segment reporting

Ferrellgas, L.P. has two primary operations that result in two reportable operating segments: propane operations and related equipment sales and midstream operations.

Until April 2017, Ferrellgas, L.P. utilized a structure that included two reportable segments which included propane operations and related equipment sales segment and the midstream operations - crude oil logistics segment. The results from midstream operations - water solutions segment were reported within Corporate and other. As a result of a change in the way management is evaluating results and allocating resources, results of the water solutions business are now included in the Midstream operations segment for all periods presented.

Following is a summary of segment information for the three months ended October 31, 2017 and 2016:

	Three months ended October 31, 2017
	Propane operations and related equipment sales		Midstream operations		Corporate			Total
Segment revenues	$	333,895	$	120,760	$	—		$	454,655
Direct costs (1)	303,329		113,901		11,209			428,439
Adjusted EBITDA	$	30,566	$	6,859	$	(11,209	)	$	26,216
	Three months ended October 31, 2016
	Propane operations and related equipment sales		Midstream operations		Corporate			Total
Segment revenues	$	271,498	$	108,044	$	—		$	379,542
Direct costs (1)	237,014		102,773		10,736			350,523
Adjusted EBITDA	$	34,484	$	5,271	$	(10,736	)	$	29,019

(1) Direct costs are comprised of "cost of sales-propane and other gas liquids sales", "cost of products sold-midstream operations", "cost of products sold-other", "operating expense", "general and administrative expense", and "equipment lease expense" less "non-cash stock-based compensation charge", "change in fair value of contingent consideration", "severance charge", "litigation accrual and related legal fees associated with a class action lawsuit", "unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments" and "acquisition and transition expenses".

Following is a reconciliation of Ferrellgas, L.P.'s total segment performance measure to condensed consolidated net earnings (loss):

	Three months ended October 31,
	2017			2016
Net loss	$	(39,699	)	$	(39,440	)
Income tax expense (benefit)	371			(591		)
Interest expense	32,196			31,398
Depreciation and amortization expense	25,732			26,202
EBITDA	18,600			17,569
Non-cash employee stock ownership plan compensation charge	3,962			3,754
Non-cash stock-based compensation charge	—			1,881
Loss on asset sales and disposal	895			6,423
Other income, net	(511		)	(508		)
Severance costs	1,663			1,469
Unrealized (non-cash) loss (gain) on changes in fair value of derivatives not designated as hedging instruments	1,607			(1,569		)
Adjusted EBITDA	$	26,216		$	29,019

Following are total assets by segment:

Assets	October 31, 2017		July 31, 2017
Propane operations and related equipment sales	$	1,292,686	$	1,194,905
Midstream operations	397,653		399,356
Corporate and unallocated	14,600		15,687
Total consolidated assets	$	1,704,939	$	1,609,948

Following are capital expenditures by segment:

	Three months ended October 31, 2017
	Propane operations and related equipment sales		Midstream operations		Corporate		Total
Capital expenditures:
Maintenance	$	8,351	$	3	$	239	$	8,593
Growth	9,688		664		—		10,352
Total	$	18,039	$	667	$	239	$	18,945
	Three months ended October 31, 2016
	Propane operations and related equipment sales		Midstream operations		Corporate		Total
Capital expenditures:
Maintenance	$	1,831	$	127	$	1,306	$	3,264
Growth	5,414		—		—		5,414
Total	$	7,245	$	127	$	1,306	$	8,678