Accounts and Notes Receivable, Net and Accounts Receivable Securitization

9 Months Ended

Apr. 30, 2011

Accounts and Notes Receivable, Net and Accounts Receivable Securitization

D.   Accounts and notes receivable, net and accounts receivable securitization

Accounts and notes receivable, net consist of the following:

	April 30,	July 31,
	2011	2010
Accounts receivable pledged as collateral	$163,897	$          0
Accounts receivable	76,132	33,725
Note receivable from Ferrellgas Receivables	0	44,927
Retained interest in Ferrellgas Receivables	0	15,323
Other	315	269
Less: Allowance for doubtful accounts	(4,652)	(5,010)
Accounts and notes receivable, net	$235,692	$89,234

See Note B – Summary of significant accounting policies - (5) New accounting standards - Transfers of financial assets and variable interest entities - for a discussion of amendments to existing GAAP which required Ferrellgas to begin consolidating its previously unconsolidated QSPE, Ferrellgas Receivables, effective August 1, 2010. Upon consolidation, Ferrellgas now recognizes accounts receivable that have been sold by the operating partnership to Ferrellgas Receivables as "Accounts receivable pledged as collateral" and eliminates the previously recognized "Note receivable from Ferrellgas Receivables" and "Retained interest in Ferrellgas Receivables."

The operating partnership, through Ferrellgas Receivables, securitizes a portion of its trade accounts receivable through a commercial paper conduit for proceeds of up to $145.0 million. At April 30, 2011, $163.9 million of trade accounts receivable were pledged as collateral against $84.0 million of collateralized notes payable due to the commercial paper conduit. These accounts receivable pledged as collateral are bankruptcy remote from the operating partnership. The operating partnership does not provide any guarantee or similar support to the collectability of these accounts receivable pledged as collateral. 

The operating partnership structured Ferrellgas Receivables in order to facilitate securitization transactions while complying with Ferrellgas' various debt covenants. If the covenants were compromised, funding from the facility could be restricted or suspended, or its costs could increase. As of April 30, 2011, the operating partnership had received cash proceeds of $84.0 million from trade accounts receivables securitized, with the ability to receive proceeds of an additional $21.0 million. Borrowings under the accounts receivable securitization facility had a weighted average interest rate of 3.1% as of April 30, 2011

Ferrellgas, L.P. and Subsidiaries [Member]

Accounts and Notes Receivable, Net and Accounts Receivable Securitization

D.   Accounts and notes receivable, net and accounts receivable securitization

Accounts and notes receivable, net consist of the following:

	April 30,	July 31,
	2011	2010
Accounts receivable pledged as collateral	$163,897	$         0
Accounts receivable	76,132	33,725
Note receivable from Ferrellgas Receivables	0	44,927
Retained interest in Ferrellgas Receivables	0	15,323
Other	315	269
Less: Allowance for doubtful accounts	(4,652)	(5,010)
Accounts and notes receivable, net	$235,692	$89,234

See Note B – Summary of significant accounting policies - (5) New accounting standards - Transfers of financial assets and variable interest entities - for a discussion of amendments to existing GAAP which required Ferrellgas, L.P. to begin consolidating its previously unconsolidated QSPE, Ferrellgas Receivables, effective August 1, 2010. Upon consolidation, Ferrellgas, L.P. now recognizes accounts receivable that have been sold to Ferrellgas Receivables as "Accounts receivable pledged as collateral" and eliminates the previously recognized "Note receivable from Ferrellgas Receivables" and "Retained interest in Ferrellgas Receivables."

Ferrellgas, L.P., through Ferrellgas Receivables, securitizes a portion of its trade accounts receivable through a commercial paper conduit for proceeds of up to $145.0 million. At April 30, 2011, $163.9 million of trade accounts receivable were pledged as collateral against $84.0 million of collateralized notes payable due to the commercial paper conduit. These accounts receivable pledged as collateral are bankruptcy remote from Ferrellgas, L.P. Ferrellgas, L.P. does not provide any guarantee or similar support to the collectability of these accounts receivable pledged as collateral. 

Ferrellgas, L.P. structured Ferrellgas Receivables in order to facilitate securitization transactions while complying with Ferrellgas, L.P.'s various debt covenants. If the covenants were compromised, funding from the facility could be restricted or suspended, or its costs could increase. As of April 30, 2011, Ferrellgas, L.P. had received cash proceeds of $84.0 million from trade accounts receivables securitized, with the ability to receive proceeds of an additional $21.0 million. Borrowings under the accounts receivable securitization facility had a weighted average interest rate of 3.1% as of April 30, 2011.