Leases

12 Months Ended

Jul. 31, 2025

Leases

Leases

K.        Leases

Ferrellgas has lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. Variable lease components include lease payments with payment escalation based on the Consumer Price Index, and other variable items, such as common area maintenance and taxes.

Key assumptions include the discount rate, the impact of purchase options and renewal options on Ferrellgas’ lease term, as well as the assessment of residual value guarantees.

Ferrellgas’ transportation equipment leases generally have purchase options. However, in most circumstances Ferrellgas is not certain if it will exercise the purchase option at lease inception. As circumstances dictate, it may instead return the existing equipment to the lessor and sign a new lease. Ferrellgas’ transportation equipment leases often contain residual value guarantees, but they are not reflected in Ferrellgas’ lease liabilities as its lease rates are such that residual value guarantees are not expected to be owed at the end of its leases.

Ferrellgas has 35 vehicle as of July 31, 2025, and 11 vehicles as of July 31, 2024, under what would have been deemed finance leases resulting in failed sale-leaseback transactions. The related finance obligation is included in Other current liabilities and Other liabilities in the consolidated balance sheets for fiscal 2025 and 2024. See the Property, plant and equipment, net and Certain cash flow and non-cash activities sections in Note E “Supplemental financial statement information” for additional information.

Ferrellgas’ real estate leases will often have an option to extend the lease, but it is typically not reasonably certain of exercising extension options. As customer demand changes over time, Ferrellgas typically maintains the ability to move to more advantageous locations, relocate to other leased and owned locations, or discontinue service from particular locations.

The following table provides the operating and financing ROU assets and lease liabilities as of July 31, 2025 and 2024:

Leases	Classification		July 31, 2025		July 31, 2024
Assets
Operating lease assets	Operating lease ROU assets	$	39,045	$	47,620
Financing lease assets	Other assets, net		37,803		24,789
Total leased assets		$	76,848	$	72,409
Liabilities
Current
Operating	Current operating lease liabilities	$	16,082	$	22,448
Financing	Other current liabilities		12,391		8,726
Noncurrent
Operating	Operating lease liabilities		24,079		26,006
Financing	Other liabilities		27,161		17,300
Total leased liabilities		$	79,713	$	74,480

The following table provides the lease expenses for the years ended July 31, 2025, 2024 and 2023:

		For the year ended July 31,
Leases expense	Classification	2025		2024		2023
Operating lease expense	Operating expense - personnel, vehicle, plant and other	$	10,088	$	9,166	$	7,194
	Operating expense - equipment lease expense		17,586		20,727		19,724
	Cost of sales - propane and other gas liquids sales		—		—		990
	General and administrative expense		894		347		1,605
Total operating lease expense			28,568		30,240		29,513
Short-term expense	Operating expense - personnel, vehicle, plant and other		9,731		9,952		10,654
	General and administrative expense		609		351		342
Total short-term expense			10,340		10,303		10,996
Variable lease expense	Operating expense - personnel, vehicle, plant and other		843		1,168		3,032
	Operating expense - equipment lease expense		779		745		2,588
Total variable lease expense			1,622		1,913		5,620
Finance lease expense:
Amortization of leased assets	Depreciation and amortization expense		10,614		7,128		7,540
Interest on lease liabilities	Interest expense		2,816		2,110		2,514
Total finance lease expense			13,430		9,238		10,054
Total lease expense		$	53,960	$	51,694	$	56,183

Minimum annual payments under existing operating and finance lease liabilities as of July 31, 2025 are as follows:

Maturities of lease liabilities		Operating leases		Finance leases		Total
2026	$	16,819	$	14,676	$	31,495
2027		11,061		11,715		22,776
2028		6,859		6,887		13,746
2029		4,756		4,552		9,308
2030		2,023		2,858		4,881
Thereafter		7,173		6,433		13,606
Total lease payments	$	48,691	$	47,121	$	95,812
Less: Imputed interest		(8,530)		(7,569)		(16,099)
Present value of lease liabilities	$	40,161	$	39,552	$	79,713

The following table represents the weighted-average remaining lease term and discount rate as of July 31, 2025 and 2024, respectively:

	As of July 31, 2025		As of July 31, 2024
Lease type	Weighted-average remaining lease term (years)	Weighted-average discount rate	Weighted-average remaining lease term (years)	Weighted-average discount rate
Operating leases	4.6	7.2%	4.2	7.4%
Finance leases	4.8	7.3%	4.2	7.6%

Cash flow information is presented below:

	For the year ended July 31,
	2025		2024		2023
Cash paid for amounts included in the measurement of lease liabilities for operating leases:
Operating cash flows	$	25,816	$	29,019	$	29,251
Cash paid for amounts included in the measurement of lease liabilities for financing leases:
Operating cash flows	$	11,109	$	9,377	$	9,117
Financing cash flows	$	11,320	$	5,363	$	6,672