Derivative instruments and hedging activities

12 Months Ended

Jul. 31, 2025

Derivative instruments and hedging activities

Derivative instruments and hedging activities

N.        Derivative instruments and hedging activities

Ferrellgas is exposed to certain market risks related to its ongoing business operations. These risks include exposure to changing commodity prices as well as fluctuations in interest rates. Ferrellgas utilizes derivative instruments to manage its exposure to fluctuations in commodity prices. Of these, the propane commodity derivative instruments are designated as cash flow hedges.

Derivative instruments and hedging activity

During the years ended July 31, 2025 and 2024, Ferrellgas did not recognize any gain or loss in earnings related to hedge ineffectiveness and did not exclude any component of financial derivative contract gains or losses from the assessment of hedge effectiveness related to commodity cash flow hedges.

The following tables provide a summary of the fair value of derivatives within Ferrellgas’ consolidated balance sheets as of July 31, 2025 and 2024:

	Final	July 31, 2025
	Maturity	Asset Derivatives			Liability Derivatives
Derivative Instrument	Date	Location	Fair value		Location	Fair value
Derivatives designated as hedging instruments	December 2026
Commodity derivatives-propane		Prepaid expenses and other current assets	$	3,244	Other current liabilities	$	3,306
Commodity derivatives-propane		Other assets, net		326	Other liabilities		348
		Total	$	3,570	Total	$	3,654

	Final	July 31, 2024
	Maturity	Asset Derivatives			Liability Derivatives
Derivative Instrument	Date	Location	Fair value		Location	Fair value
Derivatives designated as hedging instruments	December 2025
Commodity derivatives-propane		Prepaid expenses and other current assets	$	5,925	Other current liabilities	$	4,379
Commodity derivatives-propane		Other assets, net		594	Other liabilities		81
		Total	$	6,519	Total	$	4,460

Ferrellgas’ exchange traded commodity derivative contracts require a cash margin deposit as collateral for contracts that are in a negative mark-to-market position. These cash margin deposits will be returned if mark-to-market conditions improve or will be applied against the cash settlement when the contracts are settled. Liabilities represent cash margin deposits received by Ferrellgas for contracts that are in a positive mark-to-market position. The following tables provide a summary of cash margin balances as of July 31, 2025 and July 31, 2024, respectively:

	July 31, 2025
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expense and other current assets	$	6,222	Other current liabilities	$	2,193
	Other assets, net		949	Other liabilities		249
	Total	$	7,171	Total	$	2,442

	July 31, 2024
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expense and other current assets	$	6,911	Other current liabilities	$	3,111
	Other assets, net		824	Other liabilities		438
	Total	$	7,735	Total	$	3,549

The following tables provide a summary of the effect on Ferrellgas’ consolidated statements of comprehensive income for the years ended July 31, 2025, 2024 and 2023 due to derivatives designated as cash flow hedging instruments:

	For the year ended July 31, 2025
				Amount of Gain
	Amount of Gain		Location of Gain	Reclassified from
	Recognized in		Reclassified from	AOCI into Income
Derivative Instrument	AOCI		AOCI into Income	Effective portion		Ineffective portion
Commodity derivatives	$	6,258	Cost of sales - propane and other gas liquids sales	$	8,400	$	—

	For the year ended July 31, 2024
				Amount of Gain
	Amount of Gain		Location of Gain	Reclassified from
	Recognized in		Reclassified from	AOCI into Income
Derivative Instrument	AOCI		AOCI into Income	Effective portion		Ineffective portion
Commodity derivatives	$	3,448	Cost of sales - propane and other gas liquids sales	$	2,472	$	—

	For the year ended July 31, 2023
				Amount of Loss
	Amount of Loss		Location of Loss	Reclassified from
	Recognized in		Reclassified from	AOCI into Income
Derivative Instrument	AOCI		AOCI into Income	Effective portion		Ineffective portion
Commodity derivatives	$	(48,034)	Cost of sales - propane and other gas liquids sales	$	(10,810)	$	—

Accumulated other comprehensive (loss)income

Ferrellgas partners

The changes in derivatives included in AOCI for the years ended July 31, 2025, 2024 and 2023 were as follows:

	For the year ended July 31,
Gains and losses on derivatives included in AOCI	2025		2024		2023
Beginning balance attributable to Ferrellgas Partners, L.P.	$	2,025	$	1,059	$	37,907
Change in value of risk management commodity derivatives		6,258		3,448		(48,034)
Reclassification of (gains) losses on commodity hedges to cost of sales - propane and other gas liquids sales, net		(8,400)		(2,472)		10,810
Less: amount attributable to noncontrolling interests		(22)		10		(376)
Ending balance attributable to Ferrellgas Partners, L.P.	$	(95)	$	2,025	$	1,059

The operating partnership

The changes in derivatives included in AOCI for the years ended July 31, 2025, 2024 and 2023 were as follows:

	For the year ended July 31,
Gains and losses on derivatives included in AOCI	2025		2024		2023
Beginning balance	$	2,059	$	1,083	$	38,307
Change in value of risk management commodity derivatives		6,258		3,448		(48,034)
Reclassification of (gains) losses on commodity hedges to cost of sales - propane and other gas liquids sales, net		(8,400)		(2,472)		10,810
Ending balance	$	(83)	$	2,059	$	1,083

Ferrellgas expects to reclassify net losses of approximately $0.1 million to earnings during the next 12 months. These net losses are expected to be offset by increased margins on propane sales commitments Ferrellgas has with its customers that qualify for the normal purchase normal sale exception.

During the years ended July 31, 2025, 2024 and 2023, Ferrellgas had no reclassifications to operations resulting from the discontinuance of any cash flow hedges arising from the probability of the original forecasted transactions not occurring within the originally specified period of time defined within the hedging relationship.

As of July 31, 2025, Ferrellgas had financial derivative contracts covering 4.1 million barrels of propane that were entered into as cash flow hedges of forward and forecasted purchases of propane.

Derivative financial instruments credit risk

Ferrellgas is exposed to credit loss in the event of nonperformance by counterparties to derivative financial and commodity instruments. Ferrellgas’ counterparties principally consist of major energy companies and major U.S. financial institutions. Ferrellgas maintains credit policies with regard to its counterparties that it believes reduces its overall credit risk. These policies include evaluating and monitoring counterparties’ financial condition, including their credit ratings, and entering into agreements with counterparties that govern credit limits. Certain of these agreements call for the posting of collateral by the counterparty or by Ferrellgas in the forms of letters of credit, parent guarantees or cash. Ferrellgas has concentrations of credit risk associated with derivative financial instruments held by certain derivative financial instrument counterparties. If these counterparties that make up the concentration failed to perform according to the terms of their contracts at July 31, 2025, the maximum amount of loss due to credit risk that Ferrellgas would incur based upon the gross fair values of the derivative financial instruments is zero.

From time to time Ferrellgas enters into derivative contracts that have credit-risk-related contingent features which dictate credit limits based upon Ferrellgas’ debt rating. There were no open derivative contracts with credit-risk-related contingent features as of July 31, 2025.