Contingencies and commitments

12 Months Ended

Jul. 31, 2025

Contingencies and commitments

Contingencies and commitments

P.        Contingencies and commitments

Litigation

Ferrellgas’ policy is to expense litigation costs as incurred. Ferrellgas’ operations are subject to all operating hazards and risks normally incidental to the handling, storing, transporting and otherwise providing for use by consumers of combustible liquids such as propane. As a result, at any given time, we can be threatened with or named as a defendant in various lawsuits arising in the ordinary course of business. Other than as discussed below, we are not a party to any legal proceedings other than various claims and lawsuits arising in the ordinary course of business. It is not possible to determine the ultimate disposition of these matters; however, management is of the opinion that there are no known claims or contingent claims that are reasonably expected to have a material adverse effect on our consolidated financial condition, results of operations and cash flows.

As previously reported in the Company’s prior Quarterly and Annual Reports, in 2017 Ferrellgas, Bridger Logistics, LLC and other defendants were named in a lawsuit (the “EDPA Lawsuit”) filed by Eddystone Rail Company (“Eddystone”) on February 2, 2017 in the U.S. District Court for the Eastern District of Pennsylvania. On January 15, 2025, Ferrellgas and the other defendants entered into a settlement agreement (the “Settlement Agreement”) with Eddystone resolving all issues in and related to the EDPA Lawsuit. The Settlement Agreement, among other things, released all parties of any claims against the other parties, resolved the judgment entered in the EDPA Lawsuit, and resulted in the dismissal of the EDPA Lawsuit, the appeal before the U.S. Court of Appeals for the Third Circuit, and numerous other related lawsuits. In settlement of the judgment in the EDPA Lawsuit, the defendants agreed to pay Eddystone the sum of $125.0 million in three installments. The first payment of $50.0 million and the second payment of $37.5 million were paid by the Company on January 15, 2025 and June 16, 2025, respectively. The final payment of $37.5 million is due on or before January 15, 2026 and is secured by a letter of credit issued under the Credit Agreement (as defined in Note H “Debt”). As of July 31, 2025, we have an accrued liability of $37.5 million in other current liabilities in our consolidated balance sheet and $125.0 million in general and administrative expense in our consolidated statement of operations. Further, as part of the settlement, the previously disclosed $190.0 million appeal bond, and the related letters of credit, have been released.

Long-term debt-related commitments

Ferrellgas has long and short-term payment obligations under agreements such as the indentures governing our senior notes. See Note H “Debt” for a description of these debt obligations and a schedule of future maturities.

Ferrellgas Partners Finance Corp

Contingencies and commitments

Contingencies and commitments

B.     Contingencies and commitments

Partners Finance Corp. serves as co-issuer and co-obligor for debt securities of Ferrellgas Partners. As of July 31, 2025 and 2024, Ferrellgas Partners had no debt securities outstanding, and Partners Finance Corp. therefore was not liable as co-issuer for any such debt securities.

Ferrellgas Finance Corp

Contingencies and commitments

Contingencies and commitments

B.     Contingencies and commitments

Finance Corp. serves as co-issuer and co-obligor for debt securities of the operating partnership. As of July 31, 2025 and 2024, Finance Corp. was liable as co-issuer and co-obligor for the operating partnership’s (i) $650 million aggregate principal amount of unsecured senior notes due April 1, 2026 (the “2026 Notes”) and (ii) $825 million aggregate principal amount of unsecured senior notes due April 1, 2029, each of which were issued on March 30, 2021. Finance Corp. is also liable for borrowings under the operating partnership’s Credit Facility, which matures on December 31, 2025.

Due to the timing of the maturities of both the 2026 Notes and the Credit Facility, and the $121.9 million in letters of credit which it secures as of July 31, 2025, management has performed an evaluation to consider whether or not there is substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of issuance of this Annual Report. Its financial statements were prepared under the assumption that it will continue as a going concern. We have developed and received internal approval on a plan to restructure our capital structure and debt and refinance and/or extend the maturity date for the Credit Facility. External advisors have been engaged to assist in this process. Ferrellgas, Inc. (the “general partner”) believes that it is probable that the plans will be successfully implemented prior to the maturities of the 2026 Notes and the Credit Facility, and these plans will alleviate the substantial doubt about Finance Corp.’s ability to continue as a going concern.