Partners' Capital

12 Months Ended

Jul. 31, 2012

Partners' Capital

I. Partners' capital

As of July 31, 2012 and 2011, limited partner units were beneficially owned by the following:

	2012	2011
Public common unitholders (1)	52,931,590	51,285,212
Ferrell Companies (2)	21,469,664	20,080,776
FCI Trading Corp. (3)	195,686	195,686
Ferrell Propane, Inc. (4)	51,204	51,204
James E. Ferrell (5)	4,358,475	4,353,475

(1) These common units are listed on the New York Stock Exchange under the symbol “FGP.”

(2) Ferrell Companies is the owner of the general partner and a 27.2% direct owner of Ferrellgas Partner’s common units and thus a related party. Ferrell Companies also beneficially owns 195,686 and 51,204 common units of Ferrellgas Partners held by FCI Trading Corp. (“FCI Trading”) and Ferrell Propane, Inc. (“Ferrell Propane”), respectively, bringing Ferrell Companies’ total beneficial ownership to 27.5%.

(3) FCI Trading is an affiliate of the general partner and thus a related party.

(4) Ferrell Propane is controlled by the general partner and thus a related party.

(5) James E. Ferrell (“Mr. Ferrell”) is the Executive Chairman and Chairman of the Board of Directors of the general partner and thus a related party.

Together these limited partner units represent Ferrellgas Partner’s limited partners’ interest and an effective 98% economic interest in Ferrellgas Partners, exclusive of the general partners’ incentive distribution rights. The general partner has an effective 2%  interest in Ferrellgas Partners, excluding incentive distribution rights. Since ongoing distributions have not yet reached the levels required to commence payment of incentive distribution rights to the general partner, distributions to the partners from operations or interim capital transactions will generally be made in accordance with the above percentages. In liquidation, allocations and distributions will be made in accordance with each common unitholder’s positive capital account.

The common units of Ferrellgas Partners represent limited partner interests in Ferrellgas Partners, which give the holders thereof the right to participate in distributions made by Ferrellgas Partners and to exercise the other rights or privileges available to such holders under the Fourth Amended and Restated Agreement of Limited Partnership of Ferrellgas Partners, L.P. dated February 18, 2003 (the “Partnership Agreement”). Under the terms of the Partnership Agreement, holders of common units have limited voting rights on matters affecting the business of Ferrellgas Partners. Generally, persons owning 20% or more of Ferrellgas Partners’ outstanding common units cannot vote; however, this limitation does not apply to those common units owned by the general partner or its “affiliates,” as such term is defined in the Partnership Agreement.

Ferrellgas maintains shelf registration statements for the issuance of common units, and other securities that may include deferred participation units, warrants and debt securities. The Partnership Agreement allows the general partner to issue an unlimited number of additional Ferrellgas general and limited partner interests and other equity securities of Ferrellgas Partners for such consideration and on such terms and conditions as shall be established by the general partner without the approval of any unitholders.

Partnership distributions paid

Ferrellgas Partners has paid the following distributions:

	For the year ended July 31,
	2012		2011		2010
Public common unitholders	$	104,192	$	94,188	$	89,001
Ferrell Companies		41,550		40,160		40,160
FCI Trading		392		392		392
Ferrell Propane		104		104		104
Mr. Ferrell		8,717		8,708		8,708
General partner		1,565		1,450		1,398
	$	156,520	$	145,002	$	139,763

OnAugust 23, 2012, Ferrellgas Partners declared a cash distribution of $0.50 per common unit for the three months ended July 31, 2012, which was paid on September 14, 2012. Included in this cash distribution were the following amounts paid to related parties:

Ferrell Companies	$	10,735
FCI Trading		98
Ferrell Propane		26
Mr. Ferrell		2,179
General partner		399

See additional discussions about transactions with related parties in Note L – Transactions with related parties.

Common unit issuances

During fiscal 2012, Ferrellgas Partners, in a non-brokered registered direct offering, issued to Ferrell Companies 1.4 million common units. Net proceeds of approximately $25.0 million were used to reduce outstanding indebtedness under the operating partnership’s secured credit facility.

During fiscal 2012, Ferrellgas Partners entered into an agreement with an institutional investor relating to a non-brokered registered direct offering of 1.5 million common units. Net proceeds of approximately $25.0 million were used to reduce outstanding indebtedness under the operating partnership’s secured credit facility.

During fiscal 2011, Ferrellgas Partners entered into an agreement with an institutional investor relating to a non-brokered registered direct offering of 1.2 million common units. Net proceeds of approximately $30.0 million were used to reduce outstanding indebtedness under the operating partnership’s secured credit facility.

During fiscal 2011, Ferrellgas Partners completed a registered public offering of 5.1 million common units representing limited partner interests. This transaction was comprised of both an original offering of 4.4 million common units and an over-allotment offering of 0.7 million common units. Net proceeds of approximately $127.3 million were used to redeem $98.0 million of its $280.0 million 8.625% fixed rate senior notes due 2020, to pay the related $8.4 million make-whole payment, to pay $2.4 million of accrued interest and to reduce outstanding indebtedness under the operating partnership’s secured credit facility.

During fiscal 2012, Ferrellgas issued 0.1 million common units valued at $1.3 million in connection with acquisitions of propane distribution assets.

During fiscal 2011, Ferrellgas issued 0.1 million common units valued at $2.9 million in connection with acquisitions of propane distribution assets.

Accumulated Other Comprehensive Loss (“AOCL”)

See Note K – Derivative instruments and hedging activities – for details regarding changes in fair value on risk management financial derivatives recorded within AOCL for the years ended July 31, 2012 and 2011.

General partner’s commitment to maintain its capital account

Ferrellgas’ partnership agreements allows the general partner to have an option to maintain its effective 2% general partner interest concurrent with the issuance of other additional equity.

During fiscal 2012, the general partner made cash contributions of $1.1 million and non-cash contributions of $0.4 million to Ferrellgas to maintain its effective 2% general partner interest.

During fiscal 2011, the general partner made cash contributions of $3.3 million and non-cash contributions of $0.5 million to Ferrellgas to maintain its effective 2% general partner interest.

Ferrellgas, L.P. [Member]

Partners' Capital

I. Partners’ capital

Partnership distributions paid

Ferrellgas, L.P. has paid the following distributions:

	For the year ended July 31,
	2012		2011		2010
Ferrellgas Partners	$	172,218	$	272,777	$	191,822
General partner		1,757		2,783		1,958

OnAugust 23, 2012, Ferrellgas, L.P. declared distributions for the three months ended July 31, 2012 to Ferrellgas Partners and the general partner of $39.9 million and $0.4 million, respectively, which were paid onSeptember 14, 2012.  

Partnership contributions

During fiscal 2012, Ferrellgas, L.P. received cash contributions of $50.7 million from Ferrellgas Partners. The proceeds were used to reduce outstanding indebtedness under Ferrellgas, L.P.’s secured credit facility.

During fiscal 2011, Ferrellgas Partners, L.P. contributed $157.7 million of proceeds from equity offerings to Ferrellgas, L.P. Ferrellgas, L.P. used these proceeds to reduce outstanding indebtedness under its secured credit facility. Ferrellgas, L.P. then distributed $107.9 million of these proceeds to Ferrellgas Partners, L.P. to fund the redemption of $98.0 million of Ferrellgas Partners, L.P.’s $280.0 million 8.625% fixed rate senior notes due 2020 and related make-whole and interest payments.

During fiscal 2012 and 2011, Ferrellgas, L.P. received asset contributions of $1.3 million and $2.9 million, respectively, from Ferrellgas Partners in connection with acquisitions of propane distribution assets.

See additional discussions about transactions with related parties in Note L – Transactions with related parties.

Accumulated other comprehensive loss (“AOCL”)

See Note K – Derivative instruments and hedging activities–  for details regarding changes in fair value on risk management financial derivatives recorded within AOCL for the years ended July 31, 2012 and 2011.

General partner’s commitment to maintain its capital account

Ferrellgas, L.P.’s partnership agreement allows the general partner to have an option to maintain its 1.0101% general partner interest concurrent with the issuance of other additional equity.

During fiscal 2012, the general partner made cash contributions of $0.5 million and non-cash contributions of $0.2  million to Ferrellgas, L.P. to maintain its 1.0101% general partner interest.

During fiscal 2011, the general partner made cash contributions of $1.6 million and non-cash contributions of $0.2 million to Ferrellgas, L.P. to maintain its 1.0101% general partner interest.