Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities (Tables)

3 Months Ended

Oct. 31, 2016

Fair Value of Financial Derivatives Balance Sheet Locations

The following tables provide a summary of the fair value of derivatives in Ferrellgas’ condensed consolidated balance sheets as of October 31, 2016 and July 31, 2016:  

	October 31, 2016
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Location	Fair value		Location	Fair value
Derivatives designated as hedging instruments
Commodity derivatives-propane	Prepaid expenses and other current assets	$	2,458	Other current liabilities	$	3,820
Commodity derivatives-propane	Other assets, net	3,738		Other liabilities	370
Interest rate swap agreements	Prepaid expenses and other current assets	1,467		Other current liabilities	1,919
Interest rate swap agreements	Other assets, net	2,666		Other liabilities	726
Derivatives not designated as hedging instruments
Commodity derivatives-vehicle fuel	Prepaid expenses and other current assets	—		Other current liabilities	2,119
Commodity derivatives- crude oil	Prepaid expenses and other current assets	476		Other current liabilities	173
	Total	$	10,805	Total	$	9,127
	July 31, 2016
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Location	Fair value		Location	Fair value
Derivatives designated as hedging instruments
Commodity derivatives-propane	Prepaid expenses and other current assets	$	2,263	Other current liabilities	$	10,184
Commodity derivatives-propane	Other assets, net	3,056		Other liabilities	1,597
Interest rate swap agreements	Prepaid expenses and other current assets	1,654		Other current liabilities	2,309
Interest rate swap agreements	Other assets, net	4,176		Other liabilities	1,244
Derivatives not designated as hedging instruments
Commodity derivatives-vehicle fuel	Prepaid expenses and other current assets	—		Other current liabilities	3,996
Commodity derivatives-crude oil	Prepaid expenses and other current assets	2,922		Other current liabilities	1,912
	Total	$	14,071	Total	$	21,242

Schedule of Derivative Collateral

The following tables provide a summary of cash margin balances as of October 31, 2016 and July 31, 2016, respectively:

	October 31, 2016
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expenses and other current assets	$	3,298	Other current liabilities	$	747
	Other assets, net	1,287		Other liabilities	2,696
		$	4,585		$	3,443

	July 31, 2016
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expenses and other current assets	$	8,252	Other current liabilities	$	—
	Other assets, net	1,275		Other liabilities	—
		$	9,527		$	—

Fair Value Hedge Derivative Effect on Earnings

The following tables provide a summary of the effect on Ferrellgas' condensed consolidated statements of operations for the three months endedOctober 31, 2016 and 2015 due to derivatives designated as fair value hedging instruments:  

		Amount of Gain Recognized on Derivative				Amount of Interest Expense Recognized on Fixed-Rated Debt (Related Hedged Item)
Derivative Instrument	Location of Gain Recognized on Derivative	For the three months ended October 31,				For the three months ended October 31,
		2016		2015		2016			2015
Interest rate swap agreements	Interest expense	$	420	$	537	$	(2,275	)	$	(2,275	)

Cash Flow Hedge Derivative Effect on Comprehensive Income

The following tables provide a summary of the effect on Ferrellgas’ condensed consolidated statements of comprehensive loss for the three months endedOctober 31, 2016 and 2015 due to derivatives designated as cash flow hedging instruments:

	For the three months ended October 31, 2016
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI			Location of Gain (Loss) Reclassified from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income
					Effective portion			Ineffective portion
Commodity derivatives	$	4,873		Cost of sales-propane and other gas liquids sales	$	(3,596	)	$	—
Interest rate swap agreements	265			Interest expense	(642		)	—
	$	5,138			$	(4,238	)	$	—
	For the three months ended October 31, 2015
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI			Location of Gain (Loss) Reclassified from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income
					Effective portion			Ineffective portion
Commodity derivatives	$	1,585		Cost of sales-propane and other gas liquids sales	$	(7,449	)	$	—
Interest rate swap agreements	(1,201		)	Interest expense	(777		)	—
	$	384			$	(8,226	)	$	—

Derivatives not Designated as Hedging, Effect on Earnings

The following tables provide a summary of the effect on Ferrellgas' condensed consolidated statements of operations for the three months endedOctober 31, 2016 and 2015 due to the change in fair value of derivatives not designated as hedging instruments:

	For the three months ended October 31, 2016
Derivatives Not Designated as Hedging Instruments	Amount of Gain (Loss) Recognized in Income			Location of Gain (Loss) Recognized in Income
Commodity derivatives - crude oil	$	(1,241	)	Cost of sales - midstream operations
Commodity derivatives - vehicle fuel	$	1,027		Operating expense
	For the three months ended October 31, 2015
Derivatives Not Designated as Hedging Instruments	Amount of Gain (Loss) Recognized in Income			Location of Gain (Loss) Recognized in Income
Commodity derivatives - vehicle fuel	$	(1,038	)	Operating expense

Changes in Derivative Value Effect on Other Comprehensive Income (Loss)

The changes in derivatives included in AOCI for the three months endedOctober 31, 2016 and 2015 were as follows:  

	For the three months ended October 31,
Gains and losses on derivatives included in AOCI	2016			2015
Beginning balance	$	(9,815	)	$	(38,906	)
Change in value of risk management commodity derivatives	4,873			1,585
Reclassification of gains and losses on commodity hedges to cost of sales - propane and other gas liquids sales, net	3,596			7,449
Change in value of risk management interest rate derivatives	265			(1,201		)
Reclassification of gains and losses on interest rate hedges to interest expense	642			777
Ending balance	$	(439	)	$	(30,296	)

Ferrellgas, L.P. [Member]

Fair Value of Financial Derivatives Balance Sheet Locations

The following tables provide a summary of the fair value of derivatives in Ferrellgas, L.P.’s condensed consolidated balance sheets as of October 31, 2016 and July 31, 2016: 

	October 31, 2016
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Location	Fair value		Location	Fair value
Derivatives designated as hedging instruments
Commodity derivatives-propane	Prepaid expenses and other current assets	$	2,458	Other current liabilities	$	3,820
Commodity derivatives-propane	Other assets, net	3,738		Other liabilities	370
Interest rate swap agreements	Prepaid expenses and other current assets	1,467		Other current liabilities	1,919
Interest rate swap agreements	Other assets, net	2,666		Other liabilities	726
Derivatives not designated as hedging instruments
Commodity derivatives-vehicle fuel	Prepaid expenses and other current assets	—		Other current liabilities	2,119
Commodity derivatives- crude oil	Prepaid expenses and other current assets	476		Other current liabilities	173
	Total	$	10,805	Total	$	9,127
	July 31, 2016
	Asset Derivatives			Liability Derivatives
Derivative Instrument	Location	Fair value		Location	Fair value
Derivatives designated as hedging instruments
Commodity derivatives	Prepaid expenses and other current assets	$	2,263	Other current liabilities	$	10,184
Commodity derivatives	Other assets, net	3,056		Other liabilities	1,597
Interest rate swap agreements	Prepaid expenses and other current assets	1,654		Other current liabilities	2,309
Interest rate swap agreements	Other assets, net	4,176		Other liabilities	1,244
Derivatives not designated as hedging instruments
Commodity derivatives - vehicle fuel	Prepaid expenses and other current assets	—		Other current liabilities	3,996
Commodity derivatives-crude oil	Prepaid expenses and other current assets	2,922		Other current liabilities	1,912
	Total	$	14,071	Total	$	21,242

Schedule of Derivative Collateral

The following tables provide a summary of cash margin balances as of October 31, 2016 and July 31, 2016, respectively:

	October 31, 2016
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expenses and other current assets	$	3,298	Other current liabilities	$	747
	Other assets, net	1,287		Other liabilities	2,696
		$	4,585		$	3,443

	July 31, 2016
	Assets			Liabilities
Description	Location	Amount		Location	Amount
Margin Balances	Prepaid expenses and other current assets	$	8,252	Other current liabilities	$	—
	Other assets, net	1,275		Other liabilities	—
		$	9,527		$	—

Fair Value Hedge Derivative Effect on Earnings

The following table provides a summary of the effect on Ferrellgas, L.P.’s condensed consolidated statements of operations for the three and three months endedOctober 31, 2016 and 2015 due to derivatives designated as fair value hedging instruments:

		Amount of Gain Recognized on Derivative				Amount of Interest Expense Recognized on Fixed-Rated Debt (Related Hedged Item)
Derivative Instrument	Location of Gain Recognized on Derivative	For the three months ended October 31,				For the three months ended October 31,
		2016		2015		2016			2015
Interest rate swap agreements	Interest expense	$	420	$	537	$	(2,275	)	$	(2,275	)

Cash Flow Hedge Derivative Effect on Comprehensive Income

The following tables provide a summary of the effect on Ferrellgas, L.P.’s condensed consolidated statements of comprehensive loss for the three months endedOctober 31, 2016 and 2015 due to derivatives designated as cash flow hedging instruments:  

	For the three months ended October 31, 2016
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI		Location of Gain (Loss) Reclassified from AOCL into Income	Amount of Gain (Loss) Reclassified from AOCL into Income
				Effective portion			Ineffective portion
Commodity derivatives	$	4,873	Cost of sales-propane and other gas liquids sales	$	(3,596	)	$	—
Interest rate swap agreements	265		Interest expense	(642		)	—
	$	5,138		$	(4,238	)	$	—

	For the three months ended October 31, 2015
Derivative Instrument	Amount of Gain (Loss) Recognized in AOCI			Location of Gain (Loss) Reclassified from AOCL into Income	Amount of Gain (Loss) Reclassified from AOCL into Income
					Effective portion			Ineffective portion
Commodity derivatives	$	1,585		Cost of sales-propane and other gas liquids sales	$	(7,449	)	$	—
Interest rate swap agreements	(1,201		)	Interest expense	(777		)	—
	$	384			$	(8,226	)	$	—

Derivatives not Designated as Hedging, Effect on Earnings

The following tables provide a summary of the effect on Ferrellgas, L.P.'s condensed consolidated statements of operations for the three months endedOctober 31, 2016 and 2015 due to the change in fair value of derivatives not designated as hedging instruments:

	For the three months ended October 31, 2016
Derivatives Not Designated as Hedging Instruments	Amount of Gain (Loss) Recognized in Income			Location of Gain (Loss) Recognized in Income
Commodity derivatives - crude oil	$	(1,241	)	Cost of sales - midstream operations
Commodity derivatives - vehicle fuel	$	1,027		Operating expense
	For the three months ended October 31, 2015
Derivatives Not Designated as Hedging Instruments	Amount of Gain (Loss) Recognized in Income			Location of Gain (Loss) Recognized in Income
Commodity derivatives - vehicle fuel	$	(1,038	)	Operating expense

Changes in Derivative Value Effect on Other Comprehensive Income (Loss)

The changes in derivatives included in AOCI for the three months endedOctober 31, 2016 and 2015 were as follows: 

	For the three months ended October 31,
Gains and losses on derivatives included in AOCI	2016			2015
Beginning balance	$	(9,815	)	$	(38,906	)
Change in value of risk management commodity derivatives	4,873			1,585
Reclassification of gains and losses on commodity hedges to cost of sales - propane and other gas liquids sales, net	3,596			7,449
Change in value of risk management interest rate derivatives	265			(1,201		)
Reclassification of gains and losses on interest rate hedges to interest expense	642			777
Ending balance	$	(439	)	$	(30,296	)