Accounts And Notes Receivable, Net And Accounts Receivable Securitization

12 Months Ended

Jul. 31, 2017

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Accounts and notes receivable, net and accounts receivable securitization

Accounts and notes receivable, net consist of the following:

	2017			2016
Accounts receivable pledged as collateral	$	109,407		$	106,464
Accounts receivable	47,346			43,148
Note receivable - Jamex, current portion	10,000			5,000
Other	307			38
Less: Allowance for doubtful accounts	(1,976		)	(5,067		)
Accounts and notes receivable, net	$	165,084		$	149,583

During July 2016, Ferrellgas executed an amendment to its accounts receivable securitization facility with Wells Fargo Bank, N.A., Fifth Third Bank and SunTrust Bank. This accounts receivable securitization facility has up to $225.0 million of capacity and matures on the earlier of the Secured Credit Facility maturity date and July 29, 2019. As part of this facility, Ferrellgas, through Ferrellgas Receivables, securitizes a portion of its trade accounts receivable through a commercial paper conduit for proceeds of up to $225.0 million during the months of January and February $175.0 million during the months of March, April, November and December and $145.0 million for all other months, depending on the availability of undivided interests in its accounts receivable from certain customers. At July 31, 2017, $109.4 million of trade accounts receivable were pledged as collateral against $69.0 million of collateralized notes payable due to the commercial paper conduit. At July 31, 2016, $106.5 million of trade accounts receivable were pledged as collateral against $64.0 million of collateralized notes payable due to the commercial paper conduit. These accounts receivable pledged as collateral are bankruptcy remote from Ferrellgas. Ferrellgas does not provide any guarantee or similar support to the collectability of these accounts receivable pledged as collateral. 

Ferrellgas structured Ferrellgas Receivables in order to facilitate securitization transactions while complying with Ferrellgas’ various debt covenants. If the covenants were compromised, funding from the facility could be restricted or suspended, or its costs could increase. As of July 31, 2017, Ferrellgas had received cash proceeds of $69.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. As of July 31, 2016, Ferrellgas had received cash proceeds of $64.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. Borrowings under the accounts receivable securitization facility had a weighted average interest rate of 4.0% and 3.0% as of July 31, 2017 and 2016, respectively.

On September 27, 2016, Ferrellgas entered into a fourth amendment to its accounts receivable securitization facility to modify the maximum consolidated leverage ratio covenant.

On April 28, 2017, Ferrellgas entered into a fifth amendment to its accounts receivable securitization facility to modify the maximum consolidated leverage ratio covenant and the interest coverage ratio covenant.

Consolidated leverage ratio

The consolidated leverage ratio is defined as the ratio of total debt of the operating partnership to trailing four quarters earnings before interest expense, income tax expense, depreciation and amortization expense ("EBITDA") (both as adjusted for certain, specified items) of the operating partnership, as detailed in Ferrellgas' secured credit facility and accounts receivable securitization facility.

On April 28, 2017, the maximum consolidated leverage covenant was modified as follows:

	Maximum leverage ratio	Maximum leverage ratio
Date	(prior to fifth amendment)	(after fifth amendment)
July 31, 2017	6.05	7.75
October 31, 2017	5.95	7.75
January 31, 2018	5.95	7.75
April 30, 2018	5.50	7.75
July 31, 2018 & thereafter	5.50	5.50

Ferrellgas' consolidated leverage ratio was 7.46x as of July 31, 2017; the margin allows for approximately $67.5 million of additional borrowing capacity or approximately $8.7 million less EBITDA.

Consolidated interest coverage ratio

The consolidated interest coverage ratio is defined as the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of the operating partnership, as detailed in Ferrellgas' secured credit facility and accounts receivable securitization facility.

On April 28, 2017, the minimum consolidated interest coverage ratio was modified as follows:

	Minimum consolidated interest coverage ratio	Minimum consolidated interest coverage ratio
Date	(prior to fifth amendment)	(after fifth amendment)
July 31, 2017	2.50	1.75
October 31, 2017	2.50	1.75
January 31, 2018	2.50	1.75
April 30, 2018	2.50	1.75
July 31, 2018 & thereafter	2.50	2.50

Ferrellgas' consolidated interest coverage ratio was 1.99x as of July 31, 2017; the margin allows for approximately $15.9 million of additional interest expense or approximately $27.8 million less EBITDA. See additional disclosure about Ferrellgas' financial covenants in Note J – Debt.

Maximum Leverage Ratio

On April 28, 2017, the maximum consolidated leverage covenant was modified as follows:

	Maximum leverage ratio	Maximum leverage ratio
Date	(prior to fifth amendment)	(after fifth amendment)
July 31, 2017	6.05	7.75
October 31, 2017	5.95	7.75
January 31, 2018	5.95	7.75
April 30, 2018	5.50	7.75
July 31, 2018 & thereafter	5.50	5.50

On April 28, 2017, the maximum consolidated leverage covenant was modified as follows:

	Maximum leverage ratio	Maximum leverage ratio
Date	(prior to sixth amendment)	(after sixth amendment)
July 31, 2017	6.05	7.75
October 31, 2017	5.95	7.75
January 31, 2018	5.95	7.75
April 30, 2018	5.50	7.75
July 31, 2018 & thereafter	5.50	5.50

Ferrellgas, L.P. [Member]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Accounts and notes receivable, net consist of the following:

	2017			2016
Accounts receivable pledged as collateral	$	109,407		$	106,464
Accounts receivable	47,346			43,148
Note receivable - Jamex, current portion	10,000			5,000
Other	307			38
Less: Allowance for doubtful accounts	(1,976		)	(5,067		)
Accounts and notes receivable, net	$	165,084		$	149,583

During July 2016, Ferrellgas, L.P. executed an amendment to its accounts receivable securitization facility with Wells Fargo Bank, N.A., Fifth Third Bank and SunTrust Bank. This accounts receivable securitization facility has up to $225.0 million of capacity and matures on the earlier of the Secured Credit Facility maturity date and July 29, 2019. As part of this facility, Ferrellgas, L.P. through Ferrellgas Receivables, securitizes a portion of its trade accounts receivable through a commercial paper conduit for proceeds of up to $225.0 million during the months of January and February, $175.0 million during the months of March, April, November and December and $145.0 million for all other months, depending on the availability of undivided interests in its accounts receivable from certain customers. At July 31, 2017, $109.4 million of trade accounts receivable were pledged as collateral against $69.0 million of collateralized notes payable due to the commercial paper conduit. At July 31, 2016, $106.5 million of trade accounts receivable were pledged as collateral against $64.0 million of collateralized notes payable due to the commercial paper conduit. These accounts receivable pledged as collateral are bankruptcy remote from Ferrellgas, L.P. Ferrellgas, L.P. does not provide any guarantee or similar support to the collectability of these accounts receivable pledged as collateral. 

Ferrellgas, L.P. structured Ferrellgas Receivables in order to facilitate securitization transactions while complying with Ferrellgas, L.P.’s various debt covenants. If the covenants were compromised, funding from the facility could be restricted or suspended, or its costs could increase. As of July 31, 2017, Ferrellgas, L.P. had received cash proceeds of $69.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. As of July 31, 2016, Ferrellgas, L.P. had received cash proceeds of $64.0 million from trade accounts receivables securitized, with no remaining capacity to receive additional proceeds. Borrowings under the accounts receivable securitization facility had a weighted average interest rate of 4.0% and 3.0% as of July 31, 2017 and 2016, respectively.

On September 27, 2016, Ferrellgas, L.P. entered into a fourth amendment to its accounts receivable securitization facility to modify the maximum consolidated leverage ratio covenant.

On April 28, 2017, Ferrellgas, L.P. entered into a fifth amendment to its accounts receivable securitization facility to modify the maximum consolidated leverage ratio covenant and the interest coverage ratio covenant.

Consolidated leverage ratio

The consolidated leverage ratio is defined as the ratio of total debt of the operating partnership to trailing four quarters earnings before interest expense, income tax expense, depreciation and amortization expense ("EBITDA") (both as adjusted for certain, specified items) of the operating partnership, as detailed in Ferrellgas, L.P.'s secured credit facility and accounts receivable securitization facility.

On April 28, 2017, the maximum consolidated leverage covenant was modified as follows:

	Maximum leverage ratio	Maximum leverage ratio
Date	(prior to fifth amendment)	(after fifth amendment)
July 31, 2017	6.05	7.75
October 31, 2017	5.95	7.75
January 31, 2018	5.95	7.75
April 30, 2018	5.50	7.75
July 31, 2018 & thereafter	5.50	5.50

Ferrellgas, L.P.'s consolidated leverage ratio was 7.46x as of July 31, 2017; the margin allows for approximately $67.5 million of additional borrowing capacity or approximately $8.7 million less EBITDA.

Consolidated interest coverage ratio

The consolidated interest coverage ratio is defined as the ratio of trailing four quarters EBITDA to interest expense (both as adjusted for certain, specified items) of the operating partnership, as detailed in Ferrellgas, L.P.'s secured credit facility and accounts receivable securitization facility.

On April 28, 2017, the minimum consolidated interest coverage ratio was modified as follows:

	Minimum consolidated interest coverage ratio	Minimum consolidated interest coverage ratio
Date	(prior to fifth amendment)	(after fifth amendment)
July 31, 2017	2.50	1.75
October 31, 2017	2.50	1.75
January 31, 2018	2.50	1.75
April 30, 2018	2.50	1.75
July 31, 2018 & thereafter	2.50	2.50

Ferrellgas L.P.'s consolidated interest coverage ratio was 1.99x as of July 31, 2017; the margin allows for approximately $15.9 million of additional interest expense or approximately $27.8 million less EBITDA. See additional disclosure about Ferrellgas' financial covenants in Note J – Debt.

Maximum Leverage Ratio

On April 28, 2017, the maximum consolidated leverage covenant was modified as follows:

	Maximum leverage ratio	Maximum leverage ratio
Date	(prior to fifth amendment)	(after fifth amendment)
July 31, 2017	6.05	7.75
October 31, 2017	5.95	7.75
January 31, 2018	5.95	7.75
April 30, 2018	5.50	7.75
July 31, 2018 & thereafter	5.50	5.50

On April 28, 2017, the maximum consolidated leverage covenant was modified as follows:

	Maximum leverage ratio	Maximum leverage ratio
Date	(prior to sixth amendment)	(after sixth amendment)
July 31, 2017	6.05	7.75
October 31, 2017	5.95	7.75
January 31, 2018	5.95	7.75
April 30, 2018	5.50	7.75
July 31, 2018 & thereafter	5.50	5.50