Revenue from contracts with customers

3 Months Ended

Oct. 31, 2023

Revenue from contracts with customers

Revenue from contracts with customers

H.    Revenue from contracts with customers

Disaggregation of revenue

Ferrellgas disaggregates revenues based upon the type of customer and on the type of revenue. The following table presents retail propane revenues, wholesale propane revenues and other revenues. Retail revenues result from sales to end use customers, wholesale revenues result from sales to or through resellers and all other revenues include sales of appliances and other materials, other fees charged to customers and equipment rental charges.

	For the three months ended October 31,
	2023		2022
Retail - Sales to End Users	$	227,860	$	265,974
Wholesale - Sales to Resellers		105,523		116,014
Other Gas Sales		5,551		3,856
Other		32,079		27,445
Propane and related equipment revenues	$	371,013	$	413,289

Contract assets and liabilities

Ferrellgas’ performance obligations are generally limited to the delivery of propane for its retail and wholesale contracts. Ferrellgas’ performance obligations with respect to sales of appliances and other materials and other revenues are limited to the delivery of the agreed upon good or service. Ferrellgas does not have material performance obligations that are delivered over time, thus all of its revenue is recognized at the time the goods, including propane, are delivered or installed. Ferrellgas offers “even pay” and other billing programs that can create customer deposits or advances, depending on whether Ferrellgas has delivered more propane than the customer has paid for or whether the customer has paid for more propane than what has been delivered. Revenue is recognized from these customer deposits or advances to customers at the time product is delivered. The advance or deposit is considered to be a contract asset or liability. Additionally, from time to time, we have customers that pay in advance for goods or services, and such amounts result in contract liabilities.

Ferrellgas incurs incremental commissions directly related to the acquisition or renewal of customer contracts. The commissions are calculated and paid based upon the number of gallons sold to the acquired or renewed customer. The total amount of commissions that we incur is not material, and the commissions are expensed commensurate with the deliveries to which they relate; therefore, we do not capitalize these costs.

The following table presents the opening and closing balances of our contract assets and contract liabilities:

	October 31, 2023		July 31, 2023
Contract assets	$	4,771	$	10,263
Contract liabilities
Deferred revenue (1)	$	59,147	$	51,516

(1) Of the beginning balance of deferred revenue, $16.1 million was recognized as revenue during the three months ended October 31, 2023.

Remaining performance obligations

Ferrellgas’ remaining performance obligations are generally limited to situations where customers have remitted payment but have not yet received deliveries of propane. This most commonly occurs in even pay billing programs and Ferrellgas expects that these balances will be recognized within a year or less as the customer takes delivery of propane.