Fair value measurements

3 Months Ended

Oct. 31, 2023

Fair value measurements

Fair value measurements

I.    Fair value measurements

Derivative financial instruments

The following table presents Ferrellgas’ financial assets and financial liabilities that are measured at fair value on a recurring basis for each of the fair value hierarchy levels, including both current and noncurrent portions, as of October 31, 2023 and July 31, 2023:

	Asset (Liability)
	Quoted Prices in Active
	Markets for Identical		Significant Other
	Assets and Liabilities		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
October 31, 2023:
Assets:
Derivative financial instruments:
Commodity derivatives	$	—	$	6,513	$	—	$	6,513
Liabilities:
Derivative financial instruments:
Commodity derivatives	$	—	$	(15,718)	$	—	$	(15,718)
July 31, 2023:
Assets:
Derivative financial instruments:
Commodity derivatives	$	—	$	12,165	$	—	$	12,165
Liabilities:
Derivative financial instruments:
Commodity derivatives	$	—	$	(11,082)	$	—	$	(11,082)

Methodology

The fair values of Ferrellgas’ non-exchange traded commodity derivative contracts are based upon indicative price quotations available through brokers, industry price publications or recent market transactions and related market indicators. There were no transfers between Levels 1, 2 or 3 during the three months ended October 31, 2023 and the fiscal year ended July 31, 2023.

Other financial instruments

The carrying amounts of other financial instruments included in current assets and current liabilities (except for current maturities of long-term debt) approximate their fair values because of their short-term nature. At October 31, 2023 and July 31, 2023, the estimated fair value of Ferrellgas’ long-term debt instruments was $1,336.0 million and $1,318.9 million, respectively. Ferrellgas estimates the fair value of long-term debt based on quoted market prices. The fair value of Ferrellgas’ consolidated debt obligations is a Level 2 valuation based on the observable inputs used for similar liabilities.

Ferrellgas has other financial instruments such as trade accounts receivable which could expose it to concentrations of credit risk. The credit risk from trade accounts receivable is limited because of a large customer base which extends across many different U.S. markets.