Fair Value Measurements
 6 Months Ended
Jan. 31, 2016
Fair Value Measurements
Fair value measurements
 
Derivative financial instruments, assets held for sale, goodwill impairment and contingent consideration
 
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 January 31, 2016 and July 31, 2015:
 
 
Asset (Liability)
 
 
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Unobservable Inputs (Level 3)
 
Total
January 31, 2016:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Interest rate swap agreements
 
$
—

 
$
3,890

 
$
—

 
$
3,890

Commodity derivatives
 
$
—

 
$
6,957

 
$
—

 
$
6,957

Liabilities:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Interest rate swap agreements
 
$
—

 
$
(4,210
)
 
$
—

 
$
(4,210
)
Commodity derivatives
 
$
—

 
$
(42,745
)
 
$
—

 
$
(42,745
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
July 31, 2015:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Interest rate swap agreements
 
$
—

 
$
1,828

 
$
—

 
$
1,828

Commodity derivatives
 
$
—

 
$
4,655

 
$
—

 
$
4,655

Liabilities:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Interest rate swap agreements
 
$
—

 
$
(4,748
)
 
$
—

 
$
(4,748
)
Commodity derivatives
 
$
—

 
$
(42,375
)
 
$
—

 
$
(42,375
)
Contingent consideration

$
—


$
—

 
$
(100
)
 
$
(100
)


The following is a reconciliation of the opening and closing balances for the liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period ended January 31, 2016:

 
Contingent consideration liability
Balance at July 31, 2015
 
$
100

     Increase in fair value related to accretion
 
—

     Change in fair value included in earnings
 
(100
)
Balance at January 31, 2016
 
$
—



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. The fair values of interest rate swap contracts are based upon third-party quotes or indicative values based on recent market transactions. The fair value of the trucks classified as assets held for sale represents Ferrellgas' estimate of expected sales price less costs to sell. The fair value measurements used to determine this value of the assets held for sale were based on a market approach utilizing prices from prior transactions and third party pricing information.

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 January 31, 2016 and July 31, 2015, the estimated fair value of Ferrellgas’ long-term debt instruments was $1,608.3 million and $1,889.8 million, respectively. Ferrellgas estimates the fair value of long-term debt based on quoted market prices. The fair value of our 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.
Ferrellgas, L.P. [Member]  
Fair Value Measurements
Fair value measurements
 
Derivative financial instruments, assets held for sale, goodwill impairment and contingent consideration
 
The following table presents Ferrellgas, L.P.’s 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 January 31, 2016 and July 31, 2015:
 
 
Asset (Liability)
 
 
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Unobservable Inputs (Level 3)
 
Total
January 31, 2016:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Interest rate swap agreements
 
$
—

 
$
3,890

 
$
—

 
$
3,890

Commodity derivatives
 
$
—

 
$
6,957

 
$
—

 
$
6,957

Liabilities:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Interest rate swap agreements
 
$
—

 
$
(4,210
)
 
$
—

 
$
(4,210
)
Commodity derivatives
 
$
—

 
$
(42,745
)
 
$
—

 
$
(42,745
)
 
 
 
 
 
 
 
 
 
July 31, 2015:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Interest rate swap agreements
 
$
—

 
$
1,828

 
$
—

 
$
1,828

Commodity derivatives
 
$
—

 
$
4,655

 
$
—

 
$
4,655

Liabilities:
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
Interest rate swap agreements
 
$
—

 
$
(4,748
)
 
$
—

 
$
(4,748
)
Commodity derivatives
 
$
—

 
$
(42,375
)
 
$
—

 
$
(42,375
)
Contingent consideration

$
—


$
—


$
(100
)

$
(100
)


The following is a reconciliation of the opening and closing balances for the liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period ended January 31, 2016:

 
Contingent consideration liability
Balance at July 31, 2015
 
$
100

     Increase in fair value related to accretion
 
—

     Change in fair value included in earnings
 
(100
)
Balance at January 31, 2016
 
$
—

Methodology

The fair values of Ferrellgas, L.P.’s 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. The fair values of interest rate swap contracts are based upon third-party quotes or indicative values based on recent market transactions. The fair value of the trucks classified as assets held for sale represents Ferrellgas, L.P.'s estimate of expected sales price less costs to sell. The fair value measurements used to determine this value of the assets held for sale were based on a market approach utilizing prices from prior transactions and third party pricing information.

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 January 31, 2016 and July 31, 2015, the estimated fair value of Ferrellgas, L.P.’s long-term debt instruments was $1,446.3 million and $1,700.5 million, respectively. Ferrellgas estimates the fair value of long-term debt based on quoted market prices. The fair value of our consolidated debt obligations is a Level 2 valuation based on the observable inputs used for similar liabilities.

Ferrellgas, L.P. 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.