Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities (Tables)
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6 Months Ended |
Jan. 31, 2016 |
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| 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 January 31, 2016 and July 31, 2015: | | | | | | | | | | | | | | | | January 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 | | $ | 4,330 |
| | Other current liabilities | | $ | 25,956 |
| Commodity derivatives-propane | | Other assets, net | | 415 |
| | Other liabilities | | 8,011 |
| Interest rate swap agreements | | Prepaid expenses and other current assets | | 1,723 |
| | Other current liabilities | | 2,374 |
| Interest rate swap agreements | | Other assets, net | | 2,167 |
| | Other liabilities | | 1,836 |
| Derivatives not designated as hedging instruments | | | | | | | | | Commodity derivatives-vehicle fuel | | Prepaid expenses and other current assets | | — |
| | Other current liabilities | | 4,945 |
| Commodity derivatives-vehicle fuel | | Other assets, net | | — |
| | Other liabilities | | 2,201 |
| Commodity derivatives- crude oil linefill | | Prepaid expenses and other current assets | | 2,212 |
| | Other current liabilities | | 1,632 |
| | | Total | | $ | 10,847 |
| | Total | | $ | 46,955 |
| | | | | | | | | | | | | | | | | | | | | July 31, 2015 | | | 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 | | $ | 3,614 |
| | Other current liabilities | | $ | 27,929 |
| Commodity derivatives-propane | | Other assets, net | | 1,041 |
| | Other liabilities | | 12,034 |
| Interest rate swap agreements | | Prepaid expenses and other current assets | | 1,828 |
| | Other current liabilities | | 2,241 |
| Interest rate swap agreements | | Other assets, net | | — |
| | Other liabilities | | 2,507 |
| Derivatives not designated as hedging instruments | | | | | | | | | Commodity derivatives-vehicle fuel | | Prepaid expenses and other current assets | | — |
| | Other current liabilities | | 1,280 |
| Commodity derivatives-vehicle fuel | | Other assets, net | | — |
| | Other liabilities | | 1,132 |
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| | Total | | $ | 6,483 |
| | Total | | $ | 47,123 |
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| Schedule of Derivative Collateral |
The following tables provide a summary of cash margin deposit balances as of January 31, 2016 and July 31, 2015, respectively:
| | | | | | | | | | | | | | | | January 31, 2016 | | | Assets | | Liabilities | Description | | Location | | Amount | | Location | | Amount | Margin Deposits | | Prepaid expenses and other current assets | | $ | 18,786 |
| | Other current liabilities | | $ | — |
| | | Other assets, net | | 12,483 |
| | Other liabilities | | — |
| | | | | $ | 31,269 |
| | | | $ | — |
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| | | | | | | | | | | | | | | | July 31, 2015 | | | Assets | | Liabilities | Description | | Location | | Amount | | Location | | Amount | Margin Deposits | | Prepaid expenses and other current assets | | $ | 18,009 |
| | Other current liabilities | | $ | 15 |
| | | Other assets, net | | 11,786 |
| | Other liabilities | | — |
| | | | | $ | 29,795 |
| | | | $ | 15 |
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| Fair Value Hedge Derivative Effect on Earnings |
The following tables provide a summary of the effect on Ferrellgas' condensed consolidated statements of earnings for the three and six months ended January 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 January 31, | | For the three months ended January 31, | | | | | 2016 | | 2015 | | 2016 | | 2015 | Interest rate swap agreements | | Interest expense | | $ | 505 |
| | $ | 587 |
| | $ | (2,275 | ) | | $ | (2,275 | ) | | | | | | | | | | | | | | | | 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 six months ended January 31, | | For the six months ended January 31, | | | | | 2016 | | 2015 | | 2016 | | 2015 | Interest rate swap agreements | | Interest expense | | $ | 1,042 |
| | $ | 1,043 |
| | $ | (4,550 | ) | | $ | (4,550 | ) | | | | | | | | | | | |
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| Cash Flow Hedge Derivative Effect on Comprehensive Income |
The following tables provide a summary of the effect on Ferrellgas’ condensed consolidated statements of comprehensive income for the three and six months ended January 31, 2016 and 2015 due to derivatives designated as cash flow hedging instruments: | | | | | | | | | | | | | | | | | | For the three months ended January 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 | | $ | (10,760 | ) | | Cost of sales-propane and other gas liquids sales | | $ | (7,813 | ) | | $ | — |
| Interest rate swap agreements | | (744 | ) | | Interest expense | | (754 | ) | | — |
| | | $ | (11,504 | ) | | | | $ | (8,567 | ) | | $ | — |
| | | | | | | | | | | | For the three months ended January 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 | | $ | (42,910 | ) | | Cost of sales-propane and other gas liquids sales | | $ | (7,360 | ) | | $ | — |
| Interest rate swap agreements | | (2,217 | ) | | Interest expense | | — |
| | (199 | ) | | | $ | (45,127 | ) | | | | $ | (7,360 | ) | | $ | (199 | ) |
| | | | | | | | | | | | | | | | | | For the six months ended January 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 | | $ | (9,175 | ) | | Cost of sales-propane and other gas liquids sales | | $ | (15,262 | ) | | $ | — |
| Interest rate swap agreements | | (1,945 | ) | | Interest expense | | (1,531 | ) | | — |
| | | $ | (11,120 | ) | | | | $ | (16,793 | ) | | $ | — |
| | | | | | | | | | | | For the six months ended January 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 | | $ | (55,668 | ) | | Cost of sales-propane and other gas liquids sales | | $ | (6,232 | ) | | $ | — |
| Interest rate swap agreements | | (3,356 | ) | | Interest expense | | — |
| | (199 | ) | | | $ | (59,024 | ) | | | | $ | (6,232 | ) | | $ | (199 | ) |
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| Derivatives not Designated as Hedging, Effect on Earnings |
The following tables provide a summary of the effect on Ferrellgas' condensed consolidated statements of earnings for the three and six months ended January 31, 2016 due to the change in fair value of derivatives not designated as hedging instruments:
| | | | | | | | | | For the three months ended January 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 linefill | | $ | 2,992 |
| | Cost of sales - midstream operations | Commodity derivatives - vehicle fuel | | $ | (3,696 | ) | | Operating expense | | | | | | | | For the six months ended January 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 linefill | | $ | 4,020 |
| | Cost of sales - midstream operations | Commodity derivatives - vehicle fuel | | $ | (4,734 | ) | | Operating expense |
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| Changes in Derivative Value Effect on Other Comprehensive Income (Loss) |
The changes in derivatives included in AOCI for the six months ended January 31, 2016 and 2015 were as follows:
| | | | | | | | | | | | For the six months ended January 31, | Gains and losses on derivatives included in AOCI | | 2016 | | 2015 | Beginning balance | | $ | (38,906 | ) | | $ | 6,483 |
| Change in value of risk management commodity derivatives | | (9,175 | ) | | (55,668 | ) | Reclassification of gains and losses on commodity hedges to cost of sales - propane and other gas liquids sales, net | | 15,262 |
| | 6,232 |
| Change in value of risk management interest rate derivatives | | (1,945 | ) | | (3,356 | ) | Reclassification of gains and losses on interest rate hedges to interest expense | | $ | 1,531 |
| | $ | 199 |
| Ending balance | | $ | (33,233 | ) | | $ | (46,110 | ) |
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| Ferrellgas, L.P. [Member] |
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| 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 January 31, 2016 and July 31, 2015: | | | | | | | | | | | | | | | | January 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 | | $ | 4,330 |
| | Other current liabilities | | $ | 25,956 |
| Commodity derivatives-propane | | Other assets, net | | 415 |
| | Other liabilities | | 8,011 |
| Interest rate swap agreements | | Prepaid expenses and other current assets | | 1,723 |
| | Other current liabilities | | 2,374 |
| Interest rate swap agreements | | Other assets, net | | 2,167 |
| | Other liabilities | | 1,836 |
| Derivatives not designated as hedging instruments | | | | | | | | | Commodity derivatives-vehicle fuel | | Prepaid expenses and other current assets | | — |
| | Other current liabilities | | 4,945 |
| Commodity derivatives-vehicle fuel | | Other assets, net | | — |
| | Other liabilities | | 2,201 |
| Commodity derivatives- crude oil line-fill | | Prepaid expenses and other current assets | | 2,212 |
| | Other current liabilities | | 1,632 |
| | | Total | | $ | 10,847 |
| | Total | | $ | 46,955 |
| | | | | | | | | | | | July 31, 2015 | | | 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 | | $ | 3,614 |
| | Other current liabilities | | $ | 27,929 |
| Commodity derivatives | | Other assets, net | | 1,041 |
| | Other liabilities | | 12,034 |
| Interest rate swap agreements | | Prepaid expenses and other current assets | | 1,828 |
| | Other current liabilities | | 2,241 |
| Interest rate swap agreements | | Other assets, net | | — |
| | Other liabilities | | 2,507 |
| Derivatives not designated as hedging instruments | | | | | | | | | Commodity derivatives - vehicle fuel | | Prepaid expenses and other current assets | | — |
| | Other current liabilities | | 1,280 |
| Commodity derivatives - vehicle fuel | | Other assets, net | | — |
| | Other liabilities | | 1,132 |
| | | Total | | $ | 6,483 |
| | Total | | $ | 47,123 |
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| Schedule of Derivative Collateral |
The following tables provide a summary of cash margin deposit balances as of January 31, 2016 and July 31, 2015, respectively:
| | | | | | | | | | | | | | | | January 31, 2016 | | | Assets | | Liabilities | Description | | Location | | Amount | | Location | | Amount | Margin Deposits | | Prepaid expenses and other current assets | | $ | 18,786 |
| | Other current liabilities | | $ | — |
| | | Other assets, net | | 12,483 |
| | Other liabilities | | — |
| | | | | $ | 31,269 |
| | | | $ | — |
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| | | | | | | | | | | | | | | | July 31, 2015 | | | Assets | | Liabilities | Description | | Location | | Amount | | Location | | Amount | Margin Deposits | | Prepaid expenses and other current assets | | $ | 18,009 |
| | Other current liabilities | | $ | 15 |
| | | Other assets, net | | 11,786 |
| | Other liabilities | | — |
| | | | | $ | 29,795 |
| | | | $ | 15 |
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| 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 earnings for the three and six months ended January 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 January 31, | | For the three months ended January 31, | | | | | 2016 | | 2015 | | 2016 | | 2015 | Interest rate swap agreements | | Interest expense | | $ | 505 |
| | $ | 587 |
| | $ | (2,275 | ) | | $ | (2,275 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | 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 six months ended January 31, | | For the six months ended January 31, | | | | | 2016 | | 2015 | | 2016 | | 2015 | Interest rate swap agreements | | Interest expense | | $ | 1,042 |
| | $ | 1,043 |
| | $ | (4,550 | ) | | $ | (4,550 | ) |
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| 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 income for the three and six months ended January 31, 2016 and 2015 due to derivatives designated as cash flow hedging instruments: | | | | | | | | | | | | | | | | | | For the three months ended January 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 | | $ | (10,760 | ) | | Cost of sales-propane and other gas liquids sales | | $ | (7,813 | ) | | $ | — |
| Interest rate swap agreements | | (744 | ) | | Interest expense | | (754 | ) | | — |
| | | $ | (11,504 | ) | | | | $ | (8,567 | ) | | $ | — |
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| | | | | | | | | | | | | | | | | | For the three months ended January 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 | | $ | (42,910 | ) | | Cost of sales-propane and other gas liquids sales | | $ | (7,360 | ) | | $ | — |
| Interest rate swap agreements | | (2,217 | ) | | Interest expense | | — |
| | (199 | ) | | | $ | (45,127 | ) | | | | $ | (7,360 | ) | | $ | (199 | ) |
| | | | | | | | | | | | | | | | | | For the six months ended January 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 | | $ | (9,175 | ) | | Cost of sales-propane and other gas liquids sales | | $ | (15,262 | ) | | $ | — |
| Interest rate swap agreements | | (1,945 | ) | | Interest expense | | (1,531 | ) | | — |
| | | $ | (11,120 | ) | | | | $ | (16,793 | ) | | $ | — |
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| | | | | | | | | | | | | | | | | | For the six months ended January 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 | | $ | (55,668 | ) | | Cost of sales-propane and other gas liquids sales | | $ | (6,232 | ) | | $ | — |
| Interest rate swap agreements | | (3,356 | ) | | Interest expense | | — |
| | (199 | ) | | | $ | (59,024 | ) | | | | $ | (6,232 | ) | | $ | (199 | ) |
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| 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 earnings for the three and six months ended January 31, 2016 due to the change in fair value of derivatives not designated as hedging instruments:
| | | | | | | | | | For the three months ended January 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 linefill | | $ | 2,992 |
| | Cost of sales - midstream operations | Commodity derivatives - vehicle fuel | | $ | (3,696 | ) | | Operating expense | | | | | | | | For the six months ended January 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 linefill | | $ | 4,020 |
| | Cost of sales - midstream operations | Commodity derivatives - vehicle fuel | | $ | (4,734 | ) | | Operating expense |
Ferrellgas, L.P. did not hold derivatives not designated as hedging instruments for the three and six months ended January 31, 2015.
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| Changes in Derivative Value Effect on Other Comprehensive Income (Loss) |
The changes in derivatives included in AOCI for the six months ended January 31, 2016 and 2015 were as follows: | | | | | | | | | | | | For the six months ended January 31, | Gains and losses on derivatives included in AOCI | | 2016 | | 2015 | Beginning balance | | $ | (38,906 | ) | | $ | 6,483 |
| Change in value of risk management commodity derivatives | | (9,175 | ) | | (55,668 | ) | Reclassification of gains and losses on commodity hedges to cost of sales - propane and other gas liquids sales, net | | 15,262 |
| | 6,232 |
| Change in value of risk management interest rate derivatives | | (1,945 | ) | | (3,356 | ) | Reclassification of gains and losses on interest rate hedges to interest expense | | $ | 1,531 |
| | $ | 199 |
| Ending balance | | $ | (33,233 | ) | | $ | (46,110 | ) |
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