FGPR 10-K & 10-Q changes, risk factors and insider trading

Various factors exist that pose risk to our business and the risk factors listed below outline some of the most significant risks, uncertainties, and assumptions that may affect our business. These risks are categorized by: (1) those related to our business and industry, (2) those inherent in an investment in our Class A Units, Class B Units or our debt securities and others related to our capital structure and financing arrangements, (3) those arising from our partnership structure and relationship with our general partner, and (4) those related to tax. Despite their ordering, these categories are not listed by priority, significance, or materiality. Additional risks, uncertainties, and assumptions may exist that are unforeseen, or currently deemed immaterial, that create potential for a material impact on our business. You should carefully consider the risks outlined below, in addition with other information outlined or incorporated by reference in this Annual Report.

The wholesale propane price per gallon is subject to various market conditions and may fluctuate based on changes in demand, supply and other energy commodity prices. Propane prices tend to partially correlate with crude oil and natural gas prices. Heightened levels of uncertainty related to the ongoing conflicts between Russia and UkraineUkraine, the U.S. and thoseIran, and other hostilities in the Middle East, in particular, may lead to additional economic sanctions by the U.S. and the international community and could further disrupt financial and commodities markets. Additionally, the current tariff environment is dynamic and uncertain, which may add to the disruption of the financial and commodities markets. We employ risk management activities that attempt to mitigate risks related to the purchasing, storing, transporting and selling of propane. However, sudden and sharp increases in wholesale propane prices cannot be passed on to customers with which we have contracted pricing arrangements. Therefore, we are exposed to the risk of increased wholesale propane prices and reduced profit margins on the percentage of our contractual commitments that are not immediately hedged with an offsetting propane purchase commitment. If we were to experience sudden and sharp propane price decreases, our customers may not fulfill their obligations to purchase propane from us at their previously contracted price per gallon, and we may not be able to sell the related hedged or fixed price propane at a profitable sales price per gallon in the then-current pricing environment.

Hurricanes and other natural disasters can potentially destroy numerous business structures and homes and, if occurring in the Gulf Coast region of the United States, could disrupt the supply chain for oil and gas products. Disruptions in supply could have a material adverse effect on our business, financial condition, results of operations and cash flow. Damage and higher prices caused by hurricaneshurricanes, wildfires and other natural disasters could also have an adverse effect on our financial condition due to the impact on the financial condition of our customers. To the extent the frequency or magnitude of significant weather events and natural disasters increases, the resulting increase in disruptions also could have adverse impacts on our business on both the supply and demand side and therefore adversely affect our results of operations and financial condition.

We have historically expanded our business through acquisitions. We regularly consider and evaluate opportunities to acquire propane distributors. We may choose to finance these acquisitions through internal cash flow, external borrowings or the issuance of additional Class A Units or other securities. Under the terms of our current Credit Facility, total consideration paid for acquisitions is not to exceed $50.0 million in any fiscal year. We have substantial competition for acquisitions, and, although we believe there are numerous potential large and small acquisition candidates in our industry, there can be no assurance that we will be able to make any acquisitions on favorable terms or at all. There is also a risk we will not be able to successfully integrate acquired operations or achieve any expected cost savings or other synergies. We may also assume or become subject to known or unknown liabilities, including environmental liabilities, and we may not be protected against any such liabilities by indemnification from the sellers or insurance. There is no assurance that any acquisitions made will not be dilutive to our earnings and distributions and that any additional equity we issue as consideration for an acquisition will not be dilutive to our unitholders or any additional debt we incur to finance an acquisition will not affect the operating partnership’s ability to make distributions to Ferrellgas Partners or service our existing debt.

There continues to be concern, both nationally and internationally, about climate change and the contribution of GHG emissions, most notably carbon dioxide, to global warming. Increased regulation of GHG emissions, especially in the transportation sector, could impose significant additional costs on us, our suppliers and our customers. Numerous proposals have been made and are likely to continue to be made at the national, regional and state levels of government to monitor and limit GHG emissions. Additionally, the U.S. Environmental Protection AgencyEPA and the SEC have also issued climate change rules, many of which are being challenged through various states, industry groups, and others. These efforts include cap-and-trade programs, carbon taxes, GHG reporting and tracking programs and regulations that limit GHG emissions from certain sources. In February 2026, the EPA rescinded its 2009 Greenhouse Gas Endangerment Finding, which served as the basis for various GHG emissions regulations. In May 2026, the SEC proposed to rescind its climate change rules. See “Item 1. Business – Government Regulation – Climate Change Legislation” above for more information. At this time, we cannot predict the effect that climate change regulation may have on our business, financial condition or operations in the future.

Propane competes with other sources of energy, some of which can be less costly for equivalent energy valuevalue, and which also may become more prevalent in response to climate change regulation and other factors. See “Item I. Business – Industry” for additional information on our competition for customers against suppliers of electricity, natural gas and fuel oil.

Additionally, incentives offered under the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) could further accelerate the transition of the U.S. economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives and impact demand for propane. TheH.R. One Big Beautiful Bill Act approved by Congress and signed by the President on July 4, 20251 significantly modifies the Inflation Reduction Act’s clean energy credits and incentives. The ultimate impact on propane demand and our business is uncertain and may change as legislation moves forward. We cannot predict the effect that the development of alternative energy sources and related laws or changes made by the current administration might have on our financial position or results of operations.

Deteriorating regional and global economic and political conditions, including U.S. sanctions on Iran oil exports and conflict, unrest and economic instability in oil producing countries and regions, and the ongoing conflicts between Russia and UkraineUkraine, the U.S. and thoseIran, and other hostilities in the Middle East, may cause significant disruptions to commerce throughout the world. If those disruptions occur in areas of the world which are tied to the energy industry, such as the Middle East, it is likely that our industry will be either affected first or affected to a greater extent than other industries. These conditions or disruptions may impair our ability to effectively market or acquire propane or impair our ability to raise equity or debt capital for acquisitions, capital expenditures or ongoing operations.

We are subject to all operating hazards and risks normally incidental to the handling, storing and delivering of combustible liquids such as propane. These operations face an inherent risk of exposure to general liability claims in the event that they result in injury or destruction of property. As a result, we have been, and are likely to be, a defendant in various legal proceedings arising in the ordinary course of business that may not be covered by insurance. As described in more detail in Note P “Contingencies and commitments” to the consolidated financial statements, on January 15, 2025, Ferrellgas and the other defendants entered into a Settlement Agreement with Eddystone Rail Company (“Eddystone”) resolving all issues in and related to the EDPA Lawsuit (as defined in Note P “Contingencies and commitments” to the consolidated financial statements included in this Annual Report). In settlement of the judgment in the EDPA Lawsuit, the defendants agreed to pay Eddystone the sum of $125.0 million in three installments. We paid $50.0 million on January 15, 2025 and $37.5 million on June 16, 2025. The final payment is due on or before January 15, 2026, and is secured by a letter of credit issued under the Credit Agreement (as defined in Note H “Debt” to the consolidated financial statements included in this Annual Report). As part of the settlement, the previously disclosed $190.0 million appeal bond, and the related letters of credit, were released. The litigation described above was not covered by insurance. Our insurance policies do not cover all losses, costs or liabilities that we may experience, and insurance companies that currently insure companies in our industry or in the energy industry generally may cease to do so or substantially increase premiums. Although we maintain insurance policies with insurers in such amounts and with such coverages and deductibles as we believe are reasonable and prudent, we cannot guarantee that such insurance will be adequate to protect us from all material expenses related to potential future claims for personal injury and property damage or that such levels of insurance will be available in the future at economical prices.

Motor fuel is a significant operating expense for us in connection with the purchase and delivery of propane to our customers. The price and supply of motor fuel is unpredictable and fluctuates based on events we cannot control, such as changes in trade and tariff policy and geopolitical developments, including impacts from the ongoing conflicts between Russia and UkraineUkraine, the U.S, and thoseIran, and other hostilities in the Middle East, supply and demand for oil, gas, and refined fuels, actions by oil and gas producers, actions by motor fuel refiners, conflict, unrest or economic instability in oil producing countries and regions, regional production patterns and weather conditions. We may not be able to pass any increases in motor fuel prices on to our customers. As a result, any increases in these prices may adversely affect our profitability and competitiveness.

In the ordinary course of business, we rely on information technology systems, including the Internet and third-party hosted services, to support a variety of business processes and activities and to store sensitive data, including (i) intellectual property, (ii) our proprietary business information and that of our suppliers and business partners, (iii) personally identifiable information of our customers and employees, and (iv) data with respect to invoicing and the collection of payments, accounting, procurement, and supply chain activities. In addition, we rely on our information technology systems to process financial information and results of operations for internal reporting purposes and to comply with financial reporting, legal, and tax requirements. Despite our security measures, our information technology systems may be vulnerable to attacks by hackers or breached due to employee error, malfeasance, sabotage, or other disruptions. The advancement of artificial intelligence (“AI”) and large language models has given rise to additional vulnerabilities and potential entry points for cyber threats. With generative AI tools, threat actors may have additional tools to automate breaches or persistent attacks, evade detection, or generate sophisticated phishing emails.

Our operations are subject to stringent federal, state and local laws and regulations relating to protection of the environment or human health and safety. Compliance with current and future environmental laws and regulations may increase our overall cost of business, including our capital costs to construct, maintain and upgrade equipment and facilities. Failure to comply with these laws and regulations may result in the assessment of significant administrative, civil and criminal penalties, the imposition of investigatory and remedial liabilities, and even the issuance of injunctions that may restrict or prohibit some or all of our operations. Such laws and regulations are subject to changechange, and we cannot provide assurance that the cost of compliance or the consequences of any failure to comply will not have a material adverse effect on our results of operations or financial condition.

Risks Inherent in an Investment in our Class A or Class B Units or our Debt Securities and Other Risks Related to Our Capital Structure and Financing Arrangements

Market conditions may impact our ability to access the financing markets on terms acceptable to us or at all. In addition, there are limitations on our ability to utilize fully all commitments under our Credit Facility. Availability under our Credit Facility is determined by reference to a borrowing base comprised of a combination of accounts receivable and propane inventory that fluctuates over time and the borrowing base may be further reduced by discretionary actions of the administrative agent under the Credit Facility. See Note HG “Debt” to the consolidated financial statements included in this Annual Report for details. If we are unable to access the financing markets, including through our Credit Facility, we would be required to use cash on hand to fund operations and repay outstanding debt. There is no assurance that we will be able to generate sufficient cash to fund our operations and repay or refinance such debt.

We have substantial indebtedness and other financial obligations. Our ability to make scheduled payments on or refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. See Note HG “Debt” to the consolidated financial statements included in this Annual Report for more detail. Our long-term debt obligations do not contain any sinking fund provisions, but require aggregate principal payments, without premium, as disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources–Material Cash Requirements.”

If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. Our ability to enter leasing transactions at favorable terms could also be impacted. The Indentures, the Credit Agreement and the OpCo LPA Amendment restrict our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or obtain proceeds in an amount sufficient to meet any debt service obligations then due. For more detail, see Note HG “Debt” and Note IH “Preferred units” to the consolidated financial statements included in this Annual Report.

RecentA lowering of the ratings assigned to us and our debt securities by rating agencies, and any future loweringagencies or withdrawal of such ratings, may increase our future borrowing costs, reduce our access to capital and adversely affect our ability to refinance or restructure our indebtedness.

In March 2025, theThe operating partnership’spartnership has a corporate rating was downgraded fromof B2 to B3 byfrom Moody’s Investors Service (“Moody’s”) and ourits senior unsecured notes were downgraded fromhave a B3 to a Caa1 rating byfrom Moody’s.Moody’s In April 2025, the operating partnership’s senior unsecured notes rating was downgraded fromand a B to a CCC+ rating byfrom S&P Global Ratings (“S&P”). In June 2025, S&P further downgraded this rating to CCC.Ratings. Any rating assigned could be lowered further or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant. These recent downgrades and anyAny future downgrade or withdrawal of our ratings likely could make it more difficult or more expensive for us to obtain additional debt financing, including for the purpose of refinancing or restructuring our existing indebtedness.

Restrictive covenants in the Indentures, the Credit Agreement and the agreements governing our other future indebtedness and other financial obligations reduce our operating flexibility and ability to make cash distributions to holders of Class A Units and Class B Units. The Indentures, the Credit Agreement and the OpCo LPA Amendment contain important exceptions to these covenants.

The Indentures and the Credit Agreement contain, and any agreement that will govern debt incurred by us in the future may contain, various covenants that limit our ability to take certain actions as described in Note HG “Debt” to the consolidated financial statements included in this Annual Report. These covenants also limit the ability of the operating partnership to make distributions to Ferrellgas Partners and therefore effectively limit the ability of Ferrellgas Partners to make distributions to its Class A Unitholders and Class B Unitholders. Ferrellgas Partners is currently unable to make distributions to its Class A and Class B unitholders. See Note IH “Preferred units” to the consolidated financial statements included in this Annual Report for a discussion of limitations related to distributions.

The Indentures and the Credit Agreement contain important exceptions to the covenants, including the covenants that restrict our ability to sell assets and make restricted payments. For example, the Indentures2029 Indenture initially permitpermits the operating partnership to make $60 million plus the amount of the operating partnership’s Available Cash from Operating Surplus (as defined in the Indentures) for the preceding fiscal quarter (so long as the operating partnership’s fixed charge coverage ratio is greater than 1.75x) or $25 million (if the operating partnership’s fixed charge coverage ratio is equal to or less than 1.75x) plus an additional $5 million, in each case, of restricted payments for any purpose, subject to compliance with applicable conditions, as well as to make additional restricted payments for specified purposes. The 2031 Indenture has a similar but, in a few respects, less restrictive exception. Furthermore, we may utilize exceptions to sell assetsassets, and such asset sales may be on unfavorable terms.

The Preferred Units are entitled to quarterly distributions in cash or payment in kind and are redeemable at the option of the operating partnership at any time, or at the option of the holders no earlier than March 30, 2031, subject to the terms as described in more detail under Note IH “Preferred units” to our consolidated financial statements included in this Annual Report.

In the event that no Class B Units are outstanding and the outstanding amount of Preferred Units is greater than $233.3 million after March 30, 2031, to the extent the operating partnership fails to redeem all the outstanding Preferred Units, holders of at least 1/3 of the outstanding Preferred Units will have the right to appoint a majority of the members of the board of directors of the general partner and initiate a sale of the operating partnership. These restrictions may limit our flexibility to pursue strategic opportunities.

Our Class A Units are tradedtrade on the OTC markets, which have less liquidity than a major exchange and unitholders may face limited availability of market quotations for our Class A Units, reduced liquidity for the trading of our Class A Units and potentially lower trading prices for our Class A Units.

On July 1, 2025, the OTC Markets Group, Inc. eliminated the OTC Pink Market, on which ourOur Class A Units were traded, and the Company transferred to the OTCID Basic Market. We expect our Class A Units to beare quoted on the OTCID Basic Market forand the foreseeable future. Unitholdersunitholders may face limited availability of market quotations for our Class A Units, reduced liquidity for the trading of our Class A Units and potentially lower trading prices for our Class A Units. In addition, we could experience a decreased ability to issue additional securities and obtain additional financing in the future, and it could impair our ability to provide equity incentives to our employees. There can be no assurance that the trading market for our Class A Units will improve in the future or that any improvement will be sustained.

The OpCo Notes are not, and we do not expect any debt securities we may issue in the future to be,be listed on any securities exchange quoted through any automated quotation system. An established market for our debt securities may not develop, or if one does develop, it may not be maintained. We cannot assure a debt holder that a liquid market for the debt securities will develop, or that the holder will be able to sell its debt securities or receive a specific price upon any sale of its debt securities. If a public market for our debt securities did develop, the debt securities could trade at prices that may be higher or lower than their principal amount or purchase price, depending on many factors.

Subject to certain restrictions, Ferrellgas Partners may dilute existing interests of unitholders by selling additional limited partner interests. Ferrellgas Partners may also dilute existing Class A Units by converting Class B Units to Class A Units.

The partnership agreement of Ferrellgas Partners generally allows Ferrellgas Partners to issue additional limited partner interests and other equity securities, subject to consent by holders of the Requisite Class B Units (defined as (a) if the holder that initially holds a majority of the Class B Units (the “Initial Class B Majority Holder”) holds at least 50% of the Class B Units, holders of at least 50% of the outstanding Class B Units or (b) if the Initial Class B Majority Holder holds less than 50% of the Class B Units, holders of at least one-third of the outstanding Class B Units).securities. When Ferrellgas Partners issues additional equity securities, a unitholder’s proportionate partnership interest in such class will decrease. Such an issuance could negatively affect the amount of cash distributed to unitholders and the market price of such units. The issuance of additional units will also diminish the relative voting strength of the previously outstanding class of units. In addition, Ferrellgas Partners may issue preferred or other securities that could have a preferred right to distributions or other priority economic terms, which could negatively affect the value of our outstanding units. See Note J “Equity (Deficit)” to the consolidated financial statements included in this Annual Report for more information related to the Class B units.

Our general partner manages and operates us. Unlike the holders of common stock in a corporation, our unitholders generally have only limited voting rights on matters affecting our business. Holders of Ferrellgas Partners’ Class B Units and the operating partnership’s Preferred Units have certain additional voting rights focused on their respective distribution rights or preferences and their respective protective covenants and other rights under the partnership agreements of Ferrellgas Partners and the operating partnership. Amendments to the agreement of limited partnership of Ferrellgas Partners may be proposed only by or with the consent of our general partner. Proposed amendments must generally be approved by holders of at least a majority of Ferrellgas Partners’ outstanding Class A Units and, in certain cases, holders of Ferrellgas Partners’ Class B Units and the operating partnership’s Preferred Units.

Class A Unitholders will have no right to elect our general partner or the directors of our general partner on an annual or other continuing basis. See Note J “Equity (Deficit)” to the consolidated financial statements included in this Annual Report for Board rights related to the Class B Units. Under certain circumstances, holders of the Preferred Units may have the right to appoint a majority of the Board of Directors of our general partner after March 30, 2031. See Note IH “Preferred units” to the consolidated financial statements included in this Annual Report.

Our general partner may not be removed except pursuant to the vote of the holders of at least 66 2/3% of the outstanding units entitled to vote thereon, which includes the Class A Units owned by our general partner and its affiliates and upon the election of a successor general partner by the vote of the holders of not less than a majority of the outstanding Class A Units entitled to vote; provided that holders of the Class B Units will have the right to remove the general partner under certain circumstances.vote.

Unitholders may be required to pay federal income taxes and, in some cases, state and local income taxes on their share of our taxable income, including our taxable income associated with a disposition of property or cancellation of debt, whether or not they receive any cash distributions from us. Unless we are able to pay and actually pay cash distributions on our Class A Units, Class A Unitholders will not receive any cash from us to cover any such tax liabilities, and, if we do pay cash distributions in the future, such cash distributions may not be equal to unitholders’ share of our taxable income or even equal to the actual tax liability which results from that income.

We continue to pursue a strategy to normalize our capital structure. As part of this strategy, we may engage in transactions that could have significant adverse tax consequences to our unitholders. For example, we may sell some of our assets and use the proceeds to fund capital expenditures or a redemption or conversion of our Class B Units or Preferred Units rather than distributing the proceeds to our unitholders, and some or all of our unitholders may be allocated substantial taxable income and gain resulting from the sale without receiving a cash distribution. We may also engage in transactions to reduce our existing debt or debt service costs, such as debt exchanges, debt repurchases, or modifications of our existing debt, which could result in cancellation of indebtedness income, or other income, being allocated to our unitholders as taxable income. This may cause a unitholder to be allocated taxable income with respect to our units with no corresponding distribution of cash to fund the payment of the unitholder’s resulting tax liability. The ultimate effect of any such allocations will depend on the unitholder’s individual tax position with respect to its units. Unitholders are encouraged to consult their tax advisors with respect to the consequences to them of this income.

In general, our Class A Unitholders are entitled to a deduction for the interest we have paid or accrued on indebtedness properly allocable to our business during our taxable year. However, as introduced under the Tax Cuts and Jobs Act of 2017 and further amended, forby taxableH.R. years beginning after December 31, 2017,1, the deductibility of net interest expense is limited to the sum of our business interest income and 30% of our “adjusted taxable income”. which for taxable years beginning after December 31, 2024 is computed without regard to depreciation, amortization or depletion deductions. Any business interest expense disallowed at the partnership level is then generally carried forward and may be deducted in a succeeding taxable year by a unitholder, in accordance with the unitholder’s applicable tax laws. These limitations might cause interest expense to be deducted by our unitholders in a later period than recognized in the GAAP financial statements.

In the case of unitholders subject to the passive loss rules (generally, individuals, closely held corporations and regulated investment companies), any losses generated by us will only be available to offset our future income and cannot be used to offset income from other activities, including passive activities or investments. Unused losses may be deducted when the unitholder disposes of its entire investment in us in a fully taxable transaction with an unrelated party. A unitholder’s share of our net passive income may be offset by unused losses carried over from prior years, but not by losses from other passive activities, including losses from other publicly-tradedpublicly traded partnerships.

An investment in Class A Units by tax-exempt entities, such as employee benefit plans, individual retirement accounts, regulated investment companies, generally known as mutual funds, and non-U.S. persons, raises issues unique to them. For example, virtually all of our income allocated to organizations exempt from federal income tax, including individual retirement accounts and other retirement plans, will be unrelated business taxable income and thus will be taxable to them. Net income from a “qualified publicly-tradedpublicly traded partnership” is qualifying income for a regulated investment company, or mutual fund. However, no more than 25% of the value of a regulated investment company’s total assets may be invested in the securities of one or more qualified publicly-tradedpublicly traded partnerships. We expect to be treated as a qualified publicly-tradedpublicly traded partnership. Distributions and dispositions involving foreign unitholders are subject to IRS withholding rules, including withholding at the highest individual rate on distributions and a 10% withholding on gross proceeds from unit sales under Section 1446(f) of the Code, which brokers are generally responsible for enforcing. Distributions may also be subject to an additional 10% withholding if they exceed cumulative net income, potentially reducing liquidity and increasing compliance burdens for foreign investors.

We may be audited by the IRSIRS, and tax adjustments could be made. The rights of a unitholder owning less than a 1% interest in us to participate in the income tax audit process are very limited. Further, any adjustments in our tax returns may lead to adjustments in unitholders’ tax returns and may lead to audits of unitholders’ tax returns and adjustments of items unrelated to us. A unitholder will bear the cost of any expenses incurred in connection with an examination of its personal tax return.

We evaluate our overall business performance based primarily on a metric we refer to as “Adjusted EBITDA,” which is not defined by GAAP and should not be considered an alternative to earnings measures defined by GAAP. We do not utilize depreciation, depletion and amortization expense in our key measures because we focus our performance management on cash flow generation and our revenue generating assets have long useful lives. For the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net earnings (loss) earnings attributable to Ferrellgas Partners, L.P., the most directly comparable GAAP measure, see the subheading “Non-GAAP Financial Measures” below.

We use information on temperatures to understand how our results of operations are affected by temperatures that are warmer or colder than normal. Normal temperatures computed by us are the average of the last 10 years of information published by the National Oceanic and Atmospheric Administration.AccuWeather. Based on this information we calculate a ratio of actual heating degree days to normal heating degree days. Heating degree days are a general indicator of weather impacting propane usage.

We recognized net earnings attributable to Ferrellgas Partners, L.P. of $71.7 million during fiscal 2026 compared to a net loss attributable to Ferrellgas Partners, L.P. of $15.6 million during fiscal 2025 and net earnings attributable to Ferrellgas Partners, L.P. of $110.2 million during fiscal 2024.2025. The $125.8$87.3 million change was primarily driven by:

Distributable cash flow attributable to equity investors decreased to $179.1 million in fiscal 2026 compared to $208.2 million in fiscal 2025 compared to $212.3 million in fiscal 2024.2025. The $4.1$29.1 million decrease was primarily due to a $10.4 million increase in “Maintenance capital expenditures” and a $7.0$23.0 million increase in “Net cash interest expense,expense” and a $9.4 million decrease in Adjusted EBITDA, which was partially offset by a $13.3$4.1 million decrease in “Maintenance capital expenditures” as $7.5 million related to fiscal 2025 failed sale leasebacks was partially offset by a $2.4 million increase indue Adjustedto EBITDA.the implementation of our new CTRM software.

Distributable cash flow excess was $139.9$3.2 million and $43.2$139.9 million in fiscal 20252026 and 2024,2025, respectively. The $96.7$136.7 million increasedecrease was primarily due to $99.9a final $107.0 million inaggregate distributionsdistribution paid to Class B unitholders in fiscal 2024,2026 partially offset byand the $29.1 million decrease in distributable cash flow attributable to equity investors noted above.

Adjusted EBITDA. Adjusted EBITDA for Ferrellgas Partners is calculated as net earnings (loss) earnings attributable to Ferrellgas Partners, L.P., plus the sum of the following: income tax expense, interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge,expense, loss on extinguishment of debt, loss on asset sales and disposals, other income, net, severance, non-recurring employee benefit policy adjustment, legal fees and settlements related to non-core businesses, legal fees and settlements related to core businesses, acquisition and related costs, Class B conversion costs, compliance costs, business transformation costs, and net earnings (loss) earnings attributable to noncontrolling interest. Management believes the presentation of this measure is relevant and useful because it allows investors to view the partnership’s performance in a manner similar to the method management uses, adjusted for items management believes make it easier to compare its results with other companies that have different financing and capital structures. Adjusted EBITDA, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of Adjusted EBITDA that will not occur on a continuing basis may have associated cash payments. This method of calculating Adjusted EBITDA should be viewed in conjunction with measurements that are computed in accordance with GAAP.

The following table reconciles Adjusted EBITDA, Distributable cash flow attributable to equity investors, Distributable cash flow attributable to Class A and B Unitholders and Distributable cash flow excess to Net earnings (loss) earnings attributable to Ferrellgas Partners, L.P., the most directly comparable GAAP measure, for the fiscal years indicated:

Our wholesale sales price per gallon partially correlates to the change in the wholesale market price of propane. The wholesale market prices at our major supply pointspoint in Mt. Belvieu, Texas and Conway, Kansas during fiscal 20252026 averaged 5%9% and 4% moreless than fiscal 2024, respectively.2025. The wholesale market price at Mt. Belvieu, Texas averaged $0.79$0.72 and $0.75$0.79 per gallon during fiscal 20252026 and fiscal 2024, respectively, while the wholesale market price at Conway, Kansas averaged $0.75 and $0.72 per gallon during fiscal 2025 and fiscal 2024,2025, respectively. This increasedecrease in the wholesale cost of propane contributed to our increasedecrease in sales price per gallon and therefore revenues.

Retail sales increaseddecreased $48.3$49.7 million, or 4%, in fiscal 20252026 compared to fiscal 2024.2025. This increasedecrease correlates with the coolerwarmer weather and 1%2% increasedecrease in retail gallons sold in fiscal 20252026 compared to fiscal 2024,2025, and ana increasedecrease in sales price per gallon, all as discussed above. The increase in revenues from retail customers was primarily in our residential and industrial/commercial customer bases, partially offset by a decrease in sales to agricultural customers.

Wholesale sales increaseddecreased $41.6$16.0 million, or 8%,3%, in fiscal 20252026 compared to fiscal 2024.2025. This increasedecrease correlates with a 9%6% increasedecrease in wholesale gallons sold in fiscal 20252026 compared to fiscal 2024,2025, asand wella as an increasedecrease in sales price per gallon, as discussed above. Tank exchange sales drove the increase in wholesale sales with an increase of $25.5 million, or 6%, inIn fiscal 20252026 compared to fiscal 2024.2025, Atank 3%exchange increasesales indecreased $10.7 million, or 3%, as tank exchange volumes contributedsold decreased 5%. Additionally, our reseller business decreased $4.1 million, or 5%, in fiscal 2026 compared to organicfiscal sales2025. growth.The lack of significant weather events coupled with heat advisories and rain over several major holidays impacted the grilling season and consumer demand. Offsetting this, the 1%4% net decreaseincrease in tank exchange selling locations was primarily due to thegrowth removalfrom both new customers and added sites of lower-performingexisting drugstorecustomers, sitesin followingaddition customer-drivento storeexpansion closures.of our vending operations.

Other gas sales increaseddecreased $6.7$5.8 million, or 46%,27%, in fiscal 20252026 compared to fiscal 20242025 primarily due to thea increasecorresponding indecrease salesof price8.1 permillion gallongallons noted above.sold.

Other revenues increaseddecreased $4.6$2.8 million, or 4%,3%, in fiscal 20252026 compared to fiscal 20242025 primarily due to increasesa decrease of $2.0$2.2 million in transportsales revenueof appliances and $1.4 million in tank rental income.parts.

Gross margin increaseddecreased $3.6$1.7 million, or 4%,2%, in fiscal 20252026 compared to fiscal 2024.2025.

Operating income decreasedincreased $115.0$108.2 million, primarily due to a $125.0 million legal settlement andin fiscal 2025, partially offset by a $29.2$20.4 million increase in operating expense, both of which are included in “Operating, general and administrative expense.” This was partially offset by the $39.7 million increase in gross margin note above.

The $29.2$20.4 million increase in “Operating expense – personnel, vehicle, plant and other” was driven by increases of $22.4$14.8 million in plant and other costs and $8.5$7.6 million in personnelvehicle expense, which were partially offset by a decrease of $1.7$2.0 million in vehiclepersonnel expense.

The $22.4$14.8 million increase in plant and other costsincludes wasthe primarily due to increasesresolution of $8.7legacy general liability claims, which drove a net increase of $22.0 million related toin legal and general insurance liability costs, $7.9partially offset by decreases of $5.1 million for bad debt,in miscellaneous expense, bank charges, rent expense,expense and tax assessments, and $3.4$1.6 million in software costsexpense primarilyas relatedwe tocompleted several business transformation projects.projects in fiscal 2025.

The $1.7$7.6 million decreaseincrease in vehicle expense was primarily driven by aincreases $4.5of $5.3 million decrease in fuel costs,costs partiallyand offset by a $2.8$2.6 million increase primarily related to repairs and maintenance. Empowered by the Company’s telematics technology, employees continue to deliver positive results such as fuel savings and more efficient vehicle use.

Our primary sources of liquidity and capital resources are cash flows from operating activities, our Credit Facility and funds received from sales of debt and equity securities. The operating partnership, the general partner and certain of the operating partnership’s subsidiaries as guarantors are parties to a credit agreement dated March 30, 2021, as amended on JanuaryOctober 15,27, 2025 (the “Credit Agreement”), with JPMorgan Chase Bank, N.A. as administrative agent and collateral agent, and the lenders and issuing lenders party thereto from time to time, which provides for a four-year revolving credit facility (the “Credit Facility”), with a maturity date of DecemberOctober 31,27, 2025,2028, in an aggregate principal amount of up to $350.0 million. OnAn Marchaccordion 31,feature 2025,allows for increases by up to $50.0 million in conjunction with the commencementaggregate of the Fifth Amendment, the commitment level of the Credit Facility was reduced from $350.0 millionsubject to $308.8customary million.conditions. The Credit Agreement includes a sublimit not to exceed $300.0 million for the issuance of letters of credit. For additional discussion, see Note HG “Debt” in the notes to our consolidated financial statements included in this Annual Report.

As of July 31, 2025,2026, our total liquidity was $259.7$195.1 million, which was comprised of $96.9$48.4 million in unrestricted cash and $162.8$146.7 million of availability under our Credit Facility. These sources of liquidity and short-term capital resources are intended to fund our working capital requirements, acquisitions and capital expenditures. As of July 31, 2025,2026, letters of credit outstanding totaled $121.9$115.8 million. Our access to long-term capital resources, to the extent needed to refinance debt or for other purposes, may be affected by our ability to access the capital markets, covenants in our debt agreements and other financial obligations, unforeseen demands on cash, or other events beyond our control. The operating partnership has a corporate rating of B2 from Moody’s and its senior unsecured notes have a B3 rating from Moody’s and a B rating from S&P Global Ratings.

Distributable cash flow attributable to equity investors is reconciled to net earnings (loss) earnings attributable to Ferrellgas Partners, L.P., the most directly comparable GAAP measure, in this Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations under the subheading “Non-GAAP Financial Measures” above. A comparison of distributable cash flow attributable to equity investors to cash distributions accrued or paid to equity investors for thefiscal year ended July 31, 20252026 to thefiscal year ended July 31, 20242025 is as follows (in thousands):

For fiscal 2025,2026, distributable cash flow attributable to equity investors decreased $4.1$29.0 million compared to fiscal 20242025 primarily due to increasesa of $10.4$23.0 million in “Maintenance capital expenditures” and $7.0 millionincrease in “Net cash interest expense,expense” and a $9.4 million decrease in Adjusted EBITDA, which was partially offset by a $13.3$4.1 million increase in Adjusted EBITDA. The increasedecrease in “Maintenance capital expenditures” relates to a $2.5 million increase in failed sale leaseback in addition to capitalized fleet repairs.. The increase in “Net cash interest expense” consists of a $9.8$19.8 million increase in interest expense and $1.6 decrease in other income, net, which was partially offset by a $4.4$5.4 million increasedecrease in the amortization of capitalized financing costs related to amendments to our Credit Facility.Facility, which was partially offset by a $2.4 million increase in other income, net. The decrease in “Maintenance capital expenditures” is due to a $7.5 million decrease related to fiscal 2025 failed sale leasebacks, partially offset by a $2.4 million increase due to the implementation of our new CTRM software.

As of July 31, 2025,2026, the accrued quarterly distribution to Preferred Unitholders was $17.3$18.5 million, net of tax. We paid $15.2$16.7 million of this distribution on August 15, 2025.2026. The remaining $2.1$1.8 million represents Additional Amounts payable to certain holders of Preferred Units, pursuant to the side letters outlined in the OpCo LPA Amendment. Additionally, during the years ended July 31, 20252026 and 2024,2025, we paid $1.6 million and $2.0 million, respectively, for Additional Amounts payable pursuant to the side letters.

We did not pay any cash distributions to our Class A Unitholders or the general partner during fiscal 20252026 or fiscal 2024,2025. exceptIn forMarch 2026, we made a $1.0final millionaggregate distribution to the general partner, made in conjunction with the Class B distributions during the year ended July 31, 2024. Ferrellgas Partners made aggregate cash distributions of approximately $99.9 million to itsour Class B Unitholders duringof the$107.0 year ended July 31, 2024.million. We have made aggregate cash distributions of approximately $250.0$357.0 million to our Class B Unitholders since inception of our Class B Units. We subsequently converted all Class B Units to Class A Units on March 16, 2026. See Note I “Equity (Deficit)” in the notes to our consolidated financial statements included in this Annual Report for more information. Cash reserves, which we utilize to meet future anticipated expenditures, were $144.1$113.9 million and $147.5$144.1 million for the years ended July 31, 20252026 and 2024,2025, respectively.

Net cash provided by operating activities was $152.7 million for fiscal 2026 compared to $136.3 million for fiscal 20252025. comparedThe to $245.6$16.4 million for fiscal 2024. The $109.3 million decreaseincrease in cash provided by operating activities was primarily drivendue byto a $129.2$98.9 million increase in generaloperating andcash administrative expensesflow and a $42.2$12.7 million increaseinflow inassociated with working capitalcapital, requirements.which These increases werewas partially offset by a $39.7 million improvement in gross profit compared to prior year, and a $35.3$68.6 million increase in requirements for other current liabilities.liabilities, a $9.6 million outflow associated with other assets and liabilities, a $9.1 million outflow associated with prepaid expenses, and an $8.0 million increase in requirements for accrued interest.

The $39.7$1.1 million increase in gross profit was primarily due to a $101.2$75.4 million increasedecrease in revenue,cost of sales, partially offset by a $61.5$74.3 million increasedecrease in cost of sales.revenues.

Net cash provided by operating activities was $152.8 million for fiscal 2026 compared to $136.5 million for fiscal 20252025. comparedThe to $245.2$16.3 million for fiscal 2024. The $108.7 million decreaseincrease in cash provided by operating activities was primarily drivendue byto a $128.3$99.8 million increase in generaloperating andcash administrative expensesflow and a $42.2$12.7 million increaseinflow inassociated with working capitalcapital, requirements.which These increases werewas partially offset by a $39.7 million improvement in gross profit compared to prior year, and a $34.9$69.2 million increase in requirements for other current liabilities.liabilities, a $9.6 million outflow associated with other assets and liabilities, a $9.2 million outflow associated with prepaid expenses, and an $8.0 million increase in requirements for accrued interest.

The $39.7$1.1 million increase in gross profit was primarily due to a $101.2$75.4 million increasedecrease in revenue,cost of sales, partially offset by a $61.5$74.3 million increasedecrease in cost of sales.revenues.

Net cash used in investing activities was $75.5 million for fiscal 2026 compared to $80.8 million for fiscal 2025 compared to $85.0 million for fiscal 2024.2025. This $4.2$5.3 million decrease in net cash used in investing activities was primarily due to a $12.7$3.8 million decrease in “Business acquisitions, net of cash acquired” and a $2.7 million decrease in “Capital expenditures”. We had no acquisitions during fiscal 2026 and one acquisition during both fiscal 20252025. andThese fiscaldecreases 2024. This decrease waswere partially offset by a $9.1$1.2 million increasedecrease in “CapitalProceeds expendituresfrom sale of assets.”, primarily driven by capitalized repair costs and assets related to failed sale-leaseback arrangements.

Ferrellgas Partners did not pay any distributions to Class A Unitholders, Class B Unitholders or the general partner during fiscal 2026, 2025 or fiscal 2024, except for the distributions to Class B Unitholders described above and a $1.0 million distribution to the general partner, made in conjunction with the Class B distributionsdistribution during fiscal 2024.2024 as described below.

The ability of Ferrellgas Partners to make cash distributions to its Class A Unitholders and Class B Unitholders is dependent on the receipt by Ferrellgas Partners of cash distributions from the operating partnership. For so long as any Preferred Units remain outstanding, the amount of cash that otherwise would be available for distribution by the operating partnership to Ferrellgas Partners will be reduced by the amount of cash distributions and other payments made by the operating partnership in respect of the Preferred Units, including payments to redeem Preferred Units. Further, the indentures governing the 20262029 Notes and the 20292031 Notes (together with the 20262029 Notes, the “OpCo Notes”), the Credit Agreement and the OpCo LPA Amendment governing the Preferred Units contain covenants that limit the ability of the operating partnership to make distributions to Ferrellgas Partners and therefore effectively limit the ability of Ferrellgas Partners to make distributions to its Class A Unitholders and Class B Unitholders. See Note HG “Debt” and Note IH “Preferred units” for a discussion of these limitations. See also “Risk Factors—Risks Inherent in an Investment in our Class A or Class B Units or our Debt Securities and Other Risks Related to Our Capital Structure and Financing Arrangements—Restrictive covenants in the Indentures, the Credit Agreement and the agreements governing our other future indebtedness and other financial obligations reduce our operating flexibility and ability to make cash distributions to holders of Class A Units and Class B Units. The Indentures, the Credit Agreement and the OpCo LPA Amendment contain important exceptions to these covenants.”

Ferrellgas Partners is a holding entity that conducts no operations and has two direct subsidiaries, the operating partnership and Ferrellgas Partners Finance Corp. Our activities are primarily conducted through the operating partnership. Ferrellgas Partners and the Preferred Unitholders are the only limited partners of the operating partnership. Ferrellgas, Inc. is the sole general partner of Ferrellgas Partners and the operating partnership and, excluding the economic interests attributable to the Class B Units and the Preferred Units, owns an approximate 1%0.4% general partner economic interest in each,Ferrellgas and,Partners therefore,and an effectiveapproximate 2%1.0% general partner economic interest in the operating partnership.partnership, and, therefore, an effective 1.4% general partner economic interest. Excluding the economic interests attributable to the Preferred Units, Ferrellgas Partners owns an approximate 99%99.0% limited partner interest in the operating partnership. On March 16, 2026, all Class B Units were converted to Class A Units. See Note F “Equity (Deficit)” for more information. For information regarding the economic and other terms of the Class B Units and the Preferred Units, see Note F “Equity (Deficit)” and Note E “Preferred units” to our condensed consolidated financial statements included elsewhere herein.

We evaluate our overall business performance based primarily on a metric we refer to as “Adjusted EBITDA,” which is not defined by GAAP and should not be considered an alternative to earnings measures defined by GAAP. We do not utilize depreciation, depletion and amortization expense in our key measures because we focus our performance management on cash flow generation and our revenue generating assets have long useful lives. For the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net earnings (loss) attributable to Ferrellgas Partners, L.P., the most directly comparable GAAP measure, see the subheading “Non-GAAP Financial Measures” below.

Our open financial derivative propane purchase commitments are designated as hedges primarily for fiscal 2026 and 2027 sales commitments and, as of JanuaryApril 31,30, 2026, we have experienced net mark-to-market lossesgains of approximately $6.6$8.9 million. Because these financial derivative purchase commitments qualify for hedge accounting treatment, the resulting asset, liability and related mark-to-market gains or losses are recorded on the condensed consolidated balance sheets as “Prepaid expenses and other current assets,” “Other assets, net,” “Other current liabilities,” “Other liabilities” and “Accumulated other comprehensive income,” respectively, until settled. Upon settlement, realized gains or losses on these contracts will be reclassified to “Cost of sales-propane and other gas liquid sales” in the condensed consolidated statements of operations as the underlying inventory is sold. These financial derivative purchase commitment net losses are expected to be offset by increased margins on propane sales commitments that qualify for the normal purchase normal sale exception. At JanuaryApril 31,30, 2026, we estimate 94%88% of currently open financial derivative purchase commitments, the related propane sales commitments and the resulting gross margin will be realized into earnings during the next twelve months.

For the three months ended JanuaryApril 31,30, 2026 and 2025

During the three months ended JanuaryApril 31,30, 2026 and 2025, we recognized net earnings attributable to Ferrellgas Partners, L.P. of $102.2$28.0 million and $98.8$59.1 million, respectively. The $3.4$31.1 million increasedecrease was primarily due to an increase of $8.5$29.0 million in “Operating income,expense – personnel, vehicle, plant and other,” which was partially offset by a $5.3$2.2 million increase in “InterestGross expense.margin.” The $5.3 million increase was primarily due to an increase in interest expense on our senior unsecured notes related to the October 2025 refinancing, which was partially offset by decrease in amortization costs related to our credit facility.

Distributable cash flow attributable to equity investors increaseddecreased to $126.2$67.0 million for the three months ended JanuaryApril 31,30, 2026 compared to $125.2$85.6 million for the prior year period, primarily due to ana increasedecrease of $9.1$12.7 million in Adjusted EBITDA,EBITDA whichand wasan partially offset by increasesincrease of $7.6$6.5 million in “Net cash interest expense” and $0.5 million in “Maintenance capital expenditures.expense.” The increase in “Net cash Interest expense” primarilyconsists relatesof toa the$4.2 changesmillion increase in “Interest expense” explainedon above.our unsecured notes related to the October 2025 refinancing, which was partially offset by a $2.2 million change in amortization costs related to our credit facility.

We had a distributable cash flow shortage of $56.7 million during the three months ended April 30, 2026, compared to a distributable cash flow excess of $107.9 million and $106.5$68.3 million during the three months ended JanuaryApril 31,30, 2026 and 2025, respectively.2025. This $1.4$125.0 million increasechange was primarily due to the $1.0$107.0 million increasedistribution to Class B Unitholders made in March 2026, and the $18.6 million decrease in distributable cash flow attributable to equity investors noted above.

For the sixnine months ended JanuaryApril 31,30, 2026 and 2025

During the sixnine months ended JanuaryApril 31,30, 2026,2026 and 2025, we recognized net earnings attributable to Ferrellgas Partners, L.P. of $75.3$103.3 million comparedand to$11.3 amillion, net loss attributable to Ferrellgas Partners, L.P. of $47.8 million during the six months ended January 31, 2025.respectively. The $123.1$92.0 million increase was primarily due to a $125.0 million legal accrual recorded in the prior year.year, which was partially offset by an increase of $30.2 million in “Operating expense – personnel, vehicle, plant and other, and a $10.1 million increase in “Interest expense.”

Distributable cash flow attributable to equity investors was $125.6$192.6 million and $128.6$214.2 million for the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively. The $3.0$21.6 million decrease was primarily due to a $9.0$15.5 million increase in “Net cash interest expense,” and a decrease of $10.1 million in Adjusted EBITDA, which was partially offset by a decrease of $3.6$4.6 million in “Maintenance capital expenditures” and an increase of $2.6 million in Adjusted EBITDA.. The increase in “Net cash Interest expense” primarily relates to an increase of $5.9$10.1 million in “Interest expense” and a $3.0 million “Loss on extinguishment of debt” which were both related to the October 2025 refinancing transactions. The decrease in “Maintenance capital expenditures” primarily relates to failed sale-leaseback arrangements in the prior year period.

We had a distributable cash flow excess of $90.8$34.1 million and $93.6$161.9 million during the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively. This $2.8$127.8 million decrease was primarily due to the $107.0 million distribution to Class B Unitholders made in March 2026, and the $21.6 million decrease in distributable cash flow attributable to equity investors noted above.

In this Quarterly Report we present the following Non-GAAP financial measures: Adjusted EBITDA, Distributable cash flow attributable to equity investors, Distributable cash flow attributable to Class A and B Unitholders, and Distributable cash flow (shortage) excess.

Adjusted EBITDA. Adjusted EBITDA for Ferrellgas Partners is calculated as net earnings (loss) attributable to Ferrellgas Partners, L.P., plus the sum of the following: income tax expense, interest expense, depreciation and amortization expense, non-cash employee stock ownership plan compensation charge, loss on extinguishment of debt, loss on asset sales and disposals, other income, net, severance, non-recurring employee benefit policy adjustment, legal fees and settlements related to non-core businesses, legal fees and settlements related to core businesses, acquisition and related costs, Class B Unit conversion costs, compliance costs, business transformation costs, and net earnings (loss) attributable to noncontrolling interest. Management believes the presentation of this measure is relevant and useful because it allows investors to view the partnership’s performance in a manner similar to the method management uses, adjusted for items management believes make it easier to compare its results with other companies that have different financing and capital structures. Adjusted EBITDA, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of Adjusted EBITDA that will not occur on a continuing basis may have associated cash payments. This method of calculating Adjusted EBITDA should be viewed in conjunction with measurements that are computed in accordance with GAAP.

Distributable Cash Flow (Shortage) Excess. Distributable cash flow (shortage) excess is calculated as Distributable cash flow attributable to Class A and B Unitholders minus Distributions paid to Class A and B Unitholders. Distributable cash flow excess, if any, is retained to establish reserves, to reduce debt, to fund capital expenditures and for other partnership purposes, and any shortage is funded from previously established reserves, cash on hand or borrowings under our Credit Facility. Management considers Distributable cash flow (shortage) excess a meaningful measure of the partnership’s ability to effectuate those purposes. Distributable cash flow (shortage) excess, as management defines it, may not be comparable to similarly titled measurements used by other companies. Items added into our calculation of distributable cash flow (shortage) excess that will not occur on a continuing basis may have associated cash payments. Distributable cash flow (shortage) excess should be viewed in conjunction with measurements that are computed in accordance with GAAP.

The following table reconciles Adjusted EBITDA, Distributable cash flow attributable to equity investors, Distributable cash flow attributable to Class A and B Unitholders and Distributable cash flow (shortage) excess to Net earnings (loss) attributable to Ferrellgas Partners, L.P., the most directly comparable GAAP measure, for the three and sixnine months ended JanuaryApril 31,30, 2026 and 2025:

(21)Non-recurringCosts complianceassociated costswith corporate restructuring included in “Operating, general and administrative expense.”

(3)Non-recurringCosts costsrelated to conversion of Class B Units to Class A Units in March 2026 included in “Operating, general and administrative expenseexpense.” related to business transformation initiatives.

(68)The Company did not pay any distributions to Class A or Class B unitholdersUnitholders during fiscal 2025 or the first two quarters of fiscal 2026. On March 4, 2026, the board of directorsany of the generalperiods partnerin declaredfiscal 2026 or 2025. The Company paid a cash distribution on the Class B Units of $82.32 per Class B Unit, or $107.0 million in the aggregate. See Note O “Subsequent events”aggregate in theMarch notes to our condensed consolidated financial statements.2026.

Operating Results for the three months ended JanuaryApril 31,30, 2026 and 2025

WinterPersistent conditionswarmth arrivedcontinues laterto in the quarter after unseasonably warm weather in November and December of fiscal 2026, particularly acrossdominate the western half of the country. Average temperatures (measured by heating degree days) were 16%25% warmer than normal (based on AccuWeather’s ten-year average) and 27%26% warmer than the prior year quarter in the western half of the country. OurTemperatures nationalin footprintother allowedparts usof tothe repositioncountry, driversalthough andnot equipmentas fromextreme westas tothe eastwest, toalso meethad increasedwarmer demandtemperatures. from Winter Storm Fern. The aboveOverall, average temperatures infor the westthree months ended April 30, 2026, were partially12% offsetwarmer bythan normal and 9% warmer than the coldprior inyear the east.quarter. Propane sales volume during the three months ended JanuaryApril 31,30, 2026 decreased 11.52.8 million gallons, or 4%,1%, compared to the prior year period. The Company continues to proactively grow business that is not temperature-sensitive, which partially alleviates the impact of weather on its propane sales.

Our wholesale sales price per gallon partially correlates to the change in the wholesale market price of propane. The wholesale market price at major supply points in Mt. Belvieu, Texas during the three months ended JanuaryApril 31,30, 2026 averaged 21.7%15.7% less than the prior year period, while at the Conway, Kansas major supply point prices averaged 24.1%15.0% less than the prior year period. The wholesale market price at Mt. Belvieu, Texas averaged $0.65$0.75 and $0.83$0.89 per gallon during the three months ended JanuaryApril 31,30, 2026 and 2025, respectively, while the wholesale market price at Conway, Kansas averaged $0.60$0.68 and $0.79$0.80 per gallon during the three months ended JanuaryApril 31,30, 2026 and 2025, respectively.

Wholesale sales decreased $5.9$1.6 million, or 4%,1%, andwhile gallons sold decreasedincreased 7.91.6 million, or 11%,3%, compared to the prior year quarter. TheA change$4.7 million decrease in reseller and other wholesale sales was partlypartially drivenoffset by a decrease$3.1 million increase in tank exchange sales as thereselling werelocations noincreased significantto weather-relatedover events65,000 duringlocations nationwide. Growth was concentrated in the secondchannels quarterwhere consumer demand is strongest. Selling locations, gallons, and revenue collectively reflect growth, demonstrating the durability of fiscalour 2026wholesale compareddistribution to fiscal 2025.model.

Other gas sales decreasedincreased $5.9$3.8 million compared to the prior year period primarily due to aan decreaseincrease in sales volume.

Other revenues increaseddecreased $6.9$8.3 million, or 21%,30%, compared to the prior year period. The increasedecrease was primarily duerelates to a change in the presentation of fleet transportation costs. In conjunction with the implementation of new CTRM software, the Company revised the presentation of certain transportation costs from a reduction of revenue to cost of product sold.sold made in conjunction with the implementation of new CTRM software. This change does not impact gross profit, operating income or cash flows. We also have ana increasedecrease of $0.7$0.9 million in appliance sales, partially offset by a $0.8$0.7 million decreaseincrease in miscellaneous revenue.

Gross margin decreasedincreased $3.5$9.6 millionmillion, or 4%, due to aan decreaseincrease of $10.7$10.0 million in wholesaleretail gross margin partially offset by ana increasedecrease of $7.1$0.4 millionmillion, or 1%, in retailwholesale gross margin. The overall decreaseincrease was driven by a $35.3 million decrease in revenue, partially offset by a $31.8$37.6 million decrease in cost of product sold.sold, partially offset by a $28.0 million decrease in revenue.

Preparation efforts in the prior quarter positioned us to meet winter demand from residential customers. The $7.1$10.0 millionmillion, or 5%, increase in retail gross margin was primarily driven by aan 16% decrease in costincrease of product$21.1 sold,million, or 18%, related to residential customers, which was partially offset by a 5%$7.5 million decrease inrelated revenues.to industrial commercial customers.

Gross margin increaseddecreased $6.5$7.4 million, or 22%,31%, compared to the prior year period, primarily due to the increasedecrease in revenuesrevenue noted above.

We had operating income of $136.2$60.1 million and $127.6$87.3 million during the three months ended JanuaryApril 31,30, 2026 and 2025, respectively. The $8.6$27.2 million increasedecrease was primarily due to aincreases $5.0of $29.0 million decrease in “GeneralOperating expense – personnel, vehicle, plant and administrative expenseother” and $3.2 million in “Depreciation and amortization expense,” partially offset by the $3.0$2.2 million increase in gross margin noted above. Changes in personnel expense and reduced legal costs drove the decrease in “General and administrative expense.”

The $29.0 million increase in “Operating expense – personnel, vehicle, plant and other” decreasedrelates $0.4 million. The change is comprised of a decrease of $6.4 million in personnel expense, which was partially offset byto increases of $5.5$24.7 million in plant and otherother, and $0.4$3.6 million in vehicle expense and $0.7 million in personnel expense. The resolution of legacy casualty claims drove an increase of $24.8 million in legal costs in plant and other. The Company does not expect most of these settlement costs to recur in future periods. The increase in vehicle expense was primarily due to increases of $2.2 million in fuel costs and $1.2 million for repairs and maintenance.

The $5.5$3.2 million increase in plant“Depreciation and otheramortization wasexpense” primarily duerelates to increases of $4.9$1.9 million in legal and insuranceamortization expense, $0.5 millionprimarily related to badthe debtexpansion adjustments,of vending machine leases for our tank exchange business, and $0.5$1.3 million for parts and fittings. These increases were partially offset by a $0.6 million decrease in softwaredepreciation costs.expense.

Operating Results for the sixnine months ended JanuaryApril 31,30, 2026 and 2025

Propane sales volumes during the sixnine months ended JanuaryApril 31,30, 2026 decreased 20.823.6 million gallons, or 5%,4%, compared to the prior year period. Above-normal temperatures experienced in the second quarter 2026 continued to be a factor in the third quarter 2026. Average temperatures (measured by heating degree days) were 14%18% warmer than normal (based on AccuWeather’s ten-year average) and 20%23% warmer than thefiscal prior year quarter2025 in the western half of the country. TheOther aboveareas averageof the country, such as our Northeast and North Central regions, had temperatures inthat were 13% cooler than the westprior year period, which were partially offset by temperatures that were 4% warmer than the coldprior year period in the east.midwest and southeast regions.

Our wholesale sales price per gallon partially correlates to the change in the wholesale market price of propane. The wholesale market price at major supply points in Mt. Belvieu, Texas during the sixnine months ended JanuaryApril 31,30, 2026 averaged 11.8%12.5% less than the prior year period, while at the Conway, Kansas major supply point prices averaged 17.3%16.9% less than the prior year period. The wholesale market price at Mt. Belvieu, Texas averaged $0.67$0.70 and $0.76$0.80 per gallon during the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively, while the wholesale market price at Conway, Kansas averaged $0.62$0.64 and $0.75$0.77 per gallon during the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively.

Retail sales decreased $22.8$53.0 million, or 3%,5%, compared to the prior year period largely driven by the decrease in wholesale propane prices noted above. Retail gallons sold decreased 5.39.7 million gallons, or 2%, compared to the prior year period. The warmerthird weatherfiscal quarter 2026 saw a continuation of above-average temperatures in the westwest, occurring in the second fiscal quarter of fiscal 2026which drove a 7.613.7 million decrease in gallons sold, which was partially offset by a 2.34.0 million increase in gallons sold in the rest of the country. RetailWhile retail customers also decreased 2%1% compared to the prior year period contributing to the decrease in sales.sales, the Company’s continued focus on service quality and customer experience resulted in improved retention over the prior year period. Regained accounts increased meaningfully compared to the prior year period, a strong indicator of improving win-back execution, while new location activity showed momentum in the north central and midwest regions.

Wholesale sales decreased $10.1$11.7 million, or 4%,3%, compared to the prior year period, largely driven by the decrease in wholesale propane prices noted above. Wholesale gallons sold decreased 15.513.9 million gallons, or 13%,8%, compared to the prior year period. Results were also impacted by a $3.5 million decrease in tank exchange sales, partly attributable to the fiscal 2025 demand driven by Hurricane Helene and Hurricane Milton, which was partially offset by a 1%2% increase in tank exchange selling locations. So far, fiscal 2026 has not had any similarsignificant hurricane relatedweather-related events.

Other gas sales decreased $9.9$6.1 millionmillion, or 31%, compared to the prior year period primarily due to a decrease in sales volume.

Gross margin decreasedincreased $3.0$6.6 millionmillion, or 1%, due to decreasesan increase of $2.0$9.0 millionmillion, or 2%, in retail gross margin, which was partially offset by a decrease of $2.4 million, or 1%, in wholesale gross margin and 1.0 million in retail gross margin. The overall decreaseincrease was driven by a $42.8 million decrease in revenue, partially offset by a $39.8$77.4 million decrease in cost of product sold.sold, partially offset by a $70.8 million decrease in revenue.

The $2.0$2.4 million, or 2%,million decrease in wholesale gross margin was primarily related to our tank exchange business.

Gross margin increaseddecreased $5.9$1.5 million, or 11%,2%, compared to the prior year period, primarily due to the increasedecrease in revenues noted above.

We had operating income of $138.0$198.1 million and $4.7$92.0 million during the sixnine months ended JanuaryApril 31,30, 2026 and 2025, respectively. The $133.3$106.1 million changeincrease was primarily due to the $125.0 million legal settlement related to fiscal 2025 in “General and administrative expense.” The remaining increasedecrease of $8.3$18.9 million relates to an increase of $30.2 million in “Operating expense – personnel, vehicle, plant and other,” partially offset by an additional $6.0$7.7 million decrease in “General and administrative expense,expense” and the $2.9$5.1 million increase in gross margin described above, and a $2.9 million decrease in operating lease expense as we refinanced several operating leases as finance leases. These increases were partially offset by a $3.1 million increase in “Depreciation and amortization expense”.above.

AfterThe adjusting for $4.5$30.2 million increase in legal fees and settlements related to core businesses related to fiscal 2025, “Operating expense – personnel, vehicle, plant and other” increased $5.7 million. The increase is comprised of increases of $6.7$26.8 million in plant and other and $1.3$5.0 million in vehicle expense, which were partially offset by a decrease of $2.3$1.6 million in personnel expense.

The $6.7$26.8 million increase in plant and other was primarily due to increasesthe resolution of $4.9legacy casualty claims, which drove an increase of $25.1 million forin general liability insurance and legal andcosts. insuranceThe costs,Company $1.0does millionnot forexpect badmost debt,of andthese $0.4settlement millioncosts forto propertyrecur maintenance.in future periods.

VehicleThe increase in vehicle expense increased $1.3 millionwas primarily due to increases of $0.9$2.1 million for repairs and maintenance and $0.4$2.0 million forin telematicsfuel technology.costs.