Leases

12 Months Ended

Jul. 31, 2026

J. Leases

Ferrellgas has lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. Variable lease components include lease payments with payment escalation based on the Consumer Price Index, and other variable items, such as common area maintenance and taxes.

Key assumptions include the discount rate, the impact of purchase options and renewal options on Ferrellgas’ lease term, as well as the assessment of residual value guarantees.

Ferrellgas’ transportation equipment leases generally have purchase options. However, in most circumstances Ferrellgas is not certain if it will exercise the purchase option at lease inception. As circumstances dictate, it may instead return the existing equipment to the lessor and sign a new lease. Ferrellgas’ transportation equipment leases often contain residual value guarantees, but they are not reflected in Ferrellgas’ lease liabilities as its lease rates are such that residual value guarantees are not expected to be owed at the end of its leases.

Ferrellgas has 35 vehicles as of July 31, 2026 and 2025, under what would have been deemed finance leases resulting in failed sale-leaseback transactions. The related finance obligation is included in Other current liabilities and Other liabilities in the consolidated balance sheets for fiscal 2026 and 2025. See the Property, plant and equipment, net and Certain cash flow and non-cash activities sections in Note E “Supplemental financial statement information” for additional information.

Ferrellgas’ real estate leases will often have an option to extend the lease, but it is typically not reasonably certain of exercising extension options. As customer demand changes over time, Ferrellgas typically maintains the ability to move to more advantageous locations, relocate to other leased and owned locations, or discontinue service from particular locations.

The following table provides the operating and financing ROU assets and lease liabilities as of July 31, 2026 and 2025:


Leases	Classification		July 31, 2026		July 31, 2025
Assets
Operating lease assets	Operating lease ROU assets	$	36,571	$	39,045
Financing lease assets	Other assets, net		54,976		37,803
Total leased assets		$	91,547	$	76,848

Liabilities
Current
Operating	Current operating lease liabilities	$	15,257	$	16,082
Financing	Other current liabilities		19,024		12,391
Noncurrent
Operating	Operating lease liabilities		22,604		24,079
Financing	Other liabilities		37,065		27,161
Total leased liabilities		$	93,950	$	79,713

The following table provides the lease expenses for the years ended July 31, 2026, 2025 and 2024:


			For the year ended July 31,
Leases expense		Classification	2026		2025		2024
Operating lease expense		Operating expense - personnel, vehicle, plant and other	$	10,676	$	10,088	$	9,166
		Operating expense - equipment lease expense		11,336		17,586		20,727
		General and administrative expense		224		894		347
Total operating lease expense				22,236		28,568		30,240

Short-term expense		Operating expense - personnel, vehicle, plant and other		9,407		9,731		9,952
		General and administrative expense		31		609		351
Total short-term expense				9,438		10,340		10,303

Variable lease expense		Operating expense - personnel, vehicle, plant and other		897		843		1,168
		Operating expense - equipment lease expense		1,809		779		745
Total variable lease expense				2,706		1,622		1,913

Finance lease expense:
Amortization of leased assets		Depreciation and amortization expense		17,510		10,614		7,128
Interest on lease liabilities		Interest expense		4,176		2,816		2,110
Total finance lease expense				21,686		13,430		9,238

Total lease expense			$	56,066	$	53,960	$	51,694

Minimum annual payments under existing operating and finance lease liabilities as of July 31, 2026 are as follows:


Maturities of lease liabilities		Operating leases		Finance leases		Total
2027	$	15,645	$	22,172	$	37,817
2028		10,341		15,728		26,069
2029		7,491		12,312		19,803
2030		3,628		5,918		9,546
2031		2,277		4,285		6,562
Thereafter		6,363		4,687		11,050
Total lease payments	$	45,745	$	65,102	$	110,847
Less: Imputed interest		(7,884)		(9,013)		(16,897)
Present value of lease liabilities	$	37,861	$	56,089	$	93,950

The following table represents the weighted-average remaining lease term and discount rate as of July 31, 2026 and 2025, respectively:


	As of July 31, 2026		As of July 31, 2025
Lease type	Weighted-average remaining lease term (years)	Weighted-average discount rate	Weighted-average remaining lease term (years)	Weighted-average discount rate
Operating leases	4.5	7.1%	4.6	7.2%
Finance leases	4.4	7.1%	4.8	7.3%

Cash flow information is presented below:


	For the year ended July 31,
	2026		2025		2024
Cash paid for amounts included in the measurement of lease liabilities for operating leases:
Operating cash flows	$	17,516	$	25,816	$	29,019

Cash paid for amounts included in the measurement of lease liabilities for financing leases:
Operating cash flows	$	15,751	$	11,109	$	9,377
Financing cash flows	$	19,234	$	11,320	$	5,363