Executives: Alan Heitmann - Chief Financial Officer & Executive Vice President James Ferrell - Chairman, Interim Chief Executive Officer & President

Analysts: Mirek Zak - Citigroup Michael Gyure - Janney Montgomery Scott LLC

Operator: Good morning. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter Fiscal Year 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Al Heitmann, Chief Financial Officer, you may begin your conference.

Alan Heitmann: Thank you, Tiffany, and good morning, everybody. I’m joined on the call this morning by Jim Ferrell, Chairman of the Board and Interim President and CEO. Before we start, I’d like to remind you that some of the statements we make today during the call may be considered forward-looking, and that various risk, uncertainties and other factors could cause actual performance to differ materially from anticipated performance. These factors are discussed in our Form 10-K and other documents we file from time to time with the SEC. Now with that, I’d like to turn the call over to Jim for his opening remarks. Jim?

James Ferrell: Thanks, Al, and good morning. We’ve already disclosed that Al will begin to enjoy his retirement as of January 31, 2018. It is possible that this could be his last earnings call, since we have his replacement coming on board soon. He will be here for the transition and as long as needed. He reminds me and we’re all very pleased about that. Despite his impending retirement, Al has continued to be engaged. I can’t say enough about his commitment and dedication. So thank you, Al. Thank you for the 23 years of loyal service. Thank you for giving us plenty of time to find your replacement. You stuck by my side for the last year even though you and Kelly were looking forward to your retirement. You will be missed. It is rare that a CEO hears from other than disgruntled investors. But after the June earnings call, I got a nice letter in the mail that was very encouraging. A retired army colonel, who lives in Ohio took the time to write to say, he knew I had wanted to report better earnings. And to remind me that wars last longer than a few battles or in this case a few quarters. He knew that I had chosen the long road to success and wanted me to know that patience would pay off. He could also tell that I’m here for the people, for the investors and employees, and not just for myself, but for the long jeopardy of the business, which in the end will benefit everyone. My bet is that, he was an infantry officer who attended the same schools I went through, because even without a background in business, he understood what I’m trying to do. So thanks, Colonel Curt [ph] for the encouragement. People who’ve listen in on these calls and try to parse the numbers are doing this all without being inside. As I tell everyone here, success eventually has to show up in financial results. My hot air lets me go so far. But for all of you on this call, I will try to describe what we’re doing here in an event to restore – in an effort to restore your trust. We know we are clawing back from a tough period, including consecutive record warm winters and the termination of the Jamex arrangements in Bridger that collectively have not only clipped the value of our public equity, but also that of our Employee Stock Ownership Plan. The ESOP owns some 25% of the company’s equity, I own another 5%. So 30% of the company is owned by this team. People who are totally aligned with the public’s equity and have everything to gain from restoring value. For technical reasons, the word interim is tacked on to the front of my CEO title, but I want you to know that I’m present and accounted for every day, and I’m not shying away from making the tough decisions that are required. I will be here until we are back on top. Beyond that, we have worked hard over the last year to change the company’s culture. Silo management, where no one was allowed to talk to anyone outside of their discipline is gone. Accountability and merit have been restored. Blue Rhino has finally been integrated. Retail propane has been restructured and refocused. Bridger midstream is fighting hard to gain ground in a very difficult market. We have made sweeping changes at the top of the company and are now concentrating on nothing, but execution with the right people, seasoned people who have been freed up to grow the business and to make changes to whatever is in their way. They can talk with others without having the permission of officers, or having officers present. Titles have been changed to reflect actual jobs. We emphasize teamwork and respect for everyone of our people regardless of their position in the company. We’re building several new Blue Rhino production plants to make ourselves more competitive and are aggressively gaining customers. Our traditional retail propane business is growing. I want you to know that I chose the growth method, the growth mode of getting us back on top and not short-term bandaids of cutting expenses or selling the assets. Morale could not be higher despite the paper loss in the value of the ESOP. Every couple of weeks, I write an internal blog with straightforward communication that allows the entire organization to understand who I’m and the direction we are taking. Employee defections have been few. Longevity continues to climb. New incentive programs are helping with growth and morale. If we can execute on our plans, both our equity and debtholders will be very happy. We are still the company to be with the best people and with the restored and supportive and open culture. Ferrellgas is a good place to work, where people are valued and where performance is the key to success. And that has always made us the envy of the propane industry, which already knows I’m back. It is not, however, a place for those who will not or cannot step up. For Bridger, there’s also a long-term game plan, including getting unused assets to work and finding new sources of revenue. We have smart people in place, who are as energized as our propane team and who will make us all proud in the end. Buried inside all this are dozens of programs and changes that make us more competitive. Some do save money, while others remove obstacles, still others aggressively force the destruction of silos. We’re basically remodeling the business on a grand scale. We announced last week that Doran Schwartz will be our new CFO. His start date is October 16, and we’re really looking forward to getting him on board. He is a seasoned CFO with experience in both the accounting side and capital markets. He comes with a basic value system that will match very well with us. I hope this gives you some idea on what has been happening. I have been back as CEO for exactly a year today. And with that – and while there’s more that could have been done and always more yet to do, I’m pleased with what we have accomplished in the direction in which we are heading. I love this company and cannot think of where I can add more value with my time than right now. I’m surrounded by people, who I could not do without and who are just as dedicated as I’m to getting us back on track. We’re aiming squarely at the top of the hill, and I’m confident that we will get there. While Colonel Kirk [ph] urges patience, I will tell you that I have always been one of the more impatient people in the world. If I make up my mind that something needs to be done, I can hardly wait to get it done. But I also know that patience is required to stay on track to win a war. While we will never declare victory, there will come a day when we can report earnings that you will be proud of . Now back to Al.

Alan Heitmann: Thanks, Jim. Ferrellgas this morning announced a net loss of $54.5 million for fiscal 2017, compared to a net loss of $672 million in fiscal 2016. The prior year loss contained $658 million asset impairment charge related to our midstream operations that was not repeated this year. As detailed in our earnings release and Form 10-K, both of which were filed earlier today, our fiscal 2017 adjusted EBITDA was $230.1 million, compared to $344.7 million in the prior year, reflecting the effect of the termination of the Jamex contract in September of last year, which resulted in the loss of Bridger’s largest customer. Temperatures during fiscal 2017 were 18% warmer than normal, but approximately 1% cooler than the prior year period. Although we were able to increase our retail gallon sales, our gross margin decreased as a result of customer mix and an increase in the overall wholesale cost of propane. Propane sales volumes for the year were 791 million gallons, up from the 779 million gallons sold a year ago. Total gross profit was $739.7 million, excuse me, $739.4 million compared to the $877.5 million in the prior year. This decrease is primarily attributable to the termination of the Jamex contract and to a lesser extent reduced margins in the propane operation segment. Operating expense was $431.8 million, a decrease of over $25 million from the prior year period. This decrease is primarily from a combination of efficiencies in our propane operations and related equipment sales segment, plus reductions in our midstream segment related to the termination of the Jamex contract. Interest expense was $152.5 million, up from $137.9 million in the prior year period, largely due to the MLP bond offering in our second quarter. Our consolidated leverage ratio was 7.46 as of July 31, 2017, which is lower than the 7.75 times permitted under the amendment obtained this past April. On a personal note, as Jim mentioned, my time here at Ferrellgas is coming to a close. And while I’m very much looking forward to retirement, I’ll miss the good people of this company and I’m grateful for the opportunity to serve alongside them. It’s been an honor and a privilege to be a member of the Ferrellgas family for the past 23 years. And I’d like to reiterate the comment that Jim made at the top of the call, I’m committed to working alongside, Doran, to ensure his smooth transition into this Ferrellgas CFO role. At this time, I’d like to turn the call back to Tiffany, so we can address any questions you might be from the analyst group.

Operator: [Operator Instructions] Your first question comes from the line of Mirek Zak with Citigroup. Your line is open.

Mirek Zak: Hi, good morning, everyone. Regarding your strategy of increasing market share this past year, is that something you plan on continuing going into the next winter? And what and/or market share goal are you targeting to achieve there? And how do you balance that with potential tradeoffs and margin?

James Ferrell: Well, that’s the trick of running a business. We are never going to stop going for market share very aggressively. At the same time, if margin erodes, which we don’t really expect, but if margin erodes, it will be offset by volume. And we’re not that this is a – either we get that right or we don’t, you’ll have to wait and see.

Mirek Zak: Okay. And what’s your current strategy on the midstream side of the business? Is this something you’re going to continue to try to grow organically?

James Ferrell: Yes. That’s – we have no other plans, but organic. We have a number of assets that are sitting, that gives us somewhat of a competitive advantage because we’ve already written them down and putting them back to work is the trick there. This is a competitive environment because of the fall in the price of oil. If you’re covering midstream, you know that that exists everywhere. So we’re working solely today on organic.

Mirek Zak: Okay. All right. Thank you very much. Thanks for your time.

Operator: [Operator Instructions] Your next question comes from the line of Mike Gyure with Janney. Your line is open.

Michael Gyure: Hey, good morning. Can you guys talk a little bit about, I guess, the availability of capital you have under the credit facility and maybe your spending plans. I think, Jim mentioned the Blue Rhino kind of program, some spending there and kind of your working capital needs as you go into the pre-winter heating season?

Alan Heitmann: Sure, Mike. With the leverage ratio that we’ve posted at the end of the year that provides us approximately $70 million of borrowing capacity, which is sufficient to cover any working capital or CapEx needs we have.

Michael Gyure: Okay. And then maybe if Jim could expand on the Blue Rhino spending that would be appreciated

James Ferrell: Yes, sure. Yes, the Blue Rhino portion is, it’s getting our production closer to where our customers are with smaller plants. The original plants we have that we inherited are large plants. These are smaller plants. We will spend – we will get a return somewhere around 25% on whatever we spend there because of decreased shipping costs. It’s like we have one plant in the middle of the United States and we’re shipping to the coast, it’s not that but you can see savings – simple savings in first-level freight that will more than pay it back. That has nothing to do with the increased efficiency. It has nothing to do with removing eventually maybe one or two of these large plants because we don’t need them, but there’s a considerable amount of savings. At the same time, we are growing the business and producing more tanks. So it’s – this won’t come true. You won’t see any of it until 2019, because it takes time to get all of this done in fiscal 2019.

Michael Gyure: Okay. Great. Thanks very much.

Operator: Your next question comes from the line of Gabe Moreen with Bank of America. Your line is open.

Unidentified Analyst: Hi, good morning, everyone. This is actually Stacy [ph] on for Dave. Just following up on Bridger, if I may, can you discuss your outlook for 2018 compared to 2017, specifically how much do you expect the new contract to contribute to the bottom line in 2018?

James Ferrell: Yes, we’re not in a position to discuss 2018 at this point.

Unidentified Analyst: Got it. Thank you.

Operator: There are no further questions in queue at this time. I turn the conference back over to our presenters.

James Ferrell: I think we’re good with questions. Thanks.

Alan Heitmann: Good. Thanks everybody for joining the call today.

Operator: This concludes today’s conference call. You may now disconnect.