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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934For the fiscal year ended
    July 31, 2006oro

TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934For the transition period from
    __________ to __________   Commission file numbers:
    001-11331,
    333-06693,
    000-50182
    and
    000-50183
  Ferrellgas Partners,
    L.P.
 Ferrellgas Partners Finance
    Corp.
 Ferrellgas, L.P.
 Ferrellgas Finance
    Corp.
 (Exact name of registrants as
    specified in their charters)
  Delaware
    Delaware
    Delaware
    Delaware

43-169848043-174252043-1698481
    14-1866671(States or other jurisdictions
    of
    incorporation or organization)

(I.R.S. Employer
    Identification Nos.)7500 College Boulevard,
    Suite 1000, 
    Overland Park, Kansas(Address of principal
    executive office)

66210(Zip Code)   Registrants telephone
    number, including area code:
 (913) 661-1500
      Securities registered pursuant
    to Section 12(b) of the Act:
   Common Units of Ferrellgas Partners, L.P.

New York Stock ExchangeTitle of each class

Name of each exchange on which
    registered       Securities registered pursuant
    to section 12(g) of the Act:
  Limited Partner Interests of
    Ferrellgas, L.P.
  Common Stock of Ferrellgas
    Finance Corp.
    Title of class
    þ o
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  þ o o
  o o þ
  Rule 12b-2  o þ
  þ o
      Ferrellgas Partners, L.P.


62,847,113



Common UnitsFerrellgas Partners Finance
    Corp.


1,000



Common StockFerrellgas, L.P.


n/a



n/aFerrellgas Finance Corp.


1,000



Common Stock   Documents
    Incorporated by Reference: None
  FORM 10-K FORM 10-K




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##### 



FERRELLGAS
    PARTNERS, L.P.
    FERRELLGAS PARTNERS FINANCE CORP.
    FERRELLGAS, L.P.
    FERRELLGAS FINANCE CORP.
    2006
    FORM 10-K
    ANNUAL REPORT
    Table of Contents
  
  PagePART IITEM 1.

BUSINESS


1ITEM 1A.

RISK
    FACTORS


10ITEM 1B.

UNRESOLVED STAFF
    COMMENTS


31ITEM 2.

PROPERTIES


31ITEM 3.

LEGAL
    PROCEEDINGS


32ITEM 4.

SUBMISSION OF
    MATTERS TO A VOTE OF SECURITY HOLDERS


32PART IIITEM 5.

MARKET FOR
    REGISTRANTS COMMON EQUITY, RELATED UNITHOLDER AND
    STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES


32ITEM 6.

SELECTED FINANCIAL
    DATA


34ITEM 7.

MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS


36ITEM 7A.

QUANTITATIVE AND
    QUALITATIVE DISCLOSURES ABOUT MARKET RISK


53ITEM 8.

FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA


54ITEM 9.

CHANGES IN AND
    DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
    DISCLOSURE


54ITEM 9A.

CONTROLS AND
    PROCEDURES


54ITEM 9B.

OTHER
    INFORMATION


58PART IIIITEM 10.

DIRECTORS AND
    EXECUTIVE OFFICERS OF THE REGISTRANTS


58ITEM 11.

EXECUTIVE
    COMPENSATION


62ITEM 12.

SECURITY OWNERSHIP
    OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
    UNITHOLDER MATTERS


66ITEM 13.

CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS


69ITEM 14.

PRINCIPAL
    ACCOUNTANT FEES AND SERVICES


70PART IVITEM 15.

EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES


70Third Amendment to Fourth Amended Agreement of Limited PartnershipLender AddendumCommitment Increase AgreementAmendment No.2 to Amended and Restated Receivable Interest Sale AgreementChange in Control Agreement - Stephen L. WamboldChange in Control Agreement - Eugene D. CaresiaChange in Control Agreement - M. Kevin DobbinsChange in Control Agreement - Kevin T. KellyChange in Control Agreement - Brian J. KlineChange in Control Agreement - George L. KoloroutisChange in Control Agreement - Patrick J. WalshChange in Control Agreement - James E. FerrellChange in Control Agreement - Tod D. BrownList of subsidiariesConsent of Deloitte & Touche, LLPConsent of Deloitte & Touche, LLPCertification of Ferrellgas Partners, L.P. pursuant to Rule 13a-14a/15d-14aCertification of Ferrellgas Partners Finance Corp. pursuant to Rule 13a-14a/15d-14aCertification of Ferrellgas, L.P. pursuant to Rule 13a-14a/15d-14aCertification of Ferrellgas Finance Corp. pursuant to Rule 13a-14a/15d-14aCertification of Ferrellgas Partners, L.P. pursuant to Section 1350Certification of Ferrellgas Partners Finance Corp. pursuant to Section 1350Certification of Ferrellgas, L.P. pursuant to Section 1350Certification of Ferrellgas Finance Corp. pursuant to Section 1350




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PART I  ITEM 1.
    BUSINESS.    Form 10-K,
  
    us, we, our, or
    ours, are references exclusively to Ferrellgas
    Partners, L.P. together with its consolidated subsidiaries,
    including Ferrellgas Partners Finance Corp., Ferrellgas, L.P.
    and Ferrellgas Finance Corp., except when used in connection
    with common units or senior units, in
    which case these terms refer to Ferrellgas Partners, L.P.
    without its consolidated subsidiaries;
    Ferrellgas Partners refers to Ferrellgas Partners,
    L.P. itself, without its consolidated subsidiaries;
    the operating partnership refers to Ferrellgas,
    L.P.; together with its consolidated subsidiaries, including
    Ferrellgas Finance Corp.
    our general partner refers to Ferrellgas, Inc.;
    Ferrell Companies refers to Ferrell Companies, Inc.,
    the sole shareholder of our general partner;
    unitholders refers to holders of common units of
    Ferrellgas Partners;
    customers refers to customers other than our
    wholesale customers or our other bulk propane distributors or
    marketers;
    propane sales volumes refers to the volume of
    propane sold to our customers and excludes any volumes of bulk
    propane sold to our wholesale customers and other bulk propane
    distributors or marketers; and
    Notes refers to the notes of the consolidated
    financial statements of Ferrellgas Partners or the operating
    partnership, as applicable.        1-800-SEC-0330 Form 10-K
 1




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General
          Fiscal Year Ended

Propane Sales Volumes(In millions)July 31, 2006


809July 31, 2005


898July 31, 2004


874     Our
    History
     2




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Business
    Strategy
    
    achieve operating efficiencies through the utilization of our
    technology platforms;
    capitalize on our national presence and economies of scale;
    expand our operations through disciplined acquisitions and
    internal growth; and
    align employee interest with our investors through significant
    employee ownership.  Achieving
    operating efficiencies through the utilization of our technology
    platforms.
        Capitalizing
    on our national presence and economies of
    scale.
    
    product procurement;
    transportation;
    fleet purchases;
    propane customer administration; and
    general administration. 3




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state-of-the-art
  Expanding
    our operations through disciplined acquisitions and internal
    growth.
  state-of-the-art
    Aligning
    employee interests with our investors through significant
    employee
    ownership.
    Distribution
    of Propane and Related Equipment and Supplies
    
    our efficiency in delivering propane to customers;
    our employee training and safety programs; 4




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
    our enhanced customer service, facilitated by our new technology
    platform and our nationwide 24 hour/seven days a week
    retail customer call support capabilities; and
    our national distributor network for our commercial and portable
    tank exchange customers.      
    residential;
    industrial/commercial;
    portable tank exchange;
    agricultural; and
    other.  cents-per-gallon cent-per-gallon cent-per-gallon
          Effect
    of Weather and Seasonality
  warmer-than-normal colder-than-normal
 5




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colder-than-normal
  Risk
    Management Activities
    over-the-counter
  over-the-counter
     6




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over-the-counter
  colder-than-normal
  Industry
        Competition
   7




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Other
    Activities
    
    common carrier services;
    wholesale marketing of propane appliances;
    wholesale propane marketing and distribution;
    the sale of refined fuels; and
    the sale of carbon dioxide.    Employees
      Propane distribution locations


3,053Risk management, transportation
    and wholesale


184Centralized corporate functions


432Total


3,669     Governmental
    Regulation  Environmental and Safety
    Matters
         8




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Trademarks
    and Service Marks
    ® ® tm ® tm ® ® ® ® tm tm ® ® ® ® ® ® ® ® ® ® ® ® ®
  Businesses
    of Other Subsidiaries
  Form 10-K.
  Form 10-K.
   9




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ITEM 1A.
    RISK
    FACTORS.  Risks
    Inherent in the Distribution of Propane
  Weather
    conditions may reduce the demand for propane; our financial
    condition is vulnerable to warm winters and poor weather in the
    grilling season.
      Hurricanes
    and other natural disasters could have a material adverse effect
    on our business, financial condition and results of
    operations.
    The
    propane distribution business is highly competitive, which may
    negatively affect our sales volumes
    and/or our
    results of operations.
  warmer-than-normal
 10




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The
    propane distribution industry is a mature one, which may limit
    our growth.
  Year-to-year
  The
    propane distribution business faces competition from other
    energy sources, which may reduce the existing demand for our
    propane.
    Energy
    efficiency and technology advances may affect demand for
    propane; increases in propane prices may cause our residential
    customers to increase their conservation efforts.
    Current
    economic and political conditions may harm the energy business
    disproportionately to other industries.
    
    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.  Fuel
    prices are at relatively high levels and rising fuel prices may
    adversely affect our profits.
   11




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The
    revenues received from our portable tank exchange are
    concentrated with a limited number of retailers under
    non-exclusive arrangements that may be terminated at
    will.
    If the
    independently-owned distributors that some of our customers rely
    upon for the delivery of propane by portable tank exchange do
    not perform up to the expectations of such customers, if we
    encounter difficulties in managing the operations of these
    distributors or if we or these distributors are not able to
    manage growth effectively, our relationships with our customers
    may be adversely impacted and our delivery of propane by
    portable tank exchange may suffer.
    If we
    are unable to manage the impact of overfill prevention device
    valve guidelines, our delivery of propane by portable tank
    exchange may suffer.
   12




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We
    depend on particular management information systems to
    effectively manage all aspects of our delivery of
    propane.
    Potential
    retail partners may not be able to obtain necessary permits or
    may be substantially delayed in obtaining necessary permits,
    which may adversely impact our ability to increase our delivery
    of propane by portable tank exchange to new retail
    locations.
    Risks
    Inherent to Our Business
  Our
    substantial debt and other financial obligations could impair
    our financial condition and our ability to fulfill our
    obligations.
    
    we had total indebtedness of approximately $1,051.8 million;
    Ferrellgas Partners had partners capital of approximately
    $262.6 million;
    the operating partnership had availability under its bank credit
    facility of approximately $170.8 million; and
    we had aggregate future minimum rental commitments under
    non-cancelable operating leases of approximately
    $117.3 million; provided, however, if we elect to purchase
    the underlying assets at the end of the lease terms, such
    aggregate buyout would be $27.5 million.    
    $90.0 million  2008;
    $52.0 million  2009;
    $73.0 million  2010;
    $82.0 million  2011; and
    $320.0 million  2014.   13




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and/or
    
    make it more difficult for us to satisfy our obligations with
    respect to our securities;
    impair our ability to obtain additional financing in the future
    for working capital, capital expenditures, acquisitions, general
    corporate purposes or other purposes;
    result in higher interest expense in the event of increases in
    interest rates since some of our debt is, and will continue to
    be, at variable rates of interest;
    impair our operating capacity and cash flows if we fail to
    comply with financial and restrictive covenants in our debt
    agreements and an event of default occurs as a result of that
    failure that is not cured or waived;
    require us to dedicate a substantial portion of our cash flow to
    payments on our indebtedness and other financial obligations,
    thereby reducing the availability of our cash flow to fund
    distributions, working capital, capital expenditures and other
    general partnership requirements;
    limit our flexibility in planning for, or reacting to, changes
    in our business and the industry in which we operate; and
    place us at a competitive disadvantage compared to our
    competitors that have proportionately less debt.  Ferrellgas
    Partners or the operating partnership may be unable to refinance
    their indebtedness or pay that indebtedness if it becomes due
    earlier than scheduled.
    
    restructure or refinance their indebtedness;
    enter into other necessary financial transactions;
    seek additional equity capital;
    or sell their assets.    Restrictive
    covenants in the agreements governing our indebtedness and other
    financial obligations may reduce our operating
    flexibility.
    
    incur additional indebtedness;
    make distributions to our unitholders;
    purchase or redeem our outstanding equity interests or
    subordinated debt; 14




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
    make specified investments;
    create or incur liens;
    sell assets;
    engage in specified transactions with affiliates;
    restrict the ability of our subsidiaries to make specified
    payments, loans, guarantees and transfers of assets or interests
    in assets;
    engage in sale-leaseback transactions;
    effect a merger or consolidation with or into other companies or
    a sale of all or substantially all of our properties or
    assets; and
    engage in other lines of business.    
    to obtain future financings;
    to make needed capital expenditures;
    to withstand a future downturn in our business or the economy in
    general; or
    to conduct operations or otherwise take advantage of business
    opportunities that may arise.      Our
    results of operations and our ability to make distributions or
    pay interest or principal on debt securities could be negatively
    impacted by price and inventory risk and management of these
    risks.
     15




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over-the-counter
  and/or price-over-the-counter
  over-the-counter
  case-by-case and/or
  We are
    dependent on our principal suppliers, which increases the risks
    from an interruption in supply and transportation.
  colder-than-normal
 16




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The
    availability of cash from our credit facilities may be impacted
    by many factors beyond our control.
    
    a significant increase in the cost of propane;
    a significant delay in the collections of accounts receivable;
    increased volatility in energy commodity prices related to risk
    management activities;
    increased liquidity requirements imposed by insurance providers;
    a significant downgrade in our credit rating;
    decreased trade credit; or
    a significant acquisition.  colder-than-normal
  We may
    not be successful in making acquisitions and any acquisitions we
    make may not result in our anticipated results; in either case,
    this would potentially limit our growth, limit our ability to
    compete and impair our results of operations.
    
    we will be able to acquire any of these candidates on
    economically acceptable terms;
    we will be able to successfully integrate acquired operations
    with any expected cost savings;
    any acquisitions made will not be dilutive to our earnings and
    distributions;
    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 the operating
    partnerships existing debt.  We are
    subject to operating and litigation risks, which may not be
    covered by insurance.
   17




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Risks
    Inherent to an Investment in Our Debt Securities
  Ferrellgas
    Partners and the operating partnership are required to
    distribute all of their available cash to their equity holders
    and Ferrellgas Partners and the operating partnership are not
    required to accumulate cash for the purpose of meeting their
    future obligations to holders of their debt securities, which
    may limit the cash available to service those debt
    securities.
    Debt
    securities of Ferrellgas Partners will be structurally
    subordinated to all indebtedness and other liabilities of the
    operating partnership and its subsidiaries.
    
    the lenders under the operating partnerships indebtedness;
    the claims of lessors under the operating partnerships
    operating leases;
    the claims of the lenders and their affiliates under the
    operating partnerships accounts receivable securitization
    facility;
    debt securities, including any subordinated debt securities,
    issued by the operating partnership; and
    all other possible future creditors of the operating partnership
    and its subsidiaries.    All
    payments on any subordinated debt securities that we may issue
    will be subordinated to the payments of any amounts due on any
    senior indebtedness that we may have issued or
    incurred.
   18




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Debt
    securities of Ferrellgas Partners are expected to be
    non-recourse to the operating partnership, which will limit
    remedies of the holders of Ferrellgas Partners debt
    securities.
    Ferrellgas
    Partners or the operating partnership may be unable to
    repurchase debt securities upon a change of control; it may be
    difficult to determine if a change of control has
    occurred.
      There
    may be no active trading market for our debt securities, which
    may limit a holders ability to sell our debt
    securities.
   19




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
    a liquid market for the debt securities will develop;
    a debt holder will be able to sell its debt securities; or
    a debt holder will receive any specific price upon any sale of
    its debt securities.    Risks
    Inherent to an Investment in Ferrellgas Partners
    Equity
  Ferrellgas
    Partners may sell additional limited partner interests, diluting
    existing interests of unitholders.
    Cash
    distributions are not guaranteed and may fluctuate with our
    performance and other external factors.
    
    cash flow generated by operations;
    weather in our areas of operation;
    borrowing capacity under our credit facilities;
    principal and interest payments made on our debt;
    the costs of acquisitions, including related debt service
    payments;
    restrictions contained in debt instruments;
    issuances of debt and equity securities;
    fluctuations in working capital;
    capital expenditures;
    adjustments in reserves made by our general partner in its
    discretion;
    prevailing economic conditions; and
    financial, business and other factors, a number of which will be
    beyond our control.   20




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Our
    general partner has broad discretion to determine the amount of
    available cash for distribution to holders of our
    equity securities through the establishment and maintenance of
    cash reserves, thereby potentially lessening and limiting the
    amount of available cash eligible for
    distribution.
    
    to comply with the terms of any of our agreements or
    obligations, including the establishment of reserves to fund the
    payment of interest and principal in the future of any debt
    securities of Ferrellgas Partners or the operating partnership;
    to provide for level distributions of cash notwithstanding the
    seasonality of our business; and
    to provide for future capital expenditures and other payments
    deemed by our general partner to be necessary or advisable.    The
    debt agreements of Ferrellgas Partners and the operating
    partnership may limit their ability to make distributions to
    holders of their equity securities.
    
    making any distributions to unitholders if an event of default
    exists or would exist when such distribution is made;
    distributing amounts in excess of 100% of available cash for the
    immediately preceding fiscal quarter if its consolidated fixed
    charge coverage ratio as defined in the indenture is greater
    than 1.75 to 1.00; or
    distributing amounts in excess of $25.0 million less any
    restricted payments made for the prior sixteen fiscal quarters
    plus the aggregate cash contributions made to us during that
    period if its consolidated fixed charge coverage ratio as
    defined in the indenture is less than or equal to 1.75 to 1.00.    The
    distribution priority to our common units owned by the public
    terminates no later than April 30, 2010.
   21




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and/or
  Persons
    owning 20% or more of Ferrellgas Partners common units
    cannot vote. This limitation does not apply to common units
    owned by Ferrell Companies, our general partner and its
    affiliates.
    
    discourage a person or group from attempting to remove our
    general partner or otherwise change management; and
    reduce the price at which our common units will trade under
    various circumstances.    Risks
    Arising from Our Partnership Structure and Relationship with Our
    General Partner
  Ferrellgas
    Partners is a holding entity and has no material operations or
    assets. Accordingly, Ferrellgas Partners is dependent on
    distributions from the operating partnership to service its
    obligations. These distributions are not guaranteed and may be
    restricted.
     22




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
    incur additional indebtedness;
    engage in transactions with affiliates;
    create or incur liens;
    sell assets;
    make restricted payments, loans and investments;
    enter into business combinations and asset sale
    transactions; and
    engage in other lines of business.  The
    ownership of our general partner could change if Ferrell
    Companies defaults on its outstanding
    indebtedness.
    Unitholders
    have limits on their voting rights; our general partner manages
    and operates us, thereby generally precluding the participation
    of our unitholders in operational decisions.
      
    the vote of the holders of at least
    662/3%
    of the outstanding units entitled to vote thereon, which
    includes the common 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
    common units entitled to vote.   23




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Our
    general partner has a limited call right with respect to the
    limited partner interests of Ferrellgas Partners.
    Unitholders
    may not have limited liability in specified circumstances and
    may be liable for the return of distributions.
    
    remove or replace our general partner;
    make specified amendments to our partnership agreements; or
    take other action pursuant to our partnership agreements that
    constitutes participation in the control of our
    business,      Our
    general partners liability to us and our unitholders may
    be limited.
    
    the general partner does not breach any duty to us or our
    unitholders by borrowing funds or approving any borrowing; our
    general partner is protected even if the purpose or effect of
    the borrowing is to increase incentive distributions to our
    general partner;
    our general partner does not breach any duty to us or our
    unitholders by taking any actions consistent with the standards
    of reasonable discretion outlined in the definitions of
    available cash and cash from operations contained in our
    partnership agreements; and
    our general partner does not breach any standard of care or duty
    by resolving conflicts of interest unless our general partner
    acts in bad faith. 24




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Our
    general partner and its affiliates may have conflicts with
    us.
      
    decisions of our general partner with respect to the amount and
    timing of our cash expenditures, borrowings, acquisitions,
    issuances of additional securities and changes in reserves in
    any quarter may affect the amount of incentive distributions we
    are obligated to pay our general partner;
    borrowings do not constitute a breach of any duty owed by our
    general partner to our unitholders even if these borrowings have
    the purpose or effect of directly or indirectly enabling us to
    make distributions to the holder of our incentive distribution
    rights, currently our general partner, or to hasten the
    expiration of the deferral period with respect to the common
    units held by Ferrell Companies;
    we do not have any employees and rely solely on employees of our
    general partner and its affiliates;
    under the terms of our partnership agreements, we must reimburse
    our general partner and its affiliates for costs incurred in
    managing and operating us, including costs incurred in rendering
    corporate staff and support services to us;
    our general partner is not restricted from causing us to pay it
    or its affiliates for any services rendered on terms that are
    fair and reasonable to us or causing us to enter into additional
    contractual arrangements with any of such entities;
    neither our partnership agreements nor any of the other
    agreements, contracts and arrangements between us, on the one
    hand, and our general partner and its affiliates, on the other,
    are or will be the result of arms-length negotiations;
    whenever possible, our general partner limits our liability
    under contractual arrangements to all or a portion of our
    assets, with the other party thereto having no recourse against
    our general partner or its assets;
    our partnership agreements permit our general partner to make
    these limitations even if we could have obtained more favorable
    terms if our general partner had not limited its liability;
    any agreements between us and our general partner or its
    affiliates will not grant to our unitholders, separate and apart
    from us, the right to enforce the obligations of our general
    partner or such affiliates in favor of us; therefore, our
    general partner will be primarily responsible for enforcing
    those obligations;
    our general partner may exercise its right to call for and
    purchase common units as provided in the partnership agreement
    of Ferrellgas Partners or assign that right to one of its
    affiliates or to us;
    our partnership agreements provide that it will not constitute a
    breach of our general partners fiduciary duties to us for
    its affiliates to engage in activities of the type conducted by
    us, other than retail propane sales to end users in the
    continental United States in the manner engaged in by our
    general partner immediately prior to our initial public
    offering, even if these activities are in direct competition
    with us;
    our general partner and its affiliates have no obligation to
    present business opportunities to us; 25




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
    our general partner selects the attorneys, accountants and
    others who perform services for us. These persons may also
    perform services for our general partner and its affiliates. Our
    general partner is authorized to retain separate counsel for us
    or our unitholders, depending on the nature of the conflict that
    arises; and
    Mr. Ferrell is the Chief Executive Officer of our general
    partner and the Chairman of its Board of Directors.
    Mr. Ferrell also owns other companies with whom we conduct
    our ordinary business operations. Mr. Ferrells
    ownership of these entities may conflict with his duties as an
    officer and director of our general partner, including our
    relationship and conduct of business with any of
    Mr. Ferrells companies.    Ferrell
    Companies may transfer the ownership of our general partner
    which could cause a change of our management and affect the
    decisions made by our general partner regarding resolutions of
    conflicts of interest.
    Our
    general partner may voluntarily withdraw or sell its general
    partner interest.
    Our
    general partner can protect itself against
    dilution.
    Tax
    Risks
  The
    IRS could treat us as a corporation for tax purposes, which
    would substantially reduce the cash available for distribution
    to our unitholders.
     26




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##### Table of Contents



A
    successful IRS contest of the federal income tax positions we
    take may reduce the market value of our common units and the
    costs of any contest will be borne by us and therefore
    indirectly by our unitholders and our general
    partner.
    
    our classification as a partnership for federal income tax
    purposes; or
    whether our propane operations generate qualifying
    income under Section 7704 of the Internal Revenue
    Code.    Unitholders
    may be required to pay taxes on income from us even if
    unitholders do not receive any cash distributions from
    us.
    The
    ratio of taxable income to cash distributions could be higher or
    lower than our estimates, which could result in a material
    reduction of the market value of our common units.
    There
    are limits on the deductibility of losses
    Tax
    gain or loss on the disposition of our common units could be
    different than expected.
   27




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##### Table of Contents



Tax-exempt
    entities, regulated investment companies, and foreign persons
    face unique tax issues from owning common units that may result
    in additional tax liability or reporting requirements for
    them.
  non-U.S. persons, non-U.S. persons non-U.S. persons
  Certain
    information relating to a unitholders investment may be
    subject to special IRS reporting requirements.
    An
    audit of us may result in an adjustment or an audit of a
    unitholders own tax return.
    Reporting
    of partnership tax information is complicated and subject to
    audits; we cannot guarantee conformity to IRS
    requirements.
  Schedule K-1
 28




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##### Table of Contents



Unitholders
    may lose tax benefits as a result of nonconforming depreciation
    conventions.
    As a
    result of investing in our common units, a unitholder will
    likely be subject to state and local taxes and return filing
    requirements in jurisdictions where it does not
    live.
    States
    may subject partnerships to entity-level taxation in the future;
    thereby decreasing the amount of cash available to us for
    distributions and potentially causing a decrease in our
    distribution levels, including a decrease in the minimum
    quarterly distribution.
    Unitholders
    may have negative tax consequences if we default on our debt or
    sell assets.
    Conflicts
    of Interest
      
    decisions of our general partner with respect to the amount and
    timing of our cash expenditures, borrowings, acquisitions,
    issuances of additional securities and changes in reserves in
    any quarter may affect the amount of incentive distributions we
    are obligated to pay our general partner; 29




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##### Table of Contents




    borrowings do not constitute a breach of any duty owed by our
    general partner to our unitholders even if these borrowings have
    the purpose or effect of directly or indirectly enabling us to
    make distributions to the holder of our incentive distribution
    rights, currently our general partner, or to hasten the
    expiration of the deferral period with respect to the common
    units held by Ferrell Companies;
    we do not have any employees and rely solely on employees of our
    general partner and its affiliates;
    under the terms of our partnership agreements, we must reimburse
    our general partner and its affiliates for costs incurred in
    managing and operating us, including costs incurred in rendering
    corporate staff and support services to us;
    our general partner is not restricted from causing us to pay it
    or its affiliates for any services rendered on terms that are
    fair and reasonable to us or causing us to enter into additional
    contractual arrangements with any of such entities;
    neither our partnership agreements nor any of the other
    agreements, contracts and arrangements between us, on the one
    hand, and our general partner and its affiliates, on the other,
    are or will be the result of arms-length negotiations;
    whenever possible, our general partner limits our liability
    under contractual arrangements to all or a portion of our
    assets, with the other party thereto having no recourse against
    our general partner or its assets;
    our partnership agreements permit our general partner to make
    these limitations even if we could have obtained more favorable
    terms if our general partner had not limited its liability;
    any agreements between us and our general partner or its
    affiliates will not grant to our unitholders, separate and apart
    from us, the right to enforce the obligations of our general
    partner or such affiliates in favor of us; therefore, our
    general partner will be primarily responsible for enforcing
    those obligations;
    our general partner may exercise its right to call for and
    purchase common units as provided in the partnership agreement
    of Ferrellgas Partners or assign that right to one of its
    affiliates or to us;
    our partnership agreements provide that it will not constitute a
    breach of our general partners fiduciary duties to us for
    its affiliates to engage in activities of the type conducted by
    us, other than retail propane sales to end users in the
    continental United States in the manner engaged in by our
    general partner immediately prior to our initial public
    offering, even if these activities are in direct competition
    with us;
    our general partner and its affiliates have no obligation to
    present business opportunities to us;
    our general partner selects the attorneys, accountants and
    others who perform services for us. These persons may also
    perform services for our general partner and its affiliates. Our
    general partner is authorized to retain separate counsel for us
    or our unitholders, depending on the nature of the conflict that
    arises; and
    Mr. Ferrell is Chief Executive Officer of our general
    partner and the Chairman of its Board of Directors.
    Mr. Ferrell also owns other companies with whom we conduct
    our ordinary business operations. Mr. Ferrells
    ownership of these entities may conflict with his duties as an
    officer and director of our general partner, including our
    relationship and conduct of business with any of
    Mr. Ferrells companies.  Fiduciary
    Responsibilities
   30




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##### Table of Contents



ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS.    ITEM 2.
    PROPERTIES.    Owned


Leased


TotalTruck tractors


88



210



298Propane transport trailers


257



48



305Portable tank delivery trucks


253



194



447Portable tank exchange delivery
    trailers


159



92



251Bulk propane delivery trucks


1,046



755



1,801Pickup and service trucks


947



401



1,348Railroad tank cars






98



98     on-site
       31




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##### Table of Contents



ITEM 3.
    LEGAL
    PROCEEDINGS.    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS.   PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED UNITHOLDER AND
    STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES.  Common
    Units of Ferrellgas Partners
    Common Unit Price Range


Distributions DeclaredHigh


Low


per Unit2005First Quarter

$
22.14


$
19.99


$
0.50Second Quarter


21.32



19.40



0.50Third Quarter


21.97



20.29



0.50Fourth Quarter


22.10



20.51



0.50   2006First Quarter

$
22.49


$
20.75


$
0.50Second Quarter


21.95



20.18



0.50Third Quarter


22.49



21.00



0.50Fourth Quarter


22.50



20.99



0.50  32




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##### Table of Contents




    a shelf registration statement for the periodic sale of common
    units, debt securities,
    and/or other
    securities. Ferrellgas Partners Finance Corp. may, at our
    election, be the co-obligor on any debt securities issued by
    Ferrellgas Partners under this shelf registration statement;
    a shelf registration statement for the periodic sale of up to
    $75.0 million of common units in connection with Ferrellgas
    Partners direct investment plan. As of August 31,
    2006, we had $30.9 million available under this shelf
    registration statement; and
    an acquisition shelf registration statement for the
    periodic sale of up to $250.0 million of common units to
    fund acquisitions. As of August 31, 2006, we had
    $242.3 million available under this shelf registration
    statement.    Recent
    Sales of Unregistered Securities
    Ferrellgas
    Partners Tax Matters
    Common
    Equity of Other Registrants
     33




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##### Table of Contents



Equity
    Compensation Plan Information
    ITEM 6.
    SELECTED
    FINANCIAL DATA.    Ferrellgas Partners, L.P.Year Ended July 31,2006


2005


2004


2003


2002(In thousands, except per unit data)Income Statement
    Data:Total revenues

$
1,895,470


$
1,754,114


$
1,308,386


$
1,165,678


$
991,430Interest expense


84,235



91,518



74,467



63,664



59,608Earnings (loss) from continuing
    operations before discontinued operations and cumulative effect
    of change in accounting principle


25,009



(15,375
)


20,501



52,970



54,542Basic and diluted earnings (loss)
    per common unit from continuing operations before discontinued
    operations and cumulative effect of change in accounting
    principle

$
0.41


$
(0.41
)

$
0.30


$
1.15


$
1.19Cash distributions declared per
    common unit

$
2.00


$
2.00


$
2.00


$
2.00


$
2.00Balance Sheet Data at end of
    period:Working capital (deficit)

$
27,244


$
38,885


$
46,137


$
(3,862
)

$
9,436Total assets


1,549,500



1,508,973



1,578,175



1,061,396



885,128Long-term debt


983,545



948,977



1,153,652



888,226



703,858Partners capital


265,745



333,678



202,099



2,919



21,161Operating Data:Propane sales volumes (in
    thousands of gallons)


808,890



897,606



873,711



898,622



831,592Capital expenditures:Maintenance

$
13,003


$
17,259


$
20,422


$
14,187


$
9,576Growth


29,448



25,089



12,270



4,123



4,826Technology initiative


915



10,466



8,688



14,699



30,070Tank lease buyout














154,129



Acquisition


38,057



31,699



438,326



41,310



10,962Total

$
81,423


$
84,513


$
479,706


$
228,448


$
55,434   34




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##### Table of Contents



Ferrellgas, L.P.Year Ended July 31,2006


2005


2004


2003


2002Income Statement
    Data:Total revenues

$
1,895,470


$
1,754,114


$
1,308,386


$
1,165,678


$
991,430Interest expense


60,537



67,430



54,242



45,317



43,972Earnings from continuing
    operations before discontinued operations and cumulative effect
    of change in accounting principle


49,465



9,128



41,410



79,598



70,887Balance Sheet Data at end of
    period:Working capital

$
28,874


$
41,078


$
48,593


$
7,792


$
9,099Total assets


1,544,051



1,504,271



1,570,990



1,055,691



882,233Long-term debt


713,316



678,367



882,662



668,657



543,858Partners capital


539,910



608,987



475,567



231,815



182,272Operating Data:Propane sales volumes (in
    thousands of gallons)


808,890



897,606



873,711



898,622



831,592Capital expenditures:Maintenance

$
13,003


$
17,259


$
20,422


$
14,187


$
9,576Growth


29,448



25,089



12,270



4,123



4,826Technology initiative


915



10,466



8,688



14,699



30,070Tank lease buyout














154,129



Acquisition


38,057



32,430



438,326



41,310



10,962Total

$
81,423


$
85,244


$
479,706


$
228,448


$
55,434     
    maintenance capital expenditures, which include capitalized
    expenditures for betterment and replacement of property, plant
    and equipment;
    growth capital expenditures, which include expenditures for
    purchases of both bulk and portable propane tanks and other
    equipment to facilitate expansion of our customer base and
    operating capacity;
    technology initiative capital expenditures, which include
    expenditures for purchases of computer hardware and software and
    the development of new software;
    tank lease buyout expenditures, which are related to the
    purchase of bulk propane tanks and related assets during fiscal
    2003 that we previously leased; these bulk propane tanks were
    originally leased in connection with the Thermogas acquisition,
    which we completed in fiscal 2000; and
    acquisition capital expenditures, which include expenditures
    related to the acquisition of retail distribution propane
    operations; acquisition capital expenditures represent the total
    cost of acquisitions less working capital acquired.     35




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS.      Form 10-K.
    
    because Ferrellgas Partners issued $268.0 million in
    aggregate principal amount of
    83/4% senior
    secured notes due fiscal 2012 during fiscal 2004 and 2003, the
    two partnerships incur different amounts of interest expense on
    their outstanding indebtedness; see the statements of earnings
    in their respective consolidated financial statements and
    Notes J  Long-term debt  in the
    respective notes to their consolidated financial
    statements; and
    Ferrellgas Partners issued common units in several transactions
    during, fiscal 2005, 2006 and the first quarter of fiscal 2007.  Overview
    warmer-than-normal colder-than-normal
   36




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##### Table of Contents



cents-per-gallon
    
    achieve operating efficiencies through the utilization of our
    technology platforms;
    capitalize on our national presence and economies of scale;
    expand our operations through disciplined acquisitions and
    internal growth; and
    align employee interest with our investors through significant
    employee ownership.      
    Earnings from discontinued operations, including gain on sale,
    of $104.2 million in fiscal 2005. See
    Note E  Discontinued operations  to
    our consolidated financial statements;
    Gross profit increased $50.0 million primarily due to
    higher average propane margins per gallon provided by enhanced
    controls over pricing attributable to our new technology
    platform;
    Operating expense and general and administrative expense
    together increased $14.0 million primarily due to continued
    tank exchange gallon growth, performance-based compensation
    expense and increased fuel costs; and
    Interest expense decreased $7.3 million primarily due to
    the retirement of a portion of our fixed-rate senior notes
    during the fourth quarter of fiscal 2005.         37




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##### Table of Contents



Forward-looking
    statements
        
    whether the operating partnership will have sufficient funds to
    meet its obligations, including its obligations under its debt
    securities, and to enable it to distribute to Ferrellgas
    Partners sufficient funds to permit Ferrellgas Partners to meet
    its obligations with respect to its existing debt and equity
    securities;
    whether Ferrellgas Partners and the operating partnership will
    continue to meet all of the quarterly financial tests required
    by the agreements governing their indebtedness; and
    the expectation that revenues  propane and other
    liquids sales, cost of product sold  propane and
    other gas liquids, gross profit, operating income and earnings
    from continuing operations will increase in fiscal 2007.       38




---



##### Table of Contents



Results
    of Operations
  Fiscal
    Year Ended July 31, 2006 vs. July 31,
    2005
  Increase


Percentage2006


2005


(Decrease)


Change(Amounts in thousands)Propane sales volumes (gallons)


808,890



897,606



(88,716
)


(9.9
)%Propane and other gas liquids sales

$
1,697,940


$
1,592,325



105,615



6.6
%Gross profit from propane and
    other gas liquids sales


588,763



540,320



48,443



9.0
%Operating income


111,222



75,788



35,434



46.8
%Interest expense


84,235



91,518



(7,283
)


(8.0
)%              39




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##### Table of Contents



Interest
    expense of the operating partnership
    Forward
    looking
    statements.
    
    our assumption that interest rates will remain relatively stable
    in fiscal 2007;
    our assumption that weather will return to normal during fiscal
    2007; and
    our assumption that propane sales volumes will increase in
    fiscal 2007;  Fiscal
    Year Ended July 31, 2005 vs. July 31,
    2004
  Increase


Percentage2005


2004


(Decrease)


Change(Amounts in thousands)Propane sales volumes (gallons)


897,606



873,711



23,895



2.7
%Propane and other gas liquids sales

$
1,592,325


$
1,210,564


$
381,761



31.5
%Gross profit from propane and
    other gas liquids sales


540,320



480,187



60,133



12.5
%Operating income


75,788



93,402



(17,614
)


(18.9
)%Interest expense


91,518



74,467



17,051



22.9
%          40




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##### Table of Contents



Interest
    expense of the operating partnership
    Discontinued
    operations
    For the Year Ended July 31,2006


2005


2004(Amounts in thousands)Total revenues

$



$
89,339


$
70,995Cost of product sold (exclusive of
    depreciation, shown with amortization below) propane and gas
    liquids sales






77,407



59,441Gross profit






11,932



11,554Operating expense






2,506



2,362Depreciation and amortization
    expense






1,189



1,004Equipment lease expense






22



22Loss on disposal of assets and
    other






(36
)


35Earnings before income taxes,
    minority interest and discontinued operations






8,251



8,131Minority interest






1,063



82Gain on sale of discontinued
    operations






97,001



Earnings from discontinued
    operations, net of minority interest

$



$
104,189


$
8,049   Unit
    and stock-based compensation
   41




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##### Table of Contents



Liquidity
    and Capital Resources
      debt-to-cash 3 4 3 4
    
    continued significantly warmer than normal winter temperatures;
    continued volatile energy commodity cost environment;
    an unexpected downturn in business operations; or
    a general economic downturn in the United States. 42




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##### Table of Contents




    a shelf registration statement for the periodic sale of common
    units, debt securities,
    and/or other
    securities. Ferrellgas Partners Finance Corp. may, at our
    election, be the co-obligor on any debt securities issued by
    Ferrellgas Partners under this shelf registration statement;
    a shelf registration statement for the periodic sale of up to
    $75.0 million of common units in connection with Ferrellgas
    Partners direct investment plan. As of August 31,
    2006, we had $30.9 million available under this shelf
    registration statement; and
    an acquisition shelf registration statement for the
    periodic sale of up to $250.0 million of common units to
    fund acquisitions. As of August 31, 2006, we had
    $242.3 million available under this shelf registration
    statement.  Operating
    Activities
    Accounts
    receivable securitization
    364-day
 43




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##### Table of Contents



The
    operating partnership
    Investing
    Activities
    Acquisitions
    Capital
    expenditures
      Financing
    Activities
    Distributions
   44




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##### Table of Contents



August
    2006 principal payment and common unit offering
    Bank
    credit facility
        
    a base rate, which is defined as the higher of the federal funds
    rate plus 0.50% or Bank of Americas prime rate (as of
    July 31, 2006, the federal funds rate and Bank of
    Americas prime rate were 5.31% and 8.25%,
    respectively); or
    the Eurodollar Rate plus a margin varying from 1.50% to 2.50%
    (as of July 31, 2006, the one-month and three-month
    Eurodollar Rate was 5.37% and 5.45%, respectively).      
    a significant increase in the wholesale cost of propane;
    a significant delay in the collections of accounts receivable;
    increased volatility in energy commodity prices related to risk
    management activities;
    increased liquidity requirements imposed by insurance providers;
    a significant downgrade in our credit rating;
    decreased trade credit; or
    a significant acquisition.   45




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##### Table of Contents



The
    operating partnership
    Distributions
    paid by the operating partnership
    Contributions
    received by the operating partnership
      Disclosures
    about Effects of Transactions with Related Parties
          For the YearEnded July 31,2006Ferrell Companies

$
36,378FCI Trading


391Ferrell Propane


102Mr. Ferrell


8,464  46




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##### Table of Contents



brother-in-law
        Contractual
    obligations
   47




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##### Table of Contents



Payment or Settlement Due by Fiscal Year2007


2008


2009


2010


2011


Thereafter


Total(In thousands)Long-term debt, including current
    portion(1)

$
60,833


$
92,448


$
53,911


$
73,637


$
82,486


$
634,812


$
998,127Capital lease obligation


83























83Fixed rate interest obligations(2)


69,541



65,587



59,783



51,725



45,519



81,866



374,021Operating lease obligations(3)


33,390



27,809



19,280



12,606



7,585



16,666



117,336Operating lease buyouts(4)


8,462



2,851



6,340



3,505



4,498



1,887



27,543Purchase obligations:(5)Product purchase commitments:(6)Estimated payment obligations


917,913



39,632



















957,545Employment agreements(7)


1,366



















1,088



2,454Total

$
1,091,588


$
228,327


$
139,314


$
141,473


$
140,088


$
736,319


$
2,477,109Underlying product purchase volume
    commitments (in gallons)


781,301



36,798



















818,099       (1)
    
    We have long and short-term payment obligations under agreements
    such as our senior notes and credit facilities. Amounts shown in
    the table represent our scheduled future maturities of long-term
    debt (including current maturities thereof) for the periods
    indicated. For additional information regarding our debt
    obligations, please see  Liquidity and Capital
    Resources  Financing Activities.(2)
    
    Fixed rate interest obligations represent the amount of interest
    due on fixed rate long-term debt. These amounts do not include
    interest on our bank credit facility, a variable rate debt
    obligation. As of July 31, 2006, variable rate interest on
    our outstanding balance of variable rate debt of
    $98.1 million would be $7.5 million on an annual
    basis. Actual variable rate interest amounts will differ due to
    changes in interest rates and actual seasonal borrowings under
    our bank credit facility.(3)
    
    We lease certain property, plant and equipment under
    noncancelable and cancelable operating leases. Amounts shown in
    the table represent minimum lease payment obligations under our
    third-party operating leases with terms in excess of one year
    for the periods indicated.(4)
    
    Operating lease buyouts represent the maximum amount we would
    pay if we were to exercise our right to buyout the assets at the
    end of their lease term. Historically, we have been successful
    in renewing certain leases that are subject to buyouts. However,
    there is no assurance we will be successful in the future.(5)
    
    We define a purchase obligation as an agreement to purchase
    goods or services that is enforceable and legally binding
    (unconditional) on us that specifies all significant terms,
    including: fixed or minimum quantities to be purchased; fixed,
    minimum or variable price provisions; and the approximate timing
    of the transactions.(6)
    
    We have long and short-term product purchase obligations for
    propane and energy commodities with third-party suppliers. These
    purchase obligations are entered into at either variable or
    fixed prices. The purchase prices that we are obligated to pay
    under variable price contracts approximate market prices at the
    time we take delivery of the volumes. Our estimated future
    variable price contract payment obligations are based on the
    July 31, 2006 market price of the applicable commodity
    applied to future volume commitments. Actual future 48




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##### Table of Contents



payment obligations may vary depending on market prices at the
    time of delivery. The purchase prices that we are obligated to
    pay under fixed price contracts are established at the inception
    of the contract. Our estimated future fixed price contract
    payment obligations are based on the contracted fixed price
    under each commodity contract. Quantities shown in the table
    represent our volume commitments and estimated payment
    obligations under these contracts for the periods indicated.(7)
    
    We have retention agreements with certain employees totaling
    $1.4 million and have an incentive bonus payable to
    Mr. Ferrell of $1.1 million upon his termination of
    employment with us.  The
    operating partnership
    Payment or Settlement Due by Fiscal Year2007


2008


2009


2010


2011


Thereafter


Total(In thousands)Long-term debt, including current
    portion(1)

$
60,833


$
92,448


$
53,911


$
73,637


$
82,486


$
366,812


$
730,127Fixed rate interest obligations(2)


46,091



42,137



36,333



28,275



22,069



58,416



233,321Total

$
106,924


$
134,585


$
90,244


$
101,912


$
104,555


$
425,228


$
963,448     (1)
    
    The operating partnership has long and short-term payment
    obligations under agreements such as the operating
    partnerships credit facilities. Amounts shown in the table
    represent the operating partnerships scheduled future
    maturities of long-term debt (including current maturities
    thereof) for the periods indicated. For additional information
    regarding the operating partnerships debt obligations,
    please see  Liquidity and Capital
    Resources  Financing Activities.(2)
    
    Fixed rate interest obligations represent the amount of interest
    due on fixed rate long-term debt. These amounts do not include
    interest on our bank credit facility, a variable rate debt
    obligation. As of July 31, 2006, variable rate interest on
    our outstanding balance of variable rate debt of
    $98.1 million would be $7.5 million on an annual
    basis. Actual variable rate interest amounts will differ due to
    changes in interest rates and actual seasonal borrowings under
    our bank credit facility.  Off-balance
    sheet financing arrangements
    
    made guarantees;
    a retained or a contingent interest in transferred assets;
    an obligation under derivative instruments classified as
    equity; or
    any obligation arising out of a material variable interest in an
    unconsolidated entity that provides financing, liquidity, market
    risk or credit risk support to the company, or that engages in
    leasing, hedging or research and development arrangements with
    the company.   49




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##### Table of Contents



Adoption
    of New Accounting Standards
    Title of Guidance

Effective DateSFAS No. 123(R),
    Share-Based Payment

First reporting period that begins
    after June 15, 2005SFAS No. 155,
    Accounting for Certain Hybrid Financial Instruments

Fiscal years beginning after
    September 15, 2006SFAS No. 156,
    Accounting for Servicing of Financial Assets 
    an amendment of SFAS No. 140

Fiscal years beginning after
    September 15, 2006Emerging Issues Task Force
    (EITF) 04-5, Determining Whether a General
    Partner, or the General Partners as a Group, Controls a Limited
    Partnership or Similar Entity When the Limited Partners Have
    Certain Rights

Effective after June 29, 2005
    for new and modified partnerships; Fiscal years beginning after
    December 15, 2005 for existing partnershipsEITF 04-13,
    Accounting for Purchases and Sales of Inventory with the
    Same Counterparty

First reporting period that begins
    after March 15, 2006FASB Interpretation No. 48,
    Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109

Fiscal years beginning after
    December 15, 2006   Critical
    Accounting Estimates
     50




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##### Table of Contents



Depreciation
    of property, plant and equipment
    Residual
    value of customer and storage tanks
    Valuation
    methods, amortization methods and estimated useful lives of
    intangible assets
       51




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##### Table of Contents



Fair
    value of derivative commodity contracts
    Unit
    and stock-based compensation
    
    Our stock-based awards plan grants stock awards out of Ferrell
    Companies. Ferrell Companies is not a publicly-traded company
    and management does not believe it belongs to a certain industry
    group. As a result, our volatility computation is highly
    subjective. If a different volatility factor were used, it could
    significantly change the fair value assigned to stock-based
    awards at their grant date.
    Due to the limited number of employees eligible to participate
    in our unit and stock-based compensation plans, management
    believes we have only one group of employees. If a determination
    were made that we have multiple groups of employees, that
    determination could significantly change the expected term and
    forfeiture rate assigned to our unit and stock-based awards.
    We utilize the simplified method to estimate the expected term
    of our unit and stock-based awards. This method could assign a
    term to our unit and stock-based awards that is significantly
    different from their actual terms. That change could result in a
    significant difference in the actual fair value assigned to the
    awards at the grant date.
    We utilize historical forfeiture rates to estimate the expected
    forfeiture rates on our unit and stock-based awards grant dates.
    If actual forfeiture rates were to differ significantly from our
    estimates, it could result in significant differences between
    actual and reported compensation expense for our unit and
    stock-based awards. 52




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##### Table of Contents



Subsequent
    events
        ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.  over-the-counter
        Commodity
    Price Risk
       53




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##### Table of Contents



Interest
    Rate Risk
    ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA.    ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE.    ITEM 9A.
    CONTROLS
    AND PROCEDURES.  Disclosure
    Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
   54




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##### Table of Contents



Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f) Internal
    Control  Integrated Framework Internal Control  Integrated Framework
     55




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      Internal
    Control  Integrated Framework
        Internal Control  Integrated Framework Internal Control  Integrated
    Framework
    
    56




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      Internal Control 
    Integrated Framework
        Internal
    Control  Integrated Framework Internal Control  Integrated
    Framework
    
    57




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##### Table of Contents



ITEM 9B.  OTHER
    INFORMATION.   PART III  ITEM 10.
    DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANTS.  Directors
    and executive officers of our general partner
    Director

ExecutiveName

Age

Since

Officer Since

PositionJames E. Ferrell


66



1984



2000


Chairman and Chief Executive
    OfficerStephen L. Wambold


38



N/a



2005


President and Chief Operating
    OfficerEugene D. Caresia


42



N/a



2006


Vice President, Human ResourcesM. Kevin Dobbins


39



N/a



2006


Vice President, OperationsKevin T. Kelly


41



N/a



1998


Senior Vice President and Chief
    Financial OfficerBrian J. Kline


42



N/a



2006


Vice President, Corporate
    DevelopmentGeorge L. Koloroutis


45



N/a



2006


Vice President, Ferrell North
    AmericaPatrick J. Walsh


52



N/a



2003


Senior Vice President and Chief
    Information OfficerTod D. Brown


43



N/a



2006


Vice President, Blue RhinoWilliam K. Hoskins


71



2003



N/a


DirectorA. Andrew Levison


50



1994



N/a


DirectorJohn R. Lowden


49



2003



N/a


DirectorMichael F. Morrissey


64



1999



N/a


DirectorBilly D. Prim


50



2004



2004


Director, Special Advisor to the
    Chief Executive OfficerElizabeth T. Solberg


67



1998



N/a


Director   James E. Ferrell
  Stephen L. Wambold
  Eugene D. Caresia
  M. Kevin Dobbins Econogas/start-up
 58




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##### Table of Contents



Kevin T. Kelly
  Brian J. Kline
  George L. Koloroutis
  Patrick J. Walsh
  Tod D. Brown Coca-Cola
  William K. Hoskins
  A. Andrew Levison
  John R. Lowden
  Michael F. Morrissey not-for-profit
  Billy D. Prim
  Elizabeth T. Solberg
 59




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##### Table of Contents



Corporate
    governance
    www.ferrellgas.com
    Audit
    committee
    Limitation
    on directors participating on audit committees
    Corporate
    Governance and Nominating Committee
    Compensation
    Committee
   60




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##### Table of Contents



Disclosure
    about our security holders ability to communicate with the
    Board of Directors of our general partner
  e-mail
  
  Code of
    Ethics for principal executive and financial officers and Code
    of Business Conduct and Ethics
  www.ferrellgas.com
    Compensation
    of our general partner
    
    distributions on its combined approximate 2% general partner
    interest in Ferrellgas Partners and the operating
    partnership; and
    reimbursement for:  
    all direct and indirect costs and expenses incurred on our
    behalf;
    all selling, general and administrative expenses incurred by our
    general partner on our behalf; and
    all other expenses necessary or appropriate to the conduct of
    our business and allocable to us.    Section 16(a)
    Beneficial Ownership Reporting Compliance
   61




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##### Table of Contents



ITEM 11.
    EXECUTIVE
    COMPENSATION.  Summary
    compensation table
    Long-term CompensationAnnual Compensation


Awards


PayoutsOther


Securities


Long-termAnnual


Underlying


Incentive


All OtherName and




Salary


Bonus(1)


Compensation


Options


Payouts


CompensationPrincipal Position

Year


($)


($)


$(2)


(#)(3)


($)


($)James E. Ferrell


2006



635,000



450,000







200,000







8,920
(4)Chairman and Chief


2005



635,000



















11,040Executive Officer


2004



635,000



110,000















8,329Stephen L. Wambold


2006



321,000



250,000



19,829



131,250







118,508
(5)President and Chief


2005



182,000







4,998











3,792Operating OfficerKevin T. Kelly


2006



309,000



150,000



18,553



112,500







7,200
(6)Senior Vice President and


2005



300,000







7,274











10,400Chief Financial Officer


2004



298,000



110,000



6,405











12,696George L. Koloroutis


2006



202,000



140,000



16,960











88,071
(7)Vice President, NorthAmericaPatrick J. Walsh


2006



203,000



100,000



17,094



68,750







6,760
(8)Senior Vice President and


2005



174,000







6,624











5,454Chief Information Officer


2004



162,000



35,000



5,539











8,505     (1)
    
    Awards under bonus plans are for the year reported, regardless
    of the year paid.(2)
    
    All amounts represent the value of shares contributed to each
    individuals Employee Stock Ownership Plan account.(3)
    
    The awards are grants of stock options from the Incentive
    Compensation Plan, a stock option plan of Ferrell Companies (see
    below for stock option grant tables).(4)
    
    All Other Compensation for Mr. Ferrell includes
    contributions of $8,920 to the employees 401(k) and profit
    sharing plans.(5)
    
    All Other Compensation for Mr. Wambold includes $111,880
    for relocation reimbursement, contributions of $6,142 to the
    employees 401(k) plan and compensation of $486 resulting
    from the payment of life insurance premiums.(6)
    
    All Other Compensation for Mr. Kelly includes contributions
    of $7,200 to the employees 401(k) and profit sharing plans. 62




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##### Table of Contents



(7)
    
    All Other Compensation for Mr. Koloroutis includes $77,381
    for relocation reimbursement, contributions of $9,992 to the
    employees 401(k) and profit sharing plans and compensation
    of $698 resulting from the payment of life insurance premiums.(8)
    
    All Other Compensation for Mr. Walsh includes contributions
    of $5,798 to the employees 401(k) and profit sharing plans
    and compensation of $962 resulting from the payment of life
    insurance premiums.  Unit
    options
          AGGREGATED
    FERRELLGAS UNIT OPTION EXERCISES IN LAST FISCAL YEAR AND
    FISCAL YEAR-END OPTION VALUES
  Number of


Value ofSecurities


UnexercisedUnderlying


In-the-MoneyUnexercised


Options atOptions at Fiscal


Fiscal Year EndUnits





Year End (#)


($)Acquired on


Value


Exercisable/


Exercisable/Name

Exercise (#)


Realized ($)


Unexercisable


UnexercisableJames E. Ferrell


120,000


$
396,600



/-



/-Kevin T. Kelly










57,000/-



261,630/-   Employee
    Stock Ownership Plan
    Incentive
    Compensation Plan
   63




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##### Table of Contents



AGGREGATE
    FERRELL COMPANIES STOCK OPTION GRANTS IN LAST FISCAL
    YEAR
  Individual GrantsNumber of


% of TotalSecurities


Options Granted





Grant Date ValueUnderlying


to Employees in


Exercise





Grant Date PresentName

Options


Fiscal Year


Price


Expiration Date


ValueJames E. Ferrell


200,000



15
%

$
12.80



8/15/2015


$
411,000Stephen L. Wambold


131,250



10
%

$
12.80



8/15/2015


$
274,500Kevin T. Kelly


112,500



8
%

$
12.80



8/15/2015


$
234,000Patrick J. Walsh


68,750



5
%

$
12.80



8/15/2015


$
141,000     AGGREGATED
    FERRELL COMPANIES STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND
    FISCAL YEAR-END OPTION VALUES
  Value ofNumber of


UnexercisedSecurities Underlying


In-the-MoneyUnexercised Options


Options atShares


Value


at Fiscal Year End (#)


Fiscal Year End ($)Acquired on


Realized


Exercisable/


Exercisable/Name

Exercise (#)


($)


Unexercisable


UnexercisableJames E Ferrell










475,000/475,000



4,183,000/4,183,000Stephen L. Wambold










10,063/196,188



59,656/599,044Kevin T. Kelly










56,750/305,750



555,138/2,361,563George L. Koloroutis










12,000/58,000



120,548/529,553Patrick J. Walsh










43,125/175,625



383,325/1,376,675   Profit
    Sharing Plan
  and/or
  Supplemental
    Savings Plan
   64




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##### Table of Contents



Employment
    agreements
    
    an annual bonus, the amount to be determined at the sole
    discretion of the independent members of the Board of Directors
    of our general partner; and
    an incentive bonus equal to 0.5% of the increase in the equity
    value of Ferrell Companies from July 31, 1998 to
    July 31, 2005.                     65




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##### Table of Contents




    James E. Ferrell, Chairman and Chief Executive Officer,
    Stephen L. Wambold, President and Chief Operating Officer,
    Eugene D. Caresia, Vice President, Human Resources,
    M. Kevin Dobbins, Vice President Operations,
    Kevin T. Kelly, Senior Vice President and Chief Financial
    Officer,
    Brian J. Kline, Vice President, Corporate Development,
    George L. Koloroutis, Vice President, Ferrell North America,
    Patrick J. Walsh, Senior Vice President and Chief Information
    Officer, and
    Tod D. Brown, Vice President, Blue Rhino.    Compensation
    of directors
    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED UNITHOLDER MATTERS.    
    persons that own more than 5% of our common units;
    persons that are directors, nominees or named executive officers
    of our general partner; and
    all directors and executive officers of our general partner as a
    group.   66




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##### Table of Contents



Ferrellgas
    Partners,
    L.P.
  UnitsBeneficially


PercentageTitle of Class


Name and Address of Beneficial Owner

Owned


of ClassCommon units


Employee Stock Ownership Trust


20,327,666



32.4James E. Ferrell


4,292,025



7.0Stephen L. Wambold






*Eugene D. Caresia






*M. Kevin Dobbins






*Kevin T. Kelly


38,700



*Brian J. Kline






*George L. Koloroutis






*Patrick J. Walsh


2,200



*William K. Hoskins


18,000



*A. Andrew Levison


39,300



*John R. Lowden






*Michael F. Morrissey


1,000



*Billy D. Prim


412,155



*Elizabeth T. Solberg


8,431



*All Directors and Executive
    Officers as a Group


4,811,811



7.7     *
    
    Less than one percent  Rule 13d-3 and/or
   67




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##### Table of Contents



Securities
    authorized for issuance under equity compensation
    plans
    Number of Common UnitsNumber of Common


Weighted-Average


Remaining Available for FutureUnits to be Issued


Exercise Price of


Issuance Under EquityUpon Exercise of


Outstanding


Compensation PlansOutstanding Options,


Options, Warrants


(Excluding SecuritiesPlan Category

Warrants and Rights


and Rights


Reflected in the First Column)Equity compensation plans approved
    by security holders










Equity compensation plans not
    approved by security holders(1)


148,200


$
18.43



246,926
(2)Total


148,200


$
18.43



246,926     (1)
    
    The Second Amended and Restated Ferrellgas Unit Option Plan did
    not require approval by the security holders.(2)
    
    This number may be increased upon the occurrence of particular
    events. See narrative below.      
    develop a proprietary interest in our growth and performance;
    generate an increased incentive to contribute to our future
    success and prosperity, thereby enhancing our value for the
    benefit of our common unitholders; and
    enhance our ability to attract and retain key individuals who
    are essential to our progress, growth and profitability, by
    giving these individuals the opportunity to acquire our common
    units.  Rule 16b-3
    
    designate the employees who are to be participants in the plan;
    determine the number of unit options to be granted to an
    employee;
    determine the terms and conditions of any unit option;
    interpret, construe and administer the plan and any instrument
    or agreement relating to a unit option granted under the plan;
    establish, amend, suspend, or waive such rules and regulations
    and appoint such agents as it deems appropriate for the proper
    administration of the plan; 68




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##### Table of Contents




    make a determination as to the right of any person to receive
    payment of (or with respect to) a unit option; and
    make any other determinations and take any other actions that
    the administrator deems necessary or desirable for the
    administration of the plan.  Rule 16b-3
    and/or
    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS.    Certain
    business relationships
    Indebtedness
    of management
   69




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##### Table of Contents



Transactions
    with promoters
    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    For the Fiscal Year Ended July 31,

2006


2005(In thousands)Audit fees(1)

$
1,519


$
1,422Audit related fees(2)


15



17Tax fees(3)


6



16All other fees(4)


7



6Total

$
1,547


$
1,461     (1)
    
    Audit fees consist of the aggregate fees billed for each of the
    last two fiscal years for professional services rendered by
    Deloitte & Touche LLP in connection with the audit of
    our annual financial statements and the review of financial
    statements included in our quarterly reports on
    Form 10-Q.
    In addition, these fees also covered those services that are
    normally provided by an accountant in connection with statutory
    and regulatory filings or engagements and services related to
    the audit of our internal controls over financial reporting.(2)
    
    Audit-related fees consist of the aggregate fees billed in each
    of the last two fiscal years for assurance and related services
    by Deloitte & Touche LLP that we believe are reasonably
    related to the performance of the audit or review of our
    financial statements and that would not normally be reported
    under Item 9(e)(1) of Schedule 14A. These services
    generally consisted of financial accounting and reporting
    consultations and benefit plans audits.(3)
    
    Tax fees consist of the aggregate fees billed in each of the
    last two fiscal years for professional services rendered by
    Deloitte & Touche LLP in connection with tax
    compliance, tax advice, and tax planning. These services
    included the review of our tax returns, tax research and tax
    consultation.(4)
    
    All other fees consist the aggregate fees billed in each of the
    last two fiscal years for products and services provided by
    Deloitte & Touche LLP, other than the services that
    would normally be reported in Items 9(e)(1) through 9(e)(3)
    of Schedule 14A. These services consisted of subscription
    fees related to a web-based research tool provided by
    Deloitte & Touche LLP.   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES.  Financial Statements.
  page F-1.
  Financial Statement Schedules.
  page S-1.
  Exhibits.
  page E-1.
 70




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##### Table of Contents



10-K. Regulation S-K




|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|       
|        | 2  | .1          |  | Contribution Agreement dated
    February 8, 2004, by and among FCI Trading Corp.,
    Ferrellgas, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P.
    Incorporated by reference to Exhibit 2.1 to our Current
    Report on
    Form 8-K
    filed February 12, 2004.                                                                                                                                                                                                                                                                               
|        | 3  | .1          |  | Fourth Amended and Restated
    Agreement of Limited Partnership of Ferrellgas Partners, L.P.,
    dated as of February 18, 2003. Incorporated by reference to
    Exhibit 4.3 to our Current Report on
    Form 8-K
    filed February 18, 2003.                                                                                                                                                                                                                                                                                                         
|        | 3  | .2          |  | First Amendment to the Fourth
    Amended and Restated Agreement of Limited Partnership of
    Ferrellgas Partners, L.P., dated as of March 8, 2003.
    Incorporated by reference to Exhibit 3.1 to our Current
    Report on
    Form 8-K
    filed March 8, 2005.                                                                                                                                                                                                                                                                                      
|        | 3  | .3          |  | Second Amendment to the Fourth
    Amended and Restated Agreement of Limited Partnership of
    Ferrellgas Partners, L.P., dated as of June 29, 2005.
    Incorporated by reference to Exhibit 4.1 to our Current
    Report on
    Form 8-K
    filed June 30, 2005.                                                                                                                                                                                                                                                                                     
|        | *3 | .4          |  | Third Amendment to the Fourth
    Amended and Restated Agreement of Limited Partnership of
    Ferrellgas Partners, L.P. dated as of October 11, 2006.                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 3  | .5          |  | Certificate of Incorporation for
    Ferrellgas Partners Finance Corp. Incorporated by reference to
    the same numbered Exhibit to our Quarterly Report on
    Form 10-Q
    filed June 13, 1997.                                                                                                                                                                                                                                                                                                                                                       
|        | 3  | .6          |  | Bylaws of Ferrellgas Partners
    Finance Corp. Incorporated by reference to the same numbered
    Exhibit to our Quarterly Report on
    Form 10-Q
    filed June 13, 1997.                                                                                                                                                                                                                                                                                                                                                                              
|        | 3  | .7          |  | Third Amended and Restated
    Agreement of Limited Partnership of Ferrellgas, L.P., dated as
    of April 7, 2004. Incorporated by reference to
    Exhibit 3.1 to our Current Report on
    Form 8-K
    filed April 22, 2004.                                                                                                                                                                                                                                                                                                                          
|        | 3  | .8          |  | Certificate of Incorporation of
    Ferrellgas Finance Corp. Incorporated by reference to
    Exhibit 4.1 to the Current Report on
    Form 8-K
    of Ferrellgas Partners, L.P. filed February 18, 2003.                                                                                                                                                                                                                                                                                                                                                 
|        | 3  | .9          |  | Bylaws of Ferrellgas Finance Corp.
    Incorporated by reference to Exhibit 4.2 to the Current
    Report on
    Form 8-K
    of Ferrellgas Partners, L.P. filed February 18, 2003.                                                                                                                                                                                                                                                                                                                                                                       
|        | 4  | .1          |  | Specimen Certificate evidencing
    Common Units representing Limited Partner Interests (contained
    in Exhibit 3.1 hereto as Exhibit A thereto).                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 4  | .2          |  | Indenture dated as of
    September 24, 2002, with form of Note attached, among
    Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp.,
    and U.S. Bank National Association, as trustee, relating to
    83/4% Senior
    Notes due 2012. Incorporated by reference to Exhibit 4.1 to
    our Current Report on
    Form 8-K
    filed September 24, 2002.                                                                                                                                                                                   
|        | 4  | .3          |  | Indenture dated as of
    April 20, 2004, with form of Note attached, among
    Ferrellgas Escrow LLC and Ferrellgas Finance Escrow Corporation
    and U.S. Bank National Association, as trustee, relating to
    6 3/4% Senior
    Notes due 2014. Incorporated by reference to Exhibit 4.1 to
    our Current Report on
    Form 8-K
    filed April 22, 2004.                                                                                                                                                                                        
|        | 4  | .4          |  | Ferrellgas, L.P.
    Note Purchase Agreement, dated as of July 1, 1998,
    relating to: $109,000,000 6.99% Senior Notes,
    Series A, due August 1, 2005, $37,000,000 7.08% Senior
    Notes, Series B, due August 1, 2006, $52,000,000
    7.12% Senior Notes, Series C, due August 1, 2008,
    $82,000,000 7.24% Senior Notes, Series D, due
    August 1, 2010, and $70,000,000 7.42% Senior Notes,
    Series E, due August 1, 2013. Incorporated by
    reference to Exhibit 4.4 to our Annual Report on
    Form 10-K
    filed October 29, 1998.
|        | 4  | .5          |  | Ferrellgas, L.P.
    Note Purchase Agreement, dated as of February 28,
    2000, relating to: $21,000,000 8.68% Senior Notes,
    Series A, due August 1, 2006, $90,000,000 8.78% Senior
    Notes, Series B, due August 1, 2007, and $73,000,000
    8.87% Senior Notes, Series C, due August 1, 2009.
    Incorporated by reference to Exhibit 4.2 to our Quarterly
    Report on
    Form 10-Q
    filed March 16, 2000.                                                                                                                               
|        | 4  | .6          |  | Registration Rights Agreement
    dated as of December 17, 1999, by and between Ferrellgas
    Partners, L.P. and Williams Natural Gas Liquids, Inc.
    Incorporated by reference to Exhibit 4.2 to our Current
    Report on
    Form 8-K
    filed December 29, 2000.                                                                                                                                                                                                                                                                                  

E-1



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##### Table of Contents



|        |     |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | --- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|       
|        | 4   | .7          |  | First Amendment to the
    Registration Rights Agreement dated as of March 14, 2000,
    by and between Ferrellgas Partners, L.P. and Williams Natural
    Gas Liquids, Inc. Incorporated by reference to Exhibit 4.1
    to our Quarterly Report on
    Form 10-Q
    filed March 16, 2000.                                                                                                                                                                                          
|        | 4   | .8          |  | Second Amendment to the
    Registration Rights Agreement dated as of April 6, 2001, by
    and between Ferrellgas Partners, L.P. and The Williams
    Companies, Inc. Incorporated by reference to Exhibit 10.3
    to our Current Report on
    Form 8-K
    filed April 6, 2001.                                                                                                                                                                                                   
|        | 4   | .9          |  | Third Amendment to the
    Registration Rights Agreement dated as of June 29, 2005,
    between JEF Capital Management, Inc. and Ferrellgas Partners,
    L.P. Incorporated by reference to Exhibit 10.1 to our
    Current Report of
    Form 8-K
    filed June 30, 2005.                                                                                                                                                                                                           
|        | 10  | .1          |  | Fifth Amended and Restated Credit
    Agreement dated as of April 22, 2005, by and among
    Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the
    general partner of the borrower, Bank of America N.A., as
    administrative agent and swing line lender, and the lenders and
    L/C issuers party hereto. Incorporated by reference to
    Exhibit 10.5 to our Quarterly Report on
    Form 10-Q
    filed June 8, 2005.                                                 
|        | *10 | .2          |  | Lender Addendum dated as of
    June 6, 2006, by and among Deutsche Bank Trust Company
    Americas as the new lender, Ferrellgas, L.P. as the borrower,
    Ferrellgas, Inc. and Bank of America, N.A., as Administrative
    Agent.                                                                                                                                                                                                                                                 
|        | *10 | .3          |  | Commitment Increase Agreement
    dated as of August 28, 2006, by and among Fifth Third Bank
    as the lender, Ferrellgas, L.P. as the borrower, Ferrellgas,
    Inc. and Bank of America, N.A. as Administrative Agent.                                                                                                                                                                                                                                                             
|        | 10  | .4          |  | Amended and Restated Receivable
    Interest Sale Agreement dated June 7, 2005 between
    Ferrellgas, L.P., as originator, and Ferrellgas Receivables,
    L.L.C., as buyer. Incorporated by reference to Exhibit 10.9
    to our Quarterly Report on
    Form 10-Q
    filed June 8, 2005.                                                                                                                                                                                          
|        | 10  | .5          |  | Amendment No. 1 to the
    Amended and Restated Receivable Interest Sale Agreement and
    Subordinated Note dated June 6, 2006 between Ferrellgas,
    L.P., as originator, and Ferrellgas Receivables, LLC, as buyer.
    Incorporated by reference to Exhibit 10.11 to our Quarterly
    Report on
    Form 10-Q
    filed on June 8, 2006.                                                                                                                                        
|        | *10 | .6          |  | Amendment No. 2 to the
    Amended and Restated Receivable Interest Sale Agreement dated
    June 6, 2006 between Ferrellgas, L.P., as originator, and
    Ferrellgas Receivables, LLC, as buyer.                                                                                                                                                                                                                                                                                     
|        | 10  | .7          |  | Second Amended and Restated
    Receivables Purchase Agreement dated as of June 6, 2006, by
    and among Ferrellgas Receivables, L.L.C., as seller, Ferrellgas,
    L.P., as servicer, Jupiter Securitization Corporation, the
    financial institutions from time to time party hereto, Fifth
    Third Bank and JPMorgan Chase Bank, NA, as agent. Incorporated
    by reference to Exhibit 10.19 to our Quarterly Report on
    Form 10-Q
    filed June 8, 2006.                
|        | 10  | .8          |  | Amendment No. 1 to Second
    Amended and Restated Receivables Purchase Agreement dated
    August 18, 2006, by and among Ferrellgas Receivables, LLC,
    as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization
    Corporation, the financial institutions from time to time party
    hereto, Fifth Third Bank and JPMorgan Chase Bank, NA, as agent.
    Incorporated by reference to Exhibit 99.2 to our Current
    Report on
    Form 8-K
    filed August 18, 2006.
|        | 10  | .9          |  | Agreement and Plan of Merger dated
    as of February 8, 2004, by and among Blue Rhino
    Corporation, FCI Trading Corp., Diesel Acquisition, LLC and
    Ferrell Companies, Inc. Incorporated by reference to
    Exhibit 99.2 to our Current Report on
    Form 8-K
    filed February 13, 2004.                                                                                                                                                                                   
|        | 10  | .10         |  | First amendment to the Agreement
    and Plan of Merger dated as of March 16, 2004, by and among
    Blue Rhino Corporation, FCI Trading Corp., Diesel Acquisition,
    LLC, and Ferrell Companies, Inc. Incorporated by reference to
    Exhibit 99.1 to our Current Report on
    Form 8-K
    filed April 2, 2004.                                                                                                                                                                 
|        | 10  | .11         |  | Asset Purchase Agreement dated as
    of June 22, 2005 by and among Ferrellgas, L.P., Ferrellgas,
    Inc. and Enterprise Products Operating L.P. Incorporated by
    reference to Exhibit 10.1 to our Current Report on
    Form 8-K
    filed on June 23, 2005.                                                                                                                                                                                                                     
|        | 10  | .12         |  | Real Property Contribution
    Agreement dated February 8, 2004, between Ferrellgas
    Partners, L.P. and Billy D. Prim. Incorporated by reference to
    Exhibit 10.15 to our Quarterly Report on
    Form 10-Q
    filed June 14, 2004.                                                                                                                                                                                                                                            

E-2



---



##### Table of Contents



|        |      |             |  |                                                                                                                                                                                                                                                                                                      
|------- | ---- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |            
|Number  |      | Description
|       
|        | 10   | .13         |  | Unit Purchase Agreement dated
    February 8, 2004, between Ferrellgas Partners, L.P. and
    Billy D. Prim. Incorporated by reference to Exhibit 4.5 to
    our
    Form S-3
    filed May 21, 2004.                                                                                                
|        | 10   | .14         |  | Unit Purchase Agreement dated
    February 8, 2004, between Ferrellgas Partners, L.P. and
    James E. Ferrell. Incorporated by reference to Exhibit 99.3
    to our Current Report on
    Form 8-K
    filed February 12, 2004.                                                                     
|        | #10  | .15         |  | Ferrell Companies, Inc.
    Supplemental Savings Plan, restated January 1, 2000.
    Incorporated by reference to Exhibit 99.1 to our Current
    Report on
    Form 8-K
    filed February 18, 2003.                                                                                                
|        | #10  | .16         |  | Second Amended and Restated
    Ferrellgas Unit Option Plan. Incorporated by reference to
    Exhibit 10.1 to our Current Report on
    Form 8-K
    filed June 5, 2001.                                                                                                                             
|        | #10  | .17         |  | Ferrell Companies, Inc. 1998
    Incentive Compensation Plan, as amended and restated effective
    October 11, 2004. Incorporated by reference to
    Exhibit 10.23 to our Annual Report on
    Form 10-K
    filed October 13, 2004.                                                               
|        | #10  | .18         |  | Employment agreement between James
    E. Ferrell and Ferrellgas, Inc., dated July 31, 1998.
    Incorporated by reference to Exhibit 10.13 to our Annual
    Report on
    Form 10-K
    filed October 29, 1998.                                                                                    
|        | #10  | .19         |  | Amended and Restated Employment
    Agreement dated October 11, 2004, by and among Ferrellgas,
    Inc., Ferrell Companies, Inc. and Billy D. Prim. Incorporated by
    reference to Exhibit 10.25 to our Annual Report on
    Form 10-K
    filed October 13, 2004.                                 
|        | #10  | .20         |  | Separation Agreement and Release
    dated March 9, 2006 between Timothy E. Scronce and
    Ferrellgas, Inc. Incorporated by reference to
    Exhibit 10.28 to our Quarterly Report on
    Form 10-Q
    filed March 10, 2006.                                                                       
|        | #10  | .21         |  | Agreement and Release dated as of
    May 11, 2006 by and among Jeffrey B. Ward, Ferrellgas,
    Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and
    Ferrellgas, L.P. Incorporated by reference to Exhibit 10.1
    to our Current Report on
    Form 8-K
    filed June 22, 2006.      
|        | #10  | .22         |  | Agreement and Release dated as of
    August 15, 2006 by and among Kenneth A. Heinz, Ferrellgas,
    Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and
    Ferrellgas, L.P. Incorporated by reference to Exhibit 99.1
    to our Current Report on
    Form 8-K
    filed August 18, 2006.
|        | #*10 | .23         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between Stephen L. Wambold and
    Ferrellgas, Inc.                                                                                                                                                                               
|        | #*10 | .24         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between Eugene D. Caresia and
    Ferrellgas, Inc.                                                                                                                                                                                
|        | #*10 | .25         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between M. Kevin Dobbins and
    Ferrellgas, Inc.                                                                                                                                                                                 
|        | #*10 | .26         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between Kevin T. Kelly and
    Ferrellgas, Inc.                                                                                                                                                                                   
|        | #*10 | .27         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between Brian J. Kline and
    Ferrellgas, Inc.                                                                                                                                                                                   
|        | #*10 | .28         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between George L. Koloroutis
    and Ferrellgas, Inc.                                                                                                                                                                             
|        | #*10 | .29         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between Patrick J. Walsh and
    Ferrellgas, Inc.                                                                                                                                                                                 
|        | #*10 | .30         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between James E. Ferrell and
    Ferrellgas, Inc.                                                                                                                                                                                 
|        | #*10 | .31         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between Tod D. Brown and
    Ferrellgas, Inc.                                                                                                                                                                                     
|        | *21  | .1          |  | List of subsidiaries                                                                                                                                                                                                                                                                                 
|        | *23  | .1          |  | Consent of Deloitte &
    Touche, LLP, independent registered public accounting firm, for
    the certain use of its report appearing in the Annual Report on
    Form 10-K
    of Ferrellgas Partners, L.P. for the year-ended July 31,
    2006.                                                   
|        | *23  | .2          |  | Consent of Deloitte &
    Touche, LLP, independent registered public accounting firm, for
    the certain use of its report appearing in the Annual Report on
    Form 10-K
    of Ferrellgas Partners Finance Corp. for the year-ended
    July 31, 2006.                                           

E-3



---



##### Table of Contents



|        |     |             |  |                                                                                                                                         
|------- | --- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|       
|        | *31 | .1          |  | Certification of Ferrellgas
    Partners, L.P. pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a)
    of the Exchange Act.        
|        | *31 | .2          |  | Certification of Ferrellgas
    Partners Finance Corp. pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a)
    of the Exchange Act.
|        | *31 | .3          |  | Certification of Ferrellgas, L.P.
    pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a)
    of the Exchange Act.                 
|        | *31 | .4          |  | Certification of Ferrellgas
    Finance Corp. pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a)
    of the Exchange Act.         
|        | *32 | .1          |  | Certification of Ferrellgas
    Partners, L.P. pursuant to 18 U.S.C. Section 1350.                                                      
|        | *32 | .2          |  | Certification of Ferrellgas
    Partners Finance Corp. pursuant to 18 U.S.C.
    Section 1350.                                          
|        | *32 | .3          |  | Certification of Ferrellgas, L.P.
    pursuant to 18 U.S.C. Section 1350.                                                               
|        | *32 | .4          |  | Certification of Ferrellgas
    Finance Corp. pursuant to 18 U.S.C. Section 1350.                                                       









|  |  |                                            
|- |  | -------------------------------------------
|* |  | Filed herewith                             
| 
|# |  | Management contracts or compensatory plans.

E-4



---



##### Table of Contents



SIGNATURES
        By:
    /s/  James.
    E. Ferrell        Signature

Title

Date/s/  James.
    E. FerrelJames.
    E. Ferrell

Chairman and Chief Executive
    Officer
    (Principal Executive Officer)

10/12/06/s/  William
    K. HoskinsWilliam
    K. Hoskins

Director

10/12/06/s/  A.
    Andrew LevisonA.
    Andrew Levison

Director

10/12/06/s/  John
    R. LowdenJohn
    R. Lowden

Director

10/12/06/s/  Michael
    F. MorrisseyMichael
    F. Morrissey

Director

10/12/06/s/  Billy
    D. PrimBilly
    D. Prim

Director

10/12/06/s/  Elizabeth
    T. SolbergElizabeth
    T. Solberg

Director

10/12/06/s/  Kevin
    T. KellyKevin
    T. Kelly

Senior Vice President and Chief
    Financial Officer (Principal Financial
    and Accounting Officer)

10/12/06




---



##### Table of Contents



SIGNATURES
      By:
    /s/  James.
    E. Ferrell        Signature

Title

Date/s/  James.
    E. FerrellJames.
    E. Ferrell

Chief Executive Officer
    (Principal Executive Officer)

10/12/06/s/  Kevin
    T. KellyKevin
    T. Kelly

Senior Vice President, Chief
    Financial Officer and sole director
    (Principal Financial and Accounting Officer)

10/12/06   Supplemental Information to be Furnished With Reports Filed
    Pursuant to Section 15(d) of the Act by Registrants Which
    Have Not Registered Securities Pursuant to Section 12 of
    the Act
  Form 10-K,




---



##### Table of Contents



SIGNATURES
        By:
    /s/  James.
    E. Ferrell        Signature

Title

Date/s/  James.
    E. FerrellJames.
    E. Ferrell

Chairman and Chief Executive
    Officer 
    (Principal Executive Officer)

10/12/06/s/  William
    K. HoskinsWilliam
    K. Hoskins

Director

10/12/06/s/  A.
    Andrew LevisonA.
    Andrew Levison

Director

10/12/06/s/  John
    R. LowdenJohn
    R. Lowden

Director

10/12/06/s/  Michael
    F. MorrisseyMichael
    F. Morrissey

Director

10/12/06/s/  Billy
    D. PrimBilly
    D. Prim

Director

10/12/06/s/  Elizabeth
    T. SolbergElizabeth
    T. Solberg

Director

10/12/06/s/  Kevin
    T. KellyKevin
    T. Kelly

Senior Vice President and
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

10/12/06




---



##### Table of Contents



SIGNATURES
      By:
    /s/  James.
    E. Ferrell        Signature

Title

Date/s/  James.
    E. FerrellJames.
    E. Ferrell

Chief Executive Officer
    (Principal Executive Officer)

10/12/06/s/  Kevin
    T. KellyKevin
    T. Kelly

Senior Vice President, 
    Chief Financial Officer and sole director
    (Principal Financial and Accounting Officer)

10/12/06




---



##### Table of Contents



INDEX TO
    FINANCIAL STATEMENTS




|                                                                                                |  |      |      | 
|----------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                |  | Page |     
|                                                                                               
|Ferrellgas Partners, L.P.
    and Subsidiaries                                                  |  |      |      | 
|Report of
    Independent Registered Public Accounting Firm                                     |  |      | F-2  | 
|Consolidated
    Balance Sheets  July 31, 2006 and 2005                                        |  |      | F-3  | 
|Consolidated
    Statements of Earnings  Years ended July 31,
    2006, 2005 and 2004          |  |      | F-4  | 
|Consolidated
    Statements of Partners Capital  Years ended
    July 31, 2006, 2005 and 2004 |  |      | F-5  | 
|Consolidated
    Statements of Cash Flows  Years ended July 31,
    2006, 2005 and 2004        |  |      | F-7  | 
|Notes to
    Consolidated Financial Statements                                                  |  |      | F-8  | 
|                                                                                                |  |      |      | 
|Ferrellgas Partners Finance
    Corp.                                                           |  |      |      | 
|Report of
    Independent Registered Public Accounting Firm                                     |  |      | F-33 | 
|Balance
    Sheets  July 31, 2006 and 2005                                                     |  |      | F-34 | 
|Statements of
    Earnings  Years ended July 31, 2006, 2005 and
    2004                       |  |      | F-35 | 
|Statements of
    Stockholders Equity  Years ended July 31,
    2006, 2005 and 2004           |  |      | F-36 | 
|Statements of Cash
    Flows  Years ended July 31, 2006, 2005 and
    2004                     |  |      | F-37 | 
|Notes to Financial
    Statements                                                               |  |      | F-38 | 
|                                                                                                |  |      |      | 
|Ferrellgas, L.P. and
    Subsidiaries                                                           |  |      |      | 
|Report of
    Independent Registered Public Accounting Firm                                     |  |      | F-39 | 
|Consolidated
    Balance Sheets  July 31, 2006 and 2005                                        |  |      | F-40 | 
|Consolidated
    Statements of Earnings  Years ended July 31,
    2006, 2005 and 2004          |  |      | F-41 | 
|Consolidated
    Statements of Partners Capital  Years ended
    July 31, 2006, 2005 and 2004 |  |      | F-42 | 
|Consolidated
    Statements of Cash Flows  Years ended July 31,
    2006, 2005 and 2004        |  |      | F-43 | 
|Notes to
    Consolidated Financial Statements                                                  |  |      | F-44 | 
|                                                                                                |  |      |      | 
|Ferrellgas Finance
    Corp.                                                                    |  |      |      | 
|Report of
    Independent Registered Public Accounting Firm                                     |  |      | F-65 | 
|Balance
    Sheets  July 31, 2006 and 2005                                                     |  |      | F-66 | 
|Statements of
    Earnings  Year ended July 31, 2006, 2005 and
    2004                        |  |      | F-67 | 
|Statements of
    Stockholders Equity  Year ended July 31,
    2006, 2005 and 2004            |  |      | F-68 | 
|Statements of Cash
    Flows  Year ended July 31, 2006, 2005 and
    2004                      |  |      | F-69 | 
|Notes to Financial
    Statements                                                               |  |      | F-70 | 



F-1



---



##### Table of Contents

REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM























Internal Control 
    Integrated Framework




DELOITTE &
    TOUCHE LLP








F-2



---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES




CONSOLIDATED
    BALANCE SHEETS




|                                                                                                                                   |  |                   |           |   |      |   |           |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | --------- | - | ---- | - | --------- | -
|                                                                                                                                   |  | July 31,          |          
|                                                                                                                                   |  | 2006              |           |   | 2005 |  
|                                                                                                                                   |  | (In thousands,    |          
|                                                                                                                                   |  | except unit data) |          
|                                                                                                                                  
|ASSETS                                                                                                                            
|Current assets:                                                                                                                    |  |                   |           |   |      |   |           |  
|Cash and cash equivalents                                                                                                          |  | $                 | 16,525    |   |      | $ | 20,505    |  
|Accounts and notes receivable (net
    of allowance for doubtful accounts of $5,628 and $3,764 in 2006
    and 2005, respectively) |  |                   | 116,369   |   |      |   | 107,778   |  
|Inventories                                                                                                                        |  |                   | 154,613   |   |      |   | 97,743    |  
|Prepaid expenses and other current
    assets                                                                                      |  |                   | 15,334    |   |      |   | 12,861    |  
|                                                                                                                                   |  |                   |           |   |      |   |           |  
|Total current assets                                                                                                               |  |                   | 302,841   |   |      |   | 238,887   |  
|Property, plant and equipment, net                                                                                                 |  |                   | 740,101   |   |      |   | 766,765   |  
|Goodwill                                                                                                                           |  |                   | 246,050   |   |      |   | 234,142   |  
|Intangible assets, net                                                                                                             |  |                   | 248,546   |   |      |   | 255,277   |  
|Other assets, net                                                                                                                  |  |                   | 11,962    |   |      |   | 13,902    |  
|                                                                                                                                   |  |                   |           |   |      |   |           |  
|Total assets                                                                                                                       |  | $                 | 1,549,500 |   |      | $ | 1,508,973 |  
|                                                                                                                                   |  |                   |           |   |      |   |           |  
|                                                                                                                                  
|LIABILITIES AND PARTNERS
    CAPITAL                                                                                             
|Current liabilities:                                                                                                               |  |                   |           |   |      |   |           |  
|Accounts payable                                                                                                                   |  | $                 | 128,049   |   |      | $ | 108,667   |  
|Short-term borrowings                                                                                                              |  |                   | 52,647    |   |      |   | 19,800    |  
|Other current liabilities                                                                                                          |  |                   | 94,901    |   |      |   | 71,535    |  
|                                                                                                                                   |  |                   |           |   |      |   |           |  
|Total current
    liabilities                                                                                                      |  |                   | 275,597   |   |      |   | 200,002   |  
|Long-term debt                                                                                                                     |  |                   | 983,545   |   |      |   | 948,977   |  
|Other liabilities                                                                                                                  |  |                   | 19,178    |   |      |   | 20,165    |  
|Contingencies and commitments
    (Note N)                                                                                         |  |                   |          |   |      |   |          |  
|Minority interest                                                                                                                  |  |                   | 5,435     |   |      |   | 6,151     |  
|Partners
    capital:                                                                                                             |  |                   |           |   |      |   |           |  
|Common unitholders (60,885,784 and
    60,134,054 units outstanding at 2006 and 2005, respectively)                                |  |                   | 321,194   |   |      |   | 390,422   |  
|General partner (615,008 and
    607,415 units outstanding at 2006 and 2005, respectively)                                         |  |                   | (56,829   | ) |      |   | (56,132   | )
|Accumulated other comprehensive
    income (loss)                                                                                  |  |                   | 1,380     |   |      |   | (612      | )
|                                                                                                                                   |  |                   |           |   |      |   |           |  
|Total partners
    capital                                                                                                        |  |                   | 265,745   |   |      |   | 333,678   |  
|                                                                                                                                   |  |                   |           |   |      |   |           |  
|Total liabilities and
    partners capital                                                                                        |  | $                 | 1,549,500 |   |      | $ | 1,508,973 |  
|                                                                                                                                   |  |                   |           |   |      |   |           |  







F-3



---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES




CONSOLIDATED
    STATEMENTS OF EARNINGS




|                                                                                                                                                                    |  |                                      |           |   |      |   |           |      |  |   |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|                                                                                                                                                                    |  | For the Year Ended July 31,          |          
|                                                                                                                                                                    |  | 2006                                 |           |   | 2005 |   |           | 2004 | 
|                                                                                                                                                                    |  | (In thousands, except per unit data) |          
|                                                                                                                                                                   
|Revenues:                                                                                                                                                           |  |                                      |           |   |      |   |           |      |  |   |           |  
|Propane and other gas liquids sales                                                                                                                                 |  | $                                    | 1,697,940 |   |      | $ | 1,592,325 |      |  | $ | 1,210,564 |  
|Other                                                                                                                                                               |  |                                      | 197,530   |   |      |   | 161,789   |      |  |   | 97,822    |  
|                                                                                                                                                                    |  |                                      |           |   |      |   |           |      |  |   |           |  
|Total revenues                                                                                                                                                      |  |                                      | 1,895,470 |   |      |   | 1,754,114 |      |  |   | 1,308,386 |  
|Cost of product sold (exclusive
    of depreciation, shown with amortization
    below)                                                                             |  |                                      |           |   |      |   |           |      |  |   |           |  
|Propane and other gas liquids sales                                                                                                                                 |  |                                      | 1,109,177 |   |      |   | 1,052,005 |      |  |   | 730,377   |  
|Other                                                                                                                                                               |  |                                      | 122,450   |   |      |   | 88,293    |      |  |   | 36,027    |  
|                                                                                                                                                                    |  |                                      |           |   |      |   |           |      |  |   |           |  
|Gross profit                                                                                                                                                        |  |                                      | 663,843   |   |      |   | 613,816   |      |  |   | 541,982   |  
|Operating expense                                                                                                                                                   |  |                                      | 374,843   |   |      |   | 366,192   |      |  |   | 323,260   |  
|Depreciation and amortization
    expense                                                                                                                           |  |                                      | 84,953    |   |      |   | 83,060    |      |  |   | 56,111    |  
|General and administrative expense                                                                                                                                  |  |                                      | 47,689    |   |      |   | 42,342    |      |  |   | 34,532    |  
|Equipment lease expense                                                                                                                                             |  |                                      | 27,320    |   |      |   | 25,495    |      |  |   | 19,652    |  
|Employee stock ownership plan
    compensation charge                                                                                                               |  |                                      | 10,277    |   |      |   | 12,266    |      |  |   | 7,892     |  
|Loss on disposal of assets and
    other                                                                                                                            |  |                                      | 7,539     |   |      |   | 8,673     |      |  |   | 7,133     |  
|                                                                                                                                                                    |  |                                      |           |   |      |   |           |      |  |   |           |  
|Operating income                                                                                                                                                    |  |                                      | 111,222   |   |      |   | 75,788    |      |  |   | 93,402    |  
|Interest expense                                                                                                                                                    |  |                                      | (84,235   | ) |      |   | (91,518   | )    |  |   | (74,467   | )
|Interest income                                                                                                                                                     |  |                                      | 2,046     |   |      |   | 1,894     |      |  |   | 1,582     |  
|                                                                                                                                                                    |  |                                      |           |   |      |   |           |      |  |   |           |  
|Earnings (loss) before income
    taxes, minority interest and discontinued operations                                                                              |  |                                      | 29,033    |   |      |   | (13,836   | )    |  |   | 20,517    |  
|Income tax expense (benefit)                                                                                                                                        |  |                                      | 3,524     |   |      |   | 1,447     |      |  |   | (402      | )
|Minority interest                                                                                                                                                   |  |                                      | 500       |   |      |   | 92        |      |  |   | 418       |  
|                                                                                                                                                                    |  |                                      |           |   |      |   |           |      |  |   |           |  
|Earnings (loss) from continuing
    operations before discontinued operations                                                                                       |  |                                      | 25,009    |   |      |   | (15,375   | )    |  |   | 20,501    |  
|Earnings from discontinued
    operations (including gain on sale in 2005 of $97,001), net of
    minority interest of $1,063 and $82 in 2005 and 2004 respectively |  |                                      |          |   |      |   | 104,189   |      |  |   | 8,049     |  
|                                                                                                                                                                    |  |                                      |           |   |      |   |           |      |  |   |           |  
|Net earnings                                                                                                                                                        |  |                                      | 25,009    |   |      |   | 88,814    |      |  |   | 28,550    |  
|Distributions to senior unitholder                                                                                                                                  |  |                                      |          |   |      |   | 7,305     |      |  |   | 7,977     |  
|Net earnings available to general
    partner unitholder                                                                                                            |  |                                      | 250       |   |      |   | 815       |      |  |   | 206       |  
|                                                                                                                                                                    |  |                                      |           |   |      |   |           |      |  |   |           |  
|Net earnings available to
    common unitholders                                                                                                                    |  | $                                    | 24,759    |   |      | $ | 80,694    |      |  | $ | 20,367    |  
|                                                                                                                                                                    |  |                                      |           |   |      |   |           |      |  |   |           |  
|Basic and diluted earnings per
    common unit:                                                                                                                     |  |                                      |           |   |      |   |           |      |  |   |           |  
|Earnings (loss) from continuing
    operations available to common unitholders before discontinued
    operations                                                   |  | $                                    | 0.41      |   |      | $ | (0.41     | )    |  | $ | 0.30      |  
|Earnings from discontinued
    operations                                                                                                                           |  |                                      |          |   |      |   | 1.91      |      |  |   | 0.19      |  
|                                                                                                                                                                    |  |                                      |           |   |      |   |           |      |  |   |           |  
|Net earnings available to
    common unitholders                                                                                                                    |  | $                                    | 0.41      |   |      | $ | 1.50      |      |  | $ | 0.49      |  
|                                                                                                                                                                    |  |                                      |           |   |      |   |           |      |  |   |           |  







F-4



---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES




CONSOLIDATED
    STATEMENTS OF PARTNERS CAPITAL




|                                                                                                                   |  |                 |          |   |             |  |          |            |  |  |            |  |  |                             |         |   |            |   |          |            |  |   |             |   |  |           |        |   |           |   |    |  |  |   |        |   |  |   |          |  
|------------------------------------------------------------------------------------------------------------------ |  | --------------- | -------- | - | ----------- |  | -------- | ---------- |  |  | ---------- |  |  | --------------------------- | ------- | - | ---------- | - | -------- | ---------- |  | - | ----------- | - |  | --------- | ------ | - | --------- | - | -- |  |  | - | ------ | - |  | - | -------- | -
|                                                                                                                   |  |                 |          |   |             |  |          |            |  |  |            |  |  | Accumulated Other           |         |   |            |  
|                                                                                                                   |  | Number of Units |          |   |             |  |          |            |  |  |            |  |  | Comprehensive Income (Loss) |         |   |            |  
|                                                                                                                   |  |                 |          |   |             |  |          | General    |  |  |            |  |  |                             |         |   | General    |   |          |            |  |   | Currency    |   |  |           |        |   | Total     |  
|                                                                                                                   |  | Senior          |          |   | Common      |  |          | Partner    |  |  | Senior     |  |  | Common                      |         |   | Partner    |   |          | Risk       |  |   | Translation |   |  | Pension   |        |   | Partners |  
|                                                                                                                   |  | Unitholder      |          |   | Unitholders |  |          | Unitholder |  |  | Unitholder |  |  | Unitholders                 |         |   | Unitholder |   |          | Management |  |   | Adjustments |   |  | Liability |        |   | Capital   |  
|                                                                                                                   |  | (In thousands)  |         
|                                                                                                                  
|July 31, 2003                                                                                                      |  |                 | 1,994.1  |   |             |  | 37,673.5 |            |  |  | 400.7      |  |  | $                           | 79,766  |   |            | $ | (15,602  | )          |  | $ | (59,277     | ) |  | $         |       |   |           | $ |   |  |  | $ | (1,968 | ) |  | $ | 2,919    |  
|Contribution in connection with
    ESOP compensation charge                                                       |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   | 7,734    |            |  |   | 78          |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 7,812    |  
|Common unit distributions                                                                                          |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   | (82,988  | )          |  |   | (838        | ) |  |           |       |   |           |   |   |  |  |   |       |   |  |   | (83,826  | )
|Senior unit distributions                                                                                          |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   | (7,896   | )          |  |   | (160        | ) |  |           |       |   |           |   |   |  |  |   |       |   |  |   | (8,056   | )
|Common units issued in public
    offerings                                                                        |  |                 |         |   |             |  | 9,000.0  |            |  |  | 90.9       |  |  |                             |        |   |            |   | 203,156  |            |  |   | 2,052       |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 205,208  |  
|Common units issued in private
    offerings                                                                       |  |                 |         |   |             |  | 1,607.7  |            |  |  | 16.2       |  |  |                             |        |   |            |   | 35,928   |            |  |   | 363         |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 36,291   |  
|Common unit options exercised                                                                                      |  |                 |         |   |             |  | 233.9    |            |  |  | 2.4        |  |  |                             |        |   |            |   | 4,223    |            |  |   | 43          |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 4,266    |  
|Common units issued in connection
    with acquisitions                                                            |  |                 |         |   |             |  | 62.1     |            |  |  | 0.6        |  |  |                             |        |   |            |   | 1,490    |            |  |   | 15          |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 1,505    |  
|Common units issued to affiliate in
    connection with contribution of membership interests in Blue
    Rhino LLC |  |                 |         |   |             |  | 195.7    |            |  |  | 2.0        |  |  |                             |        |   |            |   | 4,685    |            |  |   | 47          |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 4,732    |  
|Comprehensive income (loss):                                                                                       |  |                 |          |   |             |  |          |            |  |  |            |  |  |                             |         |   |            |   |          |            |  |   |             |   |  |           |        |   |           |   |    |  |  |   |        |   |  |   |          |  
|Net earnings                                                                                                       |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   | 28,264   |            |  |   | 286         |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 28,550   |  
|Other comprehensive income (loss):                                                                                 |  |                 |          |   |             |  |          |            |  |  |            |  |  |                             |         |   |            |   |          |            |  |   |             |   |  |           |        |   |           |   |    |  |  |   |        |   |  |   |          |  
|Net earnings on risk management
    derivatives                                                                    |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   |         |            |  |   |            |   |  |           | 1,911  |   |           |   |   |  |  |   |       |   |  |   |          |  
|Reclassification of derivatives to
    earnings                                                                    |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   |         |            |  |   |            |   |  |           | (139   | ) |           |   |   |  |  |   |       |   |  |   |          |  
|Foreign currency translation
    adjustments                                                                       |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   |         |            |  |   |            |   |  |           |       |   |           |   | 16 |  |  |   |       |   |  |   |          |  
|Pension liability adjustment                                                                                       |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   |         |            |  |   |            |   |  |           |       |   |           |   |   |  |  |   | 910    |   |  |   | 2,698    |  
|                                                                                                                   |  |                 |          |   |             |  |          |            |  |  |            |  |  |                             |         |   |            |   |          |            |  |   |             |   |  |           |        |   |           |   |    |  |  |   |        |   |  |   |          |  
|Comprehensive income                                                                                               |  |                 |          |   |             |  |          |            |  |  |            |  |  |                             |         |   |            |   |          |            |  |   |             |   |  |           |        |   |           |   |    |  |  |   |        |   |  |   | 31,248   |  
|                                                                                                                   |  |                 |          |   |             |  |          |            |  |  |            |  |  |                             |         |   |            |   |          |            |  |   |             |   |  |           |        |   |           |   |    |  |  |   |        |   |  |   |          |  
|July 31, 2004                                                                                                      |  |                 | 1,994.1  |   |             |  | 48,772.9 |            |  |  | 512.8      |  |  |                             | 79,766  |   |            |   | 178,994  |            |  |   | (57,391     | ) |  |           | 1,772  |   |           |   | 16 |  |  |   | (1,058 | ) |  |   | 202,099  |  
|Contribution in connection with
    ESOP compensation charge                                                       |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   | 12,021   |            |  |   | 121         |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 12,142   |  
|Common unit distributions                                                                                          |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   | (106,872 | )          |  |   | (1,079      | ) |  |           |       |   |           |   |   |  |  |   |       |   |  |   | (107,951 | )
|Senior unit distributions                                                                                          |  |                 |         |   |             |  | 63.5     |            |  |  | 0.6        |  |  |                             |        |   |            |   | (5,909   | )          |  |   | (133        | ) |  |           |       |   |           |   |   |  |  |   |       |   |  |   | (6,042   | )
|Common units issued in public
    offerings                                                                        |  |                 |         |   |             |  | 5,002.0  |            |  |  | 50.5       |  |  |                             |        |   |            |   | 97,230   |            |  |   | 981         |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 98,211   |  
|Common units issued in private
    offerings                                                                       |  |                 |         |   |             |  | 2,098.6  |            |  |  | 21.2       |  |  |                             |        |   |            |   | 39,800   |            |  |   | 405         |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 40,205   |  
|Common unit options exercised                                                                                      |  |                 |         |   |             |  | 26.5     |            |  |  | 0.3        |  |  |                             |        |   |            |   | 472      |            |  |   | 5           |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 477      |  
|Common units issued in connection
    with acquisitions                                                            |  |                 |         |   |             |  | 341.2    |            |  |  | 3.5        |  |  |                             |        |   |            |   | 6,994    |            |  |   | 71          |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 7,065    |  
|Conversion of senior units to
    common units                                                                     |  |                 | (1,994.1 | ) |             |  | 3,829.4  |            |  |  | 18.5       |  |  |                             | (79,766 | ) |            |   | 79,766   |            |  |   |            |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   |         |  
|Comprehensive income (loss):                                                                                       |  |                 |          |   |             |  |          |            |  |  |            |  |  |                             |         |   |            |   |          |            |  |   |             |   |  |           |        |   |           |   |    |  |  |   |        |   |  |   |          |  
|Net earnings                                                                                                       |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   | 87,926   |            |  |   | 888         |   |  |           |       |   |           |   |   |  |  |   |       |   |  |   | 88,814   |  
|Other comprehensive income (loss):                                                                                 |  |                 |          |   |             |  |          |            |  |  |            |  |  |                             |         |   |            |   |          |            |  |   |             |   |  |           |        |   |           |   |    |  |  |   |        |   |  |   |          |  
|Net earnings on risk management
    derivatives                                                                    |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   |         |            |  |   |            |   |  |           | 70     |   |           |   |   |  |  |   |       |   |  |   |          |  
|Reclassification of derivatives to
    earnings                                                                    |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   |         |            |  |   |            |   |  |           | (1,772 | ) |           |   |   |  |  |   |       |   |  |   |          |  
|Foreign currency translation
    adjustments                                                                       |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   |         |            |  |   |            |   |  |           |       |   |           |   | 49 |  |  |   |       |   |  |   |          |  
|Pension liability adjustment                                                                                       |  |                 |         |   |             |  |         |            |  |  |           |  |  |                             |        |   |            |   |         |            |  |   |            |   |  |           |       |   |           |   |   |  |  |   | 311    |   |  |   | (1,342   | )
|                                                                                                                   |  |                 |          |   |             |  |          |            |  |  |            |  |  |                             |         |   |            |   |          |            |  |   |             |   |  |           |        |   |           |   |    |  |  |   |        |   |  |   |          |  
|Comprehensive income                                                                                               |  |                 |          |   |             |  |          |            |  |  |            |  |  |                             |         |   |            |   |          |            |  |   |             |   |  |           |        |   |           |   |    |  |  |   |        |   |  |   | 87,472   |  
|                                                                                                                   |  |                 |          |   |             |  |          |            |  |  |            |  |  |                             |         |   |            |   |          |            |  |   |             |   |  |           |        |   |           |   |    |  |  |   |        |   |  |   |          |  

F-5



---



##### Table of Contents



|                                                                                        |  |                 |   |  |             |  |          |            |  |  |            |  |  |                             |   |  |            |   |          |            |  |   |             |   |  |           |       |   |           |   |     |   |  |   |      |   |  |   |          |  
|--------------------------------------------------------------------------------------- |  | --------------- | - |  | ----------- |  | -------- | ---------- |  |  | ---------- |  |  | --------------------------- | - |  | ---------- | - | -------- | ---------- |  | - | ----------- | - |  | --------- | ----- | - | --------- | - | --- | - |  | - | ---- | - |  | - | -------- | -
|                                                                                        |  |                 |   |  |             |  |          |            |  |  |            |  |  | Accumulated Other           |   |  |            |  
|                                                                                        |  | Number of Units |   |  |             |  |          |            |  |  |            |  |  | Comprehensive Income (Loss) |   |  |            |  
|                                                                                        |  |                 |   |  |             |  |          | General    |  |  |            |  |  |                             |   |  | General    |   |          |            |  |   | Currency    |   |  |           |       |   | Total     |  
|                                                                                        |  | Senior          |   |  | Common      |  |          | Partner    |  |  | Senior     |  |  | Common                      |   |  | Partner    |   |          | Risk       |  |   | Translation |   |  | Pension   |       |   | Partners |  
|                                                                                        |  | Unitholder      |   |  | Unitholders |  |          | Unitholder |  |  | Unitholder |  |  | Unitholders                 |   |  | Unitholder |   |          | Management |  |   | Adjustments |   |  | Liability |       |   | Capital   |  
|                                                                                        |  | (In thousands)  |  
|                                                                                       
|July 31, 2005                                                                           |  |                 |  |  |             |  | 60,134.1 |            |  |  | 607.4      |  |  |                             |  |  |            |   | 390,422  |            |  |   | (56,132     | ) |  |           | 70    |   |           |   | 65  |   |  |   | (747 | ) |  |   | 333,678  |  
|Contribution in connection with
    ESOP and stock-based compensation charges           |  |                 |  |  |             |  |         |            |  |  |           |  |  |                             |  |  |            |   | 11,897   |            |  |   | 119         |   |  |           |      |   |           |   |    |   |  |   |     |   |  |   | 12,016   |  
|Common unit distributions                                                               |  |                 |  |  |             |  |         |            |  |  |           |  |  |                             |  |  |            |   | (120,976 | )          |  |   | (1,221      | ) |  |           |      |   |           |   |    |   |  |   |     |   |  |   | (122,197 | )
|Common unit options exercised                                                           |  |                 |  |  |             |  | 169.0    |            |  |  | 1.7        |  |  |                             |  |  |            |   | 3,092    |            |  |   | 32          |   |  |           |      |   |           |   |    |   |  |   |     |   |  |   | 3,124    |  
|Common units issued in connection                                                       |  |                 |  |  |             |  | 582.7    |            |  |  | 5.9        |  |  |                             |  |  |            |   | 12,000   |            |  |   | 123         |   |  |           |      |   |           |   |    |   |  |   |     |   |  |   | 12,123   |  
|with acquisitions Comprehensive
    income (loss):                                      |  |                 |  |  |             |  |         |            |  |  |           |  |  |                             |  |  |            |   | 24,759   |            |  |   | 250         |   |  |           |      |   |           |   |    |   |  |   |     |   |  |   | 25,009   |  
|Net earnings Other comprehensive
    income (loss):                                     |  |                 |  |  |             |  |         |            |  |  |           |  |  |                             |  |  |            |   |         |            |  |   |            |   |  |           | 2,540 |   |           |   |    |   |  |   |     |   |  |   |          |  
|Net earnings on risk management
    derivatives                                         |  |                 |  |  |             |  |         |            |  |  |           |  |  |                             |  |  |            |   |         |            |  |   |            |   |  |           | (484  | ) |           |   |    |   |  |   |     |   |  |   |          |  
|Reclassification of derivatives to
    earnings                                         |  |                 |  |  |             |  |         |            |  |  |           |  |  |                             |  |  |            |   |         |            |  |   |            |   |  |           |      |   |           |   | (29 | ) |  |   |     |   |  |   |          |  
|Foreign currency translation
    adjustments Tax effect on foreign currency translation |  |                 |  |  |             |  |         |            |  |  |           |  |  |                             |  |  |            |   |         |            |  |   |            |   |  |           |      |   |           |   | (15 | ) |  |   |     |   |  |   |          |  
|adjustments                                                                             |  |                 |  |  |             |  |         |            |  |  |           |  |  |                             |  |  |            |   |         |            |  |   |            |   |  |           |      |   |           |   |    |   |  |   | (20  | ) |  |   | 1,992    |  
|                                                                                        |  |                 |   |  |             |  |          |            |  |  |            |  |  |                             |   |  |            |   |          |            |  |   |             |   |  |           |       |   |           |   |     |   |  |   |      |   |  |   |          |  
|Pension liability adjustment                                                            |  |                 |   |  |             |  |          |            |  |  |            |  |  |                             |   |  |            |   |          |            |  |   |             |   |  |           |       |   |           |   |     |   |  |   |      |   |  |   |          |  
|Comprehensive income                                                                    |  |                 |   |  |             |  |          |            |  |  |            |  |  |                             |   |  |            |   |          |            |  |   |             |   |  |           |       |   |           |   |     |   |  |   |      |   |  |   | 27,001   |  
|                                                                                        |  |                 |   |  |             |  |          |            |  |  |            |  |  |                             |   |  |            |   |          |            |  |   |             |   |  |           |       |   |           |   |     |   |  |   |      |   |  |   |          |  
|July 31, 2006                                                                           |  |                 |  |  |             |  | 60,885.8 |            |  |  | 615.0      |  |  | $                           |  |  |            | $ | 321,194  |            |  | $ | (56,829     | ) |  | $         | 2,126 |   |           | $ | 21  |   |  | $ | (767 | ) |  | $ | 265,745  |  
|                                                                                        |  |                 |   |  |             |  |          |            |  |  |            |  |  |                             |   |  |            |   |          |            |  |   |             |   |  |           |       |   |           |   |     |   |  |   |      |   |  |   |          |  







F-6



---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES




CONSOLIDATED
    STATEMENTS OF CASH FLOWS




|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|---------------------------------------------------------------------------------------------------- |  | --------------------------- | ---------- | - | ---- | - | ---------- | ---- |  | - | -------- | -
|                                                                                                     |  | For the Year Ended July 31, |           
|                                                                                                     |  | 2006                        |            |   | 2005 |   |            | 2004 | 
|                                                                                                     |  | (In thousands)              |           
|                                                                                                    
|Cash flows from operating
    activities:                                                            |  |                             |            |   |      |   |            |      |  |   |          |  
|Net earnings                                                                                         |  | $                           | 25,009     |   |      | $ | 88,814     |      |  | $ | 28,550   |  
|Reconciliation of net earnings to
    net cash provided by operating activities:                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Depreciation and amortization
    expense                                                            |  |                             | 84,953     |   |      |   | 84,249     |      |  |   | 57,115   |  
|Employee stock ownership plan
    compensation charge                                                |  |                             | 10,277     |   |      |   | 12,266     |      |  |   | 7,892    |  
|Stock-based compensation charge                                                                      |  |                             | 1,863      |   |      |   |           |      |  |   |         |  
|Loss (gain) on disposal of assets
    and discontinued operations                                    |  |                             | 1,188      |   |      |   | (91,494    | )    |  |   | 6,120    |  
|Loss on transfer of accounts
    receivable related to the accounts receivable securitization        |  |                             | 10,075     |   |      |   | 5,894      |      |  |   | 2,454    |  
|Minority interest                                                                                    |  |                             | 500        |   |      |   | 1,155      |      |  |   | 500      |  
|Other                                                                                                |  |                             | 6,465      |   |      |   | 1,767      |      |  |   | 5,990    |  
|Changes in operating assets and
    liabilities, net of effects from business acquisitions:          |  |                             |            |   |      |   |            |      |  |   |          |  
|Accounts and notes receivable, net
    of securitization                                             |  |                             | (20,412    | ) |      |   | (43,246    | )    |  |   | (24,943  | )
|Inventories                                                                                          |  |                             | (57,334    | ) |      |   | (2,421     | )    |  |   | (5,264   | )
|Prepaid expenses and other current
    assets                                                        |  |                             | (2,330     | ) |      |   | (2,443     | )    |  |   | (224     | )
|Accounts payable                                                                                     |  |                             | 19,621     |   |      |   | 4,505      |      |  |   | 17,299   |  
|Accrued interest expense                                                                             |  |                             | 472        |   |      |   | (4,662     | )    |  |   | 5,427    |  
|Other current liabilities                                                                            |  |                             | 7,620      |   |      |   | (5,074     | )    |  |   | (12,927  | )
|Other liabilities                                                                                    |  |                             | 1,061      |   |      |   | 323        |      |  |   | 890      |  
|Accounts receivable securitization:                                                                  |  |                             |            |   |      |   |            |      |  |   |          |  
|Proceeds from new accounts
    receivable securitizations                                            |  |                             | 107,000    |   |      |   | 114,400    |      |  |   | 30,000   |  
|Proceeds from collections
    reinvested in revolving period accounts receivable
    securitizations |  |                             | 1,184,987  |   |      |   | 981,256    |      |  |   | 627,389  |  
|Remittances of amounts collected as
    servicer of accounts receivable securitizations              |  |                             | (1,287,987 | ) |      |   | (1,051,356 | )    |  |   | (669,689 | )
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Net cash provided by operating
    activities                                                        |  |                             | 93,028     |   |      |   | 93,933     |      |  |   | 76,579   |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Cash flows from investing
    activities:                                                            |  |                             |            |   |      |   |            |      |  |   |          |  
|Cash paid for assumed merger and
    related obligations                                             |  |                             |           |   |      |   |           |      |  |   | (343,414 | )
|Business acquisitions, net of cash
    acquired                                                      |  |                             | (21,231    | ) |      |   | (23,904    | )    |  |   | (40,960  | )
|Cash paid for acquisition
    transaction fees                                                       |  |                             |           |   |      |   |           |      |  |   | (1,476   | )
|Capital expenditures 
    technology initiative                                                     |  |                             | (915       | ) |      |   | (10,466    | )    |  |   | (8,688   | )
|Capital expenditures 
    other                                                                     |  |                             | (42,451    | ) |      |   | (42,348    | )    |  |   | (32,692  | )
|Proceeds from sale of discontinued
    operations                                                    |  |                             |           |   |      |   | 144,000    |      |  |   |         |  
|Proceeds from sale of assets                                                                         |  |                             | 18,950     |   |      |   | 11,948     |      |  |   | 5,766    |  
|Other                                                                                                |  |                             | (5,661     | ) |      |   | (4,030     | )    |  |   | (4,156   | )
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Net cash provided by (used in)
    investing activities                                              |  |                             | (51,308    | ) |      |   | 75,200     |      |  |   | (425,620 | )
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Cash flows from financing
    activities:                                                            |  |                             |            |   |      |   |            |      |  |   |          |  
|Distributions                                                                                        |  |                             | (122,197   | ) |      |   | (116,007   | )    |  |   | (91,882  | )
|Issuance of common units, net of
    issuance costs of $569 and $676 in 2005 and 2004, respectively  |  |                             |           |   |      |   | 136,824    |      |  |   | 236,029  |  
|Proceeds from increase in long-term
    debt                                                         |  |                             | 45,453     |   |      |   |           |      |  |   | 314,048  |  
|Reductions in long-term debt                                                                         |  |                             | (3,050     | ) |      |   | (205,354   | )    |  |   | (58,710  | )
|Net additions (reductions) to
    short-term borrowings                                              |  |                             | 32,847     |   |      |   | 19,800     |      |  |   | (43,719  | )
|Cash paid for financing costs                                                                        |  |                             | (375       | ) |      |   | (1,405     | )    |  |   | (7,043   | )
|Minority interest activity                                                                           |  |                             | (1,489     | ) |      |   | 60         |      |  |   | (180     | )
|Proceeds from exercise of common
    unit options                                                    |  |                             | 3,124      |   |      |   | 472        |      |  |   | 4,223    |  
|Cash contribution from general
    partner                                                           |  |                             | 16         |   |      |   | 1,461      |      |  |   | 533      |  
|Other                                                                                                |  |                             |           |   |      |   | 44         |      |  |   |         |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Net cash provided by (used in)
    financing activities                                              |  |                             | (45,671    | ) |      |   | (164,105   | )    |  |   | 353,299  |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Effect of exchange rate changes
    on cash                                                          |  |                             | (29        | ) |      |   | 49         |      |  |   | 16       |  
|Increase (decrease) in cash and
    cash equivalents                                                 |  |                             | (3,980     | ) |      |   | 5,077      |      |  |   | 4,274    |  
|Cash and cash
    equivalents  beginning of year                                                    |  |                             | 20,505     |   |      |   | 15,428     |      |  |   | 11,154   |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Cash and cash
    equivalents  end of year                                                          |  | $                           | 16,525     |   |      | $ | 20,505     |      |  | $ | 15,428   |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Supplemental disclosures of cash
    flow information:                                               |  |                             |            |   |      |   |            |      |  |   |          |  
|Cash paid for:                                                                                       |  |                             |            |   |      |   |            |      |  |   |          |  
|Interest                                                                                             |  | $                           | 81,592     |   |      | $ | 93,298     |      |  | $ | 66,240   |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Income taxes                                                                                         |  | $                           | 990        |   |      | $ | 1,359      |      |  | $ |         |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  







F-7



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##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES




NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS


(Dollars
    in thousands, except per unit data, unless otherwise
    designated)




|   |                                           
|-- | ------------------------------------------
|A. | Partnership
    organization and formation















|   |                                               
|-- | ----------------------------------------------
|B. | Summary
    of significant accounting policies



Nature of operations:








Accounting estimates:


F-8



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##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Principles of consolidation:
  Cash and cash equivalents and non-cash
    activities:
  Inventories:
  Accounts receivable
    securitization:
    Property, plant and
    equipment:
  Goodwill:
 F-9




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##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Intangible assets:
  Derivatives and Hedging
    Activities:
  Revenue recognition:
  Shipping and handling
    expenses:
  Cost of product sold:
  Operating expenses:
 F-10




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   General and administrative
    expenses:
  Income taxes:
  Sales taxes:
  Net earnings per common unit:
  Segment information:
  New accounting
    standards:
  instrument-by-instrument
     F-11




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  EITF 04-5
  EITF 04-13, EITF 04-3 EITF 04-13 EITF 04-13
    Reclassifications:
  C.
    Unit
    and stock-based compensation    For the Year EndedJuly 31, 2006Operating expense

$
438General and administrative expense


1,425$
1,863      F-12




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     For the Years Ended July 31,2005


2004Net earnings available to common
    unitholders, as reported

$
80,694


$
20,367Deduct: Total stock-based employee
    compensation expense determined under fair value based method
    for all awards


(247
)


(1,110
)Pro forma net earnings available
    to common unitholders

$
80,447


$
19,257Basic and diluted earnings per
    common unit:Earnings (loss) from continuing
    operations available to common unitholders before discontinued
    operations, as reported

$
(0.41
)

$
0.30Net earnings available to common
    unit holders, as reported

$
1.50


$
0.49Earnings (loss) from continuing
    operations available to common unitholders before discontinued
    operations, pro forma

$
(0.42
)

$
0.27Net earnings available to common
    unitholders, pro forma

$
1.49


$
0.46   Ferrellgas
    Unit Option Plan (UOP)
      Weighted-AverageWeighted


Remaining


AggregateNumber of


Average


Contractual


IntrinsicUnits


Exercise Price


Term


Value(In years)


(In thousands)Outstanding, August 1,
    2005


344,676


$
18.52Exercised


(169,000
)


18.29Forfeited


(27,476
)


20.43Outstanding, July 31,
    2006


148,200



18.43



3.7


$
601Options exercisable,
    July 31, 2006


148,200



18.43



3.7


$
601  F-13




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Ferrell
    Companies, Inc. Incentive Compensation Plan
    (ICP)
      D.
    Business
    combinations      
    Norwest Propane, Inc., based in Washington, acquired September
    2005;
    Eastern Fuels, Inc., based in North Carolina, acquired November
    2005;
    Petro Star, Corp., based in New York, acquired December 2005;
    Titan Propane, LLC (selected cylinder exchange assets), based in
    New York and New Jersey, acquired February 2006;
    Empire Propane Cylinder, Inc., based in New York, acquired in
    February 2006,
    United Energy, Inc., based in Ohio, acquired March 2006;
    Cals Propane Service, Inc., based in Oregon, acquired
    April 2006;
    Gaines Propane, Inc., based in Tennessee, acquired April 2006;
    Hometown Gas, Inc., based in Florida, acquired April 2006;
    Denman Cylinder Exchange, Ltd. and The Denman Company, Ltd.,
    based in Texas, acquired May 2006; and
    Hampton Gas Company, Inc., based in South Carolina, acquired May
    2006. F-14




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Current assets

$
689Customer tanks, buildings and land


9,640Non-compete agreements


5,598Customer lists


9,586Goodwill


13,218Other assets


15$
38,746       
    Kamps Propane, Inc. (selected cylinder exchange assets),
    based in California, acquired August 2004;
    Suburban Propanes Upper Midwest Retail Operations, based
    in Minnesota, North Dakota and Wisconsin, acquired September
    2004;
    Basin Propane, based in Washington, acquired September 2004;
    Econogas Service, Inc., based in Iowa, acquired September 2004;
    Land Propane Gas Service, based in Kentucky, acquired September
    2004;
    Parsons Gas & Appliance, Inc., Parsons Gas, Inc., and
    Daves Gas, Inc., based in Kentucky, acquired December
    2004; and
    Commercial Propane Corporation, based in Wisconsin, acquired
    January 2005.      Customer tanks, buildings and land

$
12,358Non-compete agreements


2,914Customer lists


12,690Goodwill


4,016Other assets


453Current liabilities


(749
)$
31,682    F-15




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     
    Chapmans Propane Co., Inc, based in Illinois, acquired
    August 2003;
    Buds Propane Service, Inc., based in Oregon, acquired
    September 2003;
    Prairie Land Coop, based in Iowa, acquired October 2003;
    Aeropres Propane, Inc., based in Louisiana and Arkansas,
    acquired December 2003;
    Suburban Propanes Midwest Retail Operations, based in
    Texas, Oklahoma, Missouri and Kansas, acquired January 2004;
    Crows LP Gas Co., based in Iowa, acquired March 2004;
    Hilltop Supply Company, based in Southern California, acquired
    March 2004;
    Blue Ribbon Propane, based in Canada, acquired May 2004;
    C. Barron & Sons, Inc., based in Michigan, acquired
    June 2004; and
    Tri-Counties Gas Companies, based in Northern California,
    acquired July 2004.      Customer tanks, buildings and land

$
24,576Non-compete agreements


4,306Customer lists


14,183Goodwill


244Other


(16
)$
43,293     Blue
    Rhino contribution
     F-16




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Assumption of obligations under
    the contribution agreement

$
343,414Common units and general partner
    interest issued


11,850Assumption of Blue Rhinos
    bank credit facility outstanding balance


43,719Assumption of other liabilities
    and acquisition costs


19,394$
418,377             Current assets

$
53,912Customer tanks, buildings and land


96,160Trademarks and tradenames


59,000Non-compete agreements


3,300Customer lists


95,500Goodwill


136,408Other intangibles


5,300Other assets


1,375Current liabilities


(32,578
)$
418,377      F-17




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Results
    of operations
    For the Year EndedJuly 31, 2004Revenues

$
1,470,529Earnings before discontinued
    operations

$
4,935Net earnings

$
12,984Basic and diluted net earnings
    available to common unitholders:Loss before discontinued operations

$
(0.07
)Net earnings

$
0.12   E.
    Discontinued
    operations  pipeline-to-truck
 F-18




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     For the Year Ended July 31,2006


2005


2004Total revenues

$



$
89,339


$
70,995Cost of product sold (exclusive of
    depreciation, shown with amortization below):Propane and other gas liquids sales






77,407



59,441Gross profit






11,932



11,554Operating expense






2,506



2,362Depreciation and amortization
    expense






1,189



1,004Equipment lease expense






22



22Loss on disposal of assets and
    other






(36
)


35Earnings before income taxes,
    minority interest, and discontinued operations






8,251



8,131Minority interest






1,063



82Gain on sale of discontinued
    operations






97,001



Earnings from discontinued
    operations, net of minority interest

$



$
104,189


$
8,049     F.
    Quarterly
    distributions of available cash       F-19




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    G.
    Supplemental
    financial statement information    2006


2005Propane gas and related products

$
130,644


$
70,380Appliances, parts and supplies


23,969



27,363$
154,613


$
97,743       EstimatedUseful Lives

2006


2005Land

indefinite

$
31,963


$
32,619Land improvements

2-20


10,313



10,139Buildings and improvements

20


60,548



61,192Vehicles, including transport
    trailers

8-20


86,787



90,215Bulk equipment and district
    facilities

5-30


95,986



96,047Tanks and customer equipment

2-30


756,134



743,067Computer and office equipment

2-5


108,102



104,773Construction in progress

n/a


6,608



8,1361,156,441



1,146,188Less: accumulated depreciation




416,340



379,423$
740,101


$
766,765    F-20




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006


2005Accrued interest

$
24,800


$
24,328Accrued payroll


18,724



13,816Accrued insurance


10,062



8,627Current portion of long-term debt


14,758



2,502Other


26,557



22,262$
94,901


$
71,535   For the Year Ended July 31,2006


2005


2004Loss on disposal of assets and
    other consist of:Loss on disposal of assets

$
1,188


$
5,543


$
6,085Loss on transfer of accounts
    receivable related to the accounts receivable securitization


10,075



5,894



2,454Service income related to the
    accounts receivable securitization


(3,724
)


(2,764
)


(1,406
)Loss on disposal of assets and
    other

$
7,539


$
8,673


$
7,133     For the Year Ended July 31,2006


2005


2004Operating expense

$
148,125


$
156,072


$
136,768Depreciation and amortization
    expense


5,837



6,427



6,396Equipment lease expense


24,356



23,313



15,232$
178,318


$
185,812


$
158,396   H.
    Accounts
    receivable securitization  364-day 364-day
   F-21




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006

2005Retained interest

$
16,373


$
15,710Accounts receivable transferred

$
87,500


$
82,500       For the Year Ended July 31,2006

2005

2004Net non-cash activity

$
2,579


$
1,101


$
664Bad debt expense

$
618


$
466


$
289       I.
    Goodwill
    and intangible assets, net    July 31, 2006


July 31, 2005Gross








GrossCarrying


Accumulated





Carrying


AccumulatedAmount


Amortization


Net


Amount


Amortization


NetGOODWILL, NET

$
246,050






$
246,050


$
234,142






$
234,142INTANGIBLE ASSETS, NETAmortized intangible assetsCustomer lists

$
345,103


$
(171,721
)

$
173,382


$
335,557


$
(155,281
)

$
180,276Non-compete agreements


40,921



(27,605
)


13,316



34,270



(21,803
)


12,467Other


5,340



(2,590
)


2,750



5,470



(2,010
)


3,460391,364



(201,916
)


189,448



375,297



(179,094
)


196,203Unamortized intangible assetsTradenames & trademarks


59,098







59,098



59,074







59,074Total intangible assets, net

$
450,462


$
(201,916
)

$
248,546


$
434,371


$
(179,094
)

$
255,277      F-22




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Aggregate amortization expense:
  For the Year Ended July 31,2006

$
22,2562005


22,9872004


15,893   Estimated amortization expense:
  For the Year Ended July 31,2007

$
21,5792008


19,6492009


18,6212010


17,5472011


17,386   J.
    Long-term
    debt    2006


2005Senior notesFixed rate,
    Series B-E,
    ranging from 7.08% to 7.42% due
    2006-2013(1)

$
241,000


$
241,000Fixed rate, 8.75%, due 2012, net
    of unamortized premium of $2,229 and $2,610 at 2006 and 2005,
    respectively(2)


270,229



270,610Fixed rate,
    Series A-C,
    ranging from 8.68% to 8.87%, due
    2006-2009(3)


184,000



184,000Fixed rate, 6.75% due 2014, net of
    unamortized discount of $700 and $791 at 2006 and 2005,
    respectively(4)


249,300



249,209Credit
    agreement, variable
    interest rates, expiring 2010


45,453



Notes
    payable, 7.4% and 7.2%
    weighted average interest rates in 2006 and 2005, respectively,
    due 2006 to 2016, net of unamortized discount of $1,436 and $747
    at 2006 and 2005, respectively


8,238



6,440Capital lease
    obligations


83



220998,303



951,479Less: current portion, included in
    other current liabilities on the consolidated balance sheets


14,758



2,502$
983,545


$
948,977     (1)
    
    The operating partnerships fixed rate senior notes, issued
    in August 1998, are general unsecured obligations of the
    operating partnership and rank on an equal basis in right of
    payment with all senior indebtedness of the operating
    partnership and are senior to all subordinated indebtedness of
    the operating partnership. The outstanding principal amount of
    the series B, C, D and E notes are due on August 1,
    2006, 2008, 2010, F-23




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and 2013, respectively. In general, the operating partnership
    does not have the option to prepay the notes prior to maturity
    without incurring prepayment penalties.(2)
    
    On September 24, 2002, Ferrellgas Partners issued
    $170.0 million of its fixed rate senior notes. On
    December 18, 2002, Ferrellgas Partners issued
    $48.0 million of its fixed rate senior notes with a debt
    premium of $1.7 million that will be amortized to interest
    expense through 2012. On June 10, 2004 Ferrellgas Partners
    issued $50.0 million of its fixed rate senior secured notes
    with a debt premium of $1.6 million that will be amortized
    to interest expense through 2012. The senior notes bear interest
    from the date of issuance, payable semi-annually in arrears on
    June 15 and December 15 of each year.(3)
    
    The operating partnerships fixed rate senior notes, issued
    in February 2000, are general unsecured obligations of the
    operating partnership and rank on an equal basis in right of
    payment with all senior indebtedness of the operating
    partnership and are senior to all subordinated indebtedness of
    the operating partnership. The outstanding principal amount of
    the series A, B and C notes are due on August 1, 2006,
    2007 and 2009, respectively. In general, the operating
    partnership does not have the option to prepay the notes prior
    to maturity without incurring prepayment penalties.(4)
    
    The operating partnerships fixed rate senior notes, issued
    in April 2004 are general unsecured obligations of the operating
    partnership and rank on an equal basis in right of payment with
    all senior indebtedness of the operating partnership and are
    senior to all subordinated indebtedness of the operating
    partnership. The outstanding principal amount is due on
    May 1, 2014. In general, the operating partnership does not
    have the option to prepay the notes prior to maturity without
    incurring prepayment penalties.      
    the base rate, which is defined as the higher of the federal
    funds rate plus 0.50% or Bank of Americas prime rate (as
    of July 31, 2006, the federal funds rate and Bank of
    Americas prime rate were 5.31% and 8.25%,
    respectively); or
    the Eurodollar Rate plus a margin varying from 1.50% to 2.50%
    (as of July 31, 2006, the one-month and three-month
    Eurodollar Rates were 5.37% and 5.45%).       F-24




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      ScheduledAnnualPrincipalFor the Year Ended July 31,

Payments2007

$
60,9162008


92,4482009


53,9112010


73,6372011


82,486Thereafter


634,812Total

$
998,210       K.
    Partners
    capital    2006


2005Third parties(1)


38,157,986



37,526,256Ferrell Companies


18,188,883



18,188,883FCI Trading


195,686



195,686Ferrell Propane, Inc.(2)


51,204



51,204James E. Ferrell(3)


4,292,025



4,172,025     (1)
    
    These common units are listed on the New York Stock Exchange
    under the symbol FGP.(2)
    
    Ferrell Propane, Inc. (Ferrell Propane) is
    controlled by the general partner.(3)
    
    James E. Ferrell (Mr. Ferrell) is the Chairman
    and Chief Executive Officer of the general partner.     F-25




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##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                L.
    Derivatives   F-26




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##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2006

2005Fair value adjustment classified
    as OCI

$
2,540


$
70Reclassification of net gains to
    statement of earnings

$
(484
)

$
(1,772
)     over-the-counter
    For the Year Ended July 31,2006


2005


2004Net fair value of contracts
    outstanding at the beginning of the period

$
116


$
424


$
(1,718
)Contracts outstanding at the
    beginning of the period that were realized or otherwise settled
    during the period


(116
)


(9,672
)


458Fair value of new contracts
    entered into during the period






9,364



1,684Unrealized gains in fair value of
    contracts outstanding at the end of the period

$



$
116


$
424  F-27




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##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     (In thousands)For the year ended July 31,
    2006


300For the year ended July 31,
    2005


10,717For the year ended July 31,
    2004


18,206   M.
    Transactions
    with related parties  Reimbursable
    costs
    For the Year Ended July 31,2006

2005

2004Reimbursable costs

$
227,404


$
231,635


$
211,502   Partnership
    distributions
      For the Year Ended July 31,2006


2005


2004Ferrell Companies

$
36,378


$
35,608


$
35,608FCI Trading


391



391



98Ferrell Propane


102



102



102Mr. Ferrell


8,464



419



162general partner


1,222



1,080



838       Operations
   F-28




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##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Year Ended July 31,2006

2005

2004Net receipts (disbursements)

$



$
(2,699
)

$
328Receipts from providing accounting
    services


37



40



40     brother-in-law
    N.
    Contingencies
    and commitments  Litigation
    Long-term
    debt-related commitments
    Operating
    lease commitments and buyouts
     F-29




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Future Minimum Rental and Buyout Amounts by Fiscal Year2007

2008

2009

2010

2011

ThereafterOperating lease obligations

$
33,390


$
27,809


$
19,280


$
12,606


$
7,585


$
16,666Operating lease buyouts

$
8,462


$
2,851


$
6,340


$
3,505


$
4,498


$
1,887     O.
    Employee
    benefits         F-30




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##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    P.
    Earnings
    per common unit    EITF 03-6, Earnings per
    Share, EITF 03-6 EITF 03-6
  year-to-date
  For the Year Ended July 31,2006


2005


2004Net earnings (loss) available to
    common unitholders before discontinued operations

$
24,759


$
(22,453
)

$
12,399Earnings from discontinued
    operations (including gain on sale in 2005 of $97,001), net of
    minority interest and general partner interest of $2,105 and
    $163 in 2005 and 2004, respectively






103,147



7,968Net earnings available to common
    unitholders

$
24,759


$
80,694


$
20,367Weighted average common units
    outstanding (in thousands)


60,459.5



53,945.4



41,419.2Basic and diluted earnings per
    common unit:Net earnings (loss) available to
    common unitholders before discontinued operations

$
0.41


$
(0.41
)

$
0.30Earnings from discontinued
    operations (including gain sale in 2005 of $97,001), net of
    minority interest and general partner interest of $2,105 and
    $163 in 2005 and 2004, respectively






1.91



0.19Net earnings available to common
    unitholders

$
0.41


$
1.50


$
0.49  F-31




---



##### Table of Contents



FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Q.
    Quarterly
    data (unaudited)  EITF 03-6
  First


Second


Third


FourthQuarter


Quarter


Quarter


QuarterFor the year ended July 31,
    2006Revenues

$
385,598


$
652,568


$
526,026


$
331,278Gross profit (exclusive of
    depreciation, shown with amortization)


127,596



220,839



194,343



121,065Net earnings (loss)


(25,768
)


58,064



30,941



(38,228
)Net earnings (loss) available to
    common unitholders


(25,510
)


51,459



30,632



(37,846
)Basic and diluted earnings (loss)
    per common unit available to common unitholders

$
(0.42
)

$
0.85


$
0.51


$
(0.62
)   First


Second


Third


FourthQuarter


Quarter


Quarter


QuarterFor the year ended July 31,
    2005Revenues

$
343,772


$
621,891


$
492,101


$
296,350Gross profit (exclusive of
    depreciation, shown with amortization)


112,540



217,267



177,750



106,259Earnings (loss) from continuing
    operations before discontinued operations


(36,774
)


53,522



18,267



(50,390
)Earnings from discontinued
    operations net of minority interest


1,785



3,596



1,781



97,027Net earnings (loss)


(34,989
)


57,118



20,048



46,637Net earnings (loss) available to
    common unitholders


(36,613
)


47,529



17,873



42,168Basic and diluted earnings (loss)
    per common unit:From continuing operations
    available to common unitholders

$
(0.74
)

$
0.81


$
0.30


$
(0.91
)From discontinued operations
    available to common unitholders


0.03



0.07



0.03



1.66Basic and diluted earnings (loss)
    per common unit available to common unitholders

$
(0.71
)

$
0.88


$
0.33


$
0.75   R.
    Subsequent
    events     F-32




---



##### Table of Contents

REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
































F-33



---



##### Table of Contents



FERRELLGAS
    PARTNERS FINANCE CORP.
    (a wholly-owned subsidiary of Ferrellgas Partners, L.P.)BALANCE SHEETS




|                                                                                                    |  |          |        |   |      |   |        |  
|--------------------------------------------------------------------------------------------------- |  | -------- | ------ | - | ---- | - | ------ | -
|                                                                                                    |  | July 31, |       
|                                                                                                    |  | 2006     |        |   | 2005 |  
|                                                                                                   
|ASSETS                                                                                             
|Cash                                                                                                |  | $        | 1,000  |   |      | $ | 1,000  |  
|                                                                                                    |  |          |        |   |      |   |        |  
|Total assets                                                                                        |  | $        | 1,000  |   |      | $ | 1,000  |  
|                                                                                                    |  |          |        |   |      |   |        |  
|                                                                                                   
|STOCKHOLDERS
    EQUITY                                                                           
|Common stock, $1.00 par
    value; 2,000 shares authorized; 1,000 shares issued
    and outstanding |  | $        | 1,000  |   |      | $ | 1,000  |  
|Additional paid in capital                                                                          |  |          | 3,713  |   |      |   | 3,282  |  
|Accumulated deficit                                                                                 |  |          | (3,713 | ) |      |   | (3,282 | )
|                                                                                                    |  |          |        |   |      |   |        |  
|Total stockholders
    equity                                                                      |  | $        | 1,000  |   |      | $ | 1,000  |  
|                                                                                                    |  |          |        |   |      |   |        |  







F-34



---



##### Table of Contents



FERRELLGAS
    PARTNERS FINANCE CORP.
    (a wholly-owned subsidiary of Ferrellgas Partners, L.P.)STATEMENTS OF EARNINGS




|                                   |  |                             |      |   |      |   |      |      |  |   |      |  
|---------------------------------- |  | --------------------------- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                   |  | For the Year Ended July 31, |     
|                                   |  | 2006                        |      |   | 2005 |   |      | 2004 | 
|                                  
|Revenues                           |  | $                           |     |   |      | $ |     |      |  | $ |     |  
|General and administrative expense |  |                             | 431  |   |      |   | 416  |      |  |   | 403  |  
|                                   |  |                             |      |   |      |   |      |      |  |   |      |  
|Net loss                           |  | $                           | (431 | ) |      | $ | (416 | )    |  | $ | (403 | )
|                                   |  |                             |      |   |      |   |      |      |  |   |      |  







F-35



---



##### Table of Contents



FERRELLGAS
    PARTNERS FINANCE CORP.
    (a wholly-owned subsidiary of Ferrellgas Partners, L.P.)STATEMENTS OF STOCKHOLDERS EQUITY




|                     |  |              |       |  |         |   |       |             |  |   |               |  |  |        |        |   |  |   |       |  
|-------------------- |  | ------------ | ----- |  | ------- | - | ----- | ----------- |  | - | ------------- |  |  | ------ | ------ | - |  | - | ----- | -
|                     |  |              |       |  |         |   |       | Additional  |  |   |               |  |  | Total  |       
|                     |  | Common Stock |       |  | Paid in |   |       | Accumulated |  |   | Stockholders | 
|                     |  | Shares       |       |  | Dollars |   |       | Capital     |  |   | Deficit       |  |  | Equity |       
|                    
|July 31, 2003        |  |              | 1,000 |  |         | $ | 1,000 |             |  | $ | 2,463         |  |  | $      | (2,463 | ) |  | $ | 1,000 |  
|Capital contribution |  |              |      |  |         |   |      |             |  |   | 403           |  |  |        |       |   |  |   | 403   |  
|Net loss             |  |              |      |  |         |   |      |             |  |   |              |  |  |        | (403   | ) |  |   | (403  | )
|                     |  |              |       |  |         |   |       |             |  |   |               |  |  |        |        |   |  |   |       |  
|July 31, 2004        |  |              | 1,000 |  |         |   | 1,000 |             |  |   | 2,866         |  |  |        | (2,866 | ) |  |   | 1,000 |  
|Capital contribution |  |              |      |  |         |   |      |             |  |   | 416           |  |  |        |       |   |  |   | 416   |  
|Net loss             |  |              |      |  |         |   |      |             |  |   |              |  |  |        | (416   | ) |  |   | (416  | )
|                     |  |              |       |  |         |   |       |             |  |   |               |  |  |        |        |   |  |   |       |  
|July 31, 2005        |  |              | 1,000 |  |         |   | 1,000 |             |  |   | 3,282         |  |  |        | (3,282 | ) |  |   | 1,000 |  
|Capital contribution |  |              |      |  |         |   |      |             |  |   | 431           |  |  |        |       |   |  |   | 431   |  
|Net loss             |  |              |      |  |         |   |      |             |  |   |              |  |  |        | (431   | ) |  |   | (431  | )
|                     |  |              |       |  |         |   |       |             |  |   |               |  |  |        |        |   |  |   |       |  
|July 31, 2006        |  |              | 1,000 |  |         | $ | 1,000 |             |  | $ | 3,713         |  |  | $      | (3,713 | ) |  | $ | 1,000 |  
|                     |  |              |       |  |         |   |       |             |  |   |               |  |  |        |        |   |  |   |       |  







F-36



---



##### Table of Contents



FERRELLGAS
    PARTNERS FINANCE CORP.
    (a wholly-owned subsidiary of Ferrellgas Partners, L.P.)STATEMENTS OF CASH FLOWS




|                                          |  |                             |       |   |      |   |       |      |  |   |       |  
|----------------------------------------- |  | --------------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                          |  | For the Year Ended July 31, |      
|                                          |  | 2006                        |       |   | 2005 |   |       | 2004 | 
|                                         
|Cash flows from operating
    activities: |  |                             |       |   |      |   |       |      |  |   |       |  
|Net loss                                  |  | $                           | (431  | ) |      | $ | (416  | )    |  | $ | (403  | )
|                                          |  |                             |       |   |      |   |       |      |  |   |       |  
|Cash used by operating activities         |  |                             | (431  | ) |      |   | (416  | )    |  |   | (403  | )
|                                          |  |                             |       |   |      |   |       |      |  |   |       |  
|Cash flows from financing
    activities: |  |                             |       |   |      |   |       |      |  |   |       |  
|Capital contribution                      |  |                             | 431   |   |      |   | 416   |      |  |   | 403   |  
|                                          |  |                             |       |   |      |   |       |      |  |   |       |  
|Cash provided by financing
    activities |  |                             | 431   |   |      |   | 416   |      |  |   | 403   |  
|                                          |  |                             |       |   |      |   |       |      |  |   |       |  
|Change in cash                            |  |                             |      |   |      |   |      |      |  |   |      |  
|Cash  beginning of year                  |  |                             | 1,000 |   |      |   | 1,000 |      |  |   | 1,000 |  
|                                          |  |                             |       |   |      |   |       |      |  |   |       |  
|Cash  end of
    year                    |  | $                           | 1,000 |   |      | $ | 1,000 |      |  | $ | 1,000 |  
|                                          |  |                             |       |   |      |   |       |      |  |   |       |  







F-37



---



##### Table of Contents



FERRELLGAS
    PARTNERS FINANCE CORP.
    (a wholly-owned subsidiary of Ferrellgas Partners, L.P.)NOTES TO FINANCIAL STATEMENTS
  A.
    Formation      B.
    Commitment  3 4 3 4
    C.
    Income
    taxes     F-38




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            Internal Control 
    Integrated Framework
  
    F-39




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES




CONSOLIDATED
    BALANCE SHEETS




|                                                                                                                                   |  |                |           |  |      |   |           |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | --------- |  | ---- | - | --------- | -
|                                                                                                                                   |  | July 31,       |          
|                                                                                                                                   |  | 2006           |           |  | 2005 |  
|                                                                                                                                   |  | (In thousands) |          
|                                                                                                                                  
|ASSETS                                                                                                                            
|Current assets:                                                                                                                    |  |                |           |  |      |   |           |  
|Cash and cash equivalents                                                                                                          |  | $              | 14,875    |  |      | $ | 20,191    |  
|Accounts and notes receivable (net
    of allowance for doubtful accounts of $5,628 and $3,764 in 2006
    and 2005, respectively) |  |                | 116,369   |  |      |   | 107,778   |  
|Inventories                                                                                                                        |  |                | 154,613   |  |      |   | 97,743    |  
|Prepaid expenses and other current
    assets                                                                                      |  |                | 14,664    |  |      |   | 12,121    |  
|                                                                                                                                   |  |                |           |  |      |   |           |  
|Total current assets                                                                                                               |  |                | 300,521   |  |      |   | 237,833   |  
|Property, plant and equipment, net                                                                                                 |  |                | 740,101   |  |      |   | 766,765   |  
|Goodwill                                                                                                                           |  |                | 246,050   |  |      |   | 234,142   |  
|Intangible assets, net                                                                                                             |  |                | 248,546   |  |      |   | 255,277   |  
|Other assets, net                                                                                                                  |  |                | 8,833     |  |      |   | 10,254    |  
|                                                                                                                                   |  |                |           |  |      |   |           |  
|Total assets                                                                                                                       |  | $              | 1,544,051 |  |      | $ | 1,504,271 |  
|                                                                                                                                   |  |                |           |  |      |   |           |  
|                                                                                                                                  
|LIABILITIES AND PARTNERS
    CAPITAL                                                                                             
|Current liabilities:                                                                                                               |  |                |           |  |      |   |           |  
|Accounts payable                                                                                                                   |  | $              | 128,049   |  |      | $ | 108,667   |  
|Short-term borrowings                                                                                                              |  |                | 52,647    |  |      |   | 19,800    |  
|Other current liabilities                                                                                                          |  |                | 90,951    |  |      |   | 68,288    |  
|                                                                                                                                   |  |                |           |  |      |   |           |  
|Total current
    liabilities                                                                                                      |  |                | 271,647   |  |      |   | 196,755   |  
|Long-term debt                                                                                                                     |  |                | 713,316   |  |      |   | 678,367   |  
|Other liabilities                                                                                                                  |  |                | 19,178    |  |      |   | 20,162    |  
|Contingencies and commitments
    (Note N)                                                                                         |  |                |          |  |      |   |          |  
|Partners
    capital                                                                                                              |  |                |           |  |      |   |           |  
|Limited partner                                                                                                                    |  |                | 533,095   |  |      |   | 603,448   |  
|General partner                                                                                                                    |  |                | 5,435     |  |      |   | 6,151     |  
|Accumulated other comprehensive
    income (loss)                                                                                  |  |                | 1,380     |  |      |   | (612      | )
|                                                                                                                                   |  |                |           |  |      |   |           |  
|Total partners
    capital                                                                                                        |  |                | 539,910   |  |      |   | 608,987   |  
|                                                                                                                                   |  |                |           |  |      |   |           |  
|Total liabilities and
    partners capital                                                                                        |  | $              | 1,544,051 |  |      | $ | 1,504,271 |  
|                                                                                                                                   |  |                |           |  |      |   |           |  







F-40



---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES




CONSOLIDATED
    STATEMENTS OF EARNINGS




|                                                                                        |  |                             |           |   |      |   |           |      |  |   |           |  
|--------------------------------------------------------------------------------------- |  | --------------------------- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|                                                                                        |  | For the Year Ended July 31, |          
|                                                                                        |  | 2006                        |           |   | 2005 |   |           | 2004 | 
|                                                                                        |  | (In thousands)              |          
|                                                                                       
|Revenues:                                                                               |  |                             |           |   |      |   |           |      |  |   |           |  
|Propane and other gas liquids sales                                                     |  | $                           | 1,697,940 |   |      | $ | 1,592,325 |      |  | $ | 1,210,564 |  
|Other                                                                                   |  |                             | 197,530   |   |      |   | 161,789   |      |  |   | 97,822    |  
|                                                                                        |  |                             |           |   |      |   |           |      |  |   |           |  
|Total revenues                                                                          |  |                             | 1,895,470 |   |      |   | 1,754,114 |      |  |   | 1,308,386 |  
|Cost of product sold (exclusive
    of depreciation, shown with amortization
    below) |  |                             |           |   |      |   |           |      |  |   |           |  
|Propane and other gas liquids sales                                                     |  |                             | 1,109,177 |   |      |   | 1,052,005 |      |  |   | 730,377   |  
|Other                                                                                   |  |                             | 122,450   |   |      |   | 88,293    |      |  |   | 36,027    |  
|                                                                                        |  |                             |           |   |      |   |           |      |  |   |           |  
|Gross profit                                                                            |  |                             | 663,843   |   |      |   | 613,816   |      |  |   | 541,982   |  
|Operating expense                                                                       |  |                             | 374,585   |   |      |   | 365,866   |      |  |   | 322,994   |  
|Depreciation and amortization
    expense                                               |  |                             | 84,953    |   |      |   | 83,060    |      |  |   | 56,111    |  
|General and administrative expense                                                      |  |                             | 47,689    |   |      |   | 42,342    |      |  |   | 34,532    |  
|Equipment lease expense                                                                 |  |                             | 27,320    |   |      |   | 25,495    |      |  |   | 19,652    |  
|Employee stock ownership plan
    compensation charge                                   |  |                             | 10,277    |   |      |   | 12,266    |      |  |   | 7,892     |  
|Loss on disposal of assets and
    other                                                |  |                             | 7,539     |   |      |   | 8,673     |      |  |   | 7,133     |  
|                                                                                        |  |                             |           |   |      |   |           |      |  |   |           |  
|Operating income                                                                        |  |                             | 111,480   |   |      |   | 76,114    |      |  |   | 93,668    |  
|Interest expense                                                                        |  |                             | (60,537   | ) |      |   | (67,430   | )    |  |   | (54,242   | )
|Interest income                                                                         |  |                             | 2,046     |   |      |   | 1,891     |      |  |   | 1,582     |  
|                                                                                        |  |                             |           |   |      |   |           |      |  |   |           |  
|Earnings before income taxes
    and discontinued operations                            |  |                             | 52,989    |   |      |   | 10,575    |      |  |   | 41,008    |  
|Income tax expense (benefit)                                                            |  |                             | 3,524     |   |      |   | 1,447     |      |  |   | (402      | )
|                                                                                        |  |                             |           |   |      |   |           |      |  |   |           |  
|Earnings from continuing
    operations before discontinued operations                  |  |                             | 49,465    |   |      |   | 9,128     |      |  |   | 41,410    |  
|Earnings from discontinued
    operations (including gain on sale in 2005 of $97,001)   |  |                             |          |   |      |   | 105,252   |      |  |   | 8,131     |  
|                                                                                        |  |                             |           |   |      |   |           |      |  |   |           |  
|Net earnings                                                                            |  | $                           | 49,465    |   |      | $ | 114,380   |      |  | $ | 49,541    |  
|                                                                                        |  |                             |           |   |      |   |           |      |  |   |           |  







F-41



---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES




CONSOLIDATED
    STATEMENTS OF PARTNERS CAPITAL




|                                                                                                                                  |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|--------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | -------- | - | ------- | - | ------ | --------------------------- |  | - | ----------- | - |  | --------- | --- | - | --------- | - | ------ | - |  | - | -------- | -
|                                                                                                                                  |  |                |          |   |         |   |        | Accumulated Other           |  |   |             |  
|                                                                                                                                  |  |                |          |   |         |   |        | Comprehensive Income (Loss) |  |   |             |  
|                                                                                                                                  |  |                |          |   |         |   |        |                             |  |   | Currency    |   |  |           |     |   | Total     |  
|                                                                                                                                  |  | Limited        |          |   | General |   |        | Risk                        |  |   | Translation |   |  | Pension   |     |   | Partners |  
|                                                                                                                                  |  | Partner        |          |   | Partner |   |        | Management                  |  |   | Adjustments |   |  | Liability |     |   | Capital   |  
|                                                                                                                                  |  | (In thousands) |         
|                                                                                                                                 
|July 31, 2003                                                                                                                     |  | $              | 231,420  |   |         | $ | 2,363  |                             |  | $ |            |   |  | $         |    |   |           | $ | (1,968 | ) |  | $ | 231,815  |  
|Contributions in connection with
    ESOP compensation charge                                                                     |  |                | 7,812    |   |         |   | 80     |                             |  |   |            |   |  |           |    |   |           |   |       |   |  |   | 7,892    |  
|Quarterly distributions                                                                                                           |  |                | (110,958 | ) |         |   | (1,133 | )                           |  |   |            |   |  |           |    |   |           |   |       |   |  |   | (112,091 | )
|Cash contributed by Ferrellgas
    Partners and the general partner                                                               |  |                | 88,937   |   |         |   | 907    |                             |  |   |            |   |  |           |    |   |           |   |       |   |  |   | 89,844   |  
|Net assets contributed by
    Ferrellgas Partners and the general partner in connection with
    acquisitions                     |  |                | 203,794  |   |         |   | 2,074  |                             |  |   |            |   |  |           |    |   |           |   |       |   |  |   | 205,868  |  
|Comprehensive income:                                                                                                             |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|Net earnings                                                                                                                      |  |                | 49,041   |   |         |   | 500    |                             |  |   |            |   |  |           |    |   |           |   |       |   |  |   | 49,541   |  
|Other comprehensive income:                                                                                                       |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|Net earnings on risk management
    derivatives                                                                                   |  |                |         |   |         |   |       |                             |  |   | 1,911       |   |  |           |    |   |           |   |       |   |  |   |          |  
|Reclassification of derivatives to
    earnings                                                                                   |  |                |         |   |         |   |       |                             |  |   | (139        | ) |  |           |    |   |           |   |       |   |  |   |          |  
|Foreign currency translation
    adjustments                                                                                      |  |                |          |   |         |   |        |                             |  |   |             |   |  |           | 16  |   |           |   |        |   |  |   |          |  
|Pension liability adjustment                                                                                                      |  |                |         |   |         |   |       |                             |  |   |            |   |  |           |    |   |           |   | 910    |   |  |   | 2,698    |  
|                                                                                                                                  |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|Comprehensive income                                                                                                              |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   | 52,239   |  
|                                                                                                                                  |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|July 31, 2004                                                                                                                     |  |                | 470,046  |   |         |   | 4,791  |                             |  |   | 1,772       |   |  |           | 16  |   |           |   | (1,058 | ) |  |   | 475,567  |  
|Contributions in connection with
    ESOP compensation charge                                                                     |  |                | 12,142   |   |         |   | 124    |                             |  |   |            |   |  |           |    |   |           |   |       |   |  |   | 12,266   |  
|Quarterly distributions                                                                                                           |  |                | (137,643 | ) |         |   | (1,406 | )                           |  |   |            |   |  |           |    |   |           |   |       |   |  |   | (139,049 | )
|Cash contributed by Ferrellgas
    Partners and the general partner                                                               |  |                | 138,540  |   |         |   | 1,413  |                             |  |   |            |   |  |           |    |   |           |   |       |   |  |   | 139,953  |  
|Net assets contributed by
    Ferrellgas Partners and the general partner in connection with
    acquisitions                     |  |                | 7,138    |   |         |   | 74     |                             |  |   |            |   |  |           |    |   |           |   |       |   |  |   | 7,212    |  
|Comprehensive income (loss):                                                                                                      |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|Net earnings                                                                                                                      |  |                | 113,225  |   |         |   | 1,155  |                             |  |   |            |   |  |           |    |   |           |   |       |   |  |   | 114,380  |  
|Other comprehensive income (loss):                                                                                                |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|Net earnings on risk management
    derivatives                                                                                   |  |                |         |   |         |   |       |                             |  |   | 70          |   |  |           |    |   |           |   |       |   |  |   |          |  
|Reclassification of derivatives to
    earnings                                                                                   |  |                |         |   |         |   |       |                             |  |   | (1,772      | ) |  |           |    |   |           |   |       |   |  |   |          |  
|Foreign currency translation
    adjustments                                                                                      |  |                |          |   |         |   |        |                             |  |   |             |   |  |           | 49  |   |           |   |        |   |  |   |          |  
|Pension liability adjustment                                                                                                      |  |                |         |   |         |   |       |                             |  |   |            |   |  |           |    |   |           |   | 311    |   |  |   | (1,342   | )
|                                                                                                                                  |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|Comprehensive income                                                                                                              |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   | 113,038  |  
|                                                                                                                                  |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|July 31, 2005                                                                                                                     |  |                | 603,448  |   |         |   | 6,151  |                             |  |   | 70          |   |  |           | 65  |   |           |   | (747   | ) |  |   | 608,987  |  
|Contributions in connection with
    ESOP and stock-based compensation charges                                                    |  |                | 12,016   |   |         |   | 124    |                             |  |   |            |   |  |           |    |   |           |   |       |   |  |   | 12,140   |  
|Quarterly distributions                                                                                                           |  |                | (145,938 | ) |         |   | (1,489 | )                           |  |   |            |   |  |           |    |   |           |   |       |   |  |   | (147,427 | )
|Cash contributed by Ferrellgas
    Partners and the general partner                                                               |  |                | 1,538    |   |         |   | 16     |                             |  |   |            |   |  |           |    |   |           |   |       |   |  |   | 1,554    |  
|Net assets contributed by
    Ferrellgas Partners and cash contributed by the general partner
    in connection with acquisitions |  |                | 13,066   |   |         |   | 133    |                             |  |   |            |   |  |           |    |   |           |   |       |   |  |   | 13,199   |  
|Comprehensive income (loss):                                                                                                      |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|Net earnings                                                                                                                      |  |                | 48,965   |   |         |   | 500    |                             |  |   |            |   |  |           |    |   |           |   |       |   |  |   | 49,465   |  
|Other comprehensive income (loss):                                                                                                |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|Net earnings on risk management
    derivatives                                                                                   |  |                |         |   |         |   |       |                             |  |   | 2,540       |   |  |           |    |   |           |   |       |   |  |   |          |  
|Reclassification of derivatives to
    earnings                                                                                   |  |                |         |   |         |   |       |                             |  |   | (484        | ) |  |           |    |   |           |   |       |   |  |   |          |  
|Foreign currency translation
    adjustments                                                                                      |  |                |         |   |         |   |       |                             |  |   |            |   |  |           | (29 | ) |           |   |       |   |  |   |          |  
|Tax effect on foreign currency
    translation adjustments                                                                        |  |                |          |   |         |   |        |                             |  |   |             |   |  |           | (15 | ) |           |   |        |   |  |   |          |  
|Pension liability adjustment                                                                                                      |  |                |         |   |         |   |       |                             |  |   |            |   |  |           |    |   |           |   | (20    | ) |  |   | 1,992    |  
|                                                                                                                                  |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|Comprehensive income                                                                                                              |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   | 51,457   |  
|                                                                                                                                  |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  
|July 31, 2006                                                                                                                     |  | $              | 533,095  |   |         | $ | 5,435  |                             |  | $ | 2,126       |   |  | $         | 21  |   |           | $ | (767   | ) |  | $ | 539,910  |  
|                                                                                                                                  |  |                |          |   |         |   |        |                             |  |   |             |   |  |           |     |   |           |   |        |   |  |   |          |  







F-42



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##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES




CONSOLIDATED
    STATEMENTS OF CASH FLOWS




|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|---------------------------------------------------------------------------------------------------- |  | --------------------------- | ---------- | - | ---- | - | ---------- | ---- |  | - | -------- | -
|                                                                                                     |  | For the Year Ended July 31, |           
|                                                                                                     |  | 2006                        |            |   | 2005 |   |            | 2004 | 
|                                                                                                     |  | (In thousands)              |           
|                                                                                                    
|Cash flows from operating
    activities:                                                            |  |                             |            |   |      |   |            |      |  |   |          |  
|Net earnings                                                                                         |  | $                           | 49,465     |   |      | $ | 114,380    |      |  | $ | 49,541   |  
|Reconciliation of net earnings to
    net cash provided by operating activities:                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Depreciation and amortization
    expense                                                            |  |                             | 84,953     |   |      |   | 84,249     |      |  |   | 57,115   |  
|Employee stock ownership plan
    compensation charge                                                |  |                             | 10,277     |   |      |   | 12,266     |      |  |   | 7,892    |  
|Stock-based compensation charge                                                                      |  |                             | 1,863      |   |      |   |           |      |  |   |         |  
|Loss (gain) on disposal of assets
    and discontinued operations                                    |  |                             | 1,188      |   |      |   | (91,494    | )    |  |   | 6,120    |  
|Loss on transfer of accounts
    receivable related to the accounts receivable securitization        |  |                             | 10,075     |   |      |   | 5,894      |      |  |   | 2,454    |  
|Other                                                                                                |  |                             | 6,204      |   |      |   | 1,130      |      |  |   | 5,459    |  
|Changes in operating assets and
    liabilities, net of effects from business acquisitions:          |  |                             |            |   |      |   |            |      |  |   |          |  
|Accounts and notes receivable, net
    of securitization                                             |  |                             | (20,412    | ) |      |   | (43,246    | )    |  |   | (24,943  | )
|Inventories                                                                                          |  |                             | (57,334    | ) |      |   | (2,421     | )    |  |   | (5,264   | )
|Prepaid expenses and other current
    assets                                                        |  |                             | (2,293     | ) |      |   | (2,443     | )    |  |   | (102     | )
|Accounts payable                                                                                     |  |                             | 19,621     |   |      |   | 4,505      |      |  |   | 17,227   |  
|Accrued interest expense                                                                             |  |                             | 472        |   |      |   | (4,662     | )    |  |   | 4,868    |  
|Other current liabilities                                                                            |  |                             | 7,610      |   |      |   | (4,963     | )    |  |   | (12,928  | )
|Other liabilities                                                                                    |  |                             | 1,061      |   |      |   | 323        |      |  |   | 890      |  
|Accounts receivable securitization:                                                                  |  |                             |            |   |      |   |            |      |  |   |          |  
|Proceeds from new accounts
    receivable securitizations                                            |  |                             | 107,000    |   |      |   | 114,400    |      |  |   | 30,000   |  
|Proceeds from collections
    reinvested in revolving period accounts receivable
    securitizations |  |                             | 1,184,987  |   |      |   | 981,256    |      |  |   | 627,389  |  
|Remittances of amounts collected as
    servicer of accounts receivable securitizations              |  |                             | (1,287,987 | ) |      |   | (1,051,356 | )    |  |   | (669,689 | )
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Net cash provided by operating
    activities                                                        |  |                             | 116,750    |   |      |   | 117,818    |      |  |   | 96,029   |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Cash flows from investing
    activities:                                                            |  |                             |            |   |      |   |            |      |  |   |          |  
|Cash paid for assumed merger and
    related obligations                                             |  |                             |           |   |      |   |           |      |  |   | (343,414 | )
|Business acquisitions, net of cash
    acquired                                                      |  |                             | (21,342    | ) |      |   | (23,779    | )    |  |   | (40,960  | )
|Cash paid for acquisition
    transaction fees                                                       |  |                             |           |   |      |   |           |      |  |   | (1,476   | )
|Capital expenditures 
    technology initiative                                                     |  |                             | (915       | ) |      |   | (10,466    | )    |  |   | (8,688   | )
|Capital expenditures 
    other                                                                     |  |                             | (42,451    | ) |      |   | (42,348    | )    |  |   | (32,692  | )
|Proceeds from sale of discontinued
    operations                                                    |  |                             |           |   |      |   | 144,000    |      |  |   |         |  
|Proceeds from asset sales                                                                            |  |                             | 18,950     |   |      |   | 11,948     |      |  |   | 5,766    |  
|Other                                                                                                |  |                             | (5,656     | ) |      |   | (2,891     | )    |  |   | (4,023   | )
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Net cash provided by (used in)
    investing activities                                              |  |                             | (51,414    | ) |      |   | 76,464     |      |  |   | (425,487 | )
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Cash flows from financing
    activities:                                                            |  |                             |            |   |      |   |            |      |  |   |          |  
|Distributions                                                                                        |  |                             | (147,427   | ) |      |   | (141,084   | )    |  |   | (112,092 | )
|Contributions from partners                                                                          |  |                             | 1,554      |   |      |   | 140,026    |      |  |   | 282,374  |  
|Proceeds from increase in long-term
    debt                                                         |  |                             | 45,453     |   |      |   |           |      |  |   | 262,423  |  
|Reductions in long-term debt                                                                         |  |                             | (3,050     | ) |      |   | (205,354   | )    |  |   | (50,256  | )
|Net additions (reductions) to
    short-term borrowings                                              |  |                             | 32,847     |   |      |   | 19,800     |      |  |   | (43,719  | )
|Cash paid for financing costs                                                                        |  |                             |           |   |      |   | (1,323     | )    |  |   | (6,353   | )
|Other                                                                                                |  |                             |           |   |      |   | 44         |      |  |   |         |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Net cash provided by (used in)
    financing activities                                              |  |                             | (70,623    | ) |      |   | (187,891   | )    |  |   | 332,377  |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Effect of exchange rate changes
    on cash                                                          |  |                             | (29        | ) |      |   | 49         |      |  |   | 16       |  
|Increase (decrease) in cash and
    cash equivalents                                                 |  |                             | (5,316     | ) |      |   | 6,440      |      |  |   | 2,935    |  
|Cash and cash
    equivalents  beginning of period                                                  |  |                             | 20,191     |   |      |   | 13,751     |      |  |   | 10,816   |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Cash and cash
    equivalents  end of period                                                        |  | $                           | 14,875     |   |      | $ | 20,191     |      |  | $ | 13,751   |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Supplemental disclosures of cash
    flow information:                                               |  |                             |            |   |      |   |            |      |  |   |          |  
|Cash paid for:                                                                                       |  |                             |            |   |      |   |            |      |  |   |          |  
|Interest                                                                                             |  | $                           | 58,141     |   |      | $ | 69,847     |      |  | $ | 47,325   |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  
|Income taxes                                                                                         |  | $                           | 990        |   |      | $ | 1,359      |      |  | $ |         |  
|                                                                                                     |  |                             |            |   |      |   |            |      |  |   |          |  







F-43



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##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS


(Dollars in thousands, unless otherwise designated)




|   |                                           
|-- | ------------------------------------------
|A. | Partnership
    organization and formation















|   |                                               
|-- | ----------------------------------------------
|B. | Summary
    of significant accounting policies



Nature of operations:




Accounting estimates:




Principles of consolidation:




Cash and cash equivalents and non-cash
    activities:


F-44



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##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Inventories:
  Accounts receivable
    securitization:
    Property, plant and
    equipment:
  Goodwill:
  Intangible assets:
  Derivatives and Hedging
    Activities:
 F-45




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##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Revenue recognition:
  Shipping and handling
    expenses:
  Cost of product sold:
  Operating expenses:
  General and administrative
    expenses:
  Income taxes:
  Sales taxes:
 F-46




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##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Segment information:
  New accounting standards:
    instrument-by-instrument
    EITF 04-13, EITF 04-3 EITF 04-13 EITF 04-13
    Reclassifications:
  C.
    Unit
    and stock-based compensation   F-47




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##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     For the YearEnded July 31,2006Operating expense

$
438General and administrative expense


1,425$
1,863       For the YearEnded July 31,2005


2004Net earnings, as reported

$
114,380


$
49,541Deduct: Total stock-based employee
    compensation expense determined under fair value based method
    for all awards


(250
)


(1,133
)Pro forma net earnings

$
114,130


$
48,408   Ferrellgas
    Unit Option Plan (UOP)
   F-48




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##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Ferrell
    Companies, Inc. Incentive Compensation Plan
    (ICP)
    D.
    Business
    combinations      
    Norwest Propane, Inc., based in Washington, acquired September
    2005;
    Eastern Fuels, Inc., based in North Carolina, acquired November
    2005;
    Petro Star, Corp., based in New York, acquired December 2005;
    Titan Propane, LLC (selected cylinder exchange assets), based in
    New York and New Jersey, acquired February 2006;
    Empire Propane Cylinder, Inc., based in New York, acquired in
    February 2006;
    United Energy, Inc., based in Ohio, acquired March 2006;
    Cals Propane Service, Inc., based in Oregon, acquired
    April 2006;
    Gaines Propane, Inc., based in Tennessee, acquired April 2006;
    Hometown Gas, Inc., based in Florida, acquired April 2006;
    Denman Cylinder Exchange, Ltd. and The Denman Company, Ltd.
    based in Texas, acquired May 2006; and
    Hampton Gas Company, Inc., based in South Carolina, acquired May
    2006.   F-49




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##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Current assets

$
689Customer tanks, buildings and land


9,640Non-compete agreements


5,598Customer lists


9,586Goodwill


13,218Other assets


15$
38,746       
    Kamps Propane, Inc. (selected cylinder exchange assets),
    based in California, acquired August 2004;
    Suburban Propanes Upper Midwest Retail Operations, based
    in Minnesota, North Dakota and Wisconsin, acquired September
    2004;
    Basin Propane, based in Washington, acquired September 2004;
    Econogas Service, Inc., based in Iowa, acquired September 2004;
    Land Propane Gas Service, based in Kentucky, acquired September
    2004;
    Parsons Gas & Appliance, Inc., Parsons Gas, Inc., and
    Daves Gas, Inc., based in Kentucky, acquired December
    2004; and
    Commercial Propane Corporation, based in Wisconsin, acquired
    January 2005.      Customer tanks, buildings and land

$
12,358Non-compete agreements


2,914Customer lists


12,690Goodwill


4,016Other assets


453Current liabilities


(749
)$
31,682       
    Chapmans Propane Co., Inc., based in Illinois, acquired
    August 2003;
    Buds Propane Service, Inc., based in Oregon, acquired
    September 2003; F-50




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    Prairie Land Coop, based in Iowa, acquired October 2003;
    Aeropres Propane, Inc., based in Louisiana and Arkansas,
    acquired December 2003;
    Suburban Propanes Midwest Retail Operations, based in
    Texas, Oklahoma, Missouri and Kansas, acquired January 2004;
    Crows LP Gas Co., based in Iowa, acquired March 2004;
    Hilltop Supply Company, based in Southern California, acquired
    March 2004;
    Blue Ribbon Propane, based in Canada, acquired May 2004;
    C. Barron & Sons, Inc., based in Michigan,
    acquired June 2004; and
    Tri-Counties Gas Companies, based in Northern California,
    acquired July 2004.      Customer tanks, buildings and land

$
24,576Non-compete agreements


4,306Customer lists


14,183Goodwill


244Other


(16
)$
43,293     Blue
    Rhino contribution
      Assumption of obligations under
    the contribution agreement

$
343,414Common units and general partner
    interest issued


11,850Assumption of Blue Rhinos
    bank credit facility outstanding balance


43,719Assumption of other liabilities
    and acquisition costs


19,394$
418,377  F-51




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             Current assets

$
53,912Customer tanks, buildings and land


96,160Trademarks and tradenames


59,000Non-compete agreements


3,300Customer lists


95,500Goodwill


136,408Other intangibles


5,300Other assets


1,375Current liabilities


(32,578
)$
418,377        F-52




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Results
    of operations
    For the YearEnded July 31,2004Revenues

$
1,470,529Earnings before discontinued
    operations

$
25,663Net earnings

$
33,794   E.
    Discontinued
    operations  pipeline-to-truck
    For the Year Ended July 31,2006


2005


2004Total revenues

$



$
89,339


$
70,995Cost of product sold (exclusive of
    depreciation, shown with amortization below):Propane and other gas liquids sales






77,407



59,441Gross profit






11,932



11,554Operating expense






2,506



2,362Depreciation and amortization
    expense






1,189



1,004Equipment lease expense






22



22Loss on disposal of assets and
    other






(36
)


35Earnings before income taxes and
    discontinued operations






8,251



8,131Gain on sale of discontinued
    operations






97,001



Earnings from discontinued
    operations

$



$
105,252


$
8,131     F.
    Quarterly
    distributions of available cash   F-53




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      G.
    Supplemental
    financial statement information    2006


2005Propane gas and related products

$
130,644


$
70,380Appliances, parts and supplies


23,969



27,363$
154,613


$
97,743       EstimatedUseful Lives

2006


2005Land

Indefinite

$
31,963


$
32,619Land improvements

2-20


10,313



10,139Buildings and improvements

20


60,548



61,192Vehicles, including transport
    trailers

8-20


86,787



90,215Bulk equipment and district
    facilities

5-30


95,986



96,047Tanks and customer equipment

2-30


756,134



743,067Computer and office equipment

2-5


108,102



104,773Construction in progress

n/a


6,608



8,1361,156,441



1,146,188Less: accumulated depreciation




416,340



379,423$
740,101


$
766,765    F-54




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006


2005Accrued interest

$
21,804


$
21,332Accrued payroll


18,724



13,816Accrued insurance


10,062



8,627Current portion of long-term debt


14,758



2,502Other


25,603



22,011$
90,951


$
68,288     For the Year Ended July 31,2006


2005


2004Loss on disposal of assets

$
1,188


$
5,543


$
6,085Loss on transfer of accounts
    receivable related to the accounts receivable securitization


10,075



5,894



2,454Service income related to the
    accounts receivable securitization


(3,724
)


(2,764
)


(1,406
)Loss on disposal of assets and
    other

$
7,539


$
8,673


$
7,133     For the Year Ended July 31,2006


2005


2004Operating expense

$
148,125


$
156,072


$
136,768Depreciation and amortization
    expense


5,837



6,427



6,396Equipment lease expense


24,356



23,313



15,232$
178,318


$
185,812


$
158,396   H.
    Accounts
    receivable securitization  364-day 364-day
   F-55




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006

2005Retained interest

$
16,373


$
15,710Accounts receivable transferred

$
87,500


$
82,500       For the Year Ended July 31,2006

2005

2004Net non-cash activity

$
2,579


$
1,101


$
664Bad debt expense

$
618


$
466


$
289     I.
    Goodwill
    and intangible assets, net    July 31, 2006


July 31, 2005Gross








GrossCarrying


Accumulated





Carrying


AccumulatedAmount


Amortization


Net


Amount


Amortization


NetGOODWILL, NET

$
246,050






$
246,050


$
234,142






$
234,142INTANGIBLE ASSETS, NETAmortized intangible assetsCustomer lists

$
345,103


$
(171,721
)

$
173,382


$
335,557


$
(155,281
)

$
180,276Non-compete agreements


40,921



(27,605
)


13,316



34,270



(21,803
)


12,467Other


5,340



(2,590
)


2,750



5,470



(2,010
)


3,460391,364



(201,916
)


189,448



375,297



(179,094
)


196,203Unamortized intangible assetsTradenames & trademarks


59,098







59,098



59,074







59,074Total intangible assets, net

$
450,462


$
(201,916
)

$
248,546


$
434,371


$
(179,094
)

$
255,277      F-56




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Aggregate amortization expense:
  For the Year Ended July 31,2006

$
22,2562005


22,9872004


15,893   Estimated amortization expense:
  For the Year Ended July 31,2007

$
21,5792008


19,6492009


18,6212010


17,5472011


17,386   J.
    Long-term
    debt    2005


2005Senior notesFixed rate,
    Series B-E,
    ranging from 7.08% to 7.42%, due
    2006-2013(1)

$
241,000


$
241,000Fixed rate,
    Series A-C,
    ranging from 8.68% to 8.87%, due
    2006-2009(2)


184,000



184,000Fixed rate, 6.75% due 2014, net of
    unamortized discount of $700 and $791 at 2006 and 2005,
    respectively(3)


249,300



249,209Credit
    agreement, variable
    interest rates, expiring 2010


45,453



Notes
    payable, 7.4% and 7.2%
    weighted average interest rates in 2006 and 2005, respectively,
    due 2006 to 2016, net of unamortized discount of $1,436 and $747
    at 2006 and 2005, respectively


8,238



6,440Capital lease
    obligations


83



220728,074



680,869Less: current portion, included in
    other current liabilities on the consolidated balance sheets


14,758



2,502$
713,316


$
678,367     (1)
    
    Ferrellgas, L.P.s fixed rate senior notes, issued in
    August 1998, are general unsecured obligations of Ferrellgas,
    L.P. and rank on an equal basis in right of payment with all
    senior indebtedness of Ferrellgas, L.P. and senior to all
    subordinated indebtedness of Ferrellgas, L.P. The outstanding
    principal amount of the series B, C, D and E notes are due
    on August 1, 2006, 2008, 2010, and 2013, respectively. In
    general, Ferrellgas, L.P. does not have the option to prepay the
    notes prior to maturity without incurring prepayment penalties.(2)
    
    Ferrellgas, L.P.s fixed rate senior notes, issued in
    February 2000, are general unsecured obligations of Ferrellgas,
    L.P. and rank on an equal basis in right of payment with all
    senior indebtedness of Ferrellgas, L.P. F-57




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and senior to all subordinated indebtedness of Ferrellgas, L.P.
    The outstanding principal amount of the series A, B and C
    notes are due on August 1, 2006, 2007 and 2009,
    respectively. In general, Ferrellgas, L.P. does not have the
    option to prepay the notes prior to maturity without incurring
    prepayment penalties.(3)
    
    Ferrellgas, L.P.s fixed rate senior notes, issued in April
    2004 are general unsecured obligations of the Ferrellgas, L.P.
    and rank on an equal basis in right of payment with all senior
    indebtedness of Ferrellgas, L.P. and senior to all subordinated
    indebtedness of Ferrellgas, L.P. The outstanding principal
    amount is due on May 1, 2014. In general, the Ferrellgas,
    L.P. does not have the option to prepay the notes prior to
    maturity without incurring prepayment penalties.      
    the base rate, which is defined as the higher of the federal
    funds rate plus 0.50% or Bank of Americas prime rate (as
    of July 31, 2006, the federal funds rate and Bank of
    Americas prime rate were 5.31% and 8.25%,
    respectively); or
    the Eurodollar Rate plus a margin varying from 1.50% to 2.50%
    (as of July 31, 2006, the one-month and three-month
    Eurodollar Rates were 5.37% and 5.45%, respectively).       F-58




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     ScheduledAnnual PrincipalFor the Year Ended July 31,

Payments2007

$
60,9162008


92,4482009


53,9112010


73,6372011


82,486Thereafter


366,812Total

$
730,210       K.
    Partners
    capital        L.
    Derivatives   F-59




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006

2005Fair value adjustment classified
    as OCI

$
2,540


$
70Reclassification of net gains to
    statement of earnings

$
(484
)

$
(1,772
)     over-the-counter
    For the Year Ended July 31,2006


2005


2004Net fair value of contracts
    outstanding at the beginning of the period

$
116


$
424


$
(1,718
)Contracts outstanding at the
    beginning of the period that were realized or otherwise settled
    during the period


(116
)


(9,672
)


458Fair value of new contracts
    entered into during the period






9,364



1,684Unrealized gains in fair value of
    contracts at the end of the period

$



$
116


$
424  F-60




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     (In thousands)For the year ended July 31,
    2006


300For the year ended July 31,
    2005


10,717For the year ended July 31,
    2004


18,206   M.
    Transactions
    with related parties  Reimbursable
    costs
    For the Year Ended July 31,2006

2005

2004Reimbursable costs

$
227,404


$
231,635


$
211,502   Partnership
    distributions paid
  For the Year Ended July 31,2006

2005

2004Ferrellgas Partners

$
145,938


$
139,659


$
110,959general partner

$
1,489


$
1,425


$
1,133     Operations
    For the Year Ended July 31,2006

2005

2004Net receipts (disbursements)

$



$
(2,699
)

$
328Receipts from providing accounting
    services


37



40



40    F-61




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   brother-in-law
    N.
    Contingencies
    and commitments  Litigation
    Long-term
    debt-related commitments
    Operating
    lease commitments and buyouts
       F-62




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Future Minimum Rental and Buyout Amounts by Fiscal Year2007

2008

2009

2010

2011

ThereafterOperating lease obligations

$
33,390


$
27,809


$
19,280


$
12,606


$
7,585


$
16,666Operating lease buyouts

$
8,462


$
2,851


$
6,340


$
3,505


$
4,498


$
1,887     O.
    Employee
    benefits          P.
    Quarterly
    data (unaudited)   F-63




---



##### Table of Contents



FERRELLGAS,
    L.P. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    For the Year Ended July 31, 2006First


Second


Third


FourthQuarter


Quarter


Quarter


QuarterRevenues

$
385,598


$
652,568


$
526,026



331,278Gross profit (exclusive of
    depreciation, shown with amortization)


127,596



220,839



194,343



121,065Net earnings (loss)


(19,982
)


64,702



37,306



(32,561
)   For the Year Ended July 31, 2005First


Second


Third


FourthQuarter


Quarter


Quarter


QuarterRevenues

$
343,772


$
621,891


$
492,101


$
296,350Gross profit (exclusive of
    depreciation, shown with amortization)


112,540



217,267



177,750



106,259Earnings (loss) from continuing
    operations before discontinued operations


(31,022
)


60,263



24,595



(44,708
)Earnings from discontinued
    operations (including gain on sale of $97,001)


1,803



3,633



1,799



98,017Net earnings (loss)


(29,219
)


63,896



26,394



53,309   Q.
    Subsequent
    events     F-64




---



##### Table of Contents

REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
































F-65



---



##### Table of Contents



FERRELLGAS
    FINANCE CORP.
    (a wholly-owned subsidiary of Ferrellgas, L.P.)BALANCE SHEETS




|                                                                                                    |  |          |        |   |      |   |        |  
|--------------------------------------------------------------------------------------------------- |  | -------- | ------ | - | ---- | - | ------ | -
|                                                                                                    |  | July 31, |       
|                                                                                                    |  | 2006     |        |   | 2005 |  
|                                                                                                   
|ASSETS                                                                                             
|Cash                                                                                                |  | $        | 1,000  |   |      | $ | 1,000  |  
|                                                                                                    |  |          |        |   |      |   |        |  
|Total assets                                                                                        |  | $        | 1,000  |   |      | $ | 1,000  |  
|                                                                                                    |  |          |        |   |      |   |        |  
|                                                                                                    |  |          |        |   |      |   |        |  
|                                                                                                    |  |          |        |   |      |   |        |  
|                                                                                                   
|STOCKHOLDERS
    EQUITY                                                                           
|Common stock, $1.00 par
    value; 2,000 shares authorized; 1,000 shares issued
    and outstanding |  | $        | 1,000  |   |      | $ | 1,000  |  
|Additional paid in capital                                                                          |  |          | 1,776  |   |      |   | 1,345  |  
|Accumulated deficit                                                                                 |  |          | (1,776 | ) |      |   | (1,345 | )
|                                                                                                    |  |          |        |   |      |   |        |  
|Total stockholders
    equity                                                                      |  | $        | 1,000  |   |      | $ | 1,000  |  
|                                                                                                    |  |          |        |   |      |   |        |  







F-66



---



##### Table of Contents



FERRELLGAS
    FINANCE CORP.
    (a wholly-owned subsidiary of Ferrellgas, L.P.)STATEMENTS OF EARNINGS




|                                   |  |                             |      |   |      |   |      |      |  |   |      |  
|---------------------------------- |  | --------------------------- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                   |  | For the Year Ended July 31, |     
|                                   |  | 2006                        |      |   | 2005 |   |      | 2004 | 
|                                  
|Revenues                           |  | $                           |     |   |      | $ |     |      |  | $ |     |  
|General and administrative expense |  |                             | 431  |   |      |   | 416  |      |  |   | 414  |  
|                                   |  |                             |      |   |      |   |      |      |  |   |      |  
|Net loss                           |  | $                           | (431 | ) |      | $ | (416 | )    |  | $ | (414 | )
|                                   |  |                             |      |   |      |   |      |      |  |   |      |  







F-67



---



##### Table of Contents



FERRELLGAS
    FINANCE CORP.
    (a wholly-owned subsidiary of Ferrellgas, L.P.)STATEMENTS OF STOCKHOLDERS EQUITY




|                     |  |              |       |  |         |   |       |             |  |   |               |  |  |        |        |   |  |   |       |  
|-------------------- |  | ------------ | ----- |  | ------- | - | ----- | ----------- |  | - | ------------- |  |  | ------ | ------ | - |  | - | ----- | -
|                     |  |              |       |  |         |   |       | Additional  |  |   |               |  |  | Total  |       
|                     |  | Common Stock |       |  | Paid in |   |       | Accumulated |  |   | Stockholders | 
|                     |  | Shares       |       |  | Dollars |   |       | Capital     |  |   | Deficit       |  |  | Equity |       
|                    
|July 31, 2003        |  |              | 1,000 |  |         | $ | 1,000 |             |  | $ | 515           |  |  | $      | (515   | ) |  | $ | 1,000 |  
|Capital contribution |  |              |      |  |         |   |      |             |  |   | 414           |  |  |        |       |   |  |   | 414   |  
|Net loss             |  |              |      |  |         |   |      |             |  |   |              |  |  |        | (414   | ) |  |   | (414  | )
|                     |  |              |       |  |         |   |       |             |  |   |               |  |  |        |        |   |  |   |       |  
|July 31, 2004        |  |              | 1,000 |  |         |   | 1,000 |             |  |   | 929           |  |  |        | (929   | ) |  |   | 1,000 |  
|Capital contribution |  |              |      |  |         |   |      |             |  |   | 416           |  |  |        |       |   |  |   | 416   |  
|Net loss             |  |              |      |  |         |   |      |             |  |   |              |  |  |        | (416   | ) |  |   | (416  | )
|                     |  |              |       |  |         |   |       |             |  |   |               |  |  |        |        |   |  |   |       |  
|July 31, 2005        |  |              | 1,000 |  |         |   | 1,000 |             |  |   | 1,345         |  |  |        | (1,345 | ) |  | $ | 1,000 |  
|Capital contribution |  |              |      |  |         |   |      |             |  |   | 431           |  |  |        |       |   |  |   | 431   |  
|Net loss             |  |              |      |  |         |   |      |             |  |   |              |  |  |        | (431   | ) |  |   | (431  | )
|                     |  |              |       |  |         |   |       |             |  |   |               |  |  |        |        |   |  |   |       |  
|July 31, 2006        |  |              | 1,000 |  |         | $ | 1,000 |             |  | $ | 1,776         |  |  | $      | (1,776 | ) |  | $ | 1,000 |  
|                     |  |              |       |  |         |   |       |             |  |   |               |  |  |        |        |   |  |   |       |  







F-68



---



##### Table of Contents



FERRELLGAS
    FINANCE CORP.
    (a wholly-owned subsidiary of Ferrellgas, L.P.)STATEMENTS OF CASH FLOWS




|                                          |  |                             |       |   |      |   |       |      |  |   |       |  
|----------------------------------------- |  | --------------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                          |  | For the Year Ended July 31, |      
|                                          |  | 2006                        |       |   | 2005 |   |       | 2004 | 
|                                         
|Cash flows from operating
    activities: |  |                             |       |   |      |   |       |      |  |   |       |  
|Net loss                                  |  | $                           | (431  | ) |      | $ | (416  | )    |  | $ | (414  | )
|                                          |  |                             |       |   |      |   |       |      |  |   |       |  
|Cash used by operating activities         |  |                             | (431  | ) |      |   | (416  | )    |  |   | (414  | )
|                                          |  |                             |       |   |      |   |       |      |  |   |       |  
|Cash flows from financing
    activities: |  |                             |       |   |      |   |       |      |  |   |       |  
|Capital contribution                      |  |                             | 431   |   |      |   | 416   |      |  |   | 414   |  
|                                          |  |                             |       |   |      |   |       |      |  |   |       |  
|Cash provided by financing
    activities |  |                             | 431   |   |      |   | 416   |      |  |   | 414   |  
|                                          |  |                             |       |   |      |   |       |      |  |   |       |  
|Change in cash                            |  |                             |      |   |      |   |      |      |  |   |      |  
|Cash  beginning of year                  |  |                             | 1,000 |   |      |   | 1,000 |      |  |   | 1,000 |  
|                                          |  |                             |       |   |      |   |       |      |  |   |       |  
|Cash  end of
    year                    |  | $                           | 1,000 |   |      | $ | 1,000 |      |  | $ | 1,000 |  
|                                          |  |                             |       |   |      |   |       |      |  |   |       |  







F-69



---



##### Table of Contents



FERRELLGAS
    FINANCE CORP.
    (a wholly-owned subsidiary of Ferrellgas, L.P.)NOTES TO FINANCIAL STATEMENTS




|   |          
|-- | ---------
|A. | Formation







|   |           
|-- | ----------
|B. | Commitment



3 4




|   |                 
|-- | ----------------
|C. | Income
    Taxes









F-70



---



##### Table of Contents



INDEX TO
    FINANCIAL STATEMENT SCHEDULES
  PageFerrellgas Partners, L.P. and
    SubsidiariesSchedule I

Parent Only Balance Sheets as of
    July 31, 2006 and 2005 and Statements of Earnings and Cash
    Flows for the years ended July 31, 2006, 2005 and
    2004


S-2Schedule II

Valuation and Qualifying Accounts
    for the years ended July 31, 2006, 2005 and 2004


S-5Ferrellgas, L.P. and
    SubsidiariesSchedule II

Valuation and Qualifying Accounts
    for the years ended July 31, 2006, 2005 and 2004


S-6  S-1




---



##### Table of Contents



Schedule
    l  FERRELLGAS
    PARTNERS, L.P.
    PARENT ONLY
    BALANCE SHEETS
  July 31,2006


2005(In thousands, exceptunit data)ASSETSCash and cash equivalents

$
1,650


$
314Prepaid expenses and other current
    assets


670



740Investment in Ferrellgas,
    L.P.


534,475



602,836Other assets, net


3,129



3,648Total assets

$
539,924


$
607,538LIABILITIES AND PARTNERS
    CAPITALAccounts payable

$



$
Other current liabilities


3,950



3,247Long term debt


270,229



270,610Other liabilities






3Partners
    capitalCommon unitholders (60,885,784 and
    60,134,054 units outstanding at 2006 and 2005, respectively)


321,194



390,422General partner (615,008 and
    607,415 units outstanding at 2006 and 2005, respectively)


(56,829
)


(56,132
)Accumulated other comprehensive
    income (loss)


1,380



(612
)Total partners
    capital


265,745



333,678Total liabilities and
    partners capital

$
539,924


$
607,538  S-2




---



##### Table of Contents



Schedule
    l
  FERRELLGAS
    PARTNERS, L.P.
    PARENT ONLY
    STATEMENTS OF EARNINGS
  For the Year Ended July 31,2006


2005


2004(In thousands)Equity in earnings of Ferrellgas,
    L.P.

$
49,465


$
114,380


$
49,541Operating expense


258



326



266Operating income


49,207



114,054



49,275Interest expense


(23,698
)


(23,798
)


(20,296
)Interest income






3



Other income (expense)






(290
)


71Net earnings

$
25,509


$
89,969


$
29,050  S-3




---



##### Table of Contents



Schedule
    l
  FERRELLGAS
    PARTNERS, L.P.
    PARENT ONLY
    STATEMENTS OF CASH FLOWS
  For the Year Ended July 31,2006


2005


2004(In thousands)Cash flows from operating
    activities:Net earnings

$
25,509


$
89,969


$
29,050Reconciliation of net earnings to
    net cash used in operating activities:Other


340



(613
)


1,232Equity in earnings of Ferrellgas,
    L.P.


(49,465
)


(114,380
)


(49,541
)Net cash used in operating
    activities


(23,616
)


(25,024
)


(19,259
)Cash flows from investing
    activities:Distributions received from
    Ferrellgas, L.P.


145,938



139,657



110,958Business acquisitions, net of cash
    acquired






(125
)


Cash contributed to Ferrellgas,
    L.P.


(1,554
)


(138,539
)


(281,437
)Net cash provided by (used in)
    investing activities


144,384



993



(170,479
)Cash flows from financing
    activities:Distributions


(122,197
)


(116,007
)


(91,882
)Proceeds from issuance of debt










51,625Principal payments on debt










(8,454
)Cash paid for financing costs


(375
)


(82
)


(690
)Issuance of common units, net of
    issuance costs of $569 and $676 in 2005 and 2004






136,824



236,029Proceeds from exercise of common
    unit options


3,124



472



4,223Other


16



1,461



226Net cash provided by (used in)
    financing activities


(119,432
)


22,668



191,077Increase (decrease) in cash and
    cash equivalents


1,336



(1,363
)


1,339Cash and cash
    equivalents  beginning of year


314



1,677



338Cash and cash
    equivalents  end of year

$
1,650


$
314


$
1,677  S-4




---



##### Table of Contents



Schedule II  FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  VALUATION
    AND QUALIFYING ACCOUNTS
  AdditionsBalance at


Charged to





Deductions


Balance atBeginning of


Cost/


Other


(Amounts


End ofDescription

Period


Expenses


Additions


Charged-Off)


Period(In thousands)Year ended July 31,
    2006Allowance for doubtful accounts

$
3,764


$
5,141


$
0



(3,277
)

$
5,628Year ended July 31,
    2005Allowance for doubtful accounts

$
2,523


$
2,850


$
0



(1,609
)

$
3,764Year ended July 31,
    2004Allowance for doubtful accounts

$
2,672


$
2,421


$
0



(2,570
)

$
2,523  S-5




---



##### Table of Contents



Schedule II  FERRELLGAS
    PARTNERS, L.P. AND SUBSIDIARIES
  VALUATION
    AND QUALIFYING ACCOUNTS
  AdditionsBalance at


Charged to





Deductions


Balance atBeginning of


Cost/


Other


(Amounts


End ofDescription

Period


Expenses


Additions


Charged-Off)


Period(In thousands)Year ended July 31,
    2006Allowance for doubtful accounts

$
3,764


$
5,141


$
0



(3,277
)

$
5,628Year ended July 31,
    2005Allowance for doubtful accounts

$
2,523


$
2,850


$
0



(1,609
)

$
3,764Year ended July 31,
    2004Allowance for doubtful accounts

$
2,672


$
2,421


$
0



(2,570
)

$
2,523  S-6




---



##### Table of Contents



Exhibit
    Index




|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|       
|        | 2  | .1          |  | Contribution Agreement dated
    February 8, 2004, by and among FCI Trading Corp.,
    Ferrellgas, Inc., Ferrellgas Partners, L.P. and Ferrellgas, L.P.
    Incorporated by reference to Exhibit 2.1 to our Current
    Report on
    Form 8-K
    filed February 12, 2004.                                                                                                                                                                                                                                                                               
|        | 3  | .1          |  | Fourth Amended and Restated
    Agreement of Limited Partnership of Ferrellgas Partners, L.P.,
    dated as of February 18, 2003. Incorporated by reference to
    Exhibit 4.3 to our Current Report on
    Form 8-K
    filed February 18, 2003.                                                                                                                                                                                                                                                                                                         
|        | 3  | .2          |  | First Amendment to the Fourth
    Amended and Restated Agreement of Limited Partnership of
    Ferrellgas Partners, L.P., dated as of March 8, 2003.
    Incorporated by reference to Exhibit 3.1 to our Current
    Report on
    Form 8-K
    filed March 8, 2005.                                                                                                                                                                                                                                                                                      
|        | 3  | .3          |  | Second Amendment to the Fourth
    Amended and Restated Agreement of Limited Partnership of
    Ferrellgas Partners, L.P., dated as of June 29, 2005.
    Incorporated by reference to Exhibit 4.1 to our Current
    Report on
    Form 8-K
    filed June 30, 2005.                                                                                                                                                                                                                                                                                     
|        | *3 | .4          |  | Third Amendment to the Fourth
    Amended and Restated Agreement of Limited Partnership of
    Ferrellgas Partners, L.P. dated as of October 11, 2006.                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 3  | .5          |  | Certificate of Incorporation for
    Ferrellgas Partners Finance Corp. Incorporated by reference to
    the same numbered Exhibit to our Quarterly Report on
    Form 10-Q
    filed June 13, 1997.                                                                                                                                                                                                                                                                                                                                                       
|        | 3  | .6          |  | Bylaws of Ferrellgas Partners
    Finance Corp. Incorporated by reference to the same numbered
    Exhibit to our Quarterly Report on
    Form 10-Q
    filed June 13, 1997.                                                                                                                                                                                                                                                                                                                                                                              
|        | 3  | .7          |  | Third Amended and Restated
    Agreement of Limited Partnership of Ferrellgas, L.P., dated as
    of April 7, 2004. Incorporated by reference to
    Exhibit 3.1 to our Current Report on
    Form 8-K
    filed April 22, 2004.                                                                                                                                                                                                                                                                                                                          
|        | 3  | .8          |  | Certificate of Incorporation of
    Ferrellgas Finance Corp. Incorporated by reference to
    Exhibit 4.1 to the Current Report on
    Form 8-K
    of Ferrellgas Partners, L.P. filed February 18, 2003.                                                                                                                                                                                                                                                                                                                                                 
|        | 3  | .9          |  | Bylaws of Ferrellgas Finance Corp.
    Incorporated by reference to Exhibit 4.2 to the Current
    Report on
    Form 8-K
    of Ferrellgas Partners, L.P. filed February 18, 2003.                                                                                                                                                                                                                                                                                                                                                                       
|        | 4  | .1          |  | Specimen Certificate evidencing
    Common Units representing Limited Partner Interests (contained
    in Exhibit 3.1 hereto as Exhibit A thereto).                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 4  | .2          |  | Indenture dated as of
    September 24, 2002, with form of Note attached, among
    Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp.,
    and U.S. Bank National Association, as trustee, relating to
    83/4% Senior
    Notes due 2012. Incorporated by reference to Exhibit 4.1 to
    our Current Report on
    Form 8-K
    filed September 24, 2002.                                                                                                                                                                                   
|        | 4  | .3          |  | Indenture dated as of
    April 20, 2004, with form of Note attached, among
    Ferrellgas Escrow LLC and Ferrellgas Finance Escrow Corporation
    and U.S. Bank National Association, as trustee, relating to
    6 3/4% Senior
    Notes due 2014. Incorporated by reference to Exhibit 4.1 to
    our Current Report on
    Form 8-K
    filed April 22, 2004.                                                                                                                                                                                        
|        | 4  | .4          |  | Ferrellgas, L.P.
    Note Purchase Agreement, dated as of July 1, 1998,
    relating to: $109,000,000 6.99% Senior Notes,
    Series A, due August 1, 2005, $37,000,000 7.08% Senior
    Notes, Series B, due August 1, 2006, $52,000,000
    7.12% Senior Notes, Series C, due August 1, 2008,
    $82,000,000 7.24% Senior Notes, Series D, due
    August 1, 2010, and $70,000,000 7.42% Senior Notes,
    Series E, due August 1, 2013. Incorporated by
    reference to Exhibit 4.4 to our Annual Report on
    Form 10-K
    filed October 29, 1998.
|        | 4  | .5          |  | Ferrellgas, L.P.
    Note Purchase Agreement, dated as of February 28,
    2000, relating to: $21,000,000 8.68% Senior Notes,
    Series A, due August 1, 2006, $90,000,000 8.78% Senior
    Notes, Series B, due August 1, 2007, and $73,000,000
    8.87% Senior Notes, Series C, due August 1, 2009.
    Incorporated by reference to Exhibit 4.2 to our Quarterly
    Report on
    Form 10-Q
    filed March 16, 2000.                                                                                                                               
|        | 4  | .6          |  | Registration Rights Agreement
    dated as of December 17, 1999, by and between Ferrellgas
    Partners, L.P. and Williams Natural Gas Liquids, Inc.
    Incorporated by reference to Exhibit 4.2 to our Current
    Report on
    Form 8-K
    filed December 29, 2000.                                                                                                                                                                                                                                                                                  
|        | 4  | .7          |  | First Amendment to the
    Registration Rights Agreement dated as of March 14, 2000,
    by and between Ferrellgas Partners, L.P. and Williams Natural
    Gas Liquids, Inc. Incorporated by reference to Exhibit 4.1
    to our Quarterly Report on
    Form 10-Q
    filed March 16, 2000.                                                                                                                                                                                                                                                              





---



##### Table of Contents



|        |     |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | --- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|       
|        | 4   | .8          |  | Second Amendment to the
    Registration Rights Agreement dated as of April 6, 2001, by
    and between Ferrellgas Partners, L.P. and The Williams
    Companies, Inc. Incorporated by reference to Exhibit 10.3
    to our Current Report on
    Form 8-K
    filed April 6, 2001.                                                                                                                                                                                                   
|        | 4   | .9          |  | Third Amendment to the
    Registration Rights Agreement dated as of June 29, 2005,
    between JEF Capital Management, Inc. and Ferrellgas Partners,
    L.P. Incorporated by reference to Exhibit 10.1 to our
    Current Report of
    Form 8-K
    filed June 30, 2005.                                                                                                                                                                                                           
|        | 10  | .1          |  | Fifth Amended and Restated Credit
    Agreement dated as of April 22, 2005, by and among
    Ferrellgas, L.P. as the borrower, Ferrellgas, Inc. as the
    general partner of the borrower, Bank of America N.A., as
    administrative agent and swing line lender, and the lenders and
    L/C issuers party hereto. Incorporated by reference to
    Exhibit 10.5 to our Quarterly Report on
    Form 10-Q
    filed June 8, 2005.                                                 
|        | *10 | .2          |  | Lender Addendum dated as of
    June 6, 2006, by and among Deutsche Bank Trust Company
    Americas as the new lender, Ferrellgas, L.P. as the borrower,
    Ferrellgas, Inc. and Bank of America, N.A., as Administrative
    Agent.                                                                                                                                                                                                                                                 
|        | *10 | .3          |  | Commitment Increase Agreement
    dated as of August 28, 2006, by and among Fifth Third Bank
    as the lender, Ferrellgas, L.P. as the borrower, Ferrellgas,
    Inc. and Bank of America, N.A. as Administrative Agent.                                                                                                                                                                                                                                                             
|        | 10  | .4          |  | Amended and Restated Receivable
    Interest Sale Agreement dated June 7, 2005 between
    Ferrellgas, L.P., as originator, and Ferrellgas Receivables,
    L.L.C., as buyer. Incorporated by reference to Exhibit 10.9
    to our Quarterly Report on
    Form 10-Q
    filed June 8, 2005.                                                                                                                                                                                          
|        | 10  | .5          |  | Amendment No. 1 to the
    Amended and Restated Receivable Interest Sale Agreement and
    Subordinated Note dated June 6, 2006 between Ferrellgas,
    L.P., as originator, and Ferrellgas Receivables, LLC, as buyer.
    Incorporated by reference to Exhibit 10.11 to our Quarterly
    Report on
    Form 10-Q
    filed on June 8, 2006.                                                                                                                                        
|        | *10 | .6          |  | Amendment No. 2 to the
    Amended and Restated Receivable Interest Sale Agreement dated
    June 6, 2006 between Ferrellgas, L.P., as originator, and
    Ferrellgas Receivables, LLC, as buyer.                                                                                                                                                                                                                                                                                     
|        | 10  | .7          |  | Second Amended and Restated
    Receivables Purchase Agreement dated as of June 6, 2006, by
    and among Ferrellgas Receivables, L.L.C., as seller, Ferrellgas,
    L.P., as servicer, Jupiter Securitization Corporation, the
    financial institutions from time to time party hereto, Fifth
    Third Bank and JPMorgan Chase Bank, NA, as agent. Incorporated
    by reference to Exhibit 10.19 to our Quarterly Report on
    Form 10-Q
    filed June 8, 2006.                
|        | 10  | .8          |  | Amendment No. 1 to Second
    Amended and Restated Receivables Purchase Agreement dated
    August 18, 2006, by and among Ferrellgas Receivables, LLC,
    as seller, Ferrellgas, L.P., as servicer, Jupiter Securitization
    Corporation, the financial institutions from time to time party
    hereto, Fifth Third Bank and JPMorgan Chase Bank, NA, as agent.
    Incorporated by reference to Exhibit 99.2 to our Current
    Report on
    Form 8-K
    filed August 18, 2006.
|        | 10  | .9          |  | Agreement and Plan of Merger dated
    as of February 8, 2004, by and among Blue Rhino
    Corporation, FCI Trading Corp., Diesel Acquisition, LLC and
    Ferrell Companies, Inc. Incorporated by reference to
    Exhibit 99.2 to our Current Report on
    Form 8-K
    filed February 13, 2004.                                                                                                                                                                                   
|        | 10  | .10         |  | First amendment to the Agreement
    and Plan of Merger dated as of March 16, 2004, by and among
    Blue Rhino Corporation, FCI Trading Corp., Diesel Acquisition,
    LLC, and Ferrell Companies, Inc. Incorporated by reference to
    Exhibit 99.1 to our Current Report on
    Form 8-K
    filed April 2, 2004.                                                                                                                                                                 
|        | 10  | .11         |  | Asset Purchase Agreement dated as
    of June 22, 2005 by and among Ferrellgas, L.P., Ferrellgas,
    Inc. and Enterprise Products Operating L.P. Incorporated by
    reference to Exhibit 10.1 to our Current Report on
    Form 8-K
    filed on June 23, 2005.                                                                                                                                                                                                                     
|        | 10  | .12         |  | Real Property Contribution
    Agreement dated February 8, 2004, between Ferrellgas
    Partners, L.P. and Billy D. Prim. Incorporated by reference to
    Exhibit 10.15 to our Quarterly Report on
    Form 10-Q
    filed June 14, 2004.                                                                                                                                                                                                                                            
|        | 10  | .13         |  | Unit Purchase Agreement dated
    February 8, 2004, between Ferrellgas Partners, L.P. and
    Billy D. Prim. Incorporated by reference to Exhibit 4.5 to
    our
    Form S-3
    filed May 21, 2004.                                                                                                                                                                                                                                                                                 
|        | 10  | .14         |  | Unit Purchase Agreement dated
    February 8, 2004, between Ferrellgas Partners, L.P. and
    James E. Ferrell. Incorporated by reference to Exhibit 99.3
    to our Current Report on
    Form 8-K
    filed February 12, 2004.                                                                                                                                                                                                                                                      
|        | #10 | .15         |  | Ferrell Companies, Inc.
    Supplemental Savings Plan, restated January 1, 2000.
    Incorporated by reference to Exhibit 99.1 to our Current
    Report on
    Form 8-K
    filed February 18, 2003.                                                                                                                                                                                                                                                                                 





---



##### Table of Contents



|        |      |             |  |                                                                                                                                                                                                                                                                                                      
|------- | ---- | ----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |            
|Number  |      | Description
|       
|        | #10  | .16         |  | Second Amended and Restated
    Ferrellgas Unit Option Plan. Incorporated by reference to
    Exhibit 10.1 to our Current Report on
    Form 8-K
    filed June 5, 2001.                                                                                                                             
|        | #10  | .17         |  | Ferrell Companies, Inc. 1998
    Incentive Compensation Plan, as amended and restated effective
    October 11, 2004. Incorporated by reference to
    Exhibit 10.23 to our Annual Report on
    Form 10-K
    filed October 13, 2004.                                                               
|        | #10  | .18         |  | Employment agreement between James
    E. Ferrell and Ferrellgas, Inc., dated July 31, 1998.
    Incorporated by reference to Exhibit 10.13 to our Annual
    Report on
    Form 10-K
    filed October 29, 1998.                                                                                    
|        | #10  | .19         |  | Amended and Restated Employment
    Agreement dated October 11, 2004, by and among Ferrellgas,
    Inc., Ferrell Companies, Inc. and Billy D. Prim. Incorporated by
    reference to Exhibit 10.25 to our Annual Report on
    Form 10-K
    filed October 13, 2004.                                 
|        | #10  | .20         |  | Separation Agreement and Release
    dated March 9, 2006 between Timothy E. Scronce and
    Ferrellgas, Inc. Incorporated by reference to
    Exhibit 10.28 to our Quarterly Report on
    Form 10-Q
    filed March 10, 2006.                                                                       
|        | #10  | .21         |  | Agreement and Release dated as of
    May 11, 2006 by and among Jeffrey B. Ward, Ferrellgas,
    Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and
    Ferrellgas, L.P. Incorporated by reference to Exhibit 10.1
    to our Current Report on
    Form 8-K
    filed June 22, 2006.      
|        | #10  | .22         |  | Agreement and Release dated as of
    August 15, 2006 by and among Kenneth A. Heinz, Ferrellgas,
    Inc., Ferrell Companies, Inc., Ferrellgas Partners, L.P. and
    Ferrellgas, L.P. Incorporated by reference to Exhibit 99.1
    to our Current Report on
    Form 8-K
    filed August 18, 2006.
|        | #*10 | .23         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between Stephen L. Wambold and
    Ferrellgas, Inc.                                                                                                                                                                               
|        | #*10 | .24         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between Eugene D. Caresia and
    Ferrellgas, Inc.                                                                                                                                                                                
|        | #*10 | .25         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between M. Kevin Dobbins and
    Ferrellgas, Inc.                                                                                                                                                                                 
|        | #*10 | .26         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between Kevin T. Kelly and
    Ferrellgas, Inc.                                                                                                                                                                                   
|        | #*10 | .27         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between Brian J. Kline and
    Ferrellgas, Inc.                                                                                                                                                                                   
|        | #*10 | .28         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between George L. Koloroutis
    and Ferrellgas, Inc.                                                                                                                                                                             
|        | #*10 | .29         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between Patrick J. Walsh and
    Ferrellgas, Inc.                                                                                                                                                                                 
|        | #*10 | .30         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between James E. Ferrell and
    Ferrellgas, Inc.                                                                                                                                                                                 
|        | #*10 | .31         |  | Change In Control Agreement dated
    as of October 9, 2006 by and between Tod D. Brown and
    Ferrellgas, Inc.                                                                                                                                                                                     
|        | *21  | .1          |  | List of subsidiaries                                                                                                                                                                                                                                                                                 
|        | *23  | .1          |  | Consent of Deloitte &
    Touche, LLP, independent registered public accounting firm, for
    the certain use of its report appearing in the Annual Report on
    Form 10-K
    of Ferrellgas Partners, L.P. for the year-ended July 31,
    2006.                                                   
|        | *23  | .2          |  | Consent of Deloitte &
    Touche, LLP, independent registered public accounting firm, for
    the certain use of its report appearing in the Annual Report on
    Form 10-K
    of Ferrellgas Partners Finance Corp. for the year-ended
    July 31, 2006.                                           
|        | *31  | .1          |  | Certification of Ferrellgas
    Partners, L.P. pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a)
    of the Exchange Act.                                                                                                                                                                     
|        | *31  | .2          |  | Certification of Ferrellgas
    Partners Finance Corp. pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a)
    of the Exchange Act.                                                                                                                                                             
|        | *31  | .3          |  | Certification of Ferrellgas, L.P.
    pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a)
    of the Exchange Act.                                                                                                                                                                              
|        | *31  | .4          |  | Certification of Ferrellgas
    Finance Corp. pursuant to
    Rule 13a-14(a)
    or
    Rule 15d-14(a)
    of the Exchange Act.                                                                                                                                                                      
|        | *32  | .1          |  | Certification of Ferrellgas
    Partners, L.P. pursuant to 18 U.S.C. Section 1350.                                                                                                                                                                                                                   





---



##### Table of Contents



|        |     |             |  |                                                                                               
|------- | --- | ----------- |  | ----------------------------------------------------------------------------------------------
|Exhibit |     |            
|Number  |     | Description
|       
|        | *32 | .2          |  | Certification of Ferrellgas
    Partners Finance Corp. pursuant to 18 U.S.C.
    Section 1350.
|        | *32 | .3          |  | Certification of Ferrellgas, L.P.
    pursuant to 18 U.S.C. Section 1350.                     
|        | *32 | .4          |  | Certification of Ferrellgas
    Finance Corp. pursuant to 18 U.S.C. Section 1350.             









|  |  |                                            
|- |  | -------------------------------------------
|* |  | Filed herewith                             
| 
|# |  | Management contracts or compensatory plans.