31
<PAGE>
FORM 10 - K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1994
Commission file number 1-9444
CEDAR FAIR, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 34-1560655
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 5006, Sandusky, Ohio 44871-8006
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (419) 626-0830
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Depositary Units New York Stock Exchange
(Representing Limited Partner Interests)
Securities registered pursuant to section 12(g) of the Act: None
<TABLE>
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of Depositary Units held by non-affiliates of the
Registrant based on the closing price of such units on February 17, 1995 of
$32.00 per unit was $686,831,000.
Number of Depositary Units representing limited partner interests
outstanding as of February 17, 1995: 22,240,208.
*********************************
The Exhibit Index is located at Page 36
Page 1 of 37 pages
<PAGE>
CEDAR FAIR, L.P.
INDEX
PART I PAGE
Item 1. Business 3
Item 2. Properties 7
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security Holders
8
PART II
Item 5. Market for Registrant's Depositary Units and Related Unitholder
Matters
8
Item 6. Selected Financial Data 9
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
10
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
24
PART III
Item 10. Directors and Executive Officers of Registrant 24
Item 11. Executive Compensation 28
Item 12. Security Ownership of Certain Beneficial Owners and Management
31
Item 13. Certain Relationships and Related Transactions 33
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
33
Signatures 35
Exhibit Index 36
<PAGE>
PART I
ITEM 1. BUSINESS.
Cedar Fair, L.P. (the "Partnership") is a publicly traded Delaware limited
partnership, which was originally organized as a Minnesota limited
partnership in 1983 for the purpose of acquiring Cedar Point, Inc. ("CPI").
The Partnership is managed by Cedar Fair Management Company (the "Managing
General Partner"). The Partnership owns and operates three amusement
parks: Cedar Point located on Lake Erie between Cleveland and Toledo in
Sandusky, Ohio; Valleyfair located near Minneapolis-St. Paul in Shakopee,
Minnesota; and Dorney Park & Wildwater Kingdom ("Dorney Park") located near
Allentown in South Whitehall Township, Pennsylvania. The parks are family-
oriented, with recreational facilities for people of all ages, and provide
clean and attractive environments with exciting rides and entertainment.
Generally, the parks are open daily from 9:00 a.m. to 10:00 p.m. from early
May until Labor Day, after which they are open during weekends in
September. As a result, virtually all of the operating revenues of the
parks are derived during the approximately 130-day operating season. The
parks charge a basic daily admission price, which allows unlimited use of
all rides and attractions with the exception of Challenge Park at Cedar
Point and Valleyfair and Thrills Unlimited at Dorney Park. The demographic
groups that are most important to the parks are young people ages 13
through 24 and families. Families are believed to be attracted by a
combination of the rides and entertainment and the clean, wholesome
atmosphere. Young people are believed to be attracted by the action-packed
rides. During the operating season, the parks conduct active television,
radio, and newspaper advertising campaigns in their major market areas.
CEDAR POINT PARK
Cedar Point, which was first developed as a recreational area in 1870, is
located on a peninsula in Sandusky, Ohio bordered by Lake Erie and Sandusky
Bay, approximately 60 miles west of Cleveland and 100 miles southeast of
Detroit. Cedar Point is the largest seasonal amusement park in the United
States, measured by the number of rides and attractions and the ride
capacity per hour. It serves a six-state region in the midwestern United
States, which includes nearly all of Ohio and Michigan, western
Pennsylvania and New York, northern West Virginia and Indiana and
southwestern Ontario, Canada. The park's total market area includes
approximately 22 million people, and the major areas of dominant influence
in this market area, which are Cleveland, Akron, Toledo, Detroit, Columbus,
Flint, Saginaw and Youngstown, include approximately 12 million people.
<PAGE>
The main amusement areas of Cedar Point consist of over two miles of
midways. The park's principal attractions consist of over 50 rides and
attractions, including "Magnum XL-200", "Raptor" and "Mean Streak", among
the world's tallest steel, inverted and wood roller coasters, respectively;
eight additional roller coasters; "Snake River Falls", one of the world's
tallest water flume rides; Berenstain Bear Country, a 1.2 acre children's
activity area based on the best-selling Random House children's books
created by Stan and Jan Berenstain; "Oceana", which features a live dolphin
and sea lion show in a stadium seating up to 1,600 persons; live
entertainment shows featuring talented college students in three theaters;
the Cedar Point Cinema, which features a film using a sophisticated
projection system on a 66-foot by 88-foot screen in a 950-seat theater; an
aquarium; a museum; bathing beach facilities; and "Challenge Park", an
extra-charge attraction which includes a water park named "Soak City", a 36-
hole themed miniature golf area and a Can-Am-style go-kart track. In
addition, there are over 50 restaurants, fast food outlets and refreshment
stands and a number of gift and novelty shops and game areas. All
principal rides and attractions are owned and operated by the Partnership.
Cedar Point also owns and operates the historic Hotel Breakers, which has
290 guest rooms in addition to dining and lounge facilities, beach, lake
swimming and a courtyard pool; and beginning in 1995, Breakers East, which
will feature 206 rooms, including eight tower suites, 95 additional
lakeview suites and 103 regular rooms. Other amenities at Breakers East
will be a conference/meeting center and a second outdoor pool and spa. In
addition to Hotel Breakers and Breakers East, Cedar Point offers the
lakefront Sandcastle Suites Hotel, containing 187 suites, each of which
accommodates up to six guests and features a balcony with a view of Lake
Erie. This hotel includes other amenities such as beach, lake swimming,
courtyard pool, tennis courts and the Breakwater Cafe, a contemporary
waterfront restaurant. Cedar Point also owns and operates the Cedar Point
Marina, which is one of the largest full-service marinas on the Great Lakes
and provides dockage facilities for over 700 boats, and Camper Village,
which provides sites for approximately 300 recreational vehicles.
The Partnership, through Cedar Point Bridge Company, its wholly-owned
subsidiary, owns and operates the Cedar Point Causeway across Sandusky Bay.
This causeway is a major access route to Cedar Point. The Partnership also
owns dormitory facilities located near the park which house up to 2,500 of
the park's approximately 3,600 seasonal employees.
<PAGE>
VALLEYFAIR PARK
Valleyfair, which opened in 1976 and was acquired by CPI in 1978, is
located near Minneapolis-St. Paul in Shakopee, Minnesota, and is the
largest amusement park in Minnesota. Valleyfair's market area is centered
in Minneapolis-St. Paul, which has a population of approximately two
million, but the park also draws visitors from other areas in Minnesota and
surrounding states with a combined population of eight million.
Valleyfair is comprised of approximately 34 rides and attractions,
including four roller coasters; a water park named "Whitewater Country"
which includes "Hurricane Falls", a large waterslide raft ride and "Splash
Station", a children's water park; "Thunder Canyon", a white-water raft
ride; "The Wave", a water flume ride featuring a guest splash basin; a
nostalgic train ride; a giant ferris wheel; a log flume ride; a 500-seat
amphitheater; a kiddie ride area; "Challenge Park", an extra-charge
attraction which includes a Can-Am-style go-kart track and a 36-hole themed
miniature golf area; "Bear Country", an indoor/outdoor children's activity
area added in 1994; and, new in 1995, "The Hydroblaster", a 40-foot tall
wet/dry slide, or "water coaster". In addition, there are over 20
restaurants, fast food outlets and refreshment stands and a number of gift
and novelty shops and game areas.
DORNEY PARK
Dorney Park, which was first developed as a summer resort area in 1884, was
acquired by the Partnership on July 21, 1992 and is located near Allentown
in South Whitehall Township, Pennsylvania. Dorney Park is one of the
largest amusement parks in the Northeast and serves a total market area of
approximately 35 million people. The park's major areas of dominant
influence include Philadelphia, New Jersey, New York, Lancaster,
Harrisburg, York, Scranton, Wilkes-Barre, Hazleton and the Lehigh Valley.
Dorney Park's principal attractions consist of over 50 rides and
attractions, including the "Hercules", a world class wooden roller coaster;
two additional roller coasters; "White Water Landing", one of the world's
tallest water flume rides featuring a guest splash basin (the twin of Cedar
Point's "Snake River Falls"); "Thunder Canyon", a white-water rafting ride;
a train ride named the "Cedar Creek Cannonball"; "Wildwater Kingdom", one
of the largest waterparks in the United States featuring twelve water
slides, including the "Pepsi Aquablast", the longest elevated waterslide in
the world, a giant wave pool and two children's activity areas; "Thunder
Creek Mountain", a water flume ride; a giant ferris wheel; a kiddie area
featuring "Chester Cheetah's Playland"; live musical shows featuring
talented college students; "Thrills Unlimited", an extra-charge attraction
which includes a go-kart track and two 18-hole themed
<PAGE>
miniature golf areas; the "Red Garter Saloon", an 1890's style restaurant
and saloon featuring live shows; and beginning in 1995, "Berenstain Bear
Country", a major children's activity area which has proven popular at both
Cedar Point and Valleyfair. Also new for the 1995 operating season is an
antique Dentzel carousel carved in 1921, which will be showcased in a new
main entrance plaza to the park. In addition there are over 30
restaurants, fast food outlets and refreshment stands and a number of gift
and novelty shops and game areas.
WORKING CAPITAL AND CAPITAL EXPENDITURES
The Partnership must carry significant inventories of food and merchandise
during the operating season. Seasonal working capital needs are met with a
revolving credit facility.
The Managing General Partner believes that annual park attendance is to
some extent responsive to the investment in new attractions from year to
year. Capital expenditures are planned on a seasonal basis with the
majority of such capital expenditures incurred in the period after the
parks close in October through May, just prior to the beginning of the next
operating season. Capital expenditures for the calendar year may differ
from amounts identified with a particular operating season because of
timing considerations such as weather conditions, site preparation
requirements and availability of ride components, which result in
accelerated or delayed expenditures around calendar yearends.
COMPETITION
In general, the Partnership competes with all phases of the recreational
industry within its primary market areas of Cleveland, Detroit, Minneapolis-
St. Paul, and Philadelphia, including several other amusement/theme parks
in the Partnership's market areas. The Partnership's business is subject
to factors generally affecting the recreational and leisure time market,
such as economic conditions, changes in discretionary spending patterns and
weather conditions.
In Cedar Point's major markets, its primary amusement park competitors are
Paramount Kings Island, Sea World and Geauga Lake. Cedar Point's market
shares are highest in Michigan, where it has little competition, and lowest
in central and southern Ohio, where Paramount Kings Island is a significant
competitor.
Valleyfair is the largest amusement park in Minnesota. Camp Snoopy, an
indoor amusement park at the Mall of America which opened in 1992, is
located approximately 15 miles from Valleyfair and is the park's only
nearby direct competitor. Adventureland, a theme park in Des Moines, Iowa,
is located approximately 250 miles from Valleyfair.
<PAGE>
In Dorney Park's major markets, its primary amusement park competitors are
Hershey Park and Six Flags Great Adventure. Dorney Park's market shares
are highest in eastern Pennsylvania, and lowest in central Pennsylvania and
the New Jersey/New York area, where Hershey and Six Flags Great Adventure,
respectively, are significant competitors.
The principal factors involving competition in the amusement park industry
generally include the uniqueness and perceived quality of the rides and
attractions in a particular park, the proximity of a park to metropolitan
areas, the atmosphere and cleanliness of a park and the quality of the food
and entertainment available. The Partnership believes that its amusement
parks feature a sufficient variety of rides and attractions, restaurants,
gift shops and family orientation to make them highly competitive with
other parks.
GOVERNMENT REGULATION
All rides are run and inspected daily by both the Partnership's maintenance
and rides operation departments before being put into operation. The parks
are also periodically inspected by the Partnership's insurance carrier and,
at Cedar Point and Dorney Park, by state ride safety inspectors.
EMPLOYEES
The Partnership has approximately 500 full-time employees. During the
operating season, Cedar Point, Valleyfair and Dorney Park have
approximately 3,600, 1,200 and 2,600 seasonal employees, respectively, most
of whom are college students. Approximately 2,500 of Cedar Point's
seasonal employees live in dormitories owned by the Partnership. The
Partnership maintains training programs for all new employees, and believes
that its relations with its employees are good.
ITEM 2. PROPERTIES.
Cedar Point is located on approximately 365 acres owned by the Partnership
on the Cedar Point peninsula in Sandusky, Ohio. The Partnership also owns
approximately 60 acres of property on the mainland adjoining the approach
to the Cedar Point Causeway. Two seasonal employee housing complexes and a
fast-food restaurant owned and operated by the Partnership are located on
the adjoining property.
The Partnership controls, through ownership or an easement, a six-mile
public highway and owns approximately 38 acres of vacant land adjacent to
such highway which is a secondary access route to Cedar Point and serves
about 250 private residences. The roadway is maintained by the Partnership
pursuant to deed provisions. The Cedar Point Causeway, a four-lane roadway
across Sandusky Bay, is the principal access road to Cedar Point and is
<PAGE>
owned by Cedar Point Bridge Company, a subsidiary of the Partnership.
At Valleyfair approximately 118 acres have been developed, and
approximately 52 additional acres remain available for future expansion.
Dorney Park is situated on approximately 190 acres, including 41 acres of
vacant land that the Partnership acquired in 1992, primarily for additional
parking. The Partnership plans to continue to develop the area located
between the amusement park and the waterpark, previously used for guest
parking, by adding new rides and attractions over the next several years.
The Partnership, through its subsidiary Cedar Point of Michigan, Inc., owns
approximately 450 acres of land in Southern Michigan.
All of the Partnership's property is owned in fee simple without
encumbrance. The Partnership considers its properties to be well
maintained, in good condition and adequate for its present uses and
business requirements.
ITEM 3. LEGAL PROCEEDINGS.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S DEPOSITARY UNITS AND RELATED
UNITHOLDER MATTERS.
Cedar Fair, L.P. Depositary Units representing limited partner interests
are listed for trading on The New York Stock Exchange (trading symbol =
FUN). As of February 17, 1995, there were approximately 9,200 registered
unitholders of Cedar Fair, L.P. Depositary Units. The cash distributions
declared and the high and low prices of the Partnership's units are shown
in the table below:
<CAPTION>
1994 Distribution High Low
<S> <C> <C> <C>
1st Quarter $.50 36 5/8 32 3/8
2nd Quarter .50 34 1/4 32 1/4
3rd Quarter .5625 32 5/8 30 7/8
4th Quarter .5625 32 26 3/4
<PAGE>
<CAPTION>
1993 Distribution High Low
<S> <C> <C> <C>
1st Quarter $.4625 32 7/8 27 1/8
2nd Quarter .4625 30 1/2 27
3rd Quarter .50 33 1/4 27
4th Quarter .50 36 5/8 33 1/8
ITEM 6. SELECTED FINANCIAL DATA
</TABLE>
<TABLE>
<CAPTION> For the years ended December 31,
1994(5) 1993(4) 1992(3) 1991 1990
(In thousands except amounts per unit and per capita)
<S> <C> <C> <C> <C> <C>
OPERATING DATA
Net revenues $198,358 $178,943 $152,961 $127,950 $121,962
Operating income 68,016 57,480 49,111 42,394 40,324
Net income 62,825 61,879 42,921 35,975 33,173
Per limited
partner unit (1)
2.79
2.75
1.96
1.68
1.55
FINANCIAL POSITION
Total assets $223,982 $218,359 $209,472 $142,532 $141,668
Working capital (deficit)
(25,404)
(22,365)
(19,028)
(14,616)
(13,446)
Long-term debt 71,400 86,800 89,700 65,900 69,900
Partners' equity 115,054 99,967 81,333 55,132 51,755
DISTRIBUTIONS DECLARED
Per limited partner unit
$2.125
$1.925
$1.725
$1.525
$1.35
OTHER DATA
Depreciation and amortization
$14,960
$14,473
$12,421
$10,314
$9,706
Cash flow from
operating activities
81,093
69,243
56,034
46,275
43,703
Capital expenditures
19,237
23,813
15,934
10,333
15,168
Combined attendance 5,918 5,511 4,857 4,088 4,130
Combined guest
per capita spending(2)
$30.69
$29.55
$28.69
$28.29
$26.91
NOTE 1 - Net income per limited partner unit is computed based on the
weighted average number of units outstanding.
NOTE 2 - Guest per capita spending includes all amusement park, causeway
tolls and parking revenues for the amusement park operating season.
Revenues from marina, hotel, campground and other out-of-park operations
are excluded from these statistics.
<PAGE>
NOTE 3 - Dorney Park & Wildwater Kingdom is included in 1992 data for the
period subsequent to its acquisition on July 21, 1992.
NOTE 4 - The 1993 operating results include a nonrecurring credit for
deferred taxes of $11.0 million, or $0.49 per unit.
NOTE 5 - The 1994 operating results include nonrecurring gains of $2.1
million relating to insurance claim settlements, partially offset by a $0.7
million charge to interest expense for refinancing of long-term debt.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
Net revenues for the year ended December 31, 1994 were $198.4 million, an
11% increase over the year ended December 31, 1993. This followed a 17%
increase in 1993, when revenues rose to $178.9 million from $153.0 in 1992.
Net revenues for 1994 reflect a 7% increase in combined attendance (from
5.5 million to 5.9 million) and a 4% increase in combined guest per capita
spending at our three parks. Cedar Point, which achieved a record year in
1994, accounted for the majority of the attendance increase and the rest
was attributed to Valleyfair as it rebounded strongly from the flood year
of 1993. Favorable weather throughout the peak vacation months of July and
August, together with the successful debut of the Raptor inverted roller
coaster, contributed to Cedar Point's record performance. In 1993, in
spite of Valleyfair's 16% attendance decline caused by prolonged rains and
flooding in the Minneapolis area, combined attendance increased 13% to 5.5
million, which included Dorney Park's first full year of attendance. In
1992, combined attendance at the three parks was 4.9 million, which
included Dorney Park's contribution of approximately 600,000 in attendance
for the period following its acquisition, up 19% from 4.1 million in 1991.
Combined guest per capita spending increased 3% in 1993 and 1% in 1992.
Stable population trends in our market areas and uncontrollable factors,
such as weather (as was the case at Valleyfair in 1993) and the economy,
preclude us from anticipating significant long-term increases in attendance
at Cedar Point and Valleyfair. Historically, the Partnership has been able
to improve its profitability by continuing to make substantial investments
in its parks. This has enabled us to maintain a consistently high
attendance level as well as steady increases in guest per capita spending
and revenues from guest accommodations at Cedar Point, while carefully
controlling operating and administrative expenses.
Although attendance at Dorney Park and Wildwater Kingdom was down slightly
in 1994, we continue to believe this park has
<PAGE>
substantial long-term growth potential in both attendance and
profitability.
Costs and expenses before depreciation and amortization in 1994 increased
to $115.4 million from $107.0 million in 1993. Included in costs and
expenses are approximately $3.4 million of incentive fees earned by the
managing general partner relating to 1994 cash distributions, which
exceeded the minimum distributions as defined in the partnership agreement
by 83.5 cents per unit or $18.8 million in the aggregate. This compares to
$2.7 million and $2.2 million of incentive fees in 1993 and 1992,
respectively. Excluding the incentive fees paid to the general partners,
the ratio of costs and expenses before depreciation and amortization to net
revenues for 1994 decreased to 56.5% from 58.0% in 1993, largely because
many of our operating and administrative expenses have been kept relatively
fixed. These same costs and expenses remained unchanged at 58.0% in 1992
and 1991. We are pleased with the continued success in managing our
operating expenses, particularly considering the inclusion of Dorney Park
with its relatively higher cost structure for the past 2-1/2 operating
seasons.
Operating income in 1994 increased 18% to $68.0 million, following a 17%
increase in 1993 and a 16% increase in 1992. The 1994 increase in
operating income was the result of Cedar Point achieving a record year
through increases in attendance and guest per capita spending, along with
Valleyfair rebounding strongly from the prior year. Operating income in
1993 increased as a result of Cedar Point generating a significant increase
in profits through increases in attendance and guest per capita spending
which more than offset Valleyfair's decrease, together with Dorney Park's
first full year contributing $1.8 million more operating profit than 1992's
partial year. Increased attendance and guest per capita spending at our
original two parks, in addition to Dorney Park contributing $3 million in
operating profits for the period after its acquisition, generated the
increase in operating income for 1992.
Net income for 1994 includes nonrecurring gains of $2.1 million related to
insurance claim settlements, partially offset by a $0.7 million charge to
interest expense for refinancing of long-term debt. Net income for 1993
includes an $11 million one-time, non-cash credit for deferred taxes.
Excluding nonrecurring items, net income increased 21% to $61.4 million
from $50.9 million in 1993 and $42.9 million in 1992.
FINANCIAL CONDITION
The Partnership ended 1994 in sound financial condition in terms of both
liquidity and cash flow. In our highly seasonal business with investment
heavily concentrated in property and equipment, the negative working
capital ratio of 4.1 at December 31, 1994 is financially advantageous.
Receivables and inventories are at
<PAGE>
normally low seasonal levels and credit facilities are in place to fund
current liabilities and pre-opening expenses as required.
In 1994, cash generated from operations totaled $81.1 million. The
Partnership used $19.2 million for capital expenditures, $46.3 million for
distributions to the general and limited partners and $15.4 million for the
reduction of debt. Distributions in 1995, at the current annual rate of
$2.25 per unit, would total approximately $50.5 million, 9% higher than the
distributions paid in 1994.
The Partnership has available through April, 1997 a $95 million revolving
credit facility, of which $21.4 million was borrowed and in use as of
December 31, 1994. The maximum level of borrowings during 1994 on this
facility was $86.1 million. Credit facilities and cash flow are expected
to be adequate to meet seasonal working capital needs, planned capital
expenditures and cash distribution requirements.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Partners of Cedar Fair, L.P.:
We have audited the accompanying consolidated balance sheets of Cedar Fair,
L.P. (a Delaware limited partnership) and subsidiaries as of December 31,
1994 and 1993, and the related consolidated statements of operations,
partners' equity and cash flows for each of the three years in the period
ended December 31, 1994. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cedar Fair, L.P. and
subsidiaries as of December 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1994 in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Cleveland, Ohio,
January 20, 1995.
<PAGE>
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per unit data)
<CAPTION>
For the years ended December 31, 1994 1993 1992
<S> <C> <C> <C>
Net revenues
Admissions $100,532 $89,664 $76,342
Food, merchandise and games 85,898 77,934 66,639
Accommodations and other 11,928 11,345 9,980
198,358 178,943 152,961
Cost and expenses:
Cost of products sold 21,113 19,525 16,822
Operating expenses 72,924 66,347 57,161
Selling, general and administrative
21,345
21,118
17,446
Depreciation and amortization 14,960 14,473 12,421
130,342 121,463 103,850
Operating income 68,016 57,480 49,111
Insurance claim settlements 2,102 -- --
Interest expense, net 7,293 6,601 6,190
Deferred tax credit -- (11,000) --
Net income $62,825 $61,879 $42,921
Net income allocated to general partners
628
619
429
Net income allocated to limited partners
$62,197
$61,260
$42,492
Weighted average limited
partner units outstanding
22,267
22,252
21,646
Net income per limited partner unit
$2.79
$2.75
$1.96
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
</TABLE>
<TABLE>
CONSOLIDATED BALANCE SHEET
(In thousands)
<CAPTION>
December 31, 1994 1993
<S> <C> <C>
Assets
Current Assets:
Cash $350 $228
Receivables 1,350 1,154
Inventories 3,416 3,502
Prepaids 3,082 2,003
Total current assets 8,198 6,887
Land, Buildings and Equipment:
Land 22,675 22,665
Land improvements 31,366 26,937
Buildings 70,259 69,923
Rides and equipment 174,450 158,525
Construction in progress 4,503 8,950
303,253 287,000
Less accumulated depreciation (98,922) (87,389)
204,331 199,611
Intangibles, net of amortization 11,453 11,861
$223,982 $218,359
Liabilities and Partners' Equity
Current Liabilities:
Accounts payable $5,728 $5,033
Distribution payable to partners 12,636 11,232
Accrued interest 1,595 1,341
Accrued taxes 2,757 2,632
Accrued salaries,wages and benefits 3,241 3,131
Self-insurance reserves 6,087 4,184
Other accrued liabilities 1,558 1,699
Total current liabilities 33,602 29,252
Other Liabilities 3,926 2,340
Long-Term Debt:
Revolving credit loans 21,400 36,800
Term debt 50,000 50,000
71,400 86,800
Partners' Equity:
Special L.P. interests 5,290 5,290
General partners 389 238
Limited partners, 22,240,208
units outstanding
109,375
94,439
115,054 99,967
$223,982 $218,359
The accompanying Notes to Consolidated Financial Statements are an integral
part of these balance sheets.
<PAGE>
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<CAPTION>
For the years ended December 31, 1994 1993 1992
<S> <C> <C> <C>
Cash Flows From (For) Operating Activities
Net income $62,825 $61,879 $42,921
Adjustments to reconcile net income to net cash from operating
activities
Deferred tax credit -- (11,000) --
Depreciation and amortization 14,960 14,473 12,421
Change in assets and liabilities net of effects in 1992 from purchase of
Dorney Park & Wildwater Kingdom:
Decrease in inventories 86 449 652
Decrease (increase) in current and other assets
(1,311)
131
795
Increase (decrease) in accounts payable 695 140 (2,484)
Increase in self-insurance reserves 1,903 1,102 1,000
Increase in other current liabilities 349 791 252
Increase in other liabilities 1,586 1,278 477
Net cash from operating activities 81,093 69,243 56,034
Cash Flows From (For) Investing Activities
Capital expenditures (19,237) (23,813) (15,934)
Acquisition of Dorney Park & Wildwater Kingdom:
Land, buildings, rides and equipment acquired
--
--
(51,175)
Negative working capital assumed, net of cash acquired
--
--
2,061
Net cash (for) investing activities (19,237) (23,813) (65,048)
Cash Flows From (For) Financing Activities
Net payments on revolving credit loans (15,400) (2,900) (3,171)
Distributions paid to partners (46,334) (42,403) (36,041)
Acquisition of Dorney Park & Wildwater Kingdom:
Borrowings on revolving credit loans for refinancing of assumed long-term
debt
--
--
26,971
Issuance of limited partnership units -- -- 21,160
Net cash from (for) financing activities (61,734) (45,303) 8,919
Cash:
Net increase (decrease) for the period 122 127 (95)
Balance, beginning of period 228 101 196
Balance, end of period $350 $228 $101
Supplemental Information:
Cash payments for interest expense $7,039 $6,622 $6,080
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
(In thousands)
<CAPTION>
Special General Limited Total
L.P. Partners' Partners' Partners'
Interests Equity Equity Equity
<S> <C> <C> <C> <C>
Balance at December 31, 1991 $5,290 $1 $49,841 $55,132
Issuance of 1,078,208
limited partnership units
--
--
21,160
21,160
Allocation of net income -- 429 42,492 42,921
Partnership distributions declared ($1.725 per limited partner unit)
--
(379)
(37,501)
(37,880)
Balance at December 31, 1992 5,290 51 75,992 81,333
Allocation of net income -- 619 61,260 61,879
Partnership distributions declared ($1.925 per limited partner unit)
--
(432)
(42,813)
(43,245)
Balance at December 31, 1993 5,290 238 94,439 99,967
Allocation of net income -- 628 62,197 62,825
Partnership distributions declared ($2.125 per limited partner unit)
--
(477)
(47,261)
(47,738)
Balance at December 31, 1994 $5,290 $389 $109,375 $115,054
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Partnership Organization:
Cedar Fair, L.P. (the "Partnership") is a Delaware limited partnership,
which was originally organized as a Minnesota limited partnership in 1983
for the purpose of acquiring Cedar Point, Inc. ("CPI"). Partnership
operations commenced on July 29, 1983, when the Partnership acquired CPI.
On April 29, 1987, 16 million limited partnership units were sold to the
public and 5,162,000 units were held by the original limited partners of
the Partnership. These 21,162,000 units are traded on the New York Stock
Exchange. On July 21, 1992, the Partnership issued an additional 1,078,208
limited partnership units in connection with the acquisition of Dorney Park
& Wildwater Kingdom, as discussed in Note 7. These units have not been
registered with the Securities and Exchange Commission.
The Partnership's two General Partners are (a) Cedar Fair Management
Company, an Ohio corporation owned by the Partnership's executive
management (the "Managing General Partner") and (b) CF Partners (the
"Special General Partner"), a Delaware general partnership whose equal
partners are two former Directors and a Trust, whose co-trustee is Director
Mary Ann Jorgenson. Mrs. Jorgenson is a partner in the law firm which
serves as the Partnership's general counsel.
The Managing and Special General Partners each own a 0.5% general partner
interest in the Partnership's income and losses, except in defined
circumstances. The Managing General Partner has full control over all
activities of the Partnership.
For the services it provides, the Managing General Partner earns a fee
equal to .25% of the Partnership's net revenues, as defined, and also earns
incentive compensation when quarterly distributions exceed certain levels
as defined in the Partnership Agreement. The Managing General Partner
earned $3,874,000, $3,176,000 and $2,387,000 of such fees in 1994, 1993 and
1992, respectively. In both 1994 and 1993, the Special General Partner
received a fixed annual amount of $800,000 for its services, which included
its share of cash distributions. In 1992, the Special General Partner
received fees totaling $1,370,000 based on Partnership revenues and
distributions.
The General Partners may, with the approval of a specified percentage of
the limited partners, make additional capital contributions to the
Partnership, but are only obligated to do so if the liabilities of the
Partnership cannot otherwise be paid or there exists a negative balance in
their capital account at the time of their withdrawal from the Partnership.
The Managing
<PAGE>
General Partner, in accordance with the terms of the Partnership Agreement,
is required to make regular cash distributions on a quarterly basis of all
the Partnership's available cash, as defined.
(2) Summary of Significant Accounting Policies:
The following policies are used by the Partnership in its preparation of
the accompanying financial statements.
Principles of Consolidation - The consolidated financial statements
include the accounts of the Partnership and its three wholly-owned
corporate subsidiaries. All significant intercompany transactions and
balances are eliminated in consolidation.
Inventories - All inventories are valued at the lower of first-in, first-
out cost or market. The Partnership's inventories primarily represent
purchased products, such as merchandise and food, for sale to its
customers.
Depreciation - The Partnership's policy is to provide depreciation on a
straight-line basis over the estimated useful lives of its assets. The
composite method is used for the group of assets acquired as a whole from
CPI in 1983 and for the Dorney Park & Wildwater Kingdom assets acquired in
1992, and the unit method is used for all individual assets subsequently
purchased.
Under the composite depreciation method, assets with similar estimated
lives are grouped together and the several pools of assets are depreciated
on an aggregate basis. Gains and losses on the retirement of assets,
except those related to abnormal retirements, are credited or charged to
accumulated depreciation. Accumulated gains and losses on asset
retirements under the composite depreciation method have not been
significant.
Under the unit method of depreciation, individual assets are depreciated
over their estimated useful lives with gains and losses on all asset
retirements recognized currently in income.
The weighted average useful lives combining both methods are approximately:
Land improvements 23 Years
Buildings 28 Years
Rides 17 Years
Equipment 10 Years
Segment Reporting - The Partnership is in the single business of operating
amusement parks with accompanying resort facilities.
<PAGE>
Reclassification - Certain prior year amounts have been reclassified to
reflect comparability with the 1994 presentation.
Income Taxes - The accompanying statements of operations do not include a
provision for current federal or state income taxes, as the income of the
Partnership is not taxed directly; rather, the Partnership's tax attributes
are included in the individual tax returns of its unitholders. Neither the
Partnership's financial reporting income, nor the distributions to
unitholders, can be used as a substitute for the detailed tax calculations
which the Partnership must perform annually for its unitholders. The tax
returns of the Partnership are subject to examination by state and federal
tax authorities. If such examinations result in changes to taxable income,
the tax liability of the Partners could be changed accordingly.
The Omnibus Budget Reconciliation Act of 1993 ( the "Act") was signed into
law in August 1993. Among other provisions, the Act allows taxpayers who
acquire an interest in an intangible asset to deduct its amortization over
a 15-year period beginning the month in which the intangible asset is
acquired. This provision extends to the acquisition of partnership
interests, to the extent that taxpayers obtain an increased basis for the
intangible assets of the partnership. The effect of the Act on taxpayers
acquiring Cedar Fair, L.P. units at 1994 and 1993 market prices is to
provide amortization deductions which offset a substantial portion of the
taxable income otherwise allocable by the Partnership to these units for
the next several years. The amortization deductions will be recaptured and
taxed as ordinary income upon sale of the partnership units. The new rules
generally were effective for purchases of Partnership units after August
10, 1993, but transitional relief in the Act permitted partners to elect to
apply the new rules to all units acquired after July 25, 1991.
The Revenue Act of 1987 provides that a "publicly traded partnership", such
as Cedar Fair, L.P., will be treated as a corporation for federal income
tax purposes beginning January 1, 1998, including the payment of corporate
income taxes. The partners' remaining unamortized basis in the
Partnership's intangible assets may be transferred to a corporate successor
entity. This aggregate intangible asset would then be amortizable for tax
purposes by the new corporation to reduce its future corporate taxable
income.
The amount of the intangible asset available to a successor corporation
will depend on the price and volume of trading in the
<PAGE>
Partnership's units through the date of its conversion to corporate status.
Management concluded that the amount of intangible assets resulting from
purchases of limited partner units during 1993 was sufficient to offset the
estimated amount of deferred income taxes otherwise requiring recognition
by the Partnership under Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes". Accordingly, the deferred income taxes
totaling $11 million recorded in connection with the 1992 acquisition of
Dorney Park & Wildwater Kingdom were reversed and credited to income in
1993.
The 1987 legislation also provides that net income from the Partnership is
not treated as "passive income" for federal income tax purposes. As a
result, partners subject to the passive activity loss rules are not
permitted to offset income from the Partnership with passive losses from
other sources.
(3) Long-Term Debt:
At December 31, 1994 and 1993, long-term debt consisted of the following:
<CAPTION>
(In thousands) 1994 1993
<S> <C> <C>
Revolving credit loans $21,400 $36,800
Term debt 50,000 50,000
$71,400 $86,800
Revolving Credit Loans - In October 1994, the Partnership entered into a
revised credit agreement with the same three banks under which it will have
available a $95 million credit facility through April 30, 1997. Borrowings
under this credit facility were $21.4 million as of December 31, 1994. The
maximum outstanding balance during 1994 was $86.1 million.
Borrowings under this new agreement bear interest at the banks' prime
lending rate, with LIBOR and other beneficial options. The agreement
requires the Partnership to pay a commitment fee of 1/5% per annum on the
daily unused portion of the credit. The Partnership, at its option, may
make prepayments without penalty and reduce this loan commitment.
Term Debt - In August 1994, the Partnership refinanced its $50 million in
9.15% senior notes, reducing the interest rate to 8.43%. In connection
with this refinancing, the Partnership incurred a $0.7 million prepayment
penalty which is included in 1994 interest expense. The Partnership is
required to make annual repayments of $10 million in August 2002 through
August
<PAGE>
2006 and may make prepayments with defined premiums. The fair value of the
aggregate future repayments on these senior notes at December 31, 1994, as
required by Statement of Financial Accounting Standards No. 107, would be
approximately $49.7 million, applying a discount rate of 8.81%.
Covenants - Under the terms of the new credit agreements, the Partnership,
among other restrictions, is required to maintain a specified level of net
tangible assets, as defined, and comply with certain cash flow, interest
coverage, and debt to net worth limits.
(4) Special L.P. Interests:
In accordance with the Partnership Agreement, the original limited partners
were allocated $5.3 million of 1987 and 1988 taxable income (without any
related cash distributions) for which they received Special L.P. Interests.
The Special L.P. Interests do not participate in cash distributions and
have no voting rights. However, the holders of Special L.P. Interests will
receive in the aggregate $5.3 million upon liquidation of the Partnership.
(5) Retirement Plans:
The Partnership has a trusteed, noncontributory retirement plan for
nonunion employees. Contributions are discretionary and were $1,120,000 in
1994, $1,165,000 in 1993 and $800,000 in 1992.
The Partnership also has an Employees' Savings and Investment Plan under
which employees can contribute specified percentages of their salary,
matched up to a limit by the Partnership. Contributions by the Partnership
to this plan approximated $359,000 in 1994, $352,000 in 1993 and $268,000
in 1992.
In addition, approximately 125 employees are covered by union-sponsored,
multi-employer pension plans for which approximately $294,000, $276,000 and
$282,000 were contributed for the years ended December 31, 1994, 1993 and
1992, respectively. The Partnership believes that, as of December 31,
1994, it would have no withdrawal liability as defined by the Multiemployer
Pension Plan Amendments Act of 1980.
In 1992, the Partnership amended its policy for payment of fees earned by
the Managing General Partner to permit a portion of such fees to be
deferred for payment after retirement or over certain vesting periods as
established by the Board of Directors. Payment will be made in a
combination of limited partnership units and cash. The amounts deferred
were $1,398,000 in 1994, $1,118,000 in 1993 and $514,000 in 1992, including
the value of 27,991, 10,588 and 10,039 limited partnership units issuable
in future years which are included in the calculation of weighted
<PAGE>
average units outstanding. Amounts not payable within 12 months of the
balance sheet date are included in Other Liabilities.
(6) Contingencies:
The Partnership is a party to a number of lawsuits arising in the normal
course of business. In the opinion of management, these matters will not
have a material effect in the aggregate on the Partnership's financial
statements.
(7) Acquisition:
On July 21, 1992, the Partnership acquired substantially all of the assets
of Dorney Park & Wildwater Kingdom for approximately $48 million. The
purchase price consisted of 1,078,208 unregistered limited partnership
units (valued at the July 21 NYSE closing price of $19.625, or $21.2
million in the aggregate) and the assumption of $27.0 million of long-term
debt. The acquisition was accounted for as a purchase, and accordingly the
purchase price was allocated to assets and liabilities acquired based upon
their fair values at the date of acquisition. The related intangible asset
of $11.0 million is being amortized over 40 years.
</TABLE>
<TABLE>
QUARTERLY OPERATING RESULTS (1)
(In thousands except amounts per unit)
<CAPTION> Net income
per
Operating limited
Net income Net income partner
(unaudited) revenues (loss) (loss) unit
<S> <C> <C> <C> <C>
1994
1st Quarter (2) $358 $(10,024) $(10,039) $(.45)
2nd Quarter 55,346 14,793 12,738 .57
3rd Quarter (3) 142,053 73,217 71,387 3.17
4th Quarter 601 (9,970) (11,261) (.50)
$198,358 $68,016 $62,825 $2.79
1993
1st Quarter $292 $(9,525) $(11,189) $(.50)
2nd Quarter 51,164 12,395 10,469 .47
3rd Quarter (4) 127,015 64,407 73,771 3.28
4th Quarter 472 (9,797) (11,172) (.50)
$178,943 $57,480 $61,879 $2.75
(1) To assure that our highly seasonal operations will not result in
misleading comparisons of interim periods, the Partnership has adopted the
following reporting procedures: (a) seasonal operating costs and expenses
are expensed over the operating season, including some costs incurred prior
to the season which are deferred and amortized over the season and (b) all
other costs are expensed as incurred or ratably over the entire year.
<PAGE>
(2) The first quarter of 1994 includes a gain of $1.6 million relating to
an insurance settlement for flood damage in 1993 at Valleyfair.
(3) The third quarter of 1994 includes a gain of $0.5 million relating to
an insurance settlement for winter storm damage at Dorney Park, offset by a
$0.7 million charge to interest expense for refinancing of long-term debt.
(4) The third quarter of 1993 includes a nonrecurring credit for deferred
taxes of $11.0 million, or $0.49 per unit, resulting from changes in
federal tax laws.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.
Cedar Fair Management Company, an Ohio corporation owned by the
Partnership's executive management consisting of 20 individuals, is the
Managing General Partner of the Partnership and has full responsibility for
the management of the Partnership. CF Partners, a Delaware general
partnership, is the Special General Partner of the Partnership.
Collectively, the Managing General Partner and the Special General Partner
are called the General Partners. For additional information, including the
fees paid to the General Partners for services rendered during 1994,
attention is directed to Note 1 to the consolidated financial statements on
page 18.
</TABLE>
<TABLE>
Directors:
<CAPTION>
Name Age Position with Managing General Partner
<S> <C> <C>
Richard L. Kinzel 54 President, Chief Executive Officer, Director since
1986
Mary Ann Jorgenson* 54 Director since 1988
Donald H. Messinger* 51 Director since 1993
James L. Miears 59 Executive Vice President and General Manager-Cedar
Point, Director since 1993
Thomas A. Tracy* 63 Director since 1993
* Member of Audit and Compensation Committees
<PAGE>
The Board of Directors of the Managing General Partner has a Compensation
Committee and an Audit Committee. The Compensation Committee reviews the
Partnership's compensation and employee benefit policies and programs and
recommends related actions, as well as executive compensation decisions, to
the Board of Directors. The Audit Committee meets periodically with the
Partnership's independent auditors, reviews the activities of the
Partnership's internal audit staff, considers the recommendations of the
independent and internal auditors, and reviews the annual financial
statements upon completion of the audit.
Each director of the Managing General Partner is elected for a one-year
term.
</TABLE>
<TABLE>
Executive Officers:
<CAPTION>
Name
Age Position with Managing General Partner
<S> <C> <C>
Richard L. Kinzel 54 President and Chief Executive Officer since 1986
John R. Albino 48 Vice President-Food Operations-Cedar Point since 1993
Richard J. Collingwood 55 Corporate Vice President-General Services since
1992
Jacob T. Falfas 43 Vice President-Park Operations-Cedar Point since 1993
H. John Hildebrandt 45 Vice President-Marketing-Cedar Point since 1993
Bruce A. Jackson 43 Corporate Vice President-Finance and Chief Financial
Officer since 1992
Lee C. Jewett 60 Corporate Vice President-Planning & Design since 1990
Daniel R. Keller 45 Senior Vice President-Operations-Cedar Point since
1993
James L. Miears 59 Executive Vice President-General Manager-Cedar Point
since 1993
William E. Near 53 Vice President-General Manager-Dorney Park since 1992
Thomas W. Salamone 50 Treasurer since 1982
Alan L. Schwartz 45 Vice President-Finance-Valleyfair since 1978
Joseph L. von der Weis 62 Vice President-Accommodations-Cedar Point since
1973
Walter R. Wittmer 54 Vice President-General Manager-Valleyfair since 1988
<PAGE>
BUSINESS EXPERIENCE.
Directors:
Richard L. Kinzel has served as president and chief executive officer since
1986. Mr. Kinzel has been employed by the Partnership or its predecessor
since 1972, and from 1978 to 1986 he served as vice president and general
manager of Valleyfair.
Mary Ann Jorgenson is a partner in the law firm of Squire, Sanders &
Dempsey, the Partnership's General Counsel, and has been associated with
the firm since 1975. Mrs. Jorgenson is also co-trustee of a Trust which is
a general partner in CF Partners, the Partnership's Special General
Partner. She is also a director of S 2 Golf Inc. (manufacturer and
distributor of golf clubs and bags) and is a director and Secretary of
Essef Corporation (manufacturer of plastic pressure vessels for the water
treatment and systems industry; spa and pool equipment; and containers for
hazardous waste transportation).
Donald H. Messinger is the Partner-in-Charge of the Cleveland office of the
law firm of Thompson, Hine and Flory and has been associated with the firm
since 1968.
James L. Miears has served as Executive Vice President and General Manager
of Cedar Point since 1993. In 1992, he was Senior Vice President-
Merchandise at Cedar Point and prior to 1992 he served as Vice President-
Merchandise of Cedar Point for more than five years.
Thomas A. Tracy is a business consultant and was a partner in the public
accounting firm of Arthur Andersen & Co. from 1966 until his retirement in
1989.
Executive Officers:
Richard L. Kinzel. See "Directors" above.
John R. Albino has served as Vice President-Food Operations of Cedar Point
since 1993. Prior to 1993 he served as Director-Food Operations of Cedar
Point for more than five years.
Richard J. Collingwood has served as Corporate Vice President-General
Services since 1992 and has primary responsibility for human resources,
purchasing and security. Prior to 1992, he served as Vice President-
General Services of Cedar Point for more than five years.
Jacob T. Falfas has served as Vice President-Park Operations of Cedar Point
since 1993. Prior to 1993, he served as Director-Park Operations of Cedar
Point for more than five years.
<PAGE>
H. John Hildebrandt has served as Vice President-Marketing of Cedar Point
since 1993. Prior to 1993, he served as Director-Marketing of Cedar Point
for more than five years.
Bruce A. Jackson has served as Corporate Vice President-Finance and Chief
Financial Officer since 1992. From 1988 to 1992, he served as Vice
President-Finance and Chief Financial Officer. Mr. Jackson is a certified
public accountant.
Lee C. Jewett has served as Corporate Vice President-Planning & Design
since 1990. Prior to 1990, he served as Director-Planning & Design of
Cedar Point for more than five years.
Daniel R. Keller has served as Senior Vice President-Operations of Cedar
Point since 1993. Prior to 1993, he served as Vice President-Operations of
Cedar Point for more than five years.
James L. Miears. See "Directors" above.
William E. Near has served as Vice President-General Manager of Dorney Park
since 1992. Prior to 1992, he served as Senior Vice President-Marketing of
Cedar Point for more than five years.
Thomas W. Salamone has served as Treasurer for more than five years.
Alan L. Schwartz has served as Vice President-Finance of Valleyfair for
more than five years.
Joseph L. von der Weis has served as Vice President-Accommodations of Cedar
Point for more than five years.
Walter R. Wittmer has served as Vice President-General Manager of
Valleyfair for more than five years.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Registrant's directors, executive officers and persons who own more than
ten percent of its Depositary Units ("Insiders") to file reports of
ownership and changes in ownership, within 10 days following the last day
of the month in which any change in such ownership has occurred, with the
Securities and Exchange Commission and the New York Stock Exchange, and to
furnish the Partnership with copies of all such forms they file. The
Partnership understands from the information provided to it by these
individuals that, except for Messrs. Jewett and Tracy, each of whom made
one inadvertently late filing, all filing requirements applicable to the
Insiders were adhered to for 1994.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
</TABLE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensa-tion
(a) (b) (c) (d) (f) (i)
Restric-ted Unit All Other Compensa-
Name and Salary Bonus Awards tion
Principal Position Year ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Richard L. Kinzel, 1994 189,385 469,298 179,735 200,698
President and Chief 1993 173,692 396,000 66,000 166,913
Executive Officer 1992 165,837 378,466 68,200 102,428
James L. Miears, 1994 134,423 242,508 97,160 99,698
Executive Vice Presi- 1993 119,827 199,000 31,000 77,813
dent and General Mana-ger-Cedar Point 1992 112,510 192,123 29,600 52,228
Bruce A. Jackson, 1994 119,826 215,563 69,586 17,298
Corporate Vice Presi- 1993 115,327 191,000 31,500 23,313
dent-Finance and Chief Financial Officer 1992 108,010 187,564 28,200
27,228
Walter R. Wittmer, 1994 119,615 215,563 68,586 52,698
Vice President and 1993 109,692 182,000 31,000 50,313
General Manager-Valleyfair 1992 101,904 183,615 26,100 36,028
Daniel R. Keller, 1994 119,808 215,563 33,586 15,698
Senior Vice President- 1993 114,827 168,000 25,000 21,513
Operations-Cedar Point 1992 110,394 162,955 22,000 20,028
Notes To Summary Compensation Table:
Column (f) Restricted Unit Awards. The aggregate number of restricted
Cedar Fair, L.P. depositary units, representing limited partner
interests, awarded to Messrs. Kinzel, Miears, Jackson, Wittmer and
Keller as of December 31, 1994, together with their market value at
yearend, were 11,235 ($331,431), 5,628 ($166,026), 4,610
($135,999), 4,473 ($131,947) and 2,877 ($84,875), respectively.
These units will accrue additional units on the date of each
quarterly distribution paid by the Registrant, calculated at the
NYSE closing price on that date.
<PAGE>
Column (i) All Other Compensation. Comprises amounts accrued under the
following plans:
1.Profit Sharing Retirement Plan - With respect to 1994, $11,198
was credited to the accounts of each of the named executive
officers.
2.Employees' Savings and Investment Plan - With respect to 1994,
$4,500 was credited to the accounts of each of the named executive
officers, with the exception of Mr. Wittmer, who chose not to
participate in this plan in 1994.
3.Supplemental Retirement Benefits - With respect to 1994, the
amounts credited to the accounts of Messrs. Kinzel, Miears,
Jackson, Wittmer and Keller were $185,000, $84,000, $1,600, $41,500
and $0, respectively.
Cash bonuses, restricted unit awards, and supplemental retirement benefits
provided to the Partnership's executive management are reimbursed by the
Managing General Partner out of funds provided by management and incentive
fees and cash distributions from the Partnership.
COMPENSATION OF DIRECTORS.
The Board of Directors establishes the fees paid to Directors and Board
Committee members for services in those capacities. The current schedule
of such fees is as follows:
1.For service as a member of the Board, $15,000 per annum, payable
quarterly, plus $1,000 for attendance at each meeting of the Board;
2.For service as a Board Committee member, $250 for attendance at each
Committee meeting held on the same date on which the Board of
Directors meets or $1,000 for attendance at any additional Committee
meeting held on a date other than a date on which the Board of
Directors meets; and
3.For service as Chairman of a Committee of the Board, a fee of $2,500
per annum.
These fees are payable only to non-management Directors. Management
Directors receive no additional compensation for service as a Director.
All Directors receive reimbursement from the Partnership for expenses
incurred in connection with service in that capacity.
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS.
Severance Compensation.
All regular, full-time, non-union affiliated employees, including the named
executive officers, who have been employed by the Partnership for at least
one year are eligible for severance compensation under the Cedar Fair, L.P.
Severance Pay Plan. Under the Plan, employees are generally eligible for
severance pay if their employment is terminated due to the elimination of
the job or position, a mutually agreed-upon separation of the employee due
to performance, or a change in ownership which results in replacement of
the employee by the new owner. Upon termination of employment where
severance compensation is payable under the Plan, the employee is entitled
to receive a payment based on the following schedule:
Length of Service Severance Pay
1 year through 10 years One week of pay for each full year of service
11 years through 30 years Ten weeks pay plus two weeks of pay for each full
year of service in excess of 10
31 years or more Fifty-two weeks of pay
Restricted Unit Awards.
Restricted unit awards represent the named executive officer's right to
receive newly issued Cedar Fair, L.P. units at specified future dates if
the individual is still employed by the Partnership at that time. The
dollars allocated to each officer are converted to a number of deferred
Partnership units based on the NYSE closing price on the first Monday in
December of the year granted. These units, together with quarterly
distributions thereon, vest in years three through five after date of
grant.
In the event of death, total disability, retirement at age 62 or over,
removal of the Managing General Partner, or a "change-in-control" of the
Partnership (as defined), all accrued units for a participant will become
fully vested and will be issued at the time of such event. Failure to
remain an employee of the Partnership on any vesting date for any other
reason will result in the forfeiture of all unissued deferred units of a
participant.
<PAGE>
Supplemental Retirement Benefits.
Supplemental retirement benefits represent the named executive officer's
right to receive benefits from the Partnership upon retirement at age 62 or
over, with a minimum of 20 years' service to the Partnership, its
predecessors and/or successors. Amounts are allocated among the executive
officers as approved by the Compensation Committee of the Board, based on a
target annual retirement benefit (including amounts projected to be
available from the Partnership's profit sharing retirement plan) of 57.5%
of average base salary projected for the three years prior to retirement at
age 65. Each officer's account accrues interest at the prime rate as
established from time to time by the Partnership's lead bank, beginning on
December 1 of the year of grant. Executive officers leaving the employ of
the Partnership prior to reaching age 62 or with less than 20 years of
service will forfeit their entire balance. In the event of death, total
disability, retirement at age 62 or over with at least 20 years' service,
or removal of the Managing General Partner (unless resulting from
reorganization of the Partnership into corporate form), all amounts accrued
will become immediately and fully vested and payable to the executive
officers. In the event of a "change-in-control" (as defined), all amounts
accrued will become fully vested and will be funded in a trust, for the
benefit of the executive officers when they reach age 62, die, or become
totally disabled, whichever occurs first. At each executive officer's
option, the accrued balance may be distributed in a lump sum or in a number
of future payments over a period not to exceed 10 years.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
A. Security Ownership of Certain Beneficial Owners.
The following table sets forth information obtained by the Partnership from
Schedule 13G filings with the Securities and Exchange Commission concerning
the beneficial ownership (determined in accordance with the rules of the
Securities and Exchange Commission) by parties known to the Partnership to
own more than 5 percent of its Depositary Units representing limited
partner interests as of February 17, 1995.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
Name of Percent
Beneficial Beneficial of Investment Power Voting Power
Owner Ownership Units Sole Shared Sole Shared
<S> <C> <C> <C> <C> <C> <C>
FMR Corp.
82 Devonshire Street
Boston, MA 02109 1,168,300 5.25 1,168,300 -0- 375,200 -0-
B. Security Ownership of Management.
The following table sets forth the number of Depositary Units representing
limited partner interests beneficially owned by each Director and named
executive officer and by all officers and Directors as a group as of
February 17, 1995.
</TABLE>
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
Benefi-
Name of cial Own-
Investment Power
Voting Power Percent
of
Beneficial Owner ership Sole Shared Sole Shared Units
<S> <C> <C> <C> <C> <C> <C>
Richard L. Kinzel (1) 280,582 84,667 195,915 84,667 195,915 1.3
Mary Ann Jorgenson (2) 382,388 200 382,188 200 382,188 1.7
Donald H. Messinger 207 207 -0- 207 -0- *
James L. Miears (1) 212,212 14,830 197,382 14,830 197,382 *
Thomas A. Tracy 1,663 657 1,006 657 1,006 *
Bruce A. Jackson 18,947 17,947 1,000 17,947 1,000 *
Walter R. Wittmer (3) 6,969 6,819 150 6,819 150 *
Daniel R. Keller (1) 212,387 20,877 191,510 20,877 191,510 *
All Directors and officers as a group (17 individuals)
827,390
214,434
612,956
214,434
612,956
3.7
* Less than one percent of outstanding units.
<PAGE>
(1) Includes 191,510 units held by a corporation of which Messrs. Kinzel,
Miears and Keller, together with certain current and former executive
officers of the Partnership, are shareholders and, under Rule 13d-3 of the
Securities and Exchange Commission, are deemed to be the beneficial owners
of these units by having shared investment and voting power. Messrs.
Kinzel, Miears and Keller disclaim beneficial ownership of 165,700, 170,862
and 173,443, respectively, of these units. The units owned by the
corporation have been counted only once in the total of the directors and
executive officers as a group.
(2) Includes 381,988 units held by certain trusts of which Mrs. Jorgenson
and another partner of Squire, Sanders & Dempsey are trust advisors, as to
which Mrs. Jorgenson disclaims beneficial ownership.
(3) Includes 150 units held by Mr. Wittmer's son, as to which Mr. Wittmer
disclaims beneficial ownership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Attention is directed to Notes 1 and 4 to the consolidated financial
statements located on pages 18 and 22 of this Form 10-K report, which are
incorporated herein by this reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K.
A.1. Financial Statements
With respect to the consolidated financial statements of the Registrant set
forth below, attention is directed to pages 13-23 of this Form 10-K report,
which are incorporated herein by this reference.
(i) Consolidated Balance Sheets - December 31, 1994 and 1993.
(ii) Consolidated Statements of Operations - Years ended December 31, 1994,
1993 and 1992.
(iii) Consolidated Statements of Partners' Equity - Years ended December
31, 1994, 1993 and 1992.
(iv) Consolidated Statements of Cash Flows - Years ended December 31, 1994,
1993 and 1992.
(v) Notes to Consolidated Financial Statements - December 31, 1994, 1993
and 1992.
(vi) Report of Independent Public Accountants.
A.2. Financial Statement Schedules
All Schedules are omitted, as the information is not required or is
otherwise furnished.
<PAGE>
A.3. Exhibits
The exhibits listed below are submitted in a separate section of this
report immediately following the Signatures page.
</TABLE>
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
3.1* Form of Third Amended and Restated Certificate and Agreement of
Limited Partnership of Cedar Fair, L.P. (included as Exhibit A to the
Prospectus).
3.2 Form of Admission and Substitution Agreement. Incorporated herein by
reference to Exhibit 3.2 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1988.
3.3 Amendment No. 2 to Third Amended and Restated Agreement of Limited
Partnership of Cedar Fair, L.P., dated as of December 31, 1992.
Incorporated herein by reference to Exhibit 3.3 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1992.
4* Form of Deposit Agreement.
10.1* Registration Agreement between Cedar Fair, L.P. and certain limited
partners thereof.
10.3* Letter amending Registration Agreement between Cedar Fair, L.P. and
certain limited partners thereof.
10.4 Private Shelf Agreement with Prudential Insurance Company of America
dated August 24, 1994 and $50,000,000, 8.43% Senior Note Due August 24,
2006. Incorporated herein by reference to Exhibit 10.1 to Registrant's Form
10-Q for the quarter ended October 2, 1994.
10.5 Contribution Agreement by and among Dorney Park Coaster Company,
Wildwater Kingdom, Inc. and the Registrant, dated July 21, 1992.
Incorporated herein by reference to Registrant's Form 8-K filed August 4,
1992.
10.9 Credit Agreement dated as of October 6, 1994 between Cedar Fair, L.P.
and Society National Bank, NBD Bank, N.A. and National City Bank.
Incorporated herein by reference to Exhibit 10 to Registrant's Form 10-Q
for the quarter ended October 2, 1994.
10.15 Bonus and Incentive Compensation Policy for Officers of Cedar Fair
Management Company dated as of November 2, 1992. Incorporated herein by
reference to Exhibit 10.15 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992.
21* Subsidiaries of Cedar Fair, L.P.
27 Financial Data Schedule
* Incorporated herein by reference to the Registration Statement on Form S-
1 of Cedar Fair, L.P., Registration No. 1-9444, filed April 23, 1987.
<PAGE>
B. Reports on Form 8-K.
Not Applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
CEDAR FAIR, L.P.
(Registrant)
DATED: March 2, 1995
/S/ Richard L. Kinzel
Richard L. Kinzel
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been executed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
</TABLE>
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C> <C>
/S/ Richard L. Kinzel President and Chief Executive March 2, 1995
Richard L. Kinzel Officer, Director
/S/ Bruce A. Jackson Corporate Vice President-Finance March 2, 1995
Bruce A. Jackson (Chief Financial Officer)
/S/ Charles M. Paul Controller March 2, 1995
Charles M. Paul (Principal Accounting Officer)
/S/ Mary Ann Jorgenson Director March 2, 1995
Mary Ann Jorgenson
/S/ Donald H. Messinger Director March 2, 1995
Donald H. Messinger
/S/ James L. Miears Executive Vice President, March 2, 1995
James L. Miears Director
/S/ Thomas A. Tracy Director March 2, 1995
Thomas A. Tracy
<PAGE>
</TABLE>
<TABLE>
ANNUAL REPORT ON FORM 10-K
CEDAR FAIR, L.P.
For the Year Ended December 31, 1994
EXHIBIT INDEX
<CAPTION>
Exhibit Page
<S> <C> <C>
3.1 Form of Third Amended and Restated Certificate and Agreement of Limited
Partnership of Cedar Fair, L.P.
*
3.2 Form of Admission and Substitution Agreement. *
3.3 Amendment No. 2 to Third Amended and Restated Agreement of Limited
Partnership of Cedar Fair, L.P., dated as of December 31, 1992.
*
4 Form of Deposit Agreement. *
10.1 Registration Agreement between Cedar Fair, L.P. and certain limited
partners thereof. *
10.3 Letter amending Registration Agreement between Cedar Fair, L.P. and
certain limited partners thereof.
*
10.4 Private Shelf Agreement with Prudential Insurance Company of America
dated August 24, 1994 and $50,000,000, 8.43% Senior Note Due August 24,
2006.
*
10.5 Contribution Agreement by and among Dorney Park Coaster Company,
Wildwater Kingdom, Inc. and the Registrant, dated July 21, 1992.
*
10.9 Credit Agreement dated as of October 6, 1994 between Cedar Fair, L.P.
and Society National Bank, NBD Bank, N.A. and National City Bank
*
10.15 Bonus and Incentive Compensation Policy for Officers of Cedar Fair
Management Company dated as of November 2, 1992.
*
21 Subsidiaries of Cedar Fair, L.P. *
27 Financial Data Schedule 37
* Incorporated herein by reference; see Item 14(A) (3).
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 350
<SECURITIES> 0
<RECEIVABLES> 1350
<ALLOWANCES> 0
<INVENTORY> 3416
<CURRENT-ASSETS> 8198
<PP&E> 303253
<DEPRECIATION> 98922
<TOTAL-ASSETS> 223982
<CURRENT-LIABILITIES> 33602
<BONDS> 0
<COMMON> 109375
0
0
<OTHER-SE> 5679
<TOTAL-LIABILITY-AND-EQUITY> 223982
<SALES> 85898
<TOTAL-REVENUES> 198358
<CGS> 21113
<TOTAL-COSTS> 115382
<OTHER-EXPENSES> 14960
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7293
<INCOME-PRETAX> 62825
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 62825
<EPS-PRIMARY> 2.79
<EPS-DILUTED> 0
</TABLE>
