<PAGE>
FORM 10 - Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 1, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.
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 44871-5006
(Address of principal executive offices)
(zip code)
(419) 626-0830
(Registrant's telephone number, including area code)
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
Title of Class Units Outstanding As Of
Depositary Units November 1, 1995
(Representing Limited Partner 22,965,208
Interests)
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CEDAR FAIR, L.P.
INDEX
Part I - Financial Information
Item 1. Financial Statements 3-8
Item 2. Management's Discussion and 9
Analysis of Financial Condition
and Results of Operations
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
Exhibit Index 12
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PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
<TABLE>
CEDAR FAIR, L.P.
CONSOLIDATED BALANCE SHEETS
(In thousands)
<CAPTION>
ASSETS 10/1/95 12/31/94
<S> <C> <C>
Current Assets:
Cash $ 1,547 $ 350
Receivables 12,952 1,350
Inventories 4,363 3,416
Prepaids 891 3,082
19,753 8,198
Land, Buildings and Equipment:
Land 27,335 22,675
Land improvements 36,630 31,366
Buildings 88,896 70,259
Rides and equipment 205,482 174,450
Construction in progress 3,511 4,503
361,854 303,253
Less accumulated depreciation (113,264) (98,922)
248,590 204,331
Intangibles, net of amortization 11,162 11,453
$279,505 $223,982
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable $ 7,396 $ 5,728
Distribution payable to partners 13,338 12,636
Accrued interest 531 1,595
Accrued taxes 2,573 2,757
Accrued salaries, wages and benefits 8,049 3,241
Self-insurance reserves 6,415 6,087
Other accrued liabilities 5,637 1,558
43,939 33,602
Other Liabilities 3,711 3,926
Long-Term Debt:
Revolving credit loans 3,200 21,400
Term debt 50,000 50,000
53,200 71,400
Partners' Equity:
Special L.P. interests 5,290 5,290
General partners 802 389
Limited partners, 22,965 units outstanding 172,563 109,375
178,655 115,054
$279,505 $223,982
The accompanying Notes to Consolidated Financial Statements are
an integral part of these balance sheets.
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CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per unit data)
<CAPTION>
Three months ended Twelve months
ended
10/1/95 10/2/94 10/1/95 10/2/94
Net revenues $161,164 $142,053 $217,066 $198,229
Costs and expenses:
Cost of products sold 16,427 14,571 22,809 21,083
Operating expenses 37,940 34,214 78,040 72,166
Selling, general and 13,360 10,854 24,114 21,814
administrative
Depreciation and amortization 11,140 9,197 16,739 14,976
78,867 68,836 141,702 130,039
Operating income 82,297 73,217 75,364 68,190
Interest expense, net 1,662 2,354 6,777 7,399
Insurance claim settlements - 524 (22) 2,124
Net income 80,635 71,387 68,565 62,915
Net income allocated to
general partners 806 714 686 629
Net income allocated to
limited partners $79,829 $70,673 $67,879 $62,286
Weighted average limited
partner units outstanding 22,774 22,262 22,420 22,261
Net income per limited
partner unit $3.51 $3.17 $3.03 $2.80
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
<PAGE>
CEDAR FAIR, L.P.
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, 1994 $5,290 $ 89 $109,375 $115,054
Allocation of net loss - (123) (12,225) (12,348)
Distribution declared - (127) (12,509) (12,636)
($.5625 per limited partner
unit)
Balance at March 26, 1995 5,290 139 84,641 90,070
Allocation of net income - 116 11,424 11,540
Distribution declared - (126) (12,510) (12,636)
($.5625 per limited partner
unit)
Balance at June 25, 1995 5,290 129 83,555 88,974
Issuance of 725 limited
partnership units for
acquisition - - 22,384 22,384
Allocation of net income - 806 79,829 80,635
Distribution declared - (133) (13,205) (13,338)
($.575 per limited partner
unit)
Balance at October 1, 1995 $5,290 $ 802 $172,563 $178,655
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
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CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<CAPTION>
Twelve months
Three months ended ended
10/1/95 10/2/94 10/1/95 10/2/94
<S> <C> <C> <C> <C>
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES
Net income $80,635 $71,387 $ 68,565 $62,915
Adjustments to reconcile net income to net cash
from operating activities
Depreciation and amortization 11,140 9,197 16,739 14,976
Change in assets and liabilities net of effects
from acquisition of Worlds of Fun and Oceans of
Fun:
Decrease in inventories 6,643 5,734 558 143
Decrease (increase) in current and other assets (2,867) 1,482 (3,791) (2,074)
Increase (decrease) in accounts payable (13,203) (11,041) (1,961) 387
Increase in self-insurance reserves 566 2,440 41 2,229
Increase (decrease) in other current 877 (681) 2,687 1,900
liabilities
Increase in other liabilities 281 447 933 1,100
Net cash from operating activities 84,072 78,965 83,771 81,576
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES
Acquisition of Worlds of Fun and Oceans of Fun:
Land, buildings, rides and equipment acquired (37,404) - (37,404) -
Negative working capital assumed, net of cash 1,381 - 1,381 -
acquired
Capital expenditures (4,003) (2,162) (27,169) (20,619)
Net cash (for) investing activities (40,026) (2,162) (63,192) (20,619)
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES
Acquisition of Worlds of Fun and Oceans of Fun:
Borrowings on revolving credit loans for
refinancing of assumed long-term debt 13,903 - 13,903 -
Issuance of limited partnership units 22,384 - 22,384 -
Net payments on revolving credit loans (69,903) (64,000) (10,703) (11,000)
Distributions paid to partners (12,636) (11,232) (50,546) (44,930)
Net cash (for) financing activities (46,252) (75,232) (24,962) (55,930)
Cash:
Net increase (decrease) for the period (2,206) 1,571 (4,383) 5,027
Balance, beginning of period 3,753 4,359 5,930 903
Balance, end of period $ 1,547 $ 5,930 $ 1,547 $ 5,930
SUPPLEMENTAL INFORMATION
Cash payments for interest expense $ 2,711 $ 3,048 $ 6,787 $ 6,922
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
</TABLE>
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CEDAR FAIR, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTERS ENDED
OCTOBER 1, 1995 AND OCTOBER 2, 1994
(1) Interim Reporting
The accompanying consolidated financial statements have been
prepared from the financial records of Cedar Fair, L.P. (the
Partnership) without audit and reflect all adjustments which are,
in the opinion of management, necessary to fairly present the
results of the interim periods covered in this report.
The Partnership operates four amusement park complexes (Cedar
Point and Soak City in Sandusky, Ohio; Valleyfair in Shakopee,
Minnesota; Dorney Park and Wildwater Kingdom near Allentown,
Pennsylvania; and Worlds of Fun and Oceans of Fun in Kansas City,
Missouri), which are open to the public from May through October.
These parks generate virtually all of the Partnership's annual
revenue during a 120-130-day operating season, with the major
portion concentrated in the third quarter during the peak
vacation months of July and August.
Due to the highly seasonal nature of the Partnership's
operations, the results for any interim period are not indicative
of the results to be expected for the full year. Accordingly,
the Partnership has elected to present financial information
regarding operations for the preceding twelve month periods ended
October 1, 1995 and October 2, 1994 to accompany the quarterly
results. Because amounts for the 12 months ended October 1, 1995
include actual 1994 fourth quarter operations, they are not
necessarily indicative of 1995 full calendar year operations.
The Partnership's operating results for the three and twelve
months ended October 1, 1995, include the results of Worlds of
Fun and Oceans of Fun for the period since they were acquired on
July 28, 1995 (see Note 3). The weighted average units used in
calculating net income per limited partner unit give effect to
the estimated 725,000 units issuable in connection with the
acquisition as of that date. The exact number of units to be
issued is subject to final determination at the time of this
filing.
The Partnership's operating results for the three and twelve
months ended October 2, 1994, include gains relating to insurance
claims for winter storm damage at the Pennsylvania park in 1994
and flood damage and business interruption losses at the
Minnesota park in 1993.
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(2) Significant Accounting and Reporting Policies
The Partnership's consolidated financial statements for the
quarters ended October 1, 1995 and October 2, 1994 included in
this Form 10-Q report have been prepared in accordance with the
accounting policies described in the Notes to Consolidated
Financial Statements for the year ended December 31, 1994, which
were included in the Form 10-K filed on March 29, 1995. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and
Exchange Commission. These financial statements should be read
in conjunction with the financial statements and the notes
thereto included in the Form 10-K referred to above.
To assure that its highly seasonal operations will not result in
misleading comparisons of current and subsequent interim periods,
the Partnership has adopted the following reporting procedures:
(a) depreciation, advertising and certain seasonal operating
costs are expensed ratably during the operating season, including
certain costs incurred prior to the season and amortized over the
season and (b) all other costs are expensed as incurred or
ratably over the entire year.
(3) Acquisition:
On July 28, 1995, the Partnership acquired substantially all of
the assets of Worlds of Fun and Oceans of Fun in a transaction
valued at $40 million. Worlds of Fun is a traditional, family-
oriented amusement park and Oceans of Fun is one of the largest
water parks in the midwest. Together, they serve more than 1.5
million guests per year, principally from Missouri, Kansas and
Nebraska. The preliminary purchase price calculations result in
the assumption of approximately $18 million of liabilities
and the issuance of approximately 725,000 unregistered limited
partnership units, which have been recorded at the July 28 NYSE
closing price of $30.875, or $22.4 million in the aggregate.
The Partnership has repaid the $13.9 million of long-term
debt assumed with revolving credit borrowings at lower rates.
Worlds of Fun and Oceans of Fun's assets, liabilities and results
of operations since July 28, 1995 are included in the
accompanying consolidated financial statements. The acquisition
has been accounted for as a purchase, and accordingly the
purchase price has been allocated to assets and liabilities
acquired based upon their fair values at the date of acquisition.
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The table below summarizes the unaudited consolidated pro forma
results of operations assuming the acquisition had occurred at
the beginning of each of the periods presented, with adjustments
primarily attributable to interest expense relating to the
refinancing of long-term debt and depreciation expense relating
to the fair value of assets acquired.
[CAPTION]
Twelve Months
Three Months Ended Ended
10/1/95 10/2/94 10/1/95 10/2/94
(In thousands except per unit data)
[S] [C] [C] [C] [C]
Net revenues $168,454 $159,967 $237,747 $228,925
Net income 83,423 78,407 67,135 66,736
Net income per $ 3.59 $ 3.38 $ 2.89 $ 2.87
limited partner unit
These pro forma results have been prepared for comparative
purposes only and do not purport to be indicative of what would
have occurred had the acquisition been made at the beginning of
the periods presented, or of results which may occur in the
future.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Partnership's net revenues, including Worlds of Fun and
Oceans of Fun from the date of their acquisition, increased 13%
to $161.2 million for the quarter ended October 1, 1995 from
$142.1 million for the quarter ended October 2, 1994. Net
income for the period also increased 13% to $80.6 million, or
$3.51 per limited partner unit, from $71.4 million, or $3.17 per
unit, in 1994. The 1994 operating results included a nonrecurring
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.
Operating results for the three and twelve months ended October 1,
1995, were significantly impacted by the acquisition of Worlds of
Fun and Oceans of Fun, which contributed $10.2 million of revenues
and $3.5 million of operating income subsequent to their
acquisition in late July. Excluding the acquisition, net revenues
and net income for the quarter would have increased 6% and 8%,
respectively, to $151.0 million and $77.1 million, or $3.42 per
unit. On a combined basis, this increase resulted from a 1%
increase in attendance and a 4% increase in guest per capita
spending at our original three parks, and a 27% increase in hotel
revenues, principally due to the successful 1995 expansion of
Hotel Breakers.
Included in costs and expenses are approximately $1,012,000 of
incentive fees payable to the managing general partner relating
to the 1995 third quarter distribution, which exceeded the
minimum distribution as defined in the partnership agreement by
24.25 cents per unit, or $5.6 million in the aggregate. This
compares to $970,000 of incentive fees in the 1994 third quarter.
For the entire 1995 operating season, combined attendance at the
original three parks was the second highest in the Partnership's
history and totaled 5.89 million, down less than 1% from 1994's
record level. Worlds of Fun added another 350,000 to the
Partnership's combined 1995 attendance for the period since its
acquisition. We are very pleased with the combined attendance at
our original three parks, particularly following a year in which
a very popular new roller coaster was introduced at Cedar Point,
and after a cold and rainy Spring this year at Valleyfair and
Dorney Park.
In-park guest per capita spending also continued to rise at each
of our parks. During the 1995 operating season, combined in-park
guest per capita spending for our original three parks increased
4% to a record $31.88 from $30.69 in 1994.
<PAGE>
Financial Condition
The Partnership's $95 million revolving credit facility is
adequate to meet seasonal working capital needs, planned capital
expenditures and quarterly distributions. In our highly seasonal
business with investment heavily concentrated in property and
equipment, the negative working capital ratio of 2.2 at October
1, 1995 is financially advantageous. Current assets are at
normal seasonal levels and credit facilities are in place to fund
current liabilities as required.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibits:
(a) Exhibit (20) 1995 Third Quarter Report and Cash
Distribution Notice.
(b) Reports on The Registrant filed the following reports on
Form 8-K. Form 8 during the third quarter ended October
1, 1995 and through the date of this filing:
1) August 11, 1995: Form 8-K, Registrant
acquires substantially all of the assets of
Hunt Midwest Entertainment, Inc., located
in Kansas City, Missouri.
2) October 11, 1995: Form 8-K/A, Amendment
No. 1 to Form 8-K filed August 11, 1995.
Item 7(a)(1) Financial Statements of Hunt
Midwest Entertainment, Inc. for
the years ended December 31, 1994
and 1993, together with Independent
Auditors' Report.
(a)(2) Financial Statements (unaudited)
of Hunt Midwest Entertainment,
Inc. for the six months ended
June 30, 1995 and 1994.
(b) Pro Forma Financial Information.
<PAGE>
SIGNATURES
Pursuant to the requirements 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)
By Cedar Fair Management Company
Managing General Partner
Date: November 14, 1995 By: Bruce A. Jackson
Bruce A. Jackson
Vice President
(Chief Financial Officer)
By: Charles M. Paul
Charles M. Paul
Controller
(Chief Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-START> JUN-26-1995 OCT-03-1994
<PERIOD-END> OCT-01-1995 OCT-01-1995
<CASH> 1,547 1,547
<SECURITIES> 0 0
<RECEIVABLES> 12,952 12,952
<ALLOWANCES> 0 0
<INVENTORY> 4,363 4,363
<CURRENT-ASSETS> 19,753 19,753
<PP&E> 361,854 361,854
<DEPRECIATION> 113,264 113,264
<TOTAL-ASSETS> 279,505 279,505
<CURRENT-LIABILITIES> 43,939 43,939
<BONDS> 0 0
<COMMON> 172,563 172,563
0 0
0 0
<OTHER-SE> 6,092 6,092
<TOTAL-LIABILITY-AND-EQUITY> 279,505 279,505
<SALES> 161,164 217,066
<TOTAL-REVENUES> 161,164 217,066
<CGS> 16,427 22,809
<TOTAL-COSTS> 67,727 118,893
<OTHER-EXPENSES> 11,140 16,739
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,662 6,777
<INCOME-PRETAX> 80,635 68,565
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 80,635 68,565
<EPS-PRIMARY> 3.51 3.03
<EPS-DILUTED> 0 0
</TABLE>
