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 March 31, 1996
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 May 14, 1996
(Representing Limited Partner Interests) 22,960,208
<PAGE>
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
Index to 12
Exhibits
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
CEDAR FAIR, L.P.
CONSOLIDATED BALANCE SHEETS
(In thousands)
<CAPTION> 3/31/96 12/31/95
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 105 $ 111
Receivables 656 2,468
Inventories 8,830 4,387
Prepaids 4,793 2,839
14,384 9,805
Land, Buildings and Equipment:
Land 27,999 27,999
Land improvements 36,617 36,617
Buildings 88,910 88,910
Rides and equipment 205,364 205,364
Construction in progress 19,152 8,047
378,042 366,937
Less accumulated depreciation (113,105) (113,097)
264,937 253,840
Intangibles, net of amortization 10,981 11,072
$290,302 $274,717
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable $ 13,530 $ 6,409
Distribution payable to partners 13,335 13,335
Accrued interest 895 1,685
Accrued taxes 3,197 2,889
Accrued salaries, wages and benefits 3,128 4,601
Self-insurance reserves 6,541 6,402
Other accrued liabilities 2,748 2,327
43,374 37,648
Other Liabilities 4,805 5,593
Long-Term Debt:
Revolving credit loans 69,700 30,000
Term debt 50,000 50,000
119,700 80,000
Partners' Equity:
Special L.P. interests 5,290 5,290
General partners 241 531
Limited partners, 22,960,208 units 116,892 145,655
outstanding
122,423 151,476
$290,302 $274,717
The accompanying Notes to Consolidated Financial Statements are
an integral part of these balance sheets.
<PAGE>
CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per unit data)
<CAPTION> Three months ended Twelve months ended
3/31/96 3/26/95 3/31/96 3/26/95
<S> <C> <C> <C> <C>
Net revenues $ 348 $ 382 $218,163 $198,382
Costs and expenses:
Cost of products sold 106 142 22,844 21,143
Operating expenses 11,190 8,882 83,109 73,730
Selling, general and 2,803 1,984 25,580 21,247
administrative
Depreciation and amortization 99 96 16,745 14,944
14,198 11,104 148,278 131,064
Operating income (loss) (13,850) (10,722) 69,885 67,318
Insurance claim settlement -- -- -- 502
Interest expense, net 1,868 1,626 7,119 7,304
Net income (loss) (15,718) (12,348) 62,766 60,516
Net income (loss) allocated to (157) (123) 628 605
general partners
Net income (loss) allocated to $(15,561) $(12,225) $ 62,138 $ 59,911
limited partners
Weighted average limited 23,049 22,292 22,787 22,274
partner units outstanding
Net income (loss) per limited $ (.68) $ (.55) $2.73 $ 2.69
partner unit
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, 1995 $ 5,290 $ 531 $145,655 $151,476
Allocation of net loss -- (157) (15,561) (15,718)
Distribution declared -- (133) (13,202) (13,335)
($.575 per limited partner
unit)
Balance at March 31, 1996 $ 5,290 $ 241 $116,892 $122,423
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
<PAGE>
CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
Three months ended Twelve months ended
3/31/96 3/26/95 3/31/96 3/26/95
<S> <C> <C> <C> <C>
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES
Net income (loss) $(15,718) $(12,348) $62,766 $60,516
Adjustments to reconcile net income to net cash from
(for) operating activities
Depreciation and amortization 99 96 16,745 14,944
Change in assets and liabilities, net of effects
from acquisition of Worlds of Fun / Oceans of Fun:
Increase in inventories (4,443) (3,630) (143) (250)
Decrease (increase) in current and other assets (142) 1,112 (987) 1,007
Increase (decrease) in accounts payable 7,121 6,098 (1,165) 1,743
Increase (decrease) in self-insurance reserves 139 (178) 632 1,932
Increase (decrease) in other current liabilities (1,534) (1,611) 1,033 (1,244)
Increase (decrease) in other liabilities (788) (543) 1,422 1,029
Net cash from (for) operating activities (15,266) (11,004) 80,303 79,677
CASH FLOWS (FOR) INVESTING ACTIVITIES
Capital expenditures (11,105) (7,096) (32,529) (22,668)
Acquisition of Worlds of Fun / Oceans of Fun:
Land, buildings, rides and equipment acquired - - (37,350) -
Negative working capital assumed, net of cash - - 1,481 -
acquired
Net cash (for) investing activities (11,105) (7,096) (68,398) (22,668)
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES
Net borrowings (payments) on revolving credit loans 39,700 31,100 3,297 (9,400)
Distributions paid to partners (13,335) (12,636) (51,944) (47,738)
Acquisition of Worlds of Fun / Oceans of Fun:
Borrowings on revolving credit loans for refinancing
of assumed long-term debt - - 13,903 - -
Issuance of limited partnership units - - 22,230 -
Net cash from (for) financing activities 26,365 18,464 (12,514) (57,138)
Cash:
Net increase (decrease) for the period (6) 364 (609) (129)
Balance, beginning of period 111 350 714 843
Balance, end of period $ 105 $ 714 $ 105 $ 714
SUPPLEMENTAL INFORMATION
Cash payments for interest expense $ 2,658 $ 2,622 $ 6,823 $ 9,112
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
</TABLE>
<PAGE>
CEDAR FAIR, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTERS ENDED
MARCH 31, 1996 AND MARCH 26, 1995
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.
Due to the highly seasonal nature of the Partnership's amusement
park operations, the results for the interim periods 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 March 31, 1996 and March 26, 1995 to accompany the
quarterly results. Because amounts for the 12 months ended March
31, 1996 include actual 1995 season operating results, they are
not necessarily indicative of 1996 full calendar year operations.
(1) Significant Accounting and Reporting Policies:
The Partnership's consolidated financial statements for the
quarters ended March 31, 1996 and March 26, 1995 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, 1995, which
were included in the Form 10-K filed on March 29, 1996. 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.
(2) Interim Reporting:
The Partnership operates four amusement parks (Cedar Point in
Sandusky, Ohio; Valleyfair in Shakopee, Minnesota; Dorney Park &
Wildwater Kingdom near Allentown, Pennsylvania; and Worlds of Fun
/ Oceans of Fun in Kansas City, Missouri), which generate
virtually all of the Partnership's annual revenue during a 130-
day operating season, with the major portion concentrated in the
third quarter during the peak vacation months of July and August.
To assure that these 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,
<PAGE>
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:
As discussed in Note (7) in the 1995 Annual Report to
unitholders, on July 28, 1995, the Partnership acquired
substantially all of the assets of Worlds of Fun and Oceans of
Fun.
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.
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
3/31/96 3/26/95 3/31/96 3/26/95
(In thousands except per unit data)
<S> <C> <C> <C> <C>
Net revenues $ 348 $ 445 $236,335 $229,999
Net income (15,718) (15,336) 65,701 64,423
Net income per $ (.68) $ (.66) $ 2.82 $ 2.77
limited partner unit
</TABLE>
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 amusement parks are open to the public starting
in April or May of each year and ending in early October.
Therefore, net revenues for the first quarter are historically
minimal and are primarily from restaurant operations and marina
rentals. Net revenues for the quarter ended March 31, 1996 were
$348,000 compared to $382,000 for the quarter ended March 26,
1995.
Operating results for the first quarter include normal off-season
operating, maintenance and administrative expenses for the four
parks. Expenses increased in 1996 due to the addition of Worlds
of Fun's first quarter downtime expenses and an additional week
in the 1996 period. Net loss for the quarter was $15.7 million
or $.68 per limited partner unit, compared with a loss of $12.3
million, or $.55 per unit, in 1995.
Included in costs and expenses are approximately $970,000 of
incentive fees payable to the managing general partner relating
to the 1996 first quarter distribution, which exceeded the
minimum distribution as defined in the partnership agreement by
23.25 cents per unit, or $5,392,000 in the aggregate. This
compares to $930,000 of incentive fees in the 1995 first quarter.
Financial Condition:
The Partnership has available through April, 1999 a $95 million
revolving credit facility, of which $69.7 million was borrowed
and in use as of March 31, 1996. This credit facility, together
with a supplemental $20 million seasonal facility, will be
adequate to meet seasonal working capital needs, planned capital
expenditures and distribution requirements.
In our highly seasonal business with investment heavily
concentrated in property and equipment, the negative working
capital ratio of 3.0 at March 31, 1996 is financially
advantageous. Current assets are at normal seasonal levels and
credit facilities are in place to fund current liabilities as
required.
Partnership Tax Status:
Under current law the Partnership's tax status as a publicly
traded partnership is scheduled to end on December 31, 1997,
unless proposed legislation is enacted to extend its
<PAGE>
grandfathered status. The Partnership is studying various
alternatives in the event that the law is not changed.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibits:
(a) Exhibit (20) - 1996 First Quarter Report and Cash
Distribution Notice
(b) Reports on Form 8-K: None
<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: May 14, 1996 By Bruce A. Jackson
Bruce A. Jackson
Vice President
(Chief Financial Officer)
By Charles M. Paul
Charles M. Paul
Controller
(Chief Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
Page Number
Exhibit (20) Report to Unitholders, May 15, 1996 13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-END> MAR-31-1996 MAR-31-1996
<CASH> 105 105
<SECURITIES> 0 0
<RECEIVABLES> 656 656
<ALLOWANCES> 0 0
<INVENTORY> 8,830 8,830
<CURRENT-ASSETS> 14,384 14,384
<PP&E> 378,042 378,042
<DEPRECIATION> 113,105 113,105
<TOTAL-ASSETS> 290,302 290,302
<CURRENT-LIABILITIES> 43,374 43,374
<BONDS> 0 0
<COMMON> 116,892 116,892
0 0
0 0
<OTHER-SE> 5,531 5,531
<TOTAL-LIABILITY-AND-EQUITY> 290,302 290,302
<SALES> 348 218,163
<TOTAL-REVENUES> 348 218,163
<CGS> 106 22,844
<TOTAL-COSTS> 14,099 131,533
<OTHER-EXPENSES> 99 16,745
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,868 7,119
<INCOME-PRETAX> (15,718) 62,766
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 0 0
<EPS-PRIMARY> (.68) 2.73
<EPS-DILUTED> 0 0
