FORM 10 - Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 29, 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 November 1, 1996
(Representing Limited Partner Interests) 22,960,208
<PAGE>
CEDAR FAIR, L.P.
INDEX
FORM 10 - Q
FOR QUARTERLY PERIOD ENDED SEPTEMBER 29, 1996
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 10
8-K
Signatures 11
Index to Exhibits 12
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
CEDAR FAIR, L.P.
CONSOLIDATED BALANCE SHEETS
(In thousands)
<CAPTION> 9/29/96 12/31/95
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 6,966 $ 111
Receivables 14,744 2,468
Inventories 4,489 4,387
Prepaids 970 2,839
27,169 9,805
Land, Buildings and Equipment:
Land 28,056 27,999
Land improvements 39,106 36,617
Buildings 91,443 88,910
Rides and equipment 230,850 205,364
Construction in progress 1,565 8,047
391,020 366,937
Less accumulated depreciation (130,289) (113,097)
260,731 253,840
Intangibles, net of amortization 10,800 11,072
$298,700 $274,717
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable $ 5,675 $ 6,409
Distribution payable to partners 14,495 13,335
Accrued interest 461 1,685
Accrued taxes 2,753 2,889
Accrued salaries, wages and benefits 8,671 4,601
Self-insurance reserves 7,327 6,402
Other accrued liabilities 5,842 2,327
45,224 37,648
Other Liabilities 5,624 5,593
Long-Term Debt:
Revolving credit loans - 30,000
Term debt 50,000 50,000
50,000 80,000
Partners' Equity:
Special L.P. interests 5,290 5,290
General partners 996 531
Limited partners, 22,960 units 191,566 145,655
outstanding
197,852 151,476
$298,700 $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 Twelve months
ended ended
9/29/96 10/1/95 9/29/96 10/1/95
<S> <C> <C> <C> <C>
Net revenues $167,503 $161,164 $249,362 $217,066
Costs and expenses:
Cost of products sold 16,254 16,427 24,986 22,809
Operating expenses 40,721 37,940 95,739 78,040
Selling, general and 14,202 13,360 28,935 24,114
administrative
Depreciation and 10,976 11,140 18,794 16,739
amortization
82,153 78,867 168,454 141,702
Operating income 85,350 82,297 80,908 75,364
Interest expense, net 1,470 1,662 7,058 6,777
Insurance claim settlement - - - (22)
Net income 83,880 80,635 73,850 68,565
Net income allocated to 839 806 739 686
general partners
Net income allocated to $83,041 $79,829 $73,111 $67,879
limited partners
Weighted average limited 23,051 22,774 23,047 22,420
partner units outstanding
Net income per limited $ 3.60 $ 3.51 $ 3.17 $ 3.03
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 $ 5,290 $ 531 $ 145,655 $ 151,476
31, 1995
Allocation of net - (157) (15,561) (15,718)
loss
Distribution declared - (133) (13,202) (13,335)
($.575 per limited
partner unit)
Balance at March 31, 5,290 241 116,892 122,423
1996
Allocation of net - 194 19,185 19,379
income
Distribution declared - (133) (13,202) (13,335)
($.575 per limited
partner unit)
Balance at June 30, 5,290 302 122,875 128,467
1996
Allocation of net - 839 83,041 83,880
income
Distribution declared - (145) (14,350) (14,495)
($.625 per limited
partner unit)
Balance at September $ 5,290 $ 996 $ 191,566 $ 197,852
29, 1996
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
<PAGE>
CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<CAPTION> Three months ended Twelve months ended
<S> <C> <C> <C> <C>
9/29/96 10/1/95 9/29/96 10/1/95
CASH FLOWS FROM (FOR) OPERATING
ACTIVITIES
Net income $ 83,880 $ 80,635 $73,850 $68,565
Adjustments to reconcile net income
to net cash from operating
activities
Depreciation and amortization 10,976 11,140 18,794 16,739
Change in assets and liabilities
net of effects from
acquisition of Worlds of Fun and
Oceans of Fun:
Decrease (increase) in inventories 7,258 6,643 (280) 558
Increase in current and other (1,254) (2,867) (1,871) (3,791)
assets
Decrease in accounts payable (11,660) (13,203) (1,721) (1,961)
Increase in self-insurance reserves 887 566 912 41
Increase (decrease) in other (1,359) 877 937 2,687
current liabilities
Increase in other liabilities 777 281 1,913 933
Net cash from operating activities 89,505 84,072 92,534 83,771
CASH FLOWS FROM (FOR) INVESTING
ACTIVITIES
Capital expenditures (3,190) (4,003) (30,573) (27,169)
Acquisition of Worlds of Fun and
Oceans of Fun:
Land, buildings, rides and - (37,404) - (37,404)
equipment acquired
Negative working capital assumed, - 1,381 - 1,381
net of cash acquired
Net cash (for) investing activities (3,190) (40,026) (30,573) (63,192)
CASH FLOWS FROM (FOR) FINANCING
ACTIVITIES
Net payments on revolving credit (71,200) (69,903) (3,200) (10,703)
loans
Distributions paid to partners (13,335) (12,636) (53,342) (50,546)
Acquisition of Worlds of Fun and
Oceans of Fun:
Borrowings on revolving credit
loans for refinancing of - 13,903 - 13,903
assumed long-term debt
Issuance of limited partnership - 22,384 - 22,384
units
Net cash (for) financing activities (84,535) (46,252) (56,542) (24,962)
Cash and cash equivalents:
Net increase (decrease) for the 1,780 (2,206) 5,419 (4,383)
period
Balance, beginning of period 5,186 3,753 1,547 5,930
Balance, end of period $6,966 $1,547 $6,966 $1,547
SUPPLEMENTAL INFORMATION
Cash payments for interest expense $ 2,682 $ 2,711 $ 7,128 $ 6,787
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
SEPTEMBER 29, 1996 AND OCTOBER 1, 1995
(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 seasonal amusement parks: Cedar
Point, located on Lake Erie between Cleveland and Toledo;
Valleyfair, near Minneapolis/St. Paul; Dorney Park & Wildwater
Kingdom, near Allentown, Pennsylvania; and Worlds of Fun and
Oceans of Fun, in Kansas City, Missouri. These parks generate
virtually all of the Partnership's revenue during an operating
season which starts in April and May and ends in early October,
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
September 29, 1996 and October 1, 1995 to accompany the quarterly
results. Because amounts for the 12 months ended September 29,
1996 include actual 1995 fourth quarter operations, they are not
necessarily indicative of 1996 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).
(2) Significant Accounting and Reporting Policies
The Partnership's consolidated financial statements for the
quarters ended September 29, 1996 and October 1, 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.
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.
<PAGE>
(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
<S> <C> <C> <C> <C>
9/29/96 10/1/95 9/29/96 10/1/95
(In thousands except per unit data)
Net revenues $167,503 $168,454 $249,362 $237,747
Net income 83,880 83,423 73,850 67,135
Net income per $3.60 $3.59 $3.17 $2.89
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
Net revenues for the third quarter ended September 29, 1996,
which included one less week of operations than the prior year,
increased 4% to $167.5 million from $161.2 million for the
quarter ended October 1, 1995. Net income for the period was
$83.9 million, or $3.60 per limited partner unit, compared with
$80.6 million, or $3.51 per unit, in 1995.
Operating results for the current quarter were significantly
impacted by seven fewer days of operations compared to the same
period last year, partially offset by the contribution of Worlds
of Fun for the full quarter in 1996 compared to last year, when
the park was acquired on July 28, 1995. Including Worlds of Fun
for the full quarter in 1995 and on a comparable number of
operating days, net revenues and net income for the quarter
increased 6% and 7%, respectively, on a 6% increase in guest per
capita spending and a slight increase in combined attendance.
For the quarter, combined attendance at the Partnership's
original three parks was relatively flat between years, while
guest per capita spending continued to rise, increasing 8% to
$33.22 in the current period from $30.77 in 1995. For the entire
operating season, combined attendance at the four parks was
6.9 million, up 10% from the previous year, with Worlds of Fun's
full year contribution accounting for most of the increase.
Included in costs and expenses are approximately $1,179,000 of
incentive fees payable to the managing general partner relating
to the 1996 third quarter distribution, which exceeded the
minimum distribution as defined in the partnership agreement by
28.25 cents per unit, or $6.5 million in the aggregate. This
compares to $1,012,000 of incentive fees in the 1995 third
quarter.
Financial Condition
The Partnership's $95 million revolving credit facility is
adequate to meet seasonal working capital needs, planned capital
expenditures and quarterly distributions. The negative working
capital ratio of 1.7 at September 29, 1996 is the result of the
Partnership's highly seasonal business and careful management of
cash flow. 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.
The Partnership is well along in the process of reviewing its
alternatives in preparation for the change in its tax status, and
expects to be able to report on its plans early in 1997.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibits:
(a) Exhibit (20) 1996 Third Quarter Report and Cash Distribution
Notice.
(b) Reports on None.
Form 8-K.
<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 11, 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>
EXHIBIT INDEX
Exhibit Page
20 Report to Unitholders, November 11, 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> SEP-29-1996 SEP-29-1996
<CASH> 6,966 6,966
<SECURITIES> 0 0
<RECEIVABLES> 14,744 14,744
<ALLOWANCES> 0 0
<INVENTORY> 4,489 4,489
<CURRENT-ASSETS> 27,169 27,169
<PP&E> 391,020 391,020
<DEPRECIATION> 130,289 130,289
<TOTAL-ASSETS> 298,700 298,700
<CURRENT-LIABILITIES> 45,224 45,224
<BONDS> 0 0
<COMMON> 191,566 191,566
0 0
0 0
<OTHER-SE> 6,286 6,286
<TOTAL-LIABILITY-AND-EQUITY> 298,700 298,700
<SALES> 167,503 249,362
<TOTAL-REVENUES> 167,503 249,362
<CGS> 16,254 24,986
<TOTAL-COSTS> 82,153 168,454
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,470 7,058
<INCOME-PRETAX> 83,880 73,850
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 83,880 73,850
<EPS-PRIMARY> 3.60 3.17
<EPS-DILUTED> 0 0
</TABLE>
