<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
AMENDMENT TO APPLICATION OR REPORT
Filed Pursuant to Section 13 or 15(d) of The Securities Exchange
Act of 1934
Cedar Fair, L.P.
(Exact name of Registrant as specified in its charter)
AMENDMENT NO. 1
The undersigned Registrant hereby amends the following items,
financial statements, exhibits or other portions of its Current
Report on Form 8-K filed January 13, 1998 as set forth in the
pages attached hereto:
Item 7: (a)
(b)
Pursuant to the requirements of The Securities Exchange Act of
1934, the Registrant has duly caused this amendment to be signed
on its behalf by the undersigned, hereunto duly authorized.
Cedar Fair, L.P.
(Registrant)
March 13, 1998 /s/ Bruce A. Jackson
Bruce A. Jackson
Corporate Vice President -
Finance and Chief Financial
Officer
ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
(1) Knott's Berry Farm
Independent Auditors' Report
Balance Sheets as of December 29, 1996 and
December 31, 1995
Statements of Earnings, Partners' Equity and Cash
Flows for the three years ended December 29, 1996
Notes to Financial Statements
(2) Knott's Berry Farm (unaudited)
Balance Sheet as of September 28, 1997 and
September 29, 1996
Statements of Earnings and Cash Flow for the nine
months ended September 28, 1997 and September 29, 1996
Notes to Financial Statements
(b) Pro Forma Financial Information
Cedar Fair, L.P. Pro Forma Condensed Consolidated
Financial Information (unaudited)
Pro Forma Condensed Consolidated Balance Sheet as of
September 28, 1997
Pro Forma Condensed Consolidated Statement of
Operations for the year ended December 31, 1996
Pro Forma Condensed Consolidated Statement of
Operations for the nine months ended September 28, 1997
Notes to Pro Forma Condensed Consolidated Financial
Statements
(c) Exhibits
None
<PAGE>
KNOTT'S BERRY FARM
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 29, 1996, DECEMBER 31, 1995
AND DECEMBER 25, 1994
AND INDEPENDENT AUDITORS' REPORT
<PAGE>
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS' REPORT 5
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 29, 1996,
DECEMBER 31, 1995 AND DECEMBER 25, 1994:
Balance sheets 6
Statements of earnings 7
Statements of partners' equity 8
Statements of cash flows 9
Notes to financial statements 10
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Knott's Berry Farm
Buena Park, California
We have audited the accompanying balance sheets of Knott's Berry
Farm (the Partnership) as of December 29, 1996 and December 31,
1995, and the related statements of earnings, partners' equity
and cash flows for each of the three years in the period ended
December 29, 1996. 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, such financial statements present fairly, in all
material respects, the financial position of Knott's Berry Farm
as of December 29, 1996 and December 31, 1995, and the results of
its operations and its cash flows for each of the three years in
the period ended December 29, 1996 in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
February 28, 1997
<PAGE>
<TABLE>
KNOTT'S BERRY FARM
BALANCE SHEETS
AS OF DECEMBER 29, 1996 AND DECEMBER 31, 1995
(In thousands)
1996 1995
<S> <C> <C>
ASSETS
Cash $ 536 $ 691
Short-term investments, at cost which
approximates market - 3,002
Investments, available for sale (Notes 1
and 10) 75,094 60,294
Accounts receivable, less allowance for bad
debts of $51 (1996) and $36 (1995) 2,441 2,110
Receivable from affiliates (Note 3) 4,769 3,671
Inventories (Note 4) 3,721 4,321
Prepaid expenses and other assets, net 1,547 1,493
Property, plant and equipment:
Land 1,990 2,447
Buildings, equipment, entertainment
attractions and other facilities 157,433 152,636
Construction in progress 4,938 2,125
164,361 157,208
Less accumulated depreciation (104,799) (103,268)
Property, plant and equipment, net 59,562 53,940
$ 147,670 $ 129,522
See notes to financial statements.
<PAGE>
KNOTT'S BERRY FARM
BALANCE SHEETS - LIABILITIES AND PARTNERS' EQUITY
AS OF DECEMBER 29, 1996 AND DECEMBER 31, 1995
(In thousands)
1996 1995
<S> <C> <C>
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Notes payable (Note 5 and 9) $ 9,000 $ 6,000
Accounts payable and other accrued
liabilities 9,392 11,482
Accrued salaries, wages and benefits 3,706 5,517
Accrued profit-sharing retirement plan
(Note 6) 1,716 1,283
Taxes payable, other than income taxes 1,605 1,863
Loans payable to partners and their
families (Note 7) 53,455 51,208
Commitments and contingencies (Note 8) - -
78,874 77,353
Partners' equity (Notes 2 and 7):
Capital 240 240
Fair value of securities received in excess
of basis in KBFFI 31,271 31,271
Unrealized holding gain 27,094 12,294
Undistributed net earnings 10,191 8,364
68,796 52,169
$ 147,670 $ 129,522
See note to financial statements.
<PAGE>
KNOTT'S BERRY FARM
STATEMENTS OF EARNINGS
FOR THE YEARS ENDED DECEMBER 29, 1996,
DECEMBER 31, 1995 AND DECEMBER 25, 1994
(In thousands)
1996 1995 1994
<S> <C> <C> <C>
REVENUES $ 118,605 $ 113,217 $ 107,739
COST OF OPERATIONS 85,128 81,239 77,362
EARNINGS FROM OPERATIONS 33,477 31,978 30,377
OTHER (INCOME) EXPENSES:
Advertising and selling 8,515 8,352 9,031
Administrative and general (Note 6) 12,753 13,517 13,531
Royalty income (4) (744) (3,676)
Interest, net (Note 7) 3,738 4,433 3,721
Total other expenses 25,002 25,558 22,607
EARNINGS FROM CONTINUING OPERATIONS 8,475 6,420 7,770
DISCONTINUED OPERATIONS:
Earnings (loss) from discontinued
operations - (834) 2,217
Gain on sale of KBFFI - 31,500 -
NET EARNINGS $ 8,475 $ 37,086 $ 9,987
See notes to financial statements.
<PAGE>
KNOTT'S BERRY FARM
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 29, 1996,
DECEMBER 31, 1995 AND DECEMBER 25, 1994
(In thousands)
1996 1995 1994
<S> <C> <C> <C>
BALANCE, beginning of year $ 52,169 $ 10,559 $ 6,735
Net earnings 8,475 37,086 9,987
Unrealized holding gain 14,800 12,294 -
Transfers to partners' loans - related
to year ended December 26, 1993 - - (6,163)
Transfers to partners' loans - related
to year ended December 25, 1994 - (7,770) -
Transfers to partners' loans - related
to year ended December 31, 1995 (6,648) - -
BALANCE, end of year $ 68,796 $ 52,169 $ 10,559
See notes to financial statements.
<PAGE>
KNOTT'S BERRY FARM
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 29, 1996,
DECEMBER 31, 1995 AND DECEMBER 25, 1994 (Continued)
(In thousands)
1996 1995 1994
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 8,475 $ 37,086 $ 9,987
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 8,681 7,206 6,140
(Gain) loss on sale of assets (264) 24 72
Gain on sale of KBFFI - (31,500) -
Changes in:
Accounts receivable (331) (701) 283
Receivable from affiliates (1,098) (300) (1,547)
Inventories 600 358 (1,028)
Prepaid expenses and other assets (54) 897 (727)
Accounts payable and other accrued (2,090) (773) 3,517
liabilities
Accrued salaries, wages and benefits (1,811) (329) (701)
Accrued profit-sharing retirement plan 433 (629) 725
Taxes payable, other than income taxes (258) 382 414
Net assets of KBFFI - 834 (2,217)
Net cash provided by operating
activities 12,283 12,555 14,918
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (14,864) (15,822) (13,389)
Proceeds from the sale of fixed assets 825 5 6
Receivable from KBFFI - 6,115 (4,891)
Proceeds from the sale of KBFFI - 229 -
Net cash used in investing
activities (14,039) (9,473) (18,274)
CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to loans payable to partners
and their families 14,681 15,629 14,154
Repayment of loans payable to partners
and their families (19,082) (21,053) (15,218)
Borrowings on notes payable 13,200 10,492 508
Repayment of notes payable (10,200) (5,000) -
Net cash (used in) provided by
financing activities (1,401) 68 (556)
NET (DECREASE) INCREASE IN CASH AND
SHORT-TERM INVESTMENTS (3,157) 3,150 (3,912)
CASH AND SHORT-TERM INVESTMENTS,
beginning of year 3,693 543 4,455
CASH AND SHORT-TERM INVESTMENTS,
end of year $ 536 $ 3,693 $ 543
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION - Cash paid during the year
for interest, exclusive of interest
paid on partner loans (Note 7) and
capitalized interest of $64 (1996) $ 870 $ 619 $ 389
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES:
Partners' loans include transfers of earnings from partners'
equity of $6,648, $7,770 and $6,163 related to the years ended
December 31, 1995, December 25, 1994 and December 26, 1993,
respectively.
Unrealized gains on available for sale investments during the
years ended December 29, 1996 and December 31, 1995 total $14,800
and $12,294, respectively.
During the year ended December 31, 1995, the common stock of
KBFFI was sold in exchange for common shares of ConAgra (Note 2).
See notes to financial statements.
</TABLE>
<PAGE>
KNOTT'S BERRY FARM
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 29, 1996,
DECEMBER 31, 1995 AND DECEMBER 25, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company Description - Knott's Berry Farm (the Partnership) is
a California general partnership engaged in amusement park,
dining and retail shopping operations primarily in Southern
California.
Certain of the partners have interests in retail operations
which operate on the Partnership's premises under lease
agreements with the Partnership. Rental income applicable to
such leases approximated $309,000 in fiscal 1996, $322,000 in
fiscal 1995 and $300,000 in fiscal 1994. The accounts of
these related businesses are not included in the accompanying
financial statements.
The financial statements do not include any assets,
liabilities, income or expenses attributable to the partners'
individual activities.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenues and expenses during the reporting years. Actual
results could differ from those estimates.
Investments - Effective December 26, 1994, the Partnership
adopted Statement of Financial Accounting Standards (SFAS)
No. 115, Accounting for Certain Investments in Debt and
Equity Securities. SFAS No. 115 requires the classification
of investments in debt and equity securities into three
categories: held to maturity, trading and available for
sale. Investments, consisting primarily of corporate stocks,
have been classified as available for sale securities and are
reported at fair value, based on quoted market prices, in the
accompanying balance sheets. Unrealized gains of
approximately $27,094,000 and $12,294,000 are included as a
separate component of partners' equity in the accompanying
balance sheets at December 29, 1996 and December 31, 1995,
respectively.
Inventories - Inventories are stated at the lower of cost or
market. Cost is determined under the last-in, first-out
(LIFO) method for substantially all inventories of
merchandise purchased for resale. The cost of remaining
inventories is determined on the first-in, first-out (FIFO)
method.
Property, Plant and Equipment - Property, plant and equipment
are stated at cost. The Company provides for depreciation
primarily on accelerated methods over estimated useful lives
ranging from four to 30 years; however, effective December
30, 1991, newly acquired fixed assets are depreciated on a
straight-line basis.
<PAGE>
Significant improvements and betterments are capitalized,
while maintenance and repairs are charged to operations as
incurred.
Lease Rentals - The Partnership has granted certain lease
rights to various individuals and companies to operate
amusement and merchandising activities on the Farm. The
Partnership recognizes rental income ($1,798,000 in fiscal
1996, $1,787,000 in fiscal 1995 and $1,879,000 in fiscal
1994) under these agreements as it is earned, based on a
percentage of sales.
Fiscal Year - The Partnership's fiscal year ends on the last
Sunday in December.
Short-term Investments - For purposes of the statements of
cash flows, all highly-liquid debt instruments, classified as
short-term investments, purchased with an original maturity
of three months or less are considered cash equivalents and
are presented in the balance sheets as short-term
investments.
Income Taxes - No provision has been made for federal, state
and local income taxes of the Partnership, since such taxes
are the responsibility of the individual partners.
2. SALE OF KNOTT'S BERRY FARM FOODS, INC.
Effective May 19, 1995, Knott's Berry Farm entered into an
Agreement and Plan of Merger (the Agreement) with ConAgra,
Inc. (ConAgra) to merge Knott's Berry Farm Foods, Inc.
(KBFFI) with a wholly-owned subsidiary of ConAgra. Under the
terms of the Agreement, Knott's Berry Farm received $229,000
in cash and common shares of ConAgra valued at $48,000,000 in
exchange for all of the outstanding common shares of KBFFI.
This transaction resulted in a gain of $31,500,000 to Knott's
Berry Farm. The Partnership has recorded, as a separate
component of partners' equity, the fair value of the ConAgra
stock received ($48,000,000) in excess of its basis
($16,729,000) in KBFFI. The accompanying financial
statements for the years ended December 31, 1995 and
December 25, 1994 reflect KBFFI as a discontinued operation.
3. RECEIVABLE FROM AFFILIATES
The Partnership provides a line of credit, not to exceed
$3,100,000, to Knott's Restaurant Group (KRG), a related
entity, for the operation of three restaurants. The note
receivable from KRG, including accrued interest, was
$3,024,000 and $3,345,000 at December 29, 1996 and
December 31, 1995, respectively. The Partnership also
provides certain services to KRG and is reimbursed on a
monthly basis. The amount receivable for these services was
$5,000 at December 29, 1996 and $50,000 at December 31, 1995.
In addition, at December 29, 1996, the Partnership had
advanced approximately $595,000 to KRG as a short-term loan.
All amounts receivable from KRG were repaid subsequent to
December 29, 1996.
<PAGE>
4. INVENTORIES
Inventories as of December 29, 1996 and December 31, 1995 are
summarized as follows:
1996 1995
Merchandise purchased for resale $2,902,000 $3,565,000
Food and supplies 819,000 756,000
$3,721,000 $4,321,000
The excess of current costs as determined on the FIFO basis
over the LIFO basis was approximately $1,274,000 at
December 29, 1996 and $1,302,000 at December 31, 1995.
5. NOTES PAYABLE
Outstanding borrowings under a revolving line of credit
($1,000,000 at December 29, 1996) bear interest at the bank's
reference rate (8.25% at December 29, 1996). At December 29,
1996, the Partnership had outstanding standby and commercial
letters of credit amounting to $459,000. Outstanding
borrowings under unsecured term loans ($4,000,000 at
December 29, 1996) bear interest at 7.85% pursuant to an
interest rate swap agreement (Note 9). Additional
outstanding borrowings under the unsecured term loans
($4,000,000 at December 29, 1996) bear interest at the
offshore rate plus 1.75% (7.3125% at December 29, 1996).
Borrowings under the unsecured term loans are due in
installments equal to the lesser of the outstanding principal
balance or $500,000 on the first day of each July, August,
September and December, increasing to $750,000 on July 1,
1998.
On January 30, 1997, the Partnership entered into a new
credit facility with its bank which modified certain terms of
its old credit facility and provides for a maximum
$20,000,000 unsecured term loan and a $6,000,000 unsecured
revolving line of credit. In addition, the new credit
facility provides for standby and commercial letters of
credit in the aggregate amount of $2,000,000. The credit
facility contains certain restrictive covenants, among which
are minimum levels of partner equity, as defined, and
requirements to maintain certain finacial ratios. The revolving
line of credit expires in April 1998.
6. PROFIT-SHARING RETIREMENT PLAN
The Partnership has a trustee profit-sharing retirement plan
(the Plan) for its employees, constituted as a 401(k) plan in
conformity with the requirements of the Employee Retirement
Income Security Act. Under the terms of the Plan, employees
(participants) who have reached age 21 and completed one or
more years of service are eligible to participate in the
Plan. The Partnership's annual contribution to the Plan is
based on a percentage of each participant's compensation (as
defined), as determined by the Partnership's partners, and
amounted to $1,611,000, $1,214,000 and $1,753,000 for the
years ended December 29, 1996, December 31, 1995 and
<PAGE>
December 25, 1994, respectively. Participants have the right
to make voluntary contributions to the Plan, and the
Partnership matches 50% of such voluntary contributions. The
Partnership's matching contributions amounted to $642,000,
$607,000 and $686,000 for the years ended December 29, 1996,
December 31, 1995 and December 25, 1994, respectively.
Participants also have the right to defer all or a portion of
cash bonuses (if any), contribute these amounts to the Plan
and have the contribution matched by the Partnership. The
Partnership's matching contributions amounted to $105,000,
$69,000 and $82,000 for the years ended December 29, 1996,
December 31, 1995 and December 25, 1994, respectively.
Partnership contributions vest in 20% increments from the
second through sixth years of employment. The Partnership is
under no obligation to either continue the Plan or make
future contributions.
In addition, the Partnership maintains a nonqualified defined
benefit retirement plan for one of its officers. The plan
provides for retirement benefits based on years of service
and compensation. The Partnership will fund the plan as
benefits become due and payable.
Components of the net defined benefit pension expense for the
years ended December 29, 1996, December 31, 1995 and
December 25, 1994 are as follows:
<TABLE>
1996 1995 1994
<S> <C> <C> <C>
Present value of benefits earned during
year $ - $ 13,117 $ 58,903
Interest cost on projected benefit
obligations 70,300 74,387 60,172
Net amortization and deferrals - 23,631 35,446
Amortization of prior service cost - 24,226 36,340
Total pension expense $ 70,300 $135,361 $190,861
</TABLE>
<PAGE>
The funded status of the plan is shown below:
1996 1995
Actuarial present value of benfit
obligations:
Vested benefit obligations $1,132,118 $1,029,409
Accumulated benefit obligations 1,132,118 1,029,409
Projected benefit obligations $1,132,118 $1,029,409
Unrecognized net gain (6,462) (25,947)
Additional liability recognized 6,462 -
Pension liability $1,132,118 $1,055,356
The following assumptions were used to determine the annual
pension expense and benefit obligations:
1996 1995 1994
Rate of increase in compensation
levels 5% 5% 5%
Discount rate 7% 7% 8%
Long-term rate of return on assets 8% 8% 8%
7. LOANS PAYABLE TO PARTNERS AND THEIR FAMILIES
The agreements (as amended) covering the loans payable to
partners include provisions that: the loans are payable
three years from the date of the agreements; the loans are
automatically renewed for an additional three years unless
either party chooses to terminate; interest accrues at the
prime rate, as determined at the beginning of each quarter,
and is added to the loan balances quarterly; and allocated
net income for any one fiscal year not withdrawn by January 1
of the following year is transferred to partners' loans.
These provisions are also applicable to loans payable to
members of partners' families.
<PAGE>
Interest expense related to the above loans payable to
partners and loans payable to members of partners' families
amounted to $4,493,000, $4,718,000 and $3,422,000 for the
years ended December 29, 1996, December 31, 1995 and
December 25, 1994, respectively.
8. COMMITMENTS AND CONTINGENCIES
Lease Commitments - The Partnership has an agreement with
Knott's Placentia Partnership (KPP), a related entity, to
lease land owned by the Partnership to KPP. Rental income
under the agreement was approximately $253,000 for each of
the years ended December 29, 1996, December 31, 1995 and
December 25, 1994. The following is a schedule of future
rental payments to be received under the ground lease:
Ground
lease
income
Fiscal year ending:
1997 $ 253,000
1998 253,000
1999 253,000
2000 326,000
2001 379,000
Thereafter 1,294,000
$ 2,758,000
<PAGE>
Self-insured Retention - The Partnership's insurance policies
provide for partial self-insured retention of its general
liability and workers' compensation policies. The
Partnership is liable for claims up to a maximum of $30,000
per occurrence through October 31, 1993 and $50,000 per
occurrence thereafter under its general liability coverage,
and $200,000 per claim under its workers' compensation plan
through October 31, 1995. The Partnership also participates
in a self-insured California State Disability Insurance plan.
Litigation - The Partnership is a party to legal actions
arising in the ordinary course of business. In the opinion
of management, the Partnership has adequate legal defenses
with respect to these actions and does not believe that their
ultimate outcome will materially affect the Partnership's
operations or financial position.
Guarantees - The Partnership is contingently liable under
various arrangements which guarantee debt of related
partnerships aggregating approximately $8,469,000 at
December 29, 1996.
Purchase Commitments - The Partnership has entered into
various agreements to construct new entertainment attractions
to be opened in 1997. Commitments under these agreements
amounted to $9,813,000 at December 31, 1996.
9. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The Partnership has entered into an interest rate swap
agreement to reduce the impact of changes in interest rates
on its floating rate long-term debt. At December 29, 1996,
the Partnership had outstanding an interest rate swap
agreement with a commercial bank, having a total notional
principal amount of $4,000,000. This agreement effectively
changes the Partnership's interest rate exposure on its
floating rate note due 1998 to a fixed rate of 7.85% per
annum. The interest rate swap agreement matures December 1,
1998. The Partnership is exposed to credit-related losses in
the event of nonperformance by the counterparty to the
agreement. The counterparty is a major financial institution
and management believes the risk of incurring losses related
to credit risk is remote.
The Partnership's balance sheets include the following
financial instruments: cash, short-term investments,
accounts receivable and accounts payable. The Partnership
considers the carrying amounts in the financial statements to
approximate fair value for these financial instruments
because of the relatively short period of time between the
origination of the instruments and their expected
realization.
<PAGE>
The fair value of notes payable is estimated using discounted
cash flow analyses at interest rates currently being offered
for similar instruments to lenders/borrowers with comparable
credit ratings. The fair values of derivative financial
instruments generally reflect the estimated amounts that the
Partnership would receive or pay to terminate the contracts
at the reporting date, thereby taking into account the
current unrealized gains or losses of open contracts.
Independent broker or financial institution quotations are
used in the estimates where available.
The following table presents the notional amounts (where
applicable), carrying amounts and estimated fair values of
certain financial instruments held by the Company at
December 29, 1996 and December 31, 1995.
<TABLE>
Estimated
Notional Carrying fair
1995 amount amount value
<S> <C> <C> <C>
Assets:
Long-term investments $ - $48,000,000 $60,294,000
Liabilities:
Notes payable 6,000,000 6,000,000
Swaps - Related derivatives -
interest rate swaps 6,000,000 - (86,000)
1996
Assets:
Long-term investments 48,000,000 75,094,000
Liabilities:
Notes payable 9,000,000 9,000,000
Swaps - Related derivatives -
interest rate swaps 4,000,000 - (19,000)
</TABLE>
<PAGE>
The estimated fair value amounts have been determined by the
Partnership using available market information and
appropriate valuation methodologies. However, considerable
judgment is required in developing estimates of fair values.
Accordingly, the estimates presented herein are not
necessarily indicative of the amounts that the Partnership
could realize in current market exchange. The use of
different market assumptions or methodologies could affect
the estimated fair value.
10. SUBSEQUENT EVENTS
Subsequent to December 29, 1996, the Partnership sold a
portion of available for sale investment securities with a
carrying value of approximately $15,413,000. Net proceeds
from the sales aggregated approximately $15,162,000, of which
approximately 80% was distributed to the partners.
<PAGE>
<TABLE>
KNOTT'S BERRY FARM
BALANCE SHEETS
AS OF SEPTEMBER 28, 1997 AND SEPTEMBER 29, 1996
(Unaudited, in thousands)
1997 1996
ASSETS
<S> <C> <C>
Current Assets:
Cash $ 471 $ 487
Short-term investments - 501
Receivables 3,305 3,322
Receivables - affiliates 738 3,329
Inventories 3,560 4,709
Prepaids and other assets 977 1,314
9,051 13,662
Land, buildings, rides and equipment, net 71,637 58,161
Investment in ConAgra 15,638 60,294
Investment in affiliates 182 2
$96,508 $132,119
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable $ 3,231 $ 3,554
Accrued liabilities 13,354 15,501
Notes payable 8,575 3,137
25,160 22,192
Notes payable - non-current 4,500 6,500
Partner loans payable 62,781 53,367
Partners' equity 4,067 50,060
$96,508 $132,119
See notes to financial statements for the nine months ended
September 28, 1997.
<PAGE>
KNOTT'S BERRY FARMSTATEMENTS OF EARNINGSFOR THE NINE MONTHS ENDED
SEPTEMBER 28, 1997 AND SEPTEMBER 29, 1996
(Unaudited, in thousands)
1997 1996
<S> <C> <C>
Net revenues $ 90,096 $88,349
Costs and expenses 77,293 74,150
Depreciation and amortization 7,774 6,657
Operating income 5,029 7,542
Interest expense, net 4,510 4,049
Dividend income 696 1,045
Gain on sale of ConAgra stock 11,728 -
Net income $ 12,943 $ 4,538
See notes to financial statements for the nine months ended
September 28, 1997.
<PAGE>
KNOTT'S BERRY FARM
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 28, 1997 AND SEPTEMBER 29,
1996
(Unaudited, in thousands)
1997 1996
<S> <C> <C>
CASH FLOWS FROM (FOR) OPERATING
ACTIVITIES
Net income $12,943 $ 4,538
Adjustments to reconcile net income
to net cash from
operating activities
Depreciation and amortization 7,774 6,657
Gain on sale of ConAgra stock (11,728) -
Change in assets and liabilities:
Decrease (increase) in accounts 3,167 (870)
receivable
Decrease (increase) in inventories 161 (388)
Decrease in current and other 568 179
assets
Decrease in accounts payable (6,161) (7,928)
Increase in other liabilities 6,327 6,838
Net cash from operating activities 13,051 9,026
CASH FLOWS FROM (FOR) INVESTING
ACTIVITIES
Sale of ConAgra stock 71,184 -
Capital expenditures (19,849) (10,878)
Increase in investment in (180) (2)
affiliates
Net cash from (for) investing 51,155 (10,880)
activities
CASH FLOWS FROM (FOR) FINANCING
ACTIVITIES
Increase in partner loans payable 9,326 2,159
Distributions to partners (77,672) (6,647)
Net borrowings of notes payable 4,075 3,637
Net cash (for) financing activities (64,271) (851)
Cash and short-term investments:
Net decrease for the period (65) (2,705)
Balance, beginning of period 536 3,693
Balance, end of period $ 471 $ 988
See notes to financial statements for the nine months ended
September 28, 1997.
</TABLE>
<PAGE>
KNOTT'S BERRY FARM
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 28, 1997 AND SEPTEMBER 29, 1996
(Unaudited)
Knott's Berry Farm is a privately held partnership which owns and
operates Knott's Berry Farm in Buena Park, California, a
traditional family-oriented theme park which is open to the
public year-round.
Basis of Presentation
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information. Accordingly, they
do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of the Registrant, all adjustments
considered necessary for a fair presentation have been included.
For further information, refer to the financial statements and
footnotes thereto included elsewhere in this filing for the three
years ended December 29, 1996.
Subsequent Event
On December 29, 1997, the Registrant acquired all of the
partnership interests in Knott's Berry Farm. The initial
transaction price, which is subject to adjustment under certain
circumstances, consisted of 6,482,433 unregistered limited
partnership units of the Registrant (valued at an average price
of $24.2813, or $157.4 million in the aggregate) and the payment
of $94.5 million in cash.
<PAGE>
ITEM 7(b) PRO FORMA FINANCIAL INFORMATION
The pro forma condensed consolidated balance sheet (unaudited) as
of September 28, 1997 and condensed consolidated statements of
operations (unaudited) for the year ended December 31, 1996 and
the nine months ended September 28, 1997 give effect to the
acquisition of Knott's Berry Farm (Knott's) as if it had occurred
on September 28, 1997 for the condensed consolidated balance
sheet and January 1, 1996 and 1997, respectively, for the
condensed consolidated statements of operations. The pro forma
information is based on historical financial statements of the
respective companies giving effect to the acquisition under the
purchase method of accounting and the assumptions in the
accompanying notes to the pro forma condensed consolidated
financial statements.
The pro forma condensed consolidated financial statements have
been prepared by the Registrant's management based upon Knott's
audited financial statements for the twelve months ended December
29, 1996 and unaudited financial statements for the nine months
ended September 28, 1997. The 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. The pro forma condensed
consolidated balance sheet and condensed consolidated statements
of operations should be read in conjunction with the consolidated
financial statements and notes thereto included in the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996.
<PAGE>
<TABLE>
CEDAR FAIR, L.P.
PRO FORMA
CONDENSED CONSOLIDATED BALANCE SHEET
September 28, 1997
(Unaudited, in thousands)
Pro
Forma
Cedar Knott's Pro Cedar
Fair Berry Froma Fair,
L.P. Farm Adjustment L.P.
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash $ 1,448 $ 471 $ - $ 1,919
Receivables 13,142 3,305 - 16,447
Receivables - affiliates - 738 (738) (a) -
Inventories 4,738 3,560 800 (b) 9,098
Prepaids and other assets 931 977 - 1,908
20,259 9,051 62 29,372
Land, buildings, rides and 294,558 71,637 190,237 (c) 556,432
equipment, net
Investments - 15,820 (15,820) (a) -
Intangibles, net 10,559 - - 10,559
$325,376 $ 96,508 $174,479 $596,363
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable $ 7,171 $ 3,231 $ - $ 10,402
Distribution payable to 14,768 - - 14,768
partners
Accrued liabilities 25,595 13,354 2,500 (d) 41,449
Notes payable - 8,575 (8,575) (e) -
47,534 25,160 (6,075) 66,619
Other Liabilities 8,598 - - 8,598
Long-Term Debt:
Revolving credit loans 11,800 - 94,500 (e) 106,300
Term debt 50,000 4,500 (4,500) (e) 50,000
61,800 4,500 90,000 156,300
Partner loans payable - 62,781 (62,781) (e) -
Redeemable Limited - - 51,750 (f) 51,750
Partnership Units
Partners' Equity:
Special L.P. interests 5,290 - - 5,290
General partners 552 4,067 (4,067) (f) 552
Limited partners 201,602 - 105,652 (f) 307,254
207,444 4,067 101,585 313,096
$325,376 $ 96,508 $174,479 $596,363
See explanation of letter references on page 27.
<PAGE>
CEDAR FAIR, L.P.
PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 1996
(Unaudited, in thousands)
Pro
Cedar Knott's Pro Forma
Fair, Berry Forma Cedar
L.P. Farm Adjustments Fair,
L.P.
<S> <C> <C> <C> <C>
Net revenues $250,523 $118,605 $ 6,455 (g) $375,583
Costs and expenses 150,330 97,711 3,804 (g) 251,845
Depreciation and 19,072 8,681 2,519 (h) 30,272
amortization
169,402 106,392 6,323 282,117
Operating income 81,121 12,213 132 93,466
Interest expense, net 6,942 3,738 2,168 (i) 12,848
Net income $ 74,179 $ 8,475 $(2,036) $ 80,618
Weighted average limited
partner units and equivalents
outstanding - diluted 46,116 52,599
Net income per limited $ 1.59 $ 1.53
partner unit - diluted
See explanation of letter references on page 27.
<PAGE>
CEDAR FAIR, L.P.
PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the nine months ended September 28, 1997
(Unaudited, in thousands)
Pro
Cedar Knott's Pro Forma
Fair, Berry Forma Cedar
L.P. Farm Adjustments Fair,
L.P.
<S> <C> <C> <C> <C>
Net revenues $ 255,441 $ 90,096 $ 4,478 (g) $ 350,015
Costs and expenses 147,142 77,293 2,526 (g) 226,961
Depreciation and 20,718 7,774 601 (h) 29,093
amortization
167,860 85,067 3,127 256,054
Operating income 87,581 5,029 1,351 93,961
Interest expense, net 6,177 3,814 630 (i) 10,621
Gain on sale of ConAgra - 11,728 (11,728) (j) -
stock
Net income $ 81,404 $ 12,943 $(11,007) $ 83,340
Weighted average limited
partner units and equivalents
outstanding - diluted 46,199 52,681
Net income per limited $ 1.75 $ 1.57
partner unit - diluted
See explanation of letter references on page 27.
</TABLE>
<PAGE>
CEDAR FAIR, L.P.NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(unaudited)
(a) Elimination of certain assets not acquired by
Registrant.
(b) Inventories of small related company acquired by
Knott's subsequent to September 28, 1997.
(c) Purchase accounting adjustment for fair value of land,
buildings, rides and equipment.
(d) Accrual of professional fees and expenses related to
acquisition.
(e) Revolving credit borrowings by Registrant used for
the repayment of Knott's liabilities at date of
acquisition.
(f) To eliminate Knott's partners' equity and to record
the market value of Registrant's units issued at date
of acquisition.
(g) Additional revenues and expenses from retail
operations and a management contract acquired by Knott's
subsequent to September 28, 1997, which are not material.
(h) To adjust depreciation for the assets acquired as a
result of (1) the adjustment of historical costs to fair
values at date of acquisition, and (2) differences in
depreciation methods and estimated useful lives of
assets.
(i) To eliminate dividend income from investment in
ConAgra and adjust interest expense for additional
revolving credit borrowings used for the repayment of
Knott's liabilities at date of acquisition.
(j) Elimination of income from transactions unrelated to
assets acquired by Registrant.
